AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 23, 1997
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------
USI AMERICAN HOLDINGS, INC.
(Exact Name of Co-Registrant Issuer as Specified in its Charter)
U.S. INDUSTRIES, INC.
(Exact Name of Co-Registrant Guarantor as Specified in its Charter)
---------------------------
<TABLE>
<S> <C> <C>
DELAWARE 3998 22-3363062
DELAWARE 3998 22-3369326
(State or other Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Incorporation or Organization) Classification Code Number) Identification No.)
</TABLE>
---------------------------
101 Wood Avenue South
Iselin, New Jersey 08830
(908) 767-0700
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Co-Registrants' Principal Executive Offices)
---------------------------
George H. MacLean, Esq.
Senior Vice President, General
Counsel & Secretary
USI American Holdings, Inc.
101 Wood Avenue South
Iselin, New Jersey 08830
(908) 767-0700
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
---------------------------
COPY TO:
Ellen J. Odoner, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
(212) 310-8000
---------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this registration statement becomes effective.
If the securities being registered on this form are being offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, check the following box.[_]
---------------------------
<TABLE>
<CAPTION>
========================================================================================================================
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER UNIT PRICE REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
7-1/4% Senior Notes Due December 1, 2006, $125,000,000 100% $125,000,000 $37,879(1)
Series B
- ------------------------------------------------------------------------------------------------------------------------
Guaranty of 7-1/4% Senior Notes Due $125,000,000 * * $0(2)
December 1, 2006, Series B
========================================================================================================================
<FN>
(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(f).
(2) U.S. Industries, Inc., the parent company of USI American Holdings, Inc., will guarantee the payment of the 7-1/4%
Senior Notes Due December 1, 2006, Series B. Pursuant to Rule 457(n) under the Securities Act of 1933, no filing
fee is required.
* Not Applicable
</FN>
</TABLE>
---------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
================================================================================
<PAGE>
USI AMERICAN HOLDINGS, INC.
U.S. INDUSTRIES, INC.
CROSS-REFERENCE SHEET
Pursuant to Rule 404(a) and Item 501(b) of Regulation S-K
<TABLE>
<CAPTION>
Form S-4 Item Number Location in Prospectus
- -------------------- ----------------------
<S> <C>
A. Information About the Transaction
1. Forepart of Registration Statement
and Outside Front Cover Page of
Prospectus...........................................Facing Page; Cross-Reference Sheet;
Outside Front Cover of Prospectus.
2. Inside Front and Outside Back
Cover Pages of Prospectus............................Inside Front Cover Page of
Prospectus; Available Information;
Outside Back Cover Page of
Prospectus.
3. Risk Factors, Ratio of Earnings to
Fixed Charges, and Other
Information..........................................Summary; Risk Factors; Ratio of
Earnings to Fixed Charges;
Capitalization; Selected Financial
Data
4. Terms of the Transaction.............................Summary; The Exchange Offer;
Description of the New Notes;
Certain Federal Income Tax
Considerations; Plan of Distribution
5. Pro Forma Financial
Information..........................................Not applicable.
6. Material Contracts With the
Company Being Acquired...............................Not applicable.
7. Additional Information Required
For Reoffering by Persons and
Parties Deemed to be
Underwriters.........................................Not applicable.
i
<PAGE>
8. Interests of Named Experts and
Counsel..............................................Not applicable.
9. Disclosure of Commission Position
on Indemnification For Securities
Act Liabilities......................................Not applicable.
B. Information About the Registrants
10. Information With Respect to S-3
Registrants..........................................Available Information; Incorporation
of Certain Documents by Reference;
Summary; Recent Developments
11. Incorporation of Certain
Information by Reference.............................Available Information; Incorporation
of Certain Documents by Reference;
Summary
12. Information With Respect to S-2
or S-3 Registrants...................................Not applicable.
13. Incorporation of Certain
Information by Reference.............................Not applicable.
14. Information With Respect to
Registrants Other Than S-3 or S-2
Registrants..........................................Not applicable.
ii
<PAGE>
C. Information About the Company Being
Acquired
15. Information With Respect to S-3
Companies............................................Not applicable.
16. Information With Respect to S-2
or S-3 Companies.....................................Not applicable.
17. Information With Respect to
Companies Other Than S-2 or S-3
Companies............................................Not applicable.
D. Voting and Management Information
18. Information if Proxies, Consents
or Authorizations Are to be
Solicited............................................Not applicable.
19. Information if Proxies, Consents
or Authorizations Are Not to be
Solicited, or in an Exchange
Offer................................................Incorporation of Certain Documents
by Reference
</TABLE>
iii
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED APRIL 23, 1997
PROSPECTUS
OFFER TO EXCHANGE ANY AND ALL OUTSTANDING
7 1/4% SENIOR NOTES DUE DECEMBER 1, 2006, SERIES A,
WHICH HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT,
FOR
7 1/4% SENIOR NOTES DUE DECEMBER 1, 2006,
SERIES B, WHICH HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT,
OF
USI AMERICAN HOLDINGS, INC.
EACH SERIES UNCONDITIONALLY GUARANTEED BY
U.S. INDUSTRIES, INC.
THIS EXCHANGE WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON , 1997, UNLESS EXTENDED
USI American Holdings, Inc., a Delaware corporation (the "Issuer"),
hereby offers, upon the terms and subject to the conditions set forth in this
Prospectus and the accompanying Letter of Transmittal (as defined herein; which
together with this Prospectus constitute the "Exchange Offer"), to exchange
$1,000 principal amount of its 7 1/4% Senior Notes due December 1, 2006, Series
B (the "New Notes"), which have been registered under the Securities Act of
1933, as amended (the "Securities Act"), for each outstanding $1,000 principal
amount of its 7 1/4% Senior Notes due December 1, 2006, Series A (the "Existing
Notes"), which have not been registered under the Securities Act. The aggregate
principal amount of the Existing Notes currently outstanding is $125,000,000.
The terms of the New Notes are identical in all material respects to the terms
of the Existing Notes except that the New Notes will not contain certain terms
with respect to transfer restrictions, registration rights or interest rate
increases as described herein. The New Notes will evidence the same debt as the
Existing Notes and will be issued pursuant to, and entitled to the benefits of,
the Indenture, dated as of December 12, 1996 (the "Indenture"), among the
Issuer, the Company (as defined below) and PNC Bank, National Association, as
trustee (the "Trustee"), pursuant to which the Existing Notes were issued. As
used herein, the term "Notes" means the Existing Notes and the New Notes,
treated as a single class. See "The Exchange Offer" and "Description of the New
Notes."
The New Notes will be fully and unconditionally guaranteed by the
Issuer's parent, U.S. Industries, Inc. (the "Company"). The guaranties to be
endorsed on the New Notes are referred to as the "Guaranties." The New Notes and
the Guaranties will be unsecured senior obligations of, and will rank pari passu
with all other existing and future unsecured and unsubordinated indebtedness and
senior in right of payment to all subordinated indebtedness of, the Issuer and
the Company, respectively. As of December 31, 1996, the Issuer and the Company
had $500 million aggregate principal amount of indebtedness ranking pari passu
with the New Notes and the Guaranties and no outstanding secured indebtedness or
indebtedness ranking senior or subordinated to the New Notes and the Guaranties.
The New Notes and the Guaranties will be effectively subordinated to all
existing and future indebtedness of subsidiaries of the Issuer and the Company
(other than the Issuer) and secured indebtedness of the Issuer and the Company
to the extent of the value of the assets securing such indebtedness. As of
December 31, 1996, subsidiaries of the Issuer (other than USI Funding, Inc., a
special purpose subsidiary with no operating assets) had approximately $42
million aggregate principal amount of indebtedness outstanding. See "Risk
Factors--Holding Company Structure."
The New Notes will bear interest from and including their respective
dates of issuance. Holders whose Existing Notes are accepted for exchange will
receive accrued interest thereon to, but not including, the Exchange Date (as
defined herein), such interest to be payable with the first interest payment on
the New Notes, but will not receive any payment in respect of interest on the
Existing Notes accrued after the issuance of the New Notes.
The Issuer will accept for exchange any and all Existing Notes validly
tendered and not withdrawn prior to 5:00 p.m., New York City time, on the
Expiration Date (as defined herein). See "The Exchange Offer--Expiration Date;
Extensions; Amendments." Tenders of Existing Notes may be withdrawn at any time
prior to 5:00 p.m., New York City time, on the Expiration Date. See "Procedures
for Tendering Existing Notes--Withdrawal Rights." The Exchange Offer is subject
to certain customary conditions. See "The Exchange Offer--Conditions to the
Exchange Offer."
The Existing Notes were issued and sold on December 12, 1996 in a
transaction exempt from the registration requirements of the Securities Act and
applicable state securities laws and may not be offered or sold in the United
States unless so registered or pursuant to an applicable exemption under the
Securities Act and applicable state securities laws. The New Notes are being
offered hereunder in order to satisfy certain obligations of the Issuer and the
Company
1
<PAGE>
contained in the Registration Rights Agreement (as defined herein). Based on
no-action letters issued by the Staff of the Securities and Exchange Commission
(the "Commission") to third parties with respect to similar transactions,
including Exxon Capital Holding Corp. (available May 13, 1988) ("Exxon
Capital"), Morgan Stanley & Co. Inc. (available June 5, 1991) ("Morgan Stanley")
and similar no-action letters, the Issuer believes that New Notes issued
pursuant to the Exchange Offer in exchange for Existing Notes may be offered for
resale, resold and otherwise transferred by holders thereof (other than any such
holder that is an "Affiliate" of the Issuer within the meaning of Rule 405 under
the Securities Act) without compliance with the registration and prospectus
delivery requirements of the Securities Act, provided that such New Notes are
acquired in the ordinary course of such holders' business and such holders are
not engaged in, have no arrangement or understanding with any person to
participate in, and do not intend to engage in, any distribution of the New
Notes. However, the Issuer has not sought a no-action letter with respect to the
Exchange Offer and there can be no assurance that the Staff of the Commission
would make a similar determination with respect to the Exchange Offer. Each
holder of Existing Notes, other than a broker-dealer, must acknowledge that it
is not engaged in, has no arrangement or understanding with any person to
participate in and does not intend to engage in a distribution of New Notes. Any
holder who tenders in the Exchange Offer for the purpose of participating in a
distribution of New Notes (i) cannot rely on such an interpretation by the Staff
of the Commission, (ii) will not be able to validly tender Existing Notes in the
Exchange Offer and (iii) must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any secondary
resale transactions. In addition, each broker-dealer that receives New Notes for
its own account pursuant to the Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such New Notes. The Letter
of Transmittal accompanying this Prospectus states that by so acknowledging and
by delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act. This Prospectus,
as it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of New Notes received in exchange for
Existing Notes where such Existing Notes were acquired by such broker-dealer as
a result of market-making activities or other trading activities. Pursuant to
the Registration Rights Agreement, the Issuer has agreed that it will make this
Prospectus available to any broker-dealer for use in connection with any such
resale. See "Plan of Distribution."
FOR A DISCUSSION OF CERTAIN FACTORS THAT HOLDERS (AS DEFINED HEREIN)
AND BENEFICIAL OWNERS (AS DEFINED HEREIN) OF EXISTING NOTES SHOULD CONSIDER IN
CONNECTION WITH THE EXCHANGE OFFER, SEE "RISK FACTORS" BEGINNING ON PAGE 18.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is April __, 1997.
2
<PAGE>
AVAILABLE INFORMATION
The Issuer and the Company filed with the Commission an exchange offer
registration statement on Form S-4 (together with all amendments, exhibits,
schedules and supplements thereto, the "Registration Statement") under the
Securities Act with respect to the New Notes, and the Guaranties thereof, being
offered hereby. This Prospectus, which forms a part of the Registration
Statement, does not contain all of the information set forth in the Registration
Statement. For further information with respect to the Issuer and/or the Company
and the New Notes, reference is made to the Registration Statement. Statements
contained in this Prospectus as to the contents of any contract or other
document are not necessarily complete, and, where such contract or other
document is an exhibit to the Registration Statement, each such statement is
qualified in all respects by all of the provisions in such exhibit, to which
reference is hereby made.
The Company is currently subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other documents and
information with the Commission. The reports, proxy statements and documents and
other information filed by the Company with the Commission, including the
Registration Statement, may be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following Regional Offices of the Commission:
New York Regional Office, Seven World Trade Center, 13th Floor, New York, New
York 10048 and Chicago Regional Office, Suite 1400, Citicorp Center, 500 West
Madison Street, Chicago, Illinois 60601-2511 and at the Commission Website
located at (http://www.sec.gov). Copies of such material or any part thereof may
also be obtained from the Public Reference Section of the Commission,
Washington, D.C. 20546 at prescribed rates. In addition, material filed by the
Company can be inspected at the offices of the New York Stock Exchange, Inc., 20
Broad Street, New York, New York 10005, on which the Company's Common Stock, par
value $0.01 per share, is listed. In the event the Company is not required to be
subject to the reporting requirements of the Exchange Act in the future, the
Company will be required under the Indenture to file with the Commission the
reports, proxy statements and other documents and information specified in
Sections 13 and 15(d) of the Exchange Act.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
All statements, other than statements of historical fact, included in
this Prospectus, including without limitation the documents and information
incorporated herein by reference, are, or may be deemed to be, forward-looking
statements within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act. Various economic and competitive factors could cause
actual results to differ materially from those discussed in such forward-looking
statements, including factors which are outside the control of the Company, such
as consumer spending patterns, availability of and rates for consumer credit,
levels of residential and commercial construction, levels of automotive
production and changes in raw material costs, along with the other factors noted
in this Prospectus, including without limitation the documents and information
incorporated herein by reference, with respect to the Company's businesses
("Cautionary Statements"). All subsequent written and oral forward-looking
statements attributable to the Issuer, the Company or persons acting on behalf
of one or both of them are expressly qualified in their entirety by such
Cautionary Statements.
3
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. THE ISSUER WILL PROVIDE WITHOUT CHARGE
TO EACH PERSON TO WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, INCLUDING
ANY BENEFICIAL OWNER, ON THE WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY OF
ANY AND ALL OF THE DOCUMENTS REFERRED TO ABOVE WHICH HAVE BEEN OR MAY BE
INCORPORATED IN THIS PROSPECTUS BY REFERENCE, OTHER THAN EXHIBITS TO SUCH
DOCUMENTS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE
THEREIN. THESE DOCUMENTS ARE AVAILABLE UPON REQUEST FROM USI AMERICAN HOLDINGS,
INC., 101 WOOD AVENUE SOUTH, ISELIN, NEW JERSEY 08830 (ATTENTION: VICE
PRESIDENT-INVESTOR RELATIONS). IN ORDER TO ENSURE TIMELY DELIVERY OF THE
DOCUMENTS, ANY REQUEST SHOULD BE MADE NO LATER THAN FIVE DAYS PRIOR TO THE
EXPIRATION DATE.
The following documents previously filed by the Company with the Commission
pursuant to the Exchange Act are incorporated herein by this reference: (a) the
Company's Annual Report on Form 10-K for the fiscal year ended September 28,
1996; (b) the Company's Annual Report Amendment on Form 10-K/A for the fiscal
year ended September 28, 1996 (as amended, the "1996 Annual Report"); (c) the
Company's Proxy Statement dated December 16, 1996; (d) the Company's Current
Reports on Form 8-K filed with the Commisssion on December 16, 1996 and March
19, 1997; (e) the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended December 28, 1996; and (f) the Company's Quarterly Report on Form
10-Q/A for the fiscal quarter ended December 28, 1996 (as amended, the
"Quarterly Report").
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date hereof and prior to the
Exchange Date (as defined herein) shall be deemed to be incorporated by
reference herein and to be a part hereof from the date any such document is
filed. Any statements contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes hereof to the extent that a statement contained herein (or in any
other subsequently filed document which also is incorporated by reference
herein) modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed to constitute a part hereof except as so modified
or superseded. All information appearing in this Prospectus is qualified in its
entirety by the information and financial statements (including notes thereto)
appearing in the documents incorporated herein by reference, except to the
extent set forth in the immediately preceding statement.
4
<PAGE>
IMPORTANT
To properly tender Existing Notes, the following procedures must be
followed:
o Each beneficial owner owning interests in the Existing Notes
("Beneficial Owner") through a DTC Participant (as defined below)
must instruct such DTC Participant to cause Existing Notes to be
tendered in accordance with the procedures set forth in this
Prospectus.
o Each participant (a "DTC Participant") in the Depository Trust
Company ("DTC") holding Existing Notes through DTC must (i)
electronically transmit its acceptance to DTC through the DTC
Automated Tender Offer Program ("ATOP"), for which the
transaction will be eligible, and DTC will then edit and verify
the acceptance, execute a book-entry delivery to the Exchange
Agent's account at DTC and send an Agent's Message (as defined
herein) to the Exchange Agent for its acceptance, or (ii) comply
with the guaranteed delivery procedures set forth under
"Procedures for Tendering Existing Notes--Guaranteed Delivery
Procedures--Notes held through DTC." By tendering through ATOP,
DTC Participants will expressly acknowledge receipt of the
accompanying Letter of Transmittal and agree to be bound by its
terms and the Issuer will be able to enforce such agreement
against such DTC Participants.
o Each registered owner of a registered certificated Existing Note
(a "Holder") must (i) complete and sign the accompanying Letter
of Transmittal, and mail or deliver such Letter of Transmittal,
and all other documents required by the Letter of Transmittal,
together with certificate(s) representing all tendered Existing
Notes, to the Exchange Agent at its address set forth under
"Procedures for Tendering Existing Notes--Exchange Agent," or
(ii) comply with the guaranteed delivery procedures set forth
under "Procedures for Tendering Existing Notes--Guaranteed
Delivery Procedures--Notes held by Holders."
For purposes of this Prospectus, "Tendering Holder" shall mean (i) each
DTC Participant that has properly transmitted (and not properly withdrawn) its
acceptance through ATOP and in respect of which DTC has sent an Agent's Message,
(ii) each Holder that has timely delivered to the Exchange Agent (and not
properly withdrawn) a properly completed and duly executed Letter of
Transmittal, and any other documents required by the Letter of Transmittal,
together with certificate(s) representing all tendered Existing Notes, or (iii)
each DTC Participant or Holder that has complied with the guaranteed delivery
procedures set forth herein.
The information in this Prospectus concerning DTC and their book-entry
systems has been obtained from sources that the Issuer and the Company believe
to be reliable, but the Issuer and the Company take no responsibility for the
accuracy thereof.
5
<PAGE>
SUMMARY
The following summary is qualified in its entirety by, and is subject
to, the more detailed information and financial statements, including the notes
thereto, contained elsewhere in this Prospectus and in the documents and
information incorporated herein by reference. In this Prospectus, (i) references
to "fiscal" are to the applicable fiscal year ended on the Saturday nearest
September 30 and reflects either a 52-week or 53-week period; (ii) unless
otherwise indicated, the term "the Company" refers collectively to U.S.
Industries, Inc. and its consolidated subsidiaries and the term "the Issuer"
refers collectively to USI American Holdings, Inc. and its consolidated
subsidiaries; and (iii) references to the activities of, and financial
information with respect to, the Company prior to May 31, 1995 are to the
historical activities and combined historical financial information of the
individual businesses, real estate assets and equity investments that were
transferred to the Company by Hanson PLC ("Hanson") or its subsidiaries in
connection with the demerger (i.e., spin-off) of the Company by Hanson on that
date (the "Demerger").
U.S. INDUSTRIES, INC.
The Company is a diversified manufacturer of a broad range of consumer,
building and industrial products. Many of its businesses have long operating
histories and enjoy well-established brand names and market positions. In fiscal
1996, the Company had sales of approximately $2.1 billion and operating income
of $211 million; at September 30, 1996, it had total assets of approximately
$1.8 billion. The Company's operations are organized into three business
segments: Consumer, Building Products and Industrial. The following table shows
the fiscal 1996 sales, operating income and principal products of each business
segment:
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30, 1996
SEGMENT SALES OPERATING INCOME PRINCIPAL PRODUCTS
------- ----- ---------------- ------------------
<S> <C> <C> <C>
Consumer $935 million (44.8%) $120 million (50.4%) AMES non-powered garden tools and KELLER
ladders;RAINBOW premium vacuum
cleaners; ERTL COLLECTIBLES die-cast toys
and replicas; AMT model kits; DURANGO
western boots, LEHIGH protective safety shoes
and TRIMFOOT infant and children's footwear;
TOMMY ARMOUR and ODYSSEY golf clubs and
accessories.
Building $840 million (40.2%) $ 91 million (38.2%) JACUZZI whirlpool baths and spas; KIM,
Products PRESCOLITE,COLUMBIA and PROGRESS
commercial and residential lighting
fixtures.
Industrial $314 million (15.0%) $ 27 million (11.4%) Automotive products including GARDEN STATE
TANNING automotive leather interiors.
</TABLE>
6
<PAGE>
The Company has been an independent, publicly owned company since May
31, 1995, when Hanson, to effect the Demerger, paid a dividend to its
shareholders consisting of all of the then outstanding shares of the Company's
common stock. In connection with the Demerger, the Company was capitalized with
bank debt totaling $1.4 billion. One of the Company's principal objectives since
the Demerger has been to deleverage its balance sheet by disposing of certain
non-core businesses and assets.
During the period from June 5, 1995 through November 30, 1995, the
Company prepaid approximately $500 million of its then outstanding $900 million
term loan using the proceeds of dispositions and internally generated funds. In
December 1995, the original bank credit facility was refinanced and the Company
entered into a new bank credit facility (the "Previous Credit Facility") with
substantially lower borrowing spreads and a longer maturity. Upon consummation
of the offering of the Existing Notes (the "Initial Offering") on December 12,
1996 (the "Initial Issue Date") and the application of the net proceeds
therefrom to prepay a portion of the term loan under the Previous Credit
Facility, the Issuer entered into a new $750 million reducing revolving credit
facility guaranteed by the Company (the "New Credit Facility"). The Company's
initial borrowings under the New Credit Facility were used to prepay the
remainder of the indebtedness outstanding under the Previous Credit Facility.
The New Credit Facility lowered the Company's borrowing spreads, eliminated
security interests and guaranties by subsidiaries of the Issuer and modified
certain restrictive covenants. See "Recent Developments--The New Credit
Facility." At December 31, 1996, the Company had approximately $760 million of
total debt outstanding (including $500 million under the New Credit Facility)
and stockholders' equity of $526 million.
The Company is led by an experienced management team whose long-term
objectives include maximization of cash flow, continued debt reduction and
expansion of the Company's businesses. In order to meet these objectives,
management is employing an operating philosophy that includes the following
elements:
o GROWTH AND STABILITY THROUGH DIVERSIFICATION: Management seeks to
maintain growth and earnings stability throughout an economic
cycle by operating a balanced group of diverse businesses. A
significant amount of the Company's sales and operating income is
generated by businesses that have leading positions in their
respective markets. Moreover, many of its businesses have
operating histories that significantly pre-date the inception of
the Company.
o STRATEGIC ACQUISITIONS AND DISPOSITIONS: Management seeks to
enhance the Company's core operations through "bolt-on"
acquisitions of complementary businesses. In the second quarter
of fiscal 1997, the Company acquired certain assets of
Woodings-Verona Tool Works, Inc. ("Woodings-Verona") and of the
Furniture Division of Sunbeam Products, Inc. ("Sunbeam
Furniture"), for a total cost of approximately $85 million
(including transaction costs, the funding of initial operations
and the assumption of certain liabilities). These operations will
complement Ames and Jacuzzi, respectively. In fiscal 1996, the
Company acquired the assets of Keller Ladders, Inc., a leading
manufacturer of ladders in the United States, for $37 million, to
complement the Company's Ames operations, and the assets of
Haugh's Products Limited, a leading Canadian
7
<PAGE>
manufacturer of above-ground swimming pools and equipment, for
$24 million (including the assumption of debt), to complement the
Company's Jacuzzi operations. In fiscal 1995, the Company
acquired Odyssey Sports, Inc., a maker of golf putters, for $16
million, to complement the Company's Tommy Armour operations, and
the assets of Southeastern Plastics, Inc., a plastic injection
molder, for $11 million, to complement the Company's Ames
operations. The Company may also consider more significant
"bolt-on" acquisitions as well as acquisitions in new business
areas that meet management's financial and operating criteria.
These criteria include, but are not limited to, a focus on basic
manufacturing, leading market positions, consistent earnings and
potential for long-term growth in sales, operating income and
cash flow. As opportunities arise, the Company may also make
further dispositions of businesses and assets that it does not
consider important for long-term growth and use the net proceeds
thereof for further debt reduction or acquisitions. For a
description of the dispositions made by the Company since
completion of the Demerger, see "Management's Discussion and
Analysis of Financial Condition and Results of
Operations--Balance Sheet Deleverage" in the Company's 1996
Annual Report, which is incorporated herein by reference and
"Recent Developments--Dispositions."
o DECENTRALIZATION AND MANAGEMENT INCENTIVES: The Company has a
decentralized management structure that enables management of its
operating companies to concentrate on day-to-day operations. A
small centralized senior management team is responsible for
financing and treasury matters, divestitures and acquisitions,
and legal, tax and human resource matters. Management's
compensation under the Company's annual bonus and long-term
deferred compensation plans is dependent upon the attainment of
performance criteria such as debt reduction, pre-tax profit and
operational cash flow. In addition, senior management of the
Company and its major operating subsidiaries have significant
investments in the Company in the form of restricted stock and
stock options.
The Company is a Delaware corporation organized in 1995. Its principal
executive offices are located at 101 Wood Avenue South, Iselin, New Jersey
08830; its telephone number at that address is (908) 767-0700. The Company also
has executive offices located at 17 Mount Street, Mayfair W1Y 5RA, London,
England; its telephone number at that address is (011)(44- 171) 499-8766.
USI AMERICAN HOLDINGS, INC.
The Issuer is a Delaware corporation organized in 1995. It is a direct
wholly-owned subsidiary of the Company that serves as a direct or indirect
holding company for all of the Company's operating subsidiaries and serves as a
borrower under the New Credit Facility.
The Issuer's principal executive offices are located at 101 Wood Avenue
South, Iselin, New Jersey 08830; its telephone number at that address is (908)
767-0700.
8
<PAGE>
THE EXCHANGE OFFER
The Existing Notes were issued and sold on December 12, 1996 in a
transaction exempt from the registration requirements of the Securities Act and
applicable state securities laws and may not be offered or sold in the United
States unless so registered or pursuant to an applicable exemption under the
Securities Act and applicable state securities laws. The Exchange Offer is being
made with respect to all outstanding Existing Notes. See "The Exchange Offer."
The New Notes will be entitled to the benefits of the same Indenture under which
the Existing Notes were issued. See "Description of the New Notes."
The Exchange Offer....................... The Issuer is offering to exchange
pursuant to the Exchange Offer $1,000
principal amount of New Notes in
exchange for each outstanding $1,000
principal amount of Existing Notes.
As of the date hereof, $125,000,000
aggregate principal amount of the
Existing Notes are outstanding. The
terms of the New Notes are identical
in all material respects to the terms
of the Existing Notes except that the
New Notes will not contain certain
terms with respect to transfer
restrictions, registration rights or
interest rate increases as described
in the Registration Rights Agreement
(as defined below). See "The Exchange
Offer--Terms of the Exchange Offer."
Based on no-action letters issued by
the Staff of the Commission to third
parties with respect to similar
transactions, including Exxon
Capital, Morgan Stanley and similar
no-action letters, the Issuer
believes that the New Notes issued
pursuant to the Exchange Offer in
exchange for Existing Notes may be
offered for resale, resold and
otherwise transferred by holders
thereof (other than any such holder
that is an Affiliate of the Issuer)
without compliance with the
registration and prospectus delivery
requirements of the Securities Act,
provided that such New Notes are
acquired in the ordinary course of
such holders' business and such
holders are not engaged in, have no
arrangement or understanding with any
person to participate in, and do not
intend to engage in, any distribution
of the New Notes. However, the Issuer
has not sought a no-action letter
with respect to the Exchange Offer
and there can be no assurance that
the Staff of the Commission would
make a similar determination with
respect to the Exchange Offer. Each
holder of Existing Notes, other than
a broker-dealer, must acknowledge
that it is not engaged in, has no
arrangement or understanding with any
person to participate in and does not
intend to engage in a distribution of
New Notes. Any holder who tenders in
the Exchange Offer for the purpose of
participating in a distribution of
New Notes (i) will not be able to
rely on the interpretations of the
Staff of the
9
<PAGE>
Commission set forth in the
above-referenced no-action letters,
(ii) will not be able to validly
tender Existing Notes in the Exchange
Offer, and (iii) must comply with the
registration and prospectus delivery
requirements of the Securities Act in
connection with any secondary resale
transactions. In addition, each
broker-dealer that receives New Notes
for its own account pursuant to the
Exchange Offer must acknowledge that
it will deliver a prospectus in
connection with any resale of such
New Notes. The Letter of Transmittal
accompanying this Prospectus states
that by so acknowledging and by
delivering a prospectus, a
broker-dealer will not be deemed to
admit that it is an "underwriter"
within the meaning of the Securities
Act. This Prospectus, as it may be
amended or supplemented from time to
time, may be used by a broker-dealer
in connection with resales of New
Notes received in exchange for
Existing Notes where such Existing
Notes were acquired by such
broker-dealer as a result of
market-making activities or other
trading activities. Pursuant to the
Registration Rights Agreement, the
Issuer has agreed that it will make
this Prospectus available to any
broker-dealer for use in connection
with any such resale. See "The
Exchange Offer--Purpose and Effect of
the Exchange Offer--Transferability"
and "Plan of Distribution."
Purpose and Effect of the
Exchange Offer........................... In connection with the Initial
Offering, the Issuer and the Company
entered into the Registration Rights
Agreement dated December 12, 1996
(the "Registration Rights Agreement")
with BA Securities, Inc. ("BA
Securities") providing for the
Exchange Offer. Pursuant to the
Registration Rights Agreement, the
Issuer and the Company agreed to file
with the Commission and use their
best efforts to cause to become
effective the Registration Statement
with respect to the Exchange Offer
for the New Notes registered under
the Securities Act, with terms
identical in all material respects to
the terms of the Existing Notes
except that the New Notes will not
contain certain terms with respect to
transfer restrictions (which related
to the status of the Existing Notes
as unregistered securities),
registration rights or interest rate
increases relating to the Company's
failure to meet specified milestones
with respect to such registration
rights, all as described therein. See
"The Exchange Offer--Purpose and
Effect of the Exchange Offer." In
addition, if the Exchange Offer
cannot be consummated within 165 days
after the Initial Issue Date for any
reason, or if BA Securities so
requests with respect to (i) Existing
Notes not eligible or permitted to be
exchanged or (ii) New Notes received
that are
10
<PAGE>
not fully tradeable, the Issuer and
the Company will be required to file
a Shelf Registration Statement (the
"Shelf Registration Statement") for
an offering to be made on a
continuous basis pursuant to Rule 415
under the Securities Act. See "The
Exchange Offer--Purpose and Effect of
the Exchange Offer--Shelf
Registration Statement."
Expiration Date.......................... The Exchange Offer will expire at
5:00 p.m., New York City time, on the
Expiration Date (as defined herein).
See "The Exchange Offer--Expiration
Date." Any Existing Notes not
accepted for exchange for any reason
will be returned without expense to
the Tendering Holder thereof as
promptly as practicable after the
expiration or termination of the
Exchange Offer. See "--Terms of the
Exchange Offer."
Exchange Date............................ As soon as practicable after the
close of the Exchange Offer, the
Issuer will accept for exchange all
Existing Notes properly tendered and
not validly withdrawn prior to 5:00
p.m., New York City time, on the
Expiration Date. See "The Exchange
Offer--Exchange Date."
Conditions to the
Exchange Offer........................... The Exchange Offer is subject to
customary conditions, certain of
which may be waived by the Issuer.
The Issuer reserves the right to
terminate or amend the Exchange Offer
at any time prior to the Expiration
Date upon the occurrence of any such
condition. The Exchange Offer is not
conditioned on any minimum aggregate
principal amount of Existing Notes
being tendered for exchange. See "The
Exchange Offer--Conditions."
Consequences of Failure
to Exchange.............................. Any Existing Notes not tendered
pursuant to the Exchange Offer will
remain outstanding and continue to
accrue interest. Such Existing Notes
will remain "restricted securities"
under the Securities Act, subject to
the transfer restrictions described
herein. As a result, the liquidity of
the market for such Existing Notes
could be adversely affected upon com-
pletion of the Exchange Offer. See
"Risk Factors-- Consequences of
Failure to Exchange" and "The
Exchange Offer--Consequences of
Failure to Exchange."
Certain Federal Income
Tax Considerations....................... The exchange pursuant to the Exchange
Offer should not be a taxable event
for federal income tax purposes. See
"Certain Federal Income Tax
Considerations."
11
<PAGE>
Use of Proceeds.......................... There will be no cash proceeds to the
Company from the Exchange Offer. See
"Use of Proceeds."
PROCEDURES FOR TENDERING EXISTING NOTES
Tendering
Existing Notes........................... Each Beneficial Owner of Existing
Notes held through a DTC Participant
must instruct such DTC Participant to
cause its Existing Notes to be
tendered in accordance with the
proce- dures set forth under
"Procedures for Tendering Existing
Notes--Tendering Existing
Notes--Notes held through a
Custodian."
Each DTC Participant holding Existing
Notes through DTC must (i)
electronically transmit its
acceptance through ATOP, and DTC will
then edit and verify the acceptance,
execute a book-entry delivery to the
Exchange Agent's account at DTC and
send an Agent's Message to the
Exchange Agent for its acceptance, or
(ii) comply with the guaranteed
delivery procedures set forth in this
Prospectus and in the Notice of
Guaranteed Delivery. See "Procedures
for Tendering Existing
Notes--Tendering Existing
Notes--Notes held through DTC" and
"--Guaranteed Delivery
Procedures--Notes held through DTC."
Each Holder must (i) complete and
sign a Letter of Trans- mittal, and
mail or deliver such Letter of
Transmittal, and all other documents
required by the Letter of
Transmittal, together with
certificate(s) representing all
tendered Existing Notes, to the
Exchange Agent at its address set
forth under "Procedures for Tendering
Existing Notes--Exchange Agent," or
(ii) comply with the guaranteed
delivery procedures set forth in this
Prospectus. See "Procedures for
Tendering Existing Notes--Tendering
Existing Notes--Notes held by
Holders" and "--Guaranteed Delivery
Procedures--Notes held by Holders."
By tendering, each Holder and each
DTC Participant will represent to the
Issuer that, among other things, (i)
it is not an Affiliate of the Issuer,
(ii) it is not a broker-dealer
tendering Existing Notes acquired
directly from the Issuer for its own
account, (iii) the New Notes acquired
pursuant to the Exchange Offer are
being obtained in the ordinary course
of business of such Holder and (iv)
it has no arrangements or
understandings with any person to
participate in the Exchange Offer for
the purpose of distributing the New
Notes. See "Procedures for Tendering
Existing Notes--Tendering Existing
Notes."
12
<PAGE>
Guaranteed Delivery
Procedures............................... DTC Participants holding Existing
Notes through DTC who wish to cause
their Existing Notes to be tendered,
but who cannot transmit their
acceptances through ATOP prior to the
Expiration Date, may effect a tender
in accordance with the procedures set
forth in this Prospectus. See
"Procedures for Tendering Existing
Notes--Guaranteed Delivery
Procedures-- Notes held through DTC."
Holders who wish to tender their
Existing Notes but (i) whose Existing
Notes are not immediately available
and will not be available for
tendering prior to the Expiration
Date, or (ii) who cannot deliver
their Existing Notes, the Letter of
Transmittal, or any other required
documents to the Exchange Agent prior
to the Expiration Date, may effect a
tender in accordance with the
procedures set forth in this
Prospectus. See "Procedures for
Tendering Existing Notes--Guaranteed
Delivery Procedures--Notes held by
Holders."
Withdrawal Rights........................ The tender of Existing Notes pursuant
to the Exchange Offer may be
withdrawn at any time prior to 5:00
p.m., New York City time, on the
Expiration Date, in accordance with
the procedures set forth in this
Prospectus. See "The Exchange
Offer--Withdrawal Rights."
Exchange Agent........................... PNC Bank, National Association is
serving as Exchange Agent in
connection with the Exchange Offer.
See "Procedures for Tendering
Existing Notes--Exchange Agent."
THE NEW NOTES
Issuer................................... USI American Holdings, Inc.
Securities Offered....................... $125,000,000 aggregate principal
amount of 7 1/4% Senior Notes Due
December 1, 2006, Series B.
Maturity Date............................ December 1, 2006.
Interest................................. The New Notes will accrue interest
from the Exchange Date at the rate of
7 1/4% per annum, and will be payable
in cash semiannually in arrears on
June 1 and December 1 of each year,
commencing June 1, 1997 (the
"Interest Payment
13
<PAGE>
Dates") to the holders of record on
the next preceding May 15 or November
15, respectively.
Guaranties............................... The New Notes will be fully and
unconditionally guaranteed by U.S.
Industries, Inc. See "Risk
Factors--Holding Company Structure"
and "Description of the New
Notes--Guaranties."
Ranking.................................. The New Notes and the Guaranties will
be unsecured senior obligations of,
and will rank pari passu with all
other existing and future unsecured
and unsubordinated indebtedness and
senior in right of payment to all
subordinated indebtedness of, the
Issuer and the Company, respectively.
The New Notes and the Guaranties will
be effectively subordinated to (i)
all existing and future secured
indebtedness of the Issuer and the
Company, to the extent of the value
of the assets securing such
indebtedness, (ii) all existing and
future indebtedness of any
subsidiaries of the Issuer and of the
Company (other than the Issuer) and
(iii) all existing and future
guaranties by subsidiaries of the
Issuer and of the Company (other than
the Issuer) of the Issuer's and the
Company's indebtedness. At December
31, 1996, on a pro forma basis after
giving effect to two dispositions and
two acquisitions completed in the
second quarter of fiscal 1997, the
Company had consolidated indebtedness
of approximately $680 million ($443
million of which consisted of
indebtedness of the Issuer under the
New Credit Facility), none of which
represented secured indebtedness or
subordinated indebtedness, and a
ratio of total debt to total
capitalization of 52.9%. At December
31, 1996, subsidiaries of the Issuer
other than USI Funding, Inc.
("Funding"), a special-purpose
funding subsidiary of the Issuer that
has no operating assets or
subsidiaries, had approximately $42
million of indebtedness outstanding
(other than intercompany
indebtedness), all of which had been
guaranteed by the Issuer. See "Risk
Factors--Leverage," "Risk
Factors--Holding Company Structure"
and "Description of the New
Notes--Ranking" herein and
"Management's Discussion and Analysis
of Financial Condition and Results of
Operations--Liquidity and Capital
Resources" in the Company's 1996
Annual Report, which is incorporated
herein by reference."
Redemption............................... The New Notes will be subject to
redemption, in whole or in part, at
the option of the Issuer at any time,
at a redemption price equal to the
greater of (i) 100% principal amount
of the New Notes to be redeemed, or
(ii) the sum of the present values of
the remaining scheduled payments of
principal and interest on the New
Notes to be redeemed, discounted to
the
14
<PAGE>
date of redemption on a semiannual
basis at the Treasury Rate (as
defined herein), plus 10 basis
points, plus, in each case, accrued
but unpaid interest to the date of
redemption. In addition, the New
Notes will be subject to redemption
at the option of the Issuer in
certain circumstances involving
taxation. See "Description of the New
Notes--Redemption."
Restrictive Covenants.................... The Indenture contains certain
covenants that limit, among other
things, the ability of (i) the Issuer
and Restricted Subsidiaries (as
defined) to grant liens or enter into
sale and lease-back transactions,
(ii) Restricted Subsidiaries to incur
indebtedness, (iii) the Issuer and
Restricted Subsidiaries to pay
dividends, redeem capital stock or
prepay certain subordinated
indebtedness and (iv) the Issuer and
the Company to merge, consolidate or
transfer substantially all of their
respective assets. The limitations
described above are subject to
certain qualifications and
exceptions. See "Description of the
New Notes--Restrictive Covenants" and
"--Consolidation, Merger or Certain
Sales of Assets of the Issuer or the
Company.
RECENT DEVELOPMENTS
The New Credit
Facility................................. The Company entered into the New
Credit Facility effective upon
consummation of the Initial Offering
and the application of the net
proceeds therefrom to prepay a
portion of the term loan under the
Previous Credit Facility. The
Company's initial borrowings under
the New Credit Facility were used to
refinance the remainder of the
indebtedness outstanding under the
Previous Credit Facility. The New
Credit Facility lowered the Company's
borrowing spreads, eliminated
security interests and guaranties by
subsidiaries of the Issuer and
modified certain restrictive
covenants. The revolving credit
commitment under the New Credit
Facility is subject to permanent
reductions on the third and fourth
anniversaries of the initial
borrowings thereunder. See "Recent
Developments--The New Credit
Facility."
Dispositions............................. In January 1997, the Company
completed the sale of certain assets
of QPF, Inc. ("QPF"), a manufacturer
of polypropy- lene films, for $43.2
million and the sale of the capital
stock of SCM Metal Products Inc.
("SCM Metals"), a manufacturer of
specialty metal products, for $122
million. See "Recent
Developments--Dispositions."
15
<PAGE>
Acquisitions............................. In the second quarter of fiscal 1997,
the Company purchased certain assets
of Woodings-Verona and Sunbeam
Furniture. The Company expects the
total cost of these acquisitions to
approximate $85 million including
transaction costs, the funding of
initial operations and the assumption
of certain liabilities. See "Recent
Developments--Acquisitions."
RISK FACTORS
Potential investors in the New Notes should carefully consider the
information set forth in this Prospectus and, in particular, should evaluate the
specific factors set forth under the caption "Risk Factors" prior to tendering
Existing Notes in exchange for New Notes, including (i) the consequences of a
failure to participate in the Exchange Offer, (ii) the degree of leverage of the
Issuer and the Company, (iii) the status of the Issuer and the Company as
holding companies and (iv) the lack of a public market for the New Notes. See
"Risk Factors" beginning on page 18.
16
<PAGE>
SUMMARY CONSOLIDATED (COMBINED) FINANCIAL DATA
The following table summarizes certain historical financial data with respect to
the Company and is qualified in its entirety by reference to, and should be read
in conjunction with, the Company's Consolidated (Combined) Financial Statements
and notes thereto. See "Index to Financial Statements" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in the
Company's 1996 Annual Report and the Quarterly Report, which are incorporated
herein by reference, and "Ratio of Earnings to Fixed Charges."
<TABLE>
<CAPTION>
Three Months Ended
December 31, Year ended September 30,(1)
1996 1995 1996 1995(2) 1994
(in millions, except ratios and percentages)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales.................................... $527 $464 $2,089 $1,952 $1,899
Operating income............................. 48 39 211 62 181
Interest expense............................. 12 20 60 101 95
Interest income.............................. 1 2 8 8 11
Net income (loss)............................ 21 56 133 (89) 78
BALANCE SHEET DATA (AT PERIOD END):
Total assets................................. $1,768 $1,708 $1,787 $1,842 $2,199
Cash and cash equivalents.................... 42 42 45 51 28
Total debt................................... 760 814 734 993 1,009
Stockholders' equity/invested capital........ 526 457 527 412 803
OTHER DATA:
Depreciation and amortization................ 13 14 58 54 50
Capital expenditures......................... 21 12 47 61 47
Total debt to total capitalization (3)....... 59.1% 64.0% 58.2% 70.7% --
- --------------------------
<FN>
(1) All amounts for the fiscal years ended September 30 presented above have
been restated from the amounts presented in the Company's 1996 Annual
Report to reflect the subsequent classification of SCM Metals and QPF as
discontinued operations. Such restatement was made in order to present such
amounts on a consistent basis with the first quarter results presented
above and in the Quarterly Report.
(2) In fiscal 1995, the Company adopted the fair value method of evaluating the
recoverability of goodwill and measuring for permanent impairment. This
change resulted in non-recurring charges of $98 million to the Building
Products Group's Lighting Products and Systems Operations and $13 million
to the Consumer Group's Recreation and Leisure Products Operations. In
addition, fiscal 1995 operating income includes non-recurring charges of $2
million associated with the closing of underutilized facilities of the
Lighting Products and Systems Operations.
(3) The debt to total capitalization has not been included for September 30,
1994, as such information is not indicative of the Company's continuing
capital structure following the Demerger.
17
<PAGE>
(4) Summarized consolidated information of the Issuer for the fiscal years and
as of the dates indicated is as follows:
</FN>
</TABLE>
<TABLE>
<CAPTION>
(IN MILLIONS)
THREE MONTHS ENDED FISCAL YEAR ENDED
DECEMBER 31, SEPTEMBER 30,
------------ -------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales......................................... $ 527 $ 464 $2,089 $1,952
Gross profit...................................... 172 155 688 631
Income (loss) from continuing operations.......... 21 12 89 (76)
Net income (loss)................................. 22 56 135 (88)
BALANCE SHEET DATA (AT PERIOD END):
Current Assets.................................... $ 907 $ 892 $ 945 $1,018
Noncurrent assets................................. 861 817 842 824
Current liabilities............................... 494 294 393 489
Noncurrent liabilities............................ 748 957 867 941
</TABLE>
Income statement data has not been provided for fiscal 1994 as the Issuer
did not exist prior to the Demerger.
All amounts for the fiscal years ended September 30 in the above table have
been restated from the amounts presented in the 1996 Annual Report to
reflect the subsequent classification of SCM Metals and QPF as discontinued
operations. Such restatement was made in order to present such amounts on a
consistent basis with the first quarter results presented above and in the
Quarterly Report.
18
<PAGE>
RISK FACTORS
THE FOLLOWING RISK FACTORS SHOULD BE CONSIDERED CAREFULLY IN ADDITION TO
THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS, INCLUDING WITHOUT LIMITATION
THE DOCUMENTS AND INFORMATION INCORPORATED HEREIN BY REFERENCE, BEFORE TENDERING
EXISTING NOTES PURSUANT TO THE EXCHANGE OFFER. IN CONNECTION WITH THE
FORWARD-LOOKING STATEMENTS WHICH APPEAR IN THIS PROSPECTUS, INCLUDING WITHOUT
LIMITATION THE DOCUMENTS AND INFORMATION INCORPORATED HEREIN BY REFERENCE,
PROSPECTIVE INVESTORS IN THE NEW NOTES SHOULD CAREFULLY REVIEW THE FACTORS
DISCUSSED BELOW AND THE CAUTIONARY STATEMENTS REFERRED TO IN "DISCLOSURE
REGARDING FORWARD-LOOKING STATEMENTS." SUCH FACTORS AND SUCH CAUTIONARY
STATEMENTS ARE GENERALLY APPLICABLE TO THE EXISTING NOTES AS WELL AS THE NEW
NOTES.
CONSEQUENCES OF FAILURE TO EXCHANGE
Any Existing Notes not tendered pursuant to the Exchange Offer will remain
outstanding and continue to accrue interest. Such Existing Notes will remain
"restricted securities" (within the meaning of the Securities Act). Accordingly,
prior to the date that is three years after the later of the Initial Issue Date
thereof and the last date on which the Issuer or any Affiliate of the Issuer was
the owner of such Existing Notes (the "Resale Restriction Termination Date"),
such Existing Notes may be resold only (i) to the Issuer, (ii) to a person whom
the seller reasonably believes is a "qualified institutional buyer" purchasing
for its own account or for the account of another "qualified institutional
buyer" in compliance with the resale limitations of Rule 144A, (iii) to an
Institutional Accredited Investor that, prior to such transfer, furnishes to the
Trustee a written certification containing certain representations and
agreements relating to the restrictions on transfer of the Notes (the form of
which letter can be obtained from the Trustee), (iv) pursuant to the limitations
on resale provided by Rule 144 under the Securities Act (if available), (v)
pursuant to the resale provisions of Rule 904 of Regulation S under the
Securities Act, (vi) pursuant to an effective registration statement under the
Securities Act, or (vii) pursuant to any other available exemption from the
registration requirements of the Securities Act, subject in each of the
foregoing cases to compliance with applicable state securities laws. As a
result, the liquidity of the market for such non-tendered Existing Notes could
be adversely affected upon completion of the Exchange Offer. The foregoing
restrictions on resale will not apply subsequent to the Resale Restriction
Termination Date.
LEVERAGE
At December 31, 1996, on a pro forma basis after giving effect to two
dispositions and two acquisitions completed in the second fiscal quarter of
1997, the Company had consolidated indebtedness of approximately $680 million
($443 million of which consisted of indebtedness of
19
<PAGE>
the Issuer under the New Credit Facility) and the Company's ratio of total debt
to total capitalization at such date was 52.9%. See "Capitalization" and
"Selected Financial Data."
The degree to which the Issuer is leveraged could have important
consequences to the holders of the Notes, including the following: (i) the
Issuer's ability to obtain additional financing in the future for working
capital, capital expenditures, product development, acquisitions or other
purposes may be limited or impaired; (ii) the Company's operating flexibility
with respect to certain matters is limited by covenants contained in the
Indenture and the New Credit Facility which limit the ability of the Issuer and
certain of its subsidiaries to incur additional indebtedness, grant liens, pay
dividends, redeem capital stock or prepay certain subordinated indebtedness and
enter into sale and lease-back transactions and (iii) the Issuer's degree of
leverage may make it more vulnerable to economic downturns, may limit its
ability to pursue other business opportunities and may reduce its flexibility in
responding to changing business and economic conditions.
The Issuer expects to generate sufficient cash flow from operations to meet
its debt service obligations for the foreseeable future. However, the Issuer's
ability to generate cash for the repayment of debt will be dependent upon the
future performance of the Issuer's businesses, which will in turn be subject to
financial, business and other factors affecting the business and operations of
the Issuer, including factors beyond its control, such as prevailing economic
conditions. The Company's interest expense was $60 million in fiscal 1996 and
$12 million in the first quarter of fiscal 1997. Interest expense may vary in
future fiscal periods, depending on future borrowings of the Company. If the
Company borrowed the maximum amount currently available under the New Credit
Facility, interest expense would be approximately $65 million on an annual basis
(assuming currently applicable interest rates and no other changes in currently
outstanding indebtedness). The Company's annual debt amortization requirements
on a consolidated basis, as of December 31, 1996, are as follows: $3 million in
fiscal 1997 (in addition, $165 million was voluntarily prepaid in the second
quarter of fiscal 1997 utilizing the proceeds from the sales of QPF and SCM
Metals), $4 million in fiscal 2000, $465 million in fiscal 2002 (when the New
Credit Facility is scheduled to terminate) and $125 million in fiscal 2007 (when
the Notes mature).
The Company may seek growth through selective acquisitions, including
significant acquisitions. The Company could incur substantial indebtedness in
connection with a significant acquisition, in which event the Company's leverage
would be increased. The provisions of the Indenture would not necessarily afford
holders of the Notes protection in the event of a highly leveraged transaction
involving the Company or the Issuer adversely affecting the holders of the
Notes. In particular, the Indenture does not restrict (i) the incurrence of
secured or unsecured indebtedness by the Company or by any subsidiary of the
Company that is not a subsidiary of the Issuer; (ii) the incurrence of unsecured
indebtedness by the Issuer; (iii) the incurrence of secured or unsecured
indebtedness by Unrestricted Subsidiaries (as defined) of the Issuer; (iv) a
20
<PAGE>
consolidation, merger, sale of assets, or other similar transaction that may
adversely affect the creditworthiness of the Company or the Issuer or the
successor or combined entity of either thereof; (v) a change in control of the
Company or the Issuer; or (vi) a highly leveraged transaction involving the
Company or the Issuer.
HOLDING COMPANY STRUCTURE
The Issuer is a holding company with no business operations other than (i)
holding the capital stock of its intermediate holding companies and subsidiaries
and (ii) advancing funds to, and receiving funds from, its subsidiaries. In
repaying its indebtedness, including the Notes, the Issuer must rely on
dividends and other payments made to it by its subsidiaries.
The holders of the Notes have no direct claims against the Issuer's
subsidiaries. The ability of the Issuer's subsidiaries to make payments to the
Issuer will be affected by the obligations of such subsidiaries to their
creditors. Claims of holders of indebtedness of the Issuer, including the Notes,
against the cash flow and assets of the Issuer's subsidiaries will be
effectively subordinated to claims of such creditors. In addition, the rights of
holders of the Notes to participate in the assets of any subsidiary of the
Issuer or the Company (other than the Issuer) upon such subsidiary's liquidation
or recapitalization will be subject to the prior claims of such subsidiary's
creditors. At December 31, 1996, subsidiaries of the Issuer (other than Funding)
had approximately $42 million of indebtedness outstanding (other than
intercompany indebtedness), all of which had been guaranteed by the Issuer. The
ability of the Issuer's subsidiaries to make payments to the Issuer will also be
subject to, among other things, applicable state corporate laws and other laws
and regulations. State corporate law applicable to the Issuer's subsidiaries
generally prohibits the payment of dividends by any given subsidiary unless such
subsidiary has capital surplus or net profits in the current or immediately
preceding year. In order to pay the principal amount at maturity of the Notes,
the Issuer may be required to adopt one or more alternatives, such as a
refinancing of the Notes.
The Notes are fully and unconditionally guaranteed on an unsecured basis by
the Company. The Company is a holding company whose principal asset is 100% of
the outstanding capital stock of the Issuer. If ever required to honor its
guaranty of the Notes, the Company has no current or expected future ability to
do so.
LACK OF PUBLIC MARKET FOR THE NOTES
The New Notes are being offered to the Holders of the Existing Notes. The
Existing Notes were issued on December 12, 1996 to a limited number of
institutional investors and are eligible for trading in the Private Offerings,
Resale and Trading through Automated Linkages (PORTAL) Market, the National
Association of Securities Dealers' screenbased, automated market for trading of
securities eligible for resale under Rule 144A, under the Securities Act. To the
extent
21
<PAGE>
that Existing Notes are tendered and accepted in the Exchange Offer, the trading
market for the remaining untendered Existing Notes could be adversely affected.
There is no existing trading market for the New Notes, and there can be no
assurance regarding the future development of a market for the New Notes, or the
ability of holders of the New Notes to sell their New Notes, or the price at
which such holders may be able to sell their New Notes. If such a market were to
develop, the New Notes could trade at prices that may be higher or lower than
their principal amount or purchase price, depending on many factors, including
prevailing interest rates, the market for similar notes and the financial
performance of the Company and its subsidiaries. BA Securities has advised the
Company that it currently intends to make a market in the New Notes. BA
Securities is not obligated to do so, however, and any market-making with
respect to the New Notes may be discontinued at any time without notice.
Therefore, there can be no assurance as to the liquidity of any trading market
for the New Notes or that an active public market for the New Notes will
develop. The Company does not intend to apply for listing or quotation of the
New Notes on any securities exchange or stock market.
RECENT DEVELOPMENTS
THE NEW CREDIT FACILITY
Upon consummation of the Initial Offering on December 12, 1996 and the
application of the net proceeds therefrom to prepay a portion of the term loan
under the Previous Credit Facility, the Company, the Issuer and Funding entered
into the New Credit Facility agreement (the "New Credit Agreement") with Bank of
America National Trust and Savings Association, which syndicated a substantial
portion of such facility to a group of financial institutions for whom it acts
as agent (the "Agent"). The Issuer and Funding may serve as borrowers under the
New Credit Facility. The Issuer's borrowings are guaranteed by the Company and
Funding's borrowings are guaranteed by the Issuer.
The summary herein of certain provisions of the New Credit Agreement does
not purport to be complete and is subject to, and is qualified in its entirety
by reference to, all the provisions of the New Credit Agreement, a copy of which
has been filed as an exhibit to the Registration Statement of which this
Prospectus is a part.
The New Credit Facility consists of an unsecured revolving line of credit
of up to an aggregate principal amount of $750 million that includes: (i)
short-term committed advances ("Committed Advances"), (ii) uncommitted bid
option advances, (iii) a sub-limit for letters of credit and (iv) a sub-limit
for swingline loans. The Issuer's initial borrowings under the New Credit
Facility were used to refinance the remainder of the indebtedness outstanding
under the Previous Credit Facility. Future borrowings will be used to fund
working capital and general corporate requirements, including but not limited to
acquisitions. The revolving credit
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<PAGE>
commitment will be permanently reduced by $100 million on the third anniversary
and by an additional $150 million on the fourth anniversary of the initial
borrowings under the New Credit Facility.
The Committed Advances, at the Issuer's option, may be either Base Rate
Loans or Eurodollar Loans. Base Rate Loans bear interest at the higher of (i)
the rate of interest publicly announced from time to time by the Agent as its
Reference Rate (as defined), or (ii) 0.50% per annum above the Federal Funds
Rate then in effect. Eurodollar Loans bear interest at LIBOR for 1-, 2-, 3-, or
6-month dollar deposits as offered by the Agent to prime international banks in
the offshore dollar market, adjusted for reserve requirements. The spread over
LIBOR is determined based upon the Issuer's senior unsecured debt ratings for
the relevant period. The initial spread over LIBOR is 0.25%. In addition, the
Issuer, at certain times, is permitted to request the Agent to solicit
competitive bids from the lenders under the New Credit Facility through an
auction for short-term advances.
A facility fee accrues on the full amount of the New Credit Facility,
regardless of the amount of utilization, and is determined based upon the
Issuer's senior unsecured debt ratings for the relevant period. The initial
facility fee is 0.125% per annum.
The New Credit Facility contains certain financial covenants pursuant to
which the Issuer agrees to maintain (i) a maximum ratio of Total Funded Debt (as
defined) to capitalization of 65% initially, with a reduction to 60% after
December 31, 1997 and (ii) a maximum ratio of Total Funded Debt to Adjusted
EBITDA (as defined) of 3.5x. At December 31, 1996, on a pro forma basis after
giving effect to two dispositions and two acquisitions completed in the second
quarter of fiscal 1997, the Issuer had a ratio of Total Funded Debt to
capitalization of 52.9% and a ratio of Total Funded Debt to Adjusted EBITDA of
1.8x. The New Credit Facility, subject to certain exceptions, (i) limits
additional unsecured indebtedness of the Issuer (excluding the Notes) to $200
million; (ii) limits subsidiary indebtedness and secured indebtedness in the
aggregate to 10% of Consolidated Net Tangible Assets (as defined); (iii)
restricts consolidations and mergers; and (iv) limits sale-leaseback
transactions.
DISPOSITIONS
On January 2, 1997, the Company sold certain assets of QPF, a manufacturer
of polypropylene films, to the Hood Companies for $43.2 million. On January 21,
1997, the Company sold the capital stock of SCM Metals, a manufacturer of
specialty metal products, to OM Group, Inc. for $122 million. The gross proceeds
of these dispositions were used to prepay outstanding indebtedness under the New
Credit Facility. In fiscal 1996, 1995 and 1994 on a combined basis, QPF and SCM
Metals had sales of $144 million, $142 million and $117 million, respectively,
and operating income of $17 million, $18 million and $12 million, respectively;
at September 30, 1996, on a combined basis, they had total assets of $97
million.
23
<PAGE>
ACQUISITIONS
In the second quarter of fiscal 1997, the Company purchased certain assets of
Woodings- Verona and Sunbeam Furniture. The Company expects the total cost of
these acquisitions, including transaction costs, the funding of initial
operations and the assumption of certain liabilities, to approximate $85
million.
USE OF PROCEEDS
The Exchange Offer is intended to satisfy certain of the Issuer's and the
Company's obligations under the Registration Rights Agreement. The Issuer will
not receive any cash proceeds from the issuance of the New Notes offered hereby.
In consideration for issuing the New Notes contemplated by this Prospectus, the
Issuer will receive in exchange Existing Notes in like principal amount, the
terms of which are identical in all material respects to the terms of the New
Notes, except as otherwise described herein. The Existing Notes surrendered in
exchange for New Notes will be retired and cancelled and cannot be reissued.
Accordingly, issuance of the New Notes will not result in any increase or
decrease in the indebtedness of the Issuer or the Company.
The net proceeds of the Initial Offering, after deducting the underwriting
discounts and expenses, were approximately $122.4 million. The Company used such
proceeds, as well as its initial borrowings under the New Credit Facility, to
prepay the indebtedness outstanding under the Previous Credit Facility. The New
Credit Facility lowered the Company's borrowing spreads, eliminated security
interests and guaranties by subsidiaries of the Issuer and modified certain
restrictive covenants. See "Recent Developments--The New Credit Facility" herein
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations-- Liquidity and Capital Resources" in the Company's 1996 Annual
Report and the Quarterly Report, which are incorporated herein by reference.
24
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Three Months
Ended
December 31, Year Ended September 30,
---------------------- --------------------------------------------
1996 1995 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
(unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
The Company............... 3.6x 2.0x 3.3x - 1.7x 1.5x 1.5x
</TABLE>
For purposes of computing the ratio of earnings to fixed charges,
"fixed charges" are defined as interest expense and a portion of rental expense
representing the interest factor, and "earnings" are defined as income from
continuing operations before income taxes and fixed charges. Earnings for fiscal
1995 were insufficient to cover fixed charges by $37 million. This deficiency
resulted from goodwill impairment and other non-recurring charges of $113
million. Before taking into account such items, the ratio of earnings to fixed
charges for fiscal 1995 would have been 1.7x.
25
<PAGE>
CAPITALIZATION
The following table, which is unaudited, sets forth the capitalization
of the Company as of December 31, 1996, and on a pro forma basis gives effect to
(i) gross cash proceeds of $165 million from the sale of the capital stock of
SCM Metals and the sale of certain assets of QPF in January 1997, in each case
as applied to prepay indebtedness under the Previous Credit Facility, (ii)
borrowings of approximately $85 million under the New Credit Facility to finance
the acquisitions in the second quarter of fiscal 1997 of certain assets of
Woodings-Verona and of Sunbeam Furniture and (iii) the prepayment of borrowings
of a foreign subsidiary of $23 million with borrowings under the New Credit
Facility. The debt repayment does not give effect to state and federal taxes
expected to be paid related to taxable gains on the dispositions noted above and
other transaction expenses, aggregating approximately $30 million. Such taxes
and other expenses are expected to be paid out of future cash flows from
operations or the proceeds of future borrowings. See "Recent Developments"
herein and "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Liquidity and Capital Resources" and the Company's
Consolidated (Combined) Financial Statements and notes thereto in the Company's
1996 Annual Report and the Quarterly Report, which are incorporated herein by
reference.
<TABLE>
<CAPTION>
At December 31, 1996
Pro Forma
Actual Adjustments Pro Forma
------ ----------- ---------
(In millions)
<S> <C> <C> <C>
Cash and cash equivalents.............................. $ 42 $ -- $ 42
=========== ======= ===========
Short-term debt (A).................................... $ 168 (165)(B) 3
Long-term debt:
New Credit Facility................................. 335 108(C)(F) 443
Notes............................................... 123 -- 123
Other (D)........................................... 134 (23)(F) 111
----------- ------- -----------
Total debt....................................... 760 (80) 680
----------- ------- -----------
Stockholders' equity................................... 526 79(E) 605
----------- ------- -----------
Total capitalization............................. $ 1,286 (1) $ 1,285
=========== ======= ===========
- ----------------------
<FN>
(A) Includes current maturities of long-term debt and notes payable.
(B) Represents prepayments under the New Credit Facility.
(C) Represents the borrowings required to purchase certain assets (including
transaction costs, the funding of initial operations and the assumption of
certain liabilities) of Woodings-Verona and Sunbeam Furniture totalling
pproximately $85 million.
(D) Primarily includes borrowings under uncommitted short-term lines of credit
and borrowings of foreign subsidiaries.
(E) Represents the estimated gain of $79 million related to dispositions noted
above.
(F) Represents the prepayment of borrowings of a foreign subsidiary of $23
million with borrowings under the New Credit Facility.
</FN>
</TABLE>
26
<PAGE>
SELECTED FINANCIAL DATA
The selected historical consolidated (combined) financial data presented below
are derived from, and should be read in conjunction with, the Company's
Consolidated (Combined) Financial Statements and notes thereto in the Company's
1996 Annual Report and the Quarterly Report, which are incorporated herein by
reference.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31, YEAR ENDED SEPTEMBER 30,
------------------------ -----------------------------------------------------
1996 1995 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales................................ $ 527 $ 464 $2,089 $1,952 $1,899 $1,746 $1,660
Operating income......................... 48 39 211 62 181 145 133
Interest expense......................... 12 20 60 101 94 95 89
Interest income.......................... 1 2 8 8 11 15 14
Income (loss) from continuing operations. 20 12 86 (77) 37 19 22
Net income (loss)........................ 21 56 133 (89) 78 61 52
Per share: (2)
Income from continuing operations..... 0.39 0.23 1.68
Net income............................ 0.42 1.05 2.54
BALANCE SHEET DATA (AT PERIOD END):
Cash and cash equivalents................$ 42 $ 42 $ 45 $ 51 $ 28 $ 27 $ 45
Working capital.......................... 413 598 551 529 988 1,137 995
Net assets held for disposition.......... 69 181 86 258 505 691 513
Total assets............................. 1,768 1,708 1,787 1,842 2,199 2,270 2,120
Long-term debt(3)........................ 592 810 717 832 985 985 999
Total debt(3)............................ 760 814 734 993 1,009 1,012 1,030
Stockholders' equity/Invested capital.... 526 457 527 412 803 902 768
<FN>
- ------------------------------
(1) During fiscal 1995, subsequent to the Demerger, the Company's management
conducted a comprehensive review of its accounting policies in light of its
current financial position and separate public company status. As a result,
as discussed below, the Company changed the accounting policy relating to
evaluating goodwill impairment during the third quarter of fiscal 1995. The
change affects comparability between fiscal 1995 and previous fiscal years.
The Company adopted the fair value method of evaluating the recoverability
of goodwill and measuring for permanent impairment. This change resulted in
non-recurring charges of $98 million to the Building Products Group's
Lighting Products and Systems Operations and $13 million to the Consumer
Group's Recreation and Leisure Products Operations in fiscal 1995. These
permanent impairments to goodwill were associated with the original
acquisitions of the Company's commercial lighting products and golf club
businesses and result in reduced goodwill amortization expense
prospectively. Prior periods have not been restated to reflect this change
in accounting methodology. See Note 11 to the Consolidated (Combined)
Financial Statements in the Company's 1996 Annual Report, which is
incorporated herein by
27
<PAGE>
reference. Additionally, fiscal 1995 operating income includes
non-recurring charges of $2 million associated with the closing of
underutilized facilities of the Lighting Products and Systems Operations.
See Note 12 to the Consolidated (Combined) Financial Statements in the
Company's 1996 Annual Report, which is incorporated herein by reference.
(2) Prior to fiscal 1996, earnings per share information is not presented in
accordance with Accounting Principles Board Opinion No. 15, "Earnings Per
Share," as such information is not indicative of the Company's continuing
capital structure.
(3) Amounts in fiscal 1994, 1993 and 1992 primarily represent notes payable to
Hanson.
(4) All amounts for the fiscal years ended September 30 presented above have
been restated from the amounts presented in the Company's 1996 Annual
Report to reflect the subsequent classification of SCM Metals and QPF as
discontinued operations. Such restatement was made in order to present such
amounts on a consistent basis with the first quarter results presented
above and in the Company's Quarterly Report.
</FN>
</TABLE>
28
<PAGE>
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
Exchange Offer Registration Statement. Pursuant to the Initial
Offering, the Issuer sold the Existing Notes to BA Securities on December 12,
1996 (the "Initial Issue Date"). BA Securities has advised the Issuer that it
subsequently resold the Existing Notes to "qualified institutional buyers" in
reliance on Rule 144A under the Securities Act. As a condition to the Initial
Offering, the Issuer and the Company entered into the Registration Rights
Agreement, pursuant to which the Issuer and the Company agreed, for the benefit
of all Holders of the Existing Notes, at the Issuer's expense, (i) to file the
Registration Statement with the Commission within 45 days after the Initial
Issue Date with respect to the Exchange Offer of the Existing Notes for the New
Notes, (ii) to use their best efforts to cause the Registration Statement to be
declared effective under the Securities Act within 135 days after the Initial
Issue Date, (iii) to use their best efforts to keep the Registration Statement
effective until the closing of the Exchange Offer and (iv) to use their best
efforts to cause the Exchange Offer to be consummated within 165 days after the
Initial Issue Date. The Issuer and the Company also agreed that promptly upon
the Registration Statement being declared effective, the Issuer would offer to
all Holders of the Existing Notes an opportunity to exchange the Existing Notes
for the New Notes. Further, the Issuer and the Company agreed that the Issuer
would keep the Exchange Offer open for acceptance for not less than 20 Business
Days, as such term is defined in Section 14(d) under the Exchange Act (or longer
if required by applicable law), after the date notice of the Exchange Offer is
mailed to the Holders of Existing Notes. For each Existing Note validly tendered
to the Issuer pursuant to the Exchange Offer and not withdrawn by the Holder
thereof, the Holder of such Existing Note will receive a New Note having a
principal amount equal to that of the tendered Existing Note. Interest on each
New Note will accrue from the last Interest Payment Date on which interest was
paid on the tendered Existing Note in exchange therefor or, if no interest was
paid on such Existing Note, from the Initial Issue Date.
The summary herein of certain provisions of the Registration Rights
Agreement does not purport to be complete and is subject to, and is qualified in
its entirety by reference to, all the provisions of the Registration Rights
Agreement, a copy of which has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part. The Exchange Offer is intended to
satisfy certain of the Issuer's and the Company's obligations under the
Registration Rights Agreement.
Transferability. The Existing Notes were issued and sold on December
12, 1996 in a transaction exempt from the registration requirements of the
Securities Act and applicable state securities laws and may not be offered or
sold in the United States unless so registered or pursuant to an applicable
exemption under the Securities Act and applicable state securities laws. The New
Notes are being offered hereunder in order to satisfy certain obligations of the
Issuer and the Company contained in the Registration Rights Agreement. Based on
no-action letters issued by the Staff of the Commission to third parties with
respect to similar transactions, including Exxon Capital, Morgan Stanley and
similar letters, the Issuer believes that the New Notes issued pursuant to the
Exchange Offer in exchange for Existing Notes may be offered for resale, resold
and otherwise transferred by holders thereof (other than any such holder that is
an
29
<PAGE>
Affiliate of the Issuer) without further compliance with the registration and
prospectus delivery requirements of the Securities Act, provided that such New
Notes are acquired in the ordinary course of such holders' business and such
holders are not engaged in, have no arrangement or understanding with any person
to participate in, and do not intend to engage in, any distribution of the New
Notes. However, the Issuer has not sought a no-action letter with respect to the
Exchange Offer and there can be no assurance that the Staff of the Commission
would make a similar determination with respect to the Exchange Offer. Each
holder of Existing Notes, other than a broker-dealer, must acknowledge that it
is not engaged in, has no arrangement or understanding with any person to
participate in and does not intend to engage in a distribution of New Notes. Any
holder who tenders in the Exchange Offer for the purpose of participating in a
distribution of New Notes (i) cannot rely on such an interpretation by the Staff
of the Commission, (ii) will not be able to validly tender Existing Notes in the
Exchange Offer and (iii) must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any secondary
resale transactions.
In addition, each broker-dealer that receives New Notes for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Notes. The Letter of
Transmittal accompanying this Prospectus states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
acting in the capacity of an "underwriter" within the meaning of Section 2(11)
of the Securities Act. This Prospectus, as it may be amended or supplemented
from time to time, may be used by a broker-dealer in connection with resales of
New Notes received in exchange for Existing Notes where such Existing Notes were
acquired by such broker-dealer as a result of market-making activities or other
trading activities. Pursuant to the Registration Rights Agreement, the Issuer
has agreed that it will make this Prospectus available to any broker-dealer for
use in connection with any such resale.
Shelf Registration Statement. If any changes in law or the applicable
interpretations of the Staff of the Commission do not permit the Issuer to
effect the Exchange Offer, if for any other reason the Exchange Offer is not
consummated within 165 days after the Initial Issue Date, or if BA Securities so
requests with respect to Existing Notes not eligible to be exchanged for New
Notes in the Exchange Offer or upon the request of a Holder that is not
permitted by applicable law to participate in the Exchange Offer or elects to
participate in the Exchange Offer but does not receive fully tradeable New Notes
pursuant to the Exchange Offer, the Issuer and the Company will, at the Issuer's
cost, (a) as promptly as practicable, file with the Commission the Shelf
Registration Statement covering resales of the Notes, (b) use its best efforts
to cause the Shelf Registration Statement to be declared effective under the
Securities Act and (c) use its best efforts to keep the Shelf Registration
Statement effective for a period of three years after the Initial Issue Date
(or, for such shorter period, when all of the Notes covered by the Shelf
Registration Statement have been sold pursuant thereto). The Issuer will, in the
event of the filing of the Shelf Registration Statement, provide to each Holder
of the Notes copies of the prospectus which is a part of the Shelf Registration
Statement, notify each such Holder when the Shelf Registration Statement for the
Existing Notes has become effective and take certain other actions as are
required to permit unrestricted resales of the Existing Notes. A Holder of
Existing Notes who sells such Existing Notes pursuant to the Shelf Registration
Statement generally will be required to be named as a selling security-holder in
the related prospectus and to deliver the
30
<PAGE>
prospectus to purchasers, will be subject to certain of the civil liability
provisions under the Securities Act in connection with such sales and will be
bound by the provisions of the Registration Rights Agreement which are
applicable to such a Holder (including certain indemnification obligations). In
addition, each Holder of the Existing Notes will be required to deliver
information to be used in connection with the Shelf Registration Statement and
to provide comments on the Shelf Registration Statement within the time periods
set forth in the Registration Rights Agreement in order to have their Existing
Notes included in the Shelf Registration Statement and to benefit from the
provisions regarding the increase in interest rate set forth in the following
paragraph.
Interest Rate Increase. If (i) the Registration Statement is not filed
with the Commission on or prior to the 45th day following the Initial Issue
Date, (ii) the Registration Statement is not declared effective on or prior to
the 135th day following the Initial Issue Date, (iii) neither the Exchange Offer
is consummated nor the Shelf Registration Statement is declared effective on or
prior to the 165th day following the Initial Issue Date, or (iv) the Shelf
Registration Statement is required to be filed because of the request of BA
Securities or other specified Holder, 45 days following the request by BA
Securities that the Issuer file the Shelf Registration Statement (or 90 days if
the Shelf Registration Statement is reviewed by the Commission), then the
interest rate borne by the Existing Notes (except in the case of clause (iv), in
which case only the Existing Notes which have not been exchanged in the Exchange
Offer) shall be increased by 0.5% per annum. Upon (w) the filing of the
Registration Statement in the case of clause (i) above, (x) the effectiveness of
the Registration Statement in the case of clause (ii) above, (y) the date of the
consummation of the Exchange Offer or the effectiveness of the Shelf
Registration Statement in the case of clause (iii) above, or (z) the
effectiveness of the Shelf Registration Statement, in the case of clause (iv)
above, the interest rate stated on the Existing Notes from the date of such
filing, effectiveness or the date of such consummation or effectiveness, as the
case may be, will be reduced to the original interest rate set forth on the
cover of this Prospectus; provided, however, that, if after any such reduction
in interest rate, a different event specified in clause (i), (ii), (iii) or (iv)
above occurs, the interest rate shall again be increased pursuant to the
foregoing provisions.
TERMS OF THE EXCHANGE OFFER
Upon satisfaction or waiver of all of the conditions of the Exchange
Offer, the Issuer will accept, promptly after the Expiration Date, all Existing
Notes properly tendered and will issue the New Notes promptly after acceptance
of the Existing Notes. See "--Conditions to the Exchange Offer" and "Procedures
for Tendering Existing Notes." The Issuer will issue $1,000 principal amount of
New Notes in exchange for each $1,000 principal amount of outstanding Existing
Notes accepted in the Exchange Offer. As of the date of this Prospectus,
$125,000,000 aggregate principal amount of the Existing Notes are outstanding.
Holders may tender some or all of their Existing Notes pursuant to the Exchange
Offer. However, Existing Notes may be tendered only in integral multiples of
$1,000.
The form and terms of the New Notes are the same as the form and terms
of the Existing Notes except that the New Notes will not contain certain terms
with respect to transfer restrictions (which related to the status of the
Existing Notes as unregistered securities), registration
31
<PAGE>
rights or interest rate increases relating to the Company's failure to meet
specified milestones with respect to such registration rights, all as described
in the Registration Rights Agreement. See "--Purpose and Effect of the Exchange
Offer." The New Notes will evidence the same debt as the Existing Notes and will
be issued pursuant to, and entitled to the benefits of, the Indenture pursuant
to which the Existing Notes were issued and will be deemed one issue of Notes,
together with the Existing Notes.
This Prospectus, together with the Letter of Transmittal, is being sent
to all Holders and to others believed to have beneficial interests in the
Existing Notes. Holders of Existing Notes do not have any appraisal or
dissenters' rights under the General Corporation Law of the State of Delaware in
connection with the Exchange Offer. The Issuer intends to conduct the Exchange
Offer in accordance with the applicable requirements of the Securities Act, the
Exchange Act and the rules and regulations of the Commission promulgated
thereunder.
For purposes of the Exchange Offer, the Issuer shall be deemed to have
accepted validly tendered Existing Notes when, as and if the Issuer has given
oral or written notice thereof to the Exchange Agent. The Exchange Agent will
act as agent for the tendering Holders for the purpose of receiving the New
Notes from the Issuer. If any tendered Existing Notes are not accepted for
exchange because of an invalid tender, the occurrence of certain other events
set forth herein or otherwise, such unaccepted Existing Notes will be returned,
without expense, to the Tendering Holder thereof as promptly as practicable
after the Expiration Date.
Holders who tender Existing Notes in the Exchange Offer will not be
required to pay brokerage commissions or fees or, except as set forth below
under "--Transfer Taxes," transfer taxes with respect to the exchange of
Existing Notes pursuant to the Exchange Offer. The Issuer will pay all charges
and expenses, other than certain applicable taxes, in connection with the
Exchange Offer. See "--Fees and Expenses" below.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
, 1997, unless the Issuer, in its sole discretion, extends the Exchange Offer,
in which case the term "Expiration Date" shall mean the latest date and time to
which the Exchange Offer is extended. In order to extend the Exchange Offer, the
Issuer will notify the Exchange Agent by oral or written notice and each
registered holder by means of press release or other public announcement of any
extension, in each case, prior to 9:00 a.m., New York City time, on the next
Business Day after the previously scheduled Expiration Date. The Issuer reserves
the right, in its sole discretion, (i) to delay accepting any Existing Notes, to
extend the Exchange Offer or, if any of the conditions set forth below under
"--Conditions" shall not have been satisfied, to terminate the Exchange Offer,
by giving oral or written notice of such delay, extension or termination to the
Exchange Agent, or (ii) to amend the terms of the Exchange Offer in any manner.
The Issuer will notify the Exchange Agent and each registered holder of any
amendment by oral or written notice. The Issuer will give to the Exchange Agent
written confirmation of any oral notice.
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EXCHANGE DATE
As soon as practicable after the close of the Exchange Offer (the
"Exchange Date"), the Issuer will accept for exchange all Existing Notes
properly tendered and not validly withdrawn prior to 5:00 p.m., New York City
time, on the Expiration Date pursuant to the Exchange Offer in accordance with
the terms of the Registration Statement and the Letters of Transmittal.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer, and subject
to its obligations pursuant to the Registration Rights Agreement, the Issuer
shall not be required to accept for exchange, or to issue New Notes in exchange
for, any Existing Notes and may terminate or amend the Exchange Offer, if at any
time before the acceptance of such New Notes for exchange, any of the following
events shall occur:
(i) any injunction, order or decree shall have been issued by any court
or any governmental agency that would prohibit, prevent or otherwise
materially impair the ability of the Issuer to proceed with the
Exchange Offer; or
(ii) the Exchange Offer shall violate any applicable law or any
applicable interpretation of the staff of the Commission.
The foregoing conditions are for the sole benefit of the Issuer and may
be asserted by the Issuer regardless of the circumstances giving rise to any
such condition or may be waived by the Issuer in whole or in part at any time
and from time to time in its sole discretion. The failure by the Issuer at any
time to exercise any of the foregoing rights shall not be deemed a waiver of any
such right and such right shall be deemed an ongoing right which may be asserted
at any time and from time to time.
In addition, the Issuer will not accept for exchange any Existing Notes
tendered, and no New Notes will be issued in exchange for any such Existing
Notes, if at such time any stop order shall be threatened by the Commission or
be in effect with respect to the Registration Statement of which this Prospectus
is a part or the qualification of the Indenture under the Trust Indenture Act of
1939, as amended.
The Exchange Offer is not conditioned on any minimum aggregate
principal amount of Existing Notes being tendered for exchange.
CONSEQUENCES OF FAILURE TO EXCHANGE
Any Existing Notes not tendered pursuant to the Exchange Offer will
remain outstanding and continue to accrue interest. Such Existing Notes will
remain "restricted securities" (within the meaning of the Securities Act).
Accordingly, prior to the date that is three years after the later of the
Initial Issue Date thereof and the last date on which the Issuer or any
Affiliate of the Issuer was the owner of such Existing Notes (the "Resale
Restriction Termination Date"), such Existing Notes may be resold only (i) to
the Issuer, (ii) to a person whom the seller reasonably
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believes is a "qualified institutional buyer" purchasing for its own account or
for the account of another "qualified institutional buyer" in compliance with
the resale limitations of Rule 144A, (iii) to an Institutional Accredited
Investor that, prior to such transfer, furnishes to the Trustee a written
certification containing certain representations and agreements relating to the
restrictions on transfer of the Notes (the form of which letter can be obtained
from the Trustee), (iv) pursuant to the limitations on resale provided by Rule
144 under the Securities Act (if available), (v) pursuant to the resale
provisions of Rule 904 of Regulation S under the Securities Act, (vi) pursuant
to an effective registration statement under the Securities Act, or (vii)
pursuant to any other available exemption from the registration requirements of
the Securities Act, subject in each of the foregoing cases to compliance with
applicable state securities laws. As a result, the liquidity of the market for
such non-tendered Existing Notes could be adversely affected upon completion of
the Exchange Offer. The foregoing restrictions on resale will not apply
subsequent to the Resale Restriction Termination Date.
FEES AND EXPENSES
The Issuer will not make any payments to brokers, dealers or others
soliciting acceptances of the Exchange Offer. The principal solicitation is
being made by mail; however, additional solicitations may be made in person or
by telephone by officers and employees of the Issuer.
The expenses of the Issuer to be incurred in connection with the
Exchange Offer will be paid by the Issuer and are estimated in the aggregate to
be approximately $100,000 which includes the fees and expenses of the Trustee
and the Exchange Agent, accounting and legal fees and other miscellaneous fees
and expenses.
ACCOUNTING TREATMENT
The Issuer will not recognize any gain or loss for accounting purposes
upon the consummation of the Exchange Offer. The expenses of the Exchange Offer
will be amortized by the Issuer over the term of the New Notes.
PROCEDURES FOR TENDERING EXISTING NOTES
TENDERING EXISTING NOTES
The tender of Existing Notes pursuant to any of the procedures set
forth in this Prospectus and in the Letter of Transmittal will constitute a
binding agreement between the Tendering Holder and the Issuer in accordance with
the terms and subject to the conditions set forth herein and in the Letter of
Transmittal. The tender of Existing Notes will constitute an agreement to
deliver good and marketable title to all tendered Existing Notes prior to the
Expiration Date free and clear of all liens, charges, claims, encumbrances,
interests and restrictions of any kind.
EXCEPT AS PROVIDED IN "--GUARANTEED DELIVERY PROCEDURES," UNLESS THE
EXISTING NOTES BEING TENDERED ARE DEPOSITED BY THE HOLDER WITH THE EXCHANGE
AGENT PRIOR TO THE EXPIRATION DATE (ACCOMPANIED BY A PROPERLY COMPLETED AND DULY
EXECUTED LETTER OF TRANSMITTAL), THE
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ISSUER MAY, AT ITS OPTION, REJECT SUCH TENDER. ISSUANCE OF NEW NOTES WILL BE
MADE ONLY AGAINST DEPOSIT OF TENDERED EXISTING NOTES AND DELIVERY OF ALL OTHER
REQUIRED DOCUMENTS. NOTWITHSTANDING THE FOREGOING, DTC PARTICIPANTS TENDERING
THROUGH ATOP WILL BE DEEMED TO HAVE MADE VALID DELIVERY WHERE THE EXCHANGE AGENT
RECEIVES AN AGENT'S MESSAGE (DEFINED BELOW) PRIOR TO THE EXPIRATION DATE.
Accordingly, to properly tender Existing Notes, the following
procedures must be followed:
Notes held through a Custodian. Each Beneficial Owner holding Existing
Notes through a DTC Participant must instruct such DTC Participant to cause its
Existing Notes to be tendered in accordance with the procedures set forth in
this Prospectus.
Notes held through DTC. Pursuant to an authorization given by DTC to
the DTC Participants, each DTC Participant holding Existing Notes through DTC
must (i) electronically transmit its acceptance through ATOP, and DTC will then
edit and verify the acceptance, execute a book-entry delivery to the Exchange
Agent's account at DTC and send an Agent's Message to the Exchange Agent for its
acceptance, or (ii) comply with the guaranteed delivery procedures set forth
below and in the Notice of Guaranteed Delivery. See "--Guaranteed Delivery
Procedures-- Notes held through DTC."
The Exchange Agent will (promptly after the date of this Prospectus)
establish accounts at DTC for purposes of the Exchange Offer with respect to
Existing Notes held through DTC, and any financial institution that is a DTC
Participant may make book-entry delivery of interests in Existing Notes into the
Exchange Agent's account through ATOP. However, although delivery of interests
in the Existing Notes may be effected through book-entry transfer into the
Exchange Agent's account through ATOP, an Agent's Message in connection with
such book-entry transfer, and any other required documents, must be, in any
case, transmitted to and received by the Exchange Agent at its address set forth
under "--Exchange Agent", or the guaranteed delivery procedures set forth below
must be complied with, in each case, prior to the Expiration Date. Delivery of
documents to DTC does not constitute delivery to the Exchange Agent. The
confirmation of a book-entry transfer into the Exchange Agent's account at DTC
as described above is referred to herein as a "Book-Entry Confirmation".
The term "Agent's Message" means a message transmitted by DTC to, and
received by, the Exchange Agent and forming a part of the Book-Entry
Confirmation, which states that DTC has received an express acknowledgment from
each DTC Participant tendering through ATOP that such DTC Participants have
received a Letter of Transmittal and agree to be bound by the terms of the
Letter of Transmittal and that the Issuer may enforce such agreement against
such DTC Participants.
Cede & Co., as the Holder of the Rule 144A Global Note, will tender a
portion of the Rule 144A Global Note equal to the aggregate principal amount due
at the stated maturity for which instructions to tender are given by DTC
Participants.
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Notes held by Holders. Each Holder must (i) complete and sign the
accompanying Letter of Transmittal, and mail or deliver such Letter of
Transmittal, and any other documents required by the Letter of Transmittal,
together with certificate(s) representing all tendered Existing Notes, to the
Exchange Agent at its address set forth under "--Exchange Agent," or (ii) comply
with the guaranteed delivery procedures set forth below and in the Notice of
Guaranteed Delivery. See "- -Guaranteed Delivery Procedures--Notes held by
Holders."
All signatures on a Letter of Transmittal must be guaranteed by a
recognized participant in the Securities Transfer Agents Medallion Program, the
New York Stock Exchange ("NYSE") Medallion Signature Program or the Stock
Exchange Medallion Program; provided, however, that signatures on a Letter of
Transmittal need not be guaranteed if such Existing Notes are tendered for the
account of an Eligible Institution (as defined herein).
If a Letter of Transmittal or any Existing Note is signed by a trustee,
executor, administrator, guardian, attorney-in-fact, agent, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person must so indicate when signing, and proper evidence satisfactory to
the Issuer of the authority of such person so to act must be submitted.
Holders should indicate in the applicable box in the Letter of
Transmittal the name and address to which substitute certificates evidencing
Existing Notes for amounts not tendered are to be issued or sent, if different
from the name and address of the person signing the Letter of Transmittal. In
the case of issuance in a different name, the employer identification or social
security number of the person named must also be indicated. If no instructions
are given, such Existing Notes not tendered, as the case may be, will be
returned to the person signing the Letter of Transmittal.
By tendering, each Holder and each DTC Participant will represent to
the Issuer that, among other things, (i) it is not an Affiliate of the Issuer,
(ii) it is not a broker-dealer tendering Existing Notes acquired directly from
the Issuer for its own account, (iii) the New Notes acquired pursuant to the
Exchange Offer are being obtained in the ordinary course of business of such
Holder and (iv) it has no arrangements or understandings with any person to
participate in the Exchange Offer for the purpose of distributing the New Notes.
-------------------------------------------
No alternative, conditional, irregular or contingent tenders will be
accepted (unless waived). By executing a Letter of Transmittal or transmitting
an acceptance through ATOP, as the case may be, each Tendering Holder waives any
right to receive any notice of the acceptance for purchase of its Existing
Notes.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of tendered Existing Notes will be resolved by the
Issuer, whose determination will be final and binding. The Issuer reserves the
absolute right to reject any or all tenders that are not in proper form or the
acceptance of which may, in the opinion of counsel for the Issuer, be unlawful.
The Issuer also reserves the absolute right to waive any condition to the
Exchange Offer and any irregularities or conditions of tender as to particular
Existing Notes. The Issuer's interpretation
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of the terms and conditions of the Exchange Offer (including the instructions in
the Letter of Transmittal) will be final and binding. Unless waived, any
irregularities in connection with tenders must be cured within such time as the
Issuer shall determine. The Issuer and the Exchange Agent shall not be under any
duty to give notification of defects in such tenders and shall not incur
liabilities for failure to give such notification. Tenders of Existing Notes
will not be deemed to have been made until such irregularities have been cured
or waived. Any Existing Notes received by the Exchange Agent that are not
properly tendered and as to which the irregularities have not been cured or
waived will be returned by the Exchange Agent to the tendering Holder, unless
otherwise provided in the Letter of Transmittal, as soon as practicable
following the Expiration Date.
LETTERS OF TRANSMITTAL AND EXISTING NOTES MUST BE SENT ONLY TO
THE EXCHANGE AGENT. DO NOT SEND LETTERS OF TRANSMITTAL OR EXISTING
NOTES TO THE ISSUER, THE COMPANY OR DTC.
The method of delivery of Existing Notes and Letters of Transmittal,
any required signature guaranties and all other required documents, including
delivery through DTC and any acceptance through ATOP, is at the election and
risk of the persons tendering and delivering acceptances or Letters of
Transmittal and, except as otherwise provided in the applicable Letter of
Transmittal, delivery will be deemed made only when actually received by the
Exchange Agent. If delivery is by mail, it is suggested that the Holder use
properly insured, registered mail with return receipt requested, and that the
mailing be made sufficiently in advance of the Expiration Date to permit
delivery to the Exchange Agent prior to the Expiration Date.
GUARANTEED DELIVERY PROCEDURES
Notes held through DTC. DTC Participants holding Existing Notes through
DTC who wish to cause their Existing Notes to be tendered, but who cannot
transmit their acceptances through ATOP prior to the Expiration Date, may cause
a tender to be effected if:
(a) guaranteed delivery is made by or through a firm or other
entity identified in Rule 17Ad-15 under the Exchange Act (an "Eligible
Institution"), including (as such terms are defined therein): (i) a
bank; (ii) a broker, dealer, municipal securities dealer, municipal
securities broker, government securities dealer or government
securities broker; (iii) a credit union; (iv) a national securities
exchange, registered securities association or clearing agency; or (v)
a savings institution that is a participant in a Securities Transfer
Association recognized program;
(b) prior to the Expiration Date, the Exchange Agent receives
from such Eligible Institution a properly completed and duly executed
Notice of Guaranteed Delivery (by mail, hand delivery, facsimile
transmission or overnight courier) substantially in the form provided
by the Issuer herewith; and
(c) Book-Entry Confirmation and an Agent's Message in
connection therewith (as described above) are received by the Exchange
Agent within three NYSE trading days after the date of the execution of
the Notice of Guaranteed Delivery.
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Notes held by Holders. Holders who wish to tender their Existing Notes
but (i) whose Existing Notes are not immediately available and will not be
available for tendering prior to the Expiration Date, or (ii) who cannot deliver
their Existing Notes, the Letter of Transmittal, or any other required documents
to the Exchange Agent prior to the Expiration Date, may effect a tender if:
(a) the tender is made by or through an Eligible Institution;
(b) prior to the Expiration Date, the Exchange Agent receives
from such Eligible Institution a properly completed and duly executed
Notice of Guaranteed Delivery (by mail, hand delivery, facsimile
transmission or overnight courier) substantially in the form provided
by the Issuer herewith; and
(c) a properly completed and executed Letter of Transmittal,
as well as the certificate(s) representing all tendered Existing Notes
in proper form for transfer, and all other documents required by the
Letter of Transmittal, are received by the Exchange Agent within three
NYSE trading days after the date of the execution of the Notice of
Guaranteed Delivery.
WITHDRAWAL RIGHTS
Tenders of Existing Notes (or any portion of such Existing Notes in
integral multiples of $1,000 principal amount due at the stated maturity) may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration
Date. Any Existing Notes properly withdrawn will be deemed to be not validly
tendered for purposes of the Exchange Offer.
Notes held through DTC. DTC Participants holding Existing Notes who
have transmitted their acceptances through ATOP may, prior to 5:00 p.m., New
York City time, on the Expiration Date, withdraw the instruction given thereby
by delivering to the Exchange Agent, at its address set forth under "--Exchange
Agent," a written, telegraphic or facsimile notice of withdrawal of such
instruction. Such notice of withdrawal must contain the name and number of the
DTC Participant, the principal amount due at the stated maturity of Existing
Notes to which such withdrawal related and the signature of the DTC Participant.
Withdrawal of such an instruction will be effective upon receipt of such written
notice of withdrawal by the Exchange Agent.
Notes held by Holders. Holders may withdraw their tender of Existing
Notes, prior to 5:00 p.m., New York City time, on the Expiration Date, by
delivering to the Exchange Agent, at its address set forth under "--Exchange
Agent," a written, telegraphic or facsimile notice of withdrawal. Any such
notice of withdrawal must (i) specify the name of the person who tendered the
Existing Notes to be withdrawn, (ii) contain a description of the Existing Notes
to be withdrawn and identify the certificate number or numbers shown on the
particular certificates evidencing such Existing Notes and the aggregate
principal amount due at the stated maturity represented by such Existing Notes
and (iii) be signed by the Holder of such Existing Notes in the same manner as
the original signature on the Letter of Transmittal by which such Existing Notes
were tendered (including any required signature guaranties), or be accompanied
by (x)
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documents of transfer in a form acceptable to the Issuer, in its sole discretion
and (y) a properly completed irrevocable proxy that authorized such person to
effect such revocation on behalf of such Holder. If the Existing Notes to be
withdrawn have been delivered or otherwise identified to the Exchange Agent, a
signed notice of withdrawal is effective immediately upon written, telegraphic
or facsimile notice of withdrawal even if physical release is not yet effected.
---------------------------------------
All signatures on a notice of withdrawal must be guaranteed by a
recognized participant in the Securities Transfer Agents Medallion Program, the
NYSE Medallion Signature Program or the Stock Exchange Medallion Program;
provided, however, that signatures on the notice of withdrawal need not be
guaranteed if the Existing Notes being withdrawn are held for the account of an
Eligible Institution.
A withdrawal of an instruction or a withdrawal of a tender must be
executed by a DTC Participant or a Holder, as the case may be, in the same
manner as the person's name appears on its transmission through ATOP or Letter
of Transmittal, as the case may be, to which such withdrawal relates. If a
notice of withdrawal is signed by a trustee, partner, executor, administrator,
guardian, attorney-in-fact, agent, officer of a corporation or other person
acting in a fiduciary or representative capacity, such person must so indicate
when signing and must submit with the revocation appropriate evidence of
authority to execute the notice of withdrawal. A DTC Participant or a Holder may
withdraw an instruction or a tender, as the case may be, only if such withdrawal
complies with the provisions of this Prospectus.
A withdrawal of a tender of Existing Notes by a DTC Participant or a
Holder, as the case may be, may be rescinded only by a new transmission of an
acceptance through ATOP or execution and delivery of a new Letter of
Transmittal, as the case may be, in accordance with the procedures described
herein.
EXCHANGE AGENT
PNC Bank, National Association has been appointed as Exchange Agent for
the Exchange Offer. Questions, requests for assistance and requests for
additional copies of this Prospectus or of the Letter of Transmittal should be
directed to the Exchange Agent addressed as follows:
By Registered or Certified Mail By Hand
or By Overnight Courier:
PNC Bank, National Association
as Exchange Agent
One Oliver Plaza, 27th Floor
Pittsburgh, PA 15222-2602
Attention: F.J. Deramo, Vice President
Facsimile: (412) 762-8226 By Telephone: (412) 762-3666
The Exchange Agent also acts as trustee under the Indenture.
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TRANSFER TAXES
Holders of Existing Notes who tender their Existing Notes for exchange
will not be obligated to pay any transfer taxes in connection therewith, except
that Holders who instruct the Issuer to register New Notes in the name of, or
request that Existing Notes not tendered or not accepted in the Exchange Offer
be returned to, a person other than the registered tendering Holder will be
responsible for the payment of any applicable transfer tax thereon.
DESCRIPTION OF THE NEW NOTES
The New Notes and the Guaranties will be issued under the Indenture
dated as of December 12, 1996, among the Issuer, the Company and the Trustee,
pursuant to which the Existing Notes were issued. For purposes of the following
summary, the term "Notes" collectively refers to the Existing Notes and the New
Notes. The following summaries of certain provisions of the Indenture do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all the provisions of the Indenture, a copy of which can be
obtained from the Issuer upon request. Upon the issuance of the New Notes, the
Indenture will be subject to and governed by the provisions of the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). Wherever
particular Sections or defined terms of the Indenture not otherwise defined
herein are referred to, such Sections or defined terms shall be incorporated
herein by reference, and those terms made a part of the Indenture by the Trust
Indenture Act also are incorporated herein by reference.
Unless otherwise specifically indicated, all references in this section
to (i) the "Company" are solely to U.S. Industries, Inc. and not its
subsidiaries and (ii) the "Issuer" are solely to USI American Holdings, Inc. and
not its subsidiaries.
GENERAL
The Notes, which mature on December 1, 2006, will be limited to
$125,000,000 in aggregate principal amount. (ss. 301 of the Indenture) The Notes
will be fully, irrevocably and unconditionally guaranteed by the Company. The
Notes will not be entitled to the benefit of any sinking fund. The Notes will be
redeemable at the option of the Issuer as described below under "--Redemption."
The Notes will bear interest from the Exchange Date, at the rate per
annum set forth on the cover page hereof, payable semiannually on June 1 and
December 1 of each year commencing June 1, 1997 until the principal thereof is
paid or made available for payment to the holders of record at the close of
business on the immediately preceding May 15 or November 15, respectively. (ss.
301 of the Indenture) Interest will be computed on the basis of a 360-day year
of twelve 30-day months. (ss. 312 of the Indenture)
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GUARANTIES
Pursuant to the Guaranties, the Company will fully, irrevocably and
unconditionally guarantee the performance of the Issuer under the Notes and the
punctual payment of the principal of, premium, if any, and interest on the
Notes, when and as the same shall become due and payable, whether upon maturity,
acceleration, call for redemption or otherwise. (ss. 1101 of the Indenture) See
"Risk Factors--Holding Company Structure."
The Company will be released from the Guaranties, and the Guaranties
will terminate, if the obligations of the Issuer under the Indenture are assumed
by an acquiring or successor Person (other than a direct or indirect Subsidiary
of the Company) pursuant to the consolidation, merger and sale provisions of the
Indenture. See "--Consolidation, Merger or Certain Sales of Assets of the Issuer
or the Company." (ss. 1101 of the Indenture)
RANKING
The Notes will be senior unsecured obligations of the Issuer and will
rank pari passu with all other existing and future unsecured and unsubordinated
indebtedness of the Issuer and senior in right of payment to all subordinated
indebtedness of the Issuer. The Guaranties will be senior unsecured obligations
of the Company and will rank pari passu with all other existing and future
unsecured and unsubordinated indebtedness of the Company and senior in right of
payment to all subordinated indebtedness of the Company. The Notes and the
Guaranties will be effectively subordinated to (i) all existing and future
secured indebtedness of the Issuer and the Company, to the extent of the value
of the assets securing such indebtedness, (ii) all existing and future
indebtedness of any subsidiaries of the Issuer and of the Company (other than
the Issuer) and (iii) all existing and future guaranties by subsidiaries of the
Issuer and of the Company (other than the Issuer) of the Issuer's and the
Company's indebtedness.
Each of the Issuer and the Company are holding companies that operate
through subsidiaries. Accordingly, the ability of each of the Issuer and the
Company to service their indebtedness, including the Notes, is dependent upon
the cash flow and ability to pay dividends of their respective subsidiaries. The
Issuer's and the Company's rights and the rights of their respective creditors,
including Holders of the Notes, to participate in the assets of any Subsidiary
of the Issuer or the Company (other than the Issuer) upon such Subsidiary's
liquidation or recapitalization will be subject to the prior claims of such
Subsidiary's creditors. See "Risk Factors--Holding Company Structure."
At December 31, 1996, on a pro forma basis after giving effect to two
dispositions and two acquisitions completed in the second quarter of fiscal
1997, the Company had consolidated indebtedness of approximately $680 million
($443 million of which consisted of indebtedness of the Issuer under the New
Credit Facility), none of which represented secured indebtedness or subordinated
indebtedness, and a ratio of total debt to total capitalization of 52.9%. At
December 31, 1996, subsidiaries of the Issuer (other than Funding) had $42
million of indebtedness outstanding (other than intercompany indebtedness), all
of which had been guaranteed by the Issuer.
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The Indenture does not restrict (i) the incurrence of secured or
unsecured indebtedness by the Company or by any Subsidiary of the Company that
is not a Subsidiary of the Issuer; (ii) the incurrence of unsecured indebtedness
by the Issuer; (iii) the incurrence of secured or unsecured indebtedness by
Unrestricted Subsidiaries of the Issuer; (iv) a consolidation, merger, sale of
assets or other similar transaction that may adversely affect the
creditworthiness of the Company or the Issuer or the successor or combined
entity of either thereof; (v) a change in control of the Company or the Issuer;
or (vi) a highly leveraged transaction involving the Company or the Issuer. See
"Risk Factors--Leverage."
REDEMPTION
Optional Redemption.
The Notes will be subject to redemption, in whole or in part, at any
time or from time to time, at the option of the Issuer on at least 30 days'
prior notice by mail, at a redemption price (the "Redemption Price") equal to
the greater of (i) 100% of the principal amount of the Notes to be redeemed, or
(ii) the sum of the present values of the remaining scheduled payments of
principal and interest thereon discounted to the date of redemption on a
semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at
the Treasury Rate plus 10 basis points, plus, in each case, accrued but unpaid
interest to the date of redemption. On and after the redemption date, interest
will cease to accrue on the Notes or portions of Notes called for redemption on
such date. Notes may be redeemed in part but only in integral multiples of
$1,000. (ss. 1404 and ss. 202 of the Indenture)
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker which would be utilized, at the
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the Notes. "Independent Investment Banker" means one of the
Reference Treasury Dealers appointed by the Trustee after consultation with the
Issuer.
"Comparable Treasury Price" means, with respect to any redemption date
(i) the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities," or (ii) if such release (or any successor release) is
not published or does not contain such prices on such business day (A) the
average of the Reference Treasury Dealer Quotations for such redemption date,
after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (B) if the Trustee obtains fewer than three such Reference
Treasury Dealer Quotations, the average of all such Quotations.
"Reference Treasury Dealer" means BA Securities and its successors
and/or such other primary U.S. Government securities dealers in New York City (a
"Primary Treasury Dealer") as shall be designated by the Issuer from time to
time, in each case provided that such entity continues to be a Primary Treasury
Dealer.
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"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third business day preceding such redemption date.
"Treasury Rate" means, with respect to any redemption date, the rate
per annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for such Comparable Treasury Issue (expressed
as a percentage of its principal amount) equal to the Comparable Treasury Price
for such redemption date.
Any notice to the Holders of such a redemption need not set forth the
redemption price but need only set forth the calculation thereof as described in
the first paragraph of this section entitled "Redemption." The redemption price,
calculated as aforesaid, shall be set forth in an officers' certificate to the
Trustee no later than two business days prior to the redemption date.
No sinking fund shall be established for the benefit of the Notes.
Redemption in Circumstances Involving Taxation
If, as the result of any change in or any amendment to the laws,
including any applicable double taxation treaty or convention, of the United
Kingdom (or any Other Jurisdiction, as defined below under "--Payment of
Additional Amounts"), or of any political subdivision or taxing authority
thereof, affecting taxation, or any change in the application or interpretation
of such laws, double taxation treaty or convention, which change or amendment
becomes effective on or after the Initial Issue Date of the Notes (or, in
certain circumstances, such later date on which any assignee of the Issuer, the
Company or a successor corporation to the Issuer or the Company becomes such as
permitted under the Indenture), it is determined, by the Issuer, the Company or
such assignee (which terms, for purposes of the remainder of this paragraph,
include any successor thereto) that (i) the Issuer, the Company or its assignee
would be required to make additional payments in respect of principal, premium,
if any, or interest on the next succeeding date for the payment thereof, or (ii)
based upon an opinion of independent counsel to the Issuer, the Company or its
assignee, as a result of any action taken by any taxing authority of, or any
action brought in a court of competent jurisdiction in, the United Kingdom (or
the Other Jurisdiction), or any political subdivision or taxing authority
thereof or therein (whether or not such action was taken or brought with respect
to the Issuer, the Company or its assignee), which action is taken or brought on
or after the Initial Issue Date of the Notes (or, in certain circumstances, such
later date on which a corporation becomes a successor or an assignee), the
circumstances described in clause (i) would exist, the Issuer may, at its
option, redeem the Notes in whole at any time at a redemption price equal to
100% of the principal amount thereof plus accrued but unpaid interest to the
date fixed for redemption (the "Tax Redemption Price").
(ss. 1301 of the Indenture)
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RESTRICTIVE COVENANTS
Limitation on Liens. The Issuer shall not, and shall not permit any
Restricted Subsidiary to, Incur any Lien upon any property or assets of the
Issuer or any Restricted Subsidiary, now owned or hereinafter acquired, to
secure any Debt without making, or causing such Restricted Subsidiary to make,
effective provision for securing the Notes (and, if the Issuer shall so
determine, any other Debt of the Issuer which is not subordinate in right of
payment to the Notes) (a) equally and ratably with (or prior to) such Debt as to
such property or assets for so long as such Debt shall be so secured, or (b) in
the event such Debt is subordinate in right of payment to the Notes, prior to
such Debt as to such property or assets for so long as such Debt shall be so
secured.
The foregoing restrictions will not apply to:
(1) Liens securing only the Notes or the Guaranties;
(2) Liens in favor of only the Company, the Issuer or a Restricted
Subsidiary;
(3) Liens existing on the date of the Indenture;
(4) Liens on property of a Person existing at the time such Person
is merged into or consolidated with the Issuer or a Restricted
Subsidiary or becomes a Restricted Subsidiary (and not in
anticipation of or in connection with such event), provided that
the Debt secured by such Lien is otherwise permitted to be
Incurred under the Indenture;
(5) Liens on property existing immediately prior to the time of
acquisition thereof from a non-Affiliate (and not Incurred in
anticipation of or in connection with the financing of such
acquisition), provided that the Debt secured by such Lien is
otherwise permitted to be Incurred under the Indenture;
(6) Liens to secure Debt Incurred for the purpose of financing all
or any part of the purchase price or the cost of construction or
improvement of the property subject to such Liens (including
carrying charges) and, in the case of a Restricted Subsidiary
all or substantially all of whose assets consist of such
property, any Lien on ownership interests or investments in such
Restricted Subsidiary Incurred in connection with the
acquisition or construction of such property, provided that the
Incurrence of such Debt is otherwise permitted under the
Indenture and such Debt is Incurred prior to, at the time of, or
within 180 days after, the acquisition of such property, the
completion of such construction or the making of such
improvements;
(7) Liens on property of the Issuer or any of its Restricted
Subsidiaries in favor of the United States of America or any
state thereof, or any instrumentality of either, to secure
certain payments pursuant to any contract or statute;
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(8) Liens for taxes or assessments or other governmental charges or
levies which are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted or for
which a reserve or other appropriate provision, if any, as shall
be required in accordance with GAAP shall have been made;
(9) Liens to secure obligations under workmen's compensation,
temporary disability, social security, retiree health or similar
laws or under unemployment insurance;
(10) Liens Incurred to secure the performance of statutory
obligations, bids, tenders, leases, contracts (other than
contracts for the repayment of Debt), surety or appeal bonds,
performance or return-of-money bonds or other obligations of a
like nature incurred in the ordinary course of business;
(11) Judgment and attachment Liens not giving rise to a Default or
Event of Default;
(12) Any Lien arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods in the
ordinary course of business in accordance with industry
practice;
(13) Liens securing documentary letters of credit; provided such
Liens attach only to the property or goods to which such letter
of credit relates;
(14) Liens arising from filing financing statements under the Uniform
Commercial Code for precautionary purposes in connection with
true leases of personal property that are otherwise permitted
under the Indenture and under which the Company, the Issuer or
any Restricted Subsidiary is a lessee; or
(15) Liens to secure Debt Incurred to extend, renew, refinance or
refund (or successive extensions, renewals, refinancings or
refundings), in whole or in part, Debt secured by any Lien
referred to in the foregoing clauses (1) to (14) inclusive, so
long as such Lien does not extend to any additional property
(other than property attributable to improvements, alterations
and repairs) and the principal amount of the Debt secured
pursuant to this clause (15) shall not exceed the principal
amount of Debt so extended, renewed, refinanced or refunded
(assuming all available amounts were borrowed) plus the
aggregate amount of premiums, other payments, costs and expenses
required to be paid or Incurred in connection with such
extension, renewal, refinancing or refunding at the time of such
extension, renewal, refinancing or refunding.
In addition to the foregoing, the Issuer and its Restricted
Subsidiaries may Incur a Lien to secure any Debt, without securing the Notes,
if, after giving effect thereto, the sum, without duplication, of (i) the
aggregate principal amount of all outstanding Debt secured by Liens Incurred by
the Issuer and its Restricted Subsidiaries (with the exception of secured Debt
which is excluded pursuant to clauses (1) through (15) inclusive, described
above) and (ii) the aggregate amount of all Attributable Debt of all sale and
leaseback transactions involving Principal Properties (with the exception of
Attributable Debt excluded pursuant to clauses (1) to (5)
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inclusive described below under "--Restrictions Upon Sales with Leasebacks")
does not exceed 10% of Consolidated Net Tangible Assets (the "Lien Basket");
provided, however, that the Lien Basket shall be reduced, without duplication,
by the amount of outstanding Debt Incurred from time to time pursuant to the
Debt Basket (as defined below). (ss. 1007 of the Indenture)
Restrictions Upon Sales with Leasebacks. The Issuer shall not, nor
shall it permit any Restricted Subsidiary to, enter into any arrangement with
any Person providing for the leasing by the Issuer or any Restricted Subsidiary
of any Principal Property of the Issuer or any Restricted Subsidiary, which
Principal Property has been or is to be sold or transferred by the Issuer or
such Restricted Subsidiary to such Person (herein referred to as a "sale and
leaseback transaction"), unless, after giving effect thereto, the sum, without
duplication, of (i) the aggregate amount of all Attributable Debt in respect of
all such sale and leaseback transactions involving Principal Properties (with
the exception of Attributable Debt excluded pursuant to clauses (1) through (5)
inclusive, described below) and (ii) the aggregate principal amount of all
outstanding Debt secured by Liens Incurred by the Issuer and its Restricted
Subsidiaries (with the exception of secured Debt which is excluded pursuant to
clauses (1) through (15) inclusive, described above under "--Limitation on
Liens") does not exceed 10% of Consolidated Net Tangible Assets (the "Leaseback
Basket").
This covenant shall not apply to, and there shall be excluded from
Attributable Debt in any computation under this covenant or under "--Limitation
on Liens" above, Attributable Debt with respect to any sale and leaseback
transaction if:
(1) The lease in such sale and leaseback transaction is for a
period, including renewals, of not more than three years;
(2) Such sale and leaseback transaction is entered into in respect
of a Principal Property within 180 days of the acquisition
thereof or the completion of construction and commencement of
operation thereof, whichever is later;
(3) The proceeds of the sale or transfer of the Principal Property
in such sale and leaseback transaction are at least equal to the
fair market value of such Principal Property (as determined in
good faith by the Board of Directors of the Issuer) and the
Issuer or a Restricted Subsidiary within 180 days after such
sale or transfer applies to the retirement of Funded Debt that
is not subordinated to the Notes or the Guaranties an amount
equal to the greater of (a) the net proceeds of such sale and
(b) the Attributable Debt in respect of such sale and leaseback
transaction;
(4) The Issuer or a Restricted Subsidiary applies the net proceeds
of the sale or transfer of the Principal Property in such sale
and leaseback transaction to an investment in another Principal
Property within 180 days prior or subsequent to such sale or
transfer; provided, however, that this exception shall apply
only if such proceeds invested in such other Principal Property
shall not exceed the total acquisition, alteration, repair and
construction cost of the Issuer or any Restricted Subsidiary in
such other Principal Property less amounts secured by any
purchase money or construction mortgage on such other Principal
Property; or
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(5) Such sale and leaseback transaction is entered into between the
Issuer and a Restricted Subsidiary, between the Company and the
Issuer, between the Company and a Restricted Subsidiary, or
between Restricted Subsidiaries. (ss. 1008 of the Indenture)
Limitation on Restricted Subsidiary Funded Debt. The Issuer shall not
permit any Restricted Subsidiary of the Issuer to Incur any Funded Debt.
Notwithstanding the foregoing, any Restricted Subsidiary may Incur the following
Funded Debt:
(1) Funded Debt of any Restricted Subsidiary constituting Existing
Funded Debt;
(2) Funded Debt Incurred by a Special Purpose Funding Subsidiary,
provided that such Restricted Subsidiary remains at all times
a Special Purpose Funding Subsidiary;
(3) Funded Debt owed by a Restricted Subsidiary to the Company, the
Issuer or a Wholly-Owned Subsidiary of the Issuer (provided that
such Funded Debt is at all times held by the Company, the Issuer
or a Person which is a Wholly-Owned Subsidiary of the Issuer);
provided, however, that upon either (a) the transfer or other
disposition by the Company, the Issuer or such Wholly-Owned
Subsidiary of any Funded Debt so permitted to a Person other
than the Company, the Issuer or another Wholly-Owned Subsidiary
of the Issuer, or (b) the issuance (other than directors'
qualifying shares), sale, lease, transfer or other disposition
of shares of Capital Stock (including by consolidation or
merger) of such Wholly-Owned Subsidiary to a Person other than
the Company, the Issuer or another such Wholly- Owned
Subsidiary, the provisions of this clause (3) shall no longer be
applicable to such Funded Debt and such Funded Debt shall be
deemed to have been Incurred at the time of such transfer or
other disposition;
(4) Funded Debt Incurred by a Person before such Person became a
Restricted Subsidiary in an acquisition by the Issuer from a
non-Affiliate (whether through a stock acquisition, merger,
consolidation or otherwise) after the date of the Indenture
(provided such Funded Debt was not Incurred in anticipation of
or in connection with and was outstanding prior to such
acquisition);
(5) Funded Debt Incurred in connection with the acquisition,
purchase, improvement or development of property or assets used
or held by any Subsidiary of the Issuer prior to, or within 180
days after, the time of such acquisition, purchase, improvement
or development; or
(6) Funded Debt Incurred to extend, renew, refinance or refund (or
successive extensions, renewals, refinancings or refundings) in
whole or in part, of any Funded Debt referred to in the
foregoing clauses (1), (4) and (5), provided that the principal
amount of the Funded Debt Incurred pursuant to this clause (6)
shall not exceed the principal amount of Funded Debt so
extended, renewed, refinanced or refunded plus the aggregate
amount of premiums, other payments, costs and expenses required
to
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be paid or incurred in connection with such extension, renewal,
refinancing or refunding at the time of such extension, renewal,
refinancing or refunding.
In addition to the foregoing, any Restricted Subsidiary may Incur
Funded Debt if, immediately after the Incurrence thereof, the aggregate
principal amount of such Funded Debt plus all other Funded Debt (without
duplication) of all Restricted Subsidiaries of the Issuer then outstanding
(other than Funded Debt permitted by clauses (1) through (6) inclusive, above)
does not exceed 10% of Consolidated Net Tangible Assets (the "Debt Basket");
provided, however, that the Debt Basket shall be reduced, without duplication,
by the amount of Debt secured pursuant to the Lien Basket and by the amount of
Attributable Debt Incurred pursuant to the Leaseback Basket, in each case to the
extent such secured Debt and such Attributable Debt may from time to time be
outstanding. (ss. 1009 of the Indenture)
Limitation on Restricted Payments. Until such time as the Notes are
rated Baa2 by Moody's Investors Service, Inc. and its successors ("Moody's"), or
BBB by Standard & Poor's Ratings Group, a division of the McGraw-Hill Companies,
Inc., and its successors ("S&P"), or higher, the Issuer will not, and will not
permit any Restricted Subsidiary to, directly or indirectly:
(1) declare or pay any dividend on, or make any distribution in
respect of the Issuer's or any Restricted Subsidiary's Capital
Stock or other Equity Interests, except to the extent any such
dividend or distribution is actually received by the Issuer or a
Subsidiary of the Issuer;
(2) purchase, redeem or otherwise acquire or retire for
consideration any Capital Stock or other Equity Interests of the
Issuer or a Restricted Subsidiary, except to the extent such
consideration is actually received by the Issuer or a Subsidiary
of the Issuer; or
(3) voluntarily purchase, redeem or otherwise acquire or retire for
consideration, prior to a scheduled mandatory sinking fund
payment date, mandatory amortization or mandatory prepayment or
maturity date (including, but not limited to, by legal
defeasance), any Debt of the Issuer that is junior in right of
payment to the Notes, other than in connection with the
refinancing of such Debt to the extent permitted by the
Indenture (each such declaration, distribution, purchase,
redemption, acquisition or retirement being referred to as a
"Restricted Payment") if, at the time of such action, or after
giving effect to such Restricted Payment:
(a) an Event of Default shall have occurred and be
continuing;
(b) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments declared or
made after the Initial Issue Date, exceeds the sum
of:(i) 50% of the aggregate cumulative Consolidated
Net Income of the Issuer accrued on a cumulative
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basis during the period beginning on September 29,
1996 and ending on the last day of the Issuer's last
fiscal quarter ending prior to the date of the
Restricted Payment (or, if such aggregate cumulative
Consolidated Net Income shall be a loss, minus 100%
of such loss); (ii) the aggregate Net Cash Proceeds
and the fair market value (as determined in good
faith by the Board of Directors of the Issuer) of
marketable securities and other property, if any,
received by the Issuer or a Wholly-Owned Subsidiary
of the Issuer (other than from a Restricted
Subsidiary) from the issuance and sale of either
Capital Stock (other than Redeemable Capital Stock)
or Debt that is convertible into Capital Stock, to
the extent such Debt is converted into Capital Stock
after the Initial Issue Date; (iii) the fair market
value (as determined in good faith by the Board of
Directors of the Issuer) of any shares of Capital
Stock (other than Redeemable Capital Stock) or
options in respect thereof of the Issuer issued after
the Initial Issue Date, pursuant to a plan or other
arrangement approved by the Compensation Committee of
the Board of Directors of the Issuer, to or for the
benefit of any employee or director of the Issuer or
any Subsidiary of the Issuer or to or by any stock
ownership plan or similar trust for the benefit of
any such employee or director, in each case to the
extent such value is includible as compensation
expense in the computation of Consolidated Net
Income; (iv) 50% of the aggregate Net Cash Proceeds
received after September 29, 1996 by the Issuer, or a
Wholly- Owned Subsidiary of the Issuer, from an Asset
Sale; and (v) $50 million; or
(c) the Issuer could not incur $1.00 of additional Debt
pursuant to the Debt Basket under "--Limitation on
Restricted Subsidiary Funded Debt." (ss. 1010 of the
Indenture)
The foregoing will not prohibit, so long as no Event of Default shall
have occurred and be continuing, (i) the payment of any dividend within 60 days
after the date of the declaration, if at the date of declaration thereof such
payment would comply with such provisions or (ii) the declaration or payment of
any dividend on or purchase, redemption or retirement of shares of Capital Stock
payable solely in shares of Capital Stock (other than Redeemable Stock) of the
Issuer, or any Subsidiary which does not constitute a "significant subsidiary"
of the Issuer within
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the meaning of Rule 1-02(w) of Regulation S-X promulgated under the Exchange Act
or any successor provision thereto. (ss. 1010 of the Indenture)
Provision of Financial Statements. Whether or not the Issuer is subject
to Section 13(a) or 15(d) of the Exchange Act (or any successor provision
thereto), the Issuer will, to the extent permitted under the Exchange Act, file
with the Commission the annual reports, quarterly reports and other documents
which the Issuer would have been required to file with the Commission pursuant
to such Section 13(a) or 15(d) (or any successor provision thereto) if the
Issuer were so subject, such documents to be filed with the Commission on or
prior to the respective dates (the "Required Filing Dates") by which the Issuer
would have been required so to file such documents if the Issuer were so
subject. The Issuer also will: (1) within 15 days of each Required Filing Date,
file with the Trustee copies of the annual reports, quarterly reports and other
documents (excluding exhibits) which the Issuer would have been required to file
with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act if
the Issuer were subject to such Sections; and (2) if filing such documents by
the Issuer with the Commission is not permitted under the Exchange Act, promptly
upon written request supply copies of such documents to any Holder. The Issuer
will be deemed to have satisfied the requirements set forth above if (i) the
Company prepares, files, mails and supplies reports and other documents prepared
on a Consolidated basis of the types required above, in each case within the
applicable time periods and (ii) the Issuer is not required to file such reports
and other documents separately under the applicable rules and regulations of the
Commission (after giving effect to any exemptive relief) because of the filings
by the Company. (ss. 1011 of the Indenture)
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in
the Indenture. Reference is made to the Indenture for the full definition of all
such terms, as well as any other terms used herein for which no definition is
provided. (ss. 101 of the Indenture)
"Asset Sale" means, with respect to any Person, the sale, lease,
conveyance, disposition or other transfer by such Person of all or substantially
all of the properties and assets of any division or line of business of such
Person or any other properties or assets of such Person other than in the
ordinary course of business (including by way of a sale-and-leaseback and
including the sale or other transfer of any of the Capital Stock of any
Subsidiary of such Person), in a single transaction or through a series of
related transactions. For the purposes of this definition, the term "Asset Sale"
shall not include (x) any transfer of properties and assets (A) that is governed
by the first paragraph under "--Consolidation, Merger or Certain Sales of Assets
of the Issuer or the Company" or (B) that is from the Issuer to any Subsidiary
or from any Subsidiary to the Issuer or another Subsidiary of the Issuer or (y)
the transfer of properties and assets (other than in the ordinary course of
business) in any given fiscal year if the aggregate fair market value (as
determined in good faith by the Board of Directors of the Issuer) of all such
properties and assets transferred (other than in the ordinary course of
business) in such fiscal year is less than $1 million, it being understood that
if such aggregate fair market value exceeds $1 million, the entire aggregate
fair market value shall be included.
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"Attributable Debt" means, as to any particular lease under which
either the Issuer or any Restricted Subsidiary is at any time liable as lessee
and at any date as of which the amount thereof is to be determined, the total
net obligations of the lessee for rental payments during the remaining term of
the lease (including any period for which such lease has been extended or may,
at the option of the lessor, be extended) discounted from the respective due
dates thereof to such date at a rate per annum equivalent to the interest rate
inherent in such lease (as determined in good faith by the Board of Directors of
the Issuer), compounded semiannually.
"Capital Lease Obligation" of any Person means the obligation to pay
rent or other payment amounts under a lease of (or other Debt arrangements
conveying the right to use) real or personal property of such Person which is
required to be classified and accounted for as a capital lease or a liability on
the face of a balance sheet of such Person in accordance with GAAP; for the
purposes hereof the amount of such obligations shall be the capitalized amount
reflected on such balance sheet.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of corporate stock of
such Person.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate net income (or loss) of such Person and its Subsidiaries
for such period, before extraordinary items and the cumulative effect of a
change in accounting principles (as each such term is defined under GAAP) of
such Person and its Subsidiaries, on a consolidated basis, determined in
accordance with GAAP adjusted by excluding (i) any net gains or losses in
respect of Asset Sales; (ii) the net income or loss of any Person acquired by
such Person or any Subsidiary of such Person in a pooling-of-interests
transaction for any period prior to the date of such transaction; (iii) any
gains or losses from currency exchange transactions; (iv) any gains or losses
realized upon the termination of any employee pension benefit plan; (v) any
gains or losses realized upon the refinancing of any of such Person's Debt; (vi)
any settlements or judgments with respect to any litigation not in the ordinary
course of business; (vii) any gains or losses arising from the destruction of
property due to fire or other casualty; (viii) any gains or losses arising from
the revaluation of property or assets; (ix) the net income (or loss) accounted
for by the equity method of accounting, except for dividends or other
distributions actually received by such Person or its Subsidiaries; and (x) the
net income of any Subsidiary of such Person to the extent that such net income
has any restrictions on making dividends or other distributions to such Person,
it being understood that the net income of any Subsidiary organized under the
laws of a jurisdiction other than a jurisdiction in the United States shall not
be excluded to the extent that annual dividends to such Person are permitted
pursuant to applicable law, but shall be net of any withholding requirements
pursuant to or reserves established in connection with the restrictions of such
applicable law.
"Consolidated Net Tangible Assets" means, at any date, the total amount
of assets appearing on the most recent Consolidated balance sheet of the Company
and its Subsidiaries, prepared in accordance with GAAP, less (i) all current
liabilities (due within one year) as shown on such balance sheet (excluding
current maturities of long-term indebtedness and intercompany items), (ii)
applicable depreciation, amortization and other valuation reserves not already
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reflected in such total amount of assets and (iii) Intangible Assets and
liabilities relating thereto.
"Intangible Assets" means the value (net of any applicable reserves),
as shown on or reflected in such balance sheet, of: (A) all trade names,
trademarks, licenses, patents, copyrights, service marks, goodwill and other
like intangibles; and (B) unamortized debt discount and expense, less
unamortized premium.
"Consolidation" means, with respect to any Person, the consolidation of
the accounts of such Person and each of its Subsidiaries if and to the extent
the accounts of such Person and each of its Subsidiaries would normally be
consolidated with those of such Person, all in accordance with GAAP. The term
"Consolidated" shall have a similar meaning.
"Debt" means (without duplication), with respect to any Person, whether
recourse is to all or a portion of the assets of such Person and whether or not
contingent, (i) every obligation of such Person for money borrowed, (ii) every
obligation of such Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) every reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for the
account of such Person, (iv) every obligation of such Person issued or assumed
as the deferred purchase price of property or services, if and to the extent
that such obligation would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP (but excluding trade accounts payable or
accrued liabilities arising in the ordinary course of business), (v) every
Capital Lease Obligation of such Person, (vi) the maximum fixed redemption or
repurchase price of Redeemable Stock of such Person at the time of determination
and (vii) every obligation of the type referred to in clauses (i) through (vi)
of another Person and all Debt of another Person the payment of which, in either
case, such Person has Guaranteed or for which such Person is responsible or
liable, directly or indirectly, as obligor, Guarantor or otherwise.
"Equity Interest" means Capital Stock or warrants, options or other
rights to acquire Capital Stock (but excluding any debt security which is
convertible into, or exchangeable for, Capital Stock).
"Existing Funded Debt" means all Funded Debt (other than Funded Debt
outstanding pursuant to the New Credit Facility) existing on the date of the
Indenture.
"Funded Debt" means Debt that by its terms (i) matures more than one
year from the date of original issuance or creation or (ii) matures within one
year from such date but is renewable or extendible at the option of any obligor
to a date more than one year from such date.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as approved by a significant segment of the accounting profession
in the United States, from time to time.
"Guaranty" by any Person means any obligation, contingent or otherwise,
of such Person guaranteeing any Debt of any other Person (the "primary obligor")
in any manner, whether
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directly or indirectly, and including, without limitation, any obligation of
such Person, (i) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Debt or to purchase (or to advance or supply funds for the
purchase of) any security for the payment of such Debt, (ii) to purchase
property, securities or services for the purpose of assuring the holder of such
Debt of the payment of such Debt, or (iii) to maintain working capital, equity
capital or other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Debt (and "Guaranteed",
"Guaranteeing" and "Guarantor" shall have meanings correlative to the
foregoing); provided, however, that the Guaranty by any Person shall not include
endorsements by such Person for collection or deposit, in either case, in the
ordinary course of business.
"Incur" means, with respect to any Debt of any Person, to create,
issue, incur (by conversion, exchange or otherwise), assume, Guarantee or
otherwise become, directly or indirectly, liable in respect of such Debt or the
recording, as required pursuant to GAAP or otherwise, of any such Debt on the
balance sheet of such Person (and "Incurrence", "Incurred", "Incurrable" and
"Incurring" shall have meanings correlative to the foregoing); provided,
however, that a change in GAAP that results in an obligation of such Person that
exists at such time becoming Debt shall not be deemed an Incurrence of such
Debt.
"Lien" means, with respect to any property or assets, any mortgage or
deed of trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement, encumbrance, preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
on or with respect to such property or assets (including, without limitation,
any conditional sale or other title retention agreement having substantially the
same economic effect as any of the foregoing).
"Net Cash Proceeds" means (a) with respect to any Asset Sale by any
Person, the proceeds thereof in the form of cash or Temporary Cash Investments
including payments in respect of deferred payment obligations when received in
the form of, or stock or other assets when disposed for, cash or Temporary Cash
Investments (except to the extent that such obligations are financed or sold
with recourse to the Company, the Issuer or any Restricted Subsidiary) net of
(i) brokerage commissions and other actual fees and expenses (including fees and
expenses of counsel and investment bankers) related to such Asset Sale, (ii)
provisions for all taxes payable as a result of such Asset Sale, (iii) payments
made to retire Debt where payment of such Debt is secured by the assets or
properties which are the subject of such Asset Sale, (iv) amounts required to be
paid to any Person (other than the Company, Issuer or any Subsidiary of the
Company or Issuer) owning a beneficial interest in the assets subject to the
Asset Sale and (v) appropriate amounts to be provided by the Issuer or a
Restricted Subsidiary, as the case may be, as a reserve, in accordance with
GAAP, against any liabilities associated with such Asset Sale and retained by
the Issuer or Restricted Subsidiary, as the case may be, after such Asset Sale,
including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale, all as
reflected in an officers' certificate delivered to the Trustee and (b) with
respect to any issuance or sale of Capital Stock or options, warrants or rights
to purchase Capital Stock, or Debt or Capital Stock that have been converted
into or exchanged for Capital Stock, the proceeds of such issuance or sale in
the form of cash or Temporary Cash Investments,
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including payments in respect of deferred payment obligations when received in
the form of, or stock or other assets when disposed for, cash or Temporary Cash
Investments (except to the extent that such obligations are financed or sold
with recourse to the Company, the Issuer or any Restricted Subsidiary), net of
attorneys' fees, accountants' fees and brokerage, consultation, underwriting and
other fees and expenses actually incurred in connection with such issuance or
sale and net of taxes paid or payable as a result thereof.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Principal Property" means any real property (including related
fixtures), plant or equipment owned or leased by the Issuer or any Restricted
Subsidiary, other than real property, plant or equipment that, in the good faith
determination of the Board of Directors of the Issuer (whose determination shall
be conclusive and evidenced by a Board Resolution), is not of material
importance to the respective businesses conducted by the Issuer or any
Restricted Subsidiary as of the date of such determination; provided, however,
that, unless otherwise specified by the Board of Directors of the Issuer, any
real property (including related fixtures), plant or equipment with a fair
market value of less than $5 million (as determined in good faith by the Board
of Directors of the Issuer) shall not be a "Principal Property."
"Redeemable Capital Stock" means any Equity Interest which, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable before the stated maturity of the Notes), or upon the
happening of any event, matures or is mandatorily redeemable, in whole or in
part, prior to the stated maturity of the Notes.
"Redeemable Stock" of any Person means any equity security of such
Person that by its terms or otherwise is required to be redeemed for cash prior
to the final stated maturity of the Notes or is redeemable for cash at the
option of the holder thereof at any time prior to the final stated maturity of
the Notes.
"Restricted Subsidiary" means each Subsidiary of the Issuer other than
Unrestricted Subsidiaries.
"Special Purpose Funding Subsidiary" means a direct Wholly-Owned
Subsidiary of the Issuer (i) that serves as the cash management company for the
Issuer and its Subsidiaries and has no other material operations or business,
(ii) that for every transfer of funds to it, records a corresponding liability
on its books and records to the transferor thereof and (iii) whose assets do not
materially exceed its liabilities.
"Subsidiary" of any Person means (i) a corporation more than 50% of the
outstanding Voting Stock of which is owned, directly or indirectly, by such
Person or by one or more other Subsidiaries of such Person or by such Person and
one or more Subsidiaries thereof, (ii) a partnership of which such Person, or
one or more Subsidiaries of such Person or such Person and one or more other
Subsidiaries thereof, directly or indirectly, is the general partner, has at
least a majority ownership and has the power to direct the policies, management
and affairs
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thereof or (iii) any other Person (other than a corporation or a partnership) in
which such Person, or one or more other Subsidiaries of such Person or such
Person and one or more other Subsidiaries thereof, directly or indirectly, has
at least a majority ownership and power to direct the policies, management and
affairs thereof.
"Temporary Cash Investments" means (i) any evidence of Debt issued by
the United States of America, or an instrumentality or agency thereof and
Guaranteed fully as to principal, premium, if any, and interest by the United
States of America, maturing not more than one year after the date of
acquisition, (ii) any certificate of deposit, maturing not more than one year
after the date of acquisition, issued by, or time deposit of, a commercial
banking institution that is a member of the Federal Reserve System and that has
combined capital and surplus and undivided profits of not less than $500
million, whose Debt has a rating, at the time as of which any investment therein
is made, of "P-1" (or higher) according to Moody's or "A-1" (or higher)
according to S&P, (iii) commercial paper, maturing not more than one year after
the date of acquisition, issued by a corporation (other than the Company, the
Issuer or a Subsidiary of the Issuer or the Company) organized and existing
under the laws of the United States of America with a rating, at the time as of
which any investment therein is made, of "P-1" (or higher) according to Moody's
or "A-1" (or higher) according to S&P or (iv) any money market deposit accounts
issued or offered by a domestic commercial bank having capital and surplus in
excess of $500 million.
"Unrestricted Subsidiary" means any Subsidiary of the Issuer that (i)
is organized under the laws of a jurisdiction other than a jurisdiction in the
United States of America or (ii) does not constitute a "significant subsidiary"
of the Company within the meaning of Rule 1-02(w) of Regulation S-X promulgated
under the Exchange Act or any successor provision thereto.
"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
"Wholly-Owned Subsidiary" of any Person means a Subsidiary of such
Person all the outstanding Capital Stock or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by such
Person or by one or more Wholly-Owned Subsidiaries of such Person or by such
Person and one or more Wholly-Owned Subsidiaries of such Person.
CONSOLIDATION, MERGER OR CERTAIN SALES OF ASSETS OF THE ISSUER OR THE COMPANY
The Issuer will not, in a single transaction or through a series of
related transactions, consolidate with or merge with or into any other Person or
sell, assign, convey, transfer, lease or otherwise dispose of ("a sale") all or
substantially all of its properties and assets on a Consolidated basis to any
Person, or permit any of its Subsidiaries to enter into any such transaction or
series of related transactions if such transaction or series of related
transactions, in the aggregate, would result in a sale, assignment, conveyance,
transfer, lease or disposition of all or substantially all of the properties and
assets of the Issuer and its Subsidiaries on a Consolidated basis to any other
Person, unless at the time and after giving effect thereto (1)
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either the Issuer will be the continuing entity, or the successor entity, as a
result of such consolidation, merger or sale of the Issuer's assets, is
organized in the United States of America and expressly assumes the due and
punctual payment of the principal of, premium, if any, and interest on all the
Notes and the performance of every covenant of the Notes and the Indenture on
the part of the Issuer to be performed, and (2) immediately after giving effect
to such transaction, no Event of Default, and no event which, after notice or
lapse of time, or both, would become an Event of Default, shall have happened
and be continuing. If the acquiring or successor Person is not a direct or
indirect Subsidiary of the Company, all obligations of the Company under the
Indenture and the Guaranties will be released. (ss.ss. 801 and 802 of the
Indenture)
The Company will not, in a single transaction or through a series of
related transactions, consolidate with or merge with or into any other Person or
sell, assign, convey, transfer, lease or otherwise dispose of ("a sale") all or
substantially all of its properties and assets on a Consolidated basis to any
Person, or permit any of its Subsidiaries to enter into any such transaction or
series of related transactions if such transaction or series of related
transactions, in the aggregate, would result in a sale, assignment, conveyance,
transfer, lease or disposition of all or substantially all of the properties and
assets of the Company and its Subsidiaries on a Consolidated basis to any other
Person, unless at the time and after giving effect thereto (1) either the
Company will be the continuing entity, or the successor entity, as a result of
such consolidation, merger or sale of the Company assets, is organized in the
United States of America and expressly assumes the due and punctual payment of
the Guaranties and the performance of every covenant of the Guaranties and the
Indenture on the part of the Company to be performed, and (2) immediately after
giving effect to such transaction, no Event of Default, and no event which,
after notice or lapse of time, or both, would become an Event of Default, shall
have happened and be continuing. If the acquiring or successor Person is not a
direct or indirect Subsidiary of the Company, all obligations of the Company
under the Indenture and the Guaranties will be released. (ss.ss. 801 and 802 of
the Indenture)
If the Issuer or the Company consolidates, merges or sells all or
substantially all of its properties and assets as described above, and the
continuing or successor entity does not assume all obligations of the Issuer or
the Company, as applicable, under the Indenture and the Notes or the Guaranties,
as applicable, the Trustee or the Holders of the Notes may declare an Event of
Default after notice and a grace period. See "--Events of Default, Notice and
Waiver." However, although there is a developing body of case law interpreting
the phrase "substantially all," as used in Section 909 of the New York Business
Corporation Law, there is no precise established definition of the phrase as
used in indentures under applicable New York law. Accordingly, it is not
possible to quantify with certainty the point at which the Trustee or a Holder
of the Notes would be able to prove that "substantially all" of the assets of
the Company or the Issuer have been transferred to another Person, and thus
declare an Event of Default if a continuing or successor entity fails to assume
such obligations.
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PAYMENT OF ADDITIONAL AMOUNTS
The Indenture provides that any amounts paid, or caused to be paid, by
the Company or its assignee (or any successor to the Company or such assignee as
permitted under the Indenture) under the Guaranties, or paid by any successor to
the Issuer under the Indenture, will be paid without deduction or withholding
for any and all present and future taxes, levies, imposts or other governmental
charges whatsoever imposed, assessed, levied or collected by or for the account
of the United Kingdom, including any political subdivision or taxing authority
thereof ("U.K. Taxes"), or such other jurisdiction (the "Other Jurisdiction") as
is the jurisdiction of incorporation or residence (other than the United States
or any political subdivision or taxing authority thereof) of any assignee of the
Company or any successor to the Issuer or the Company, or any political
subdivision or taxing authority thereof ("Other Jurisdiction Taxes"). If there
is at any time a requirement to deduct or withhold U.K. Taxes or Other
Jurisdiction Taxes in respect of principal, premium, if any, or interest, the
Company, its assignee or any relevant successor will (subject to timely
compliance by the Holders or beneficial owners of the relevant Notes with any
relevant administrative requirements) pay or cause to be paid such Additional
Amounts as may be necessary in order that the net amounts paid to the Holders of
the Notes or the Trustee under the Indenture, as the case may be, pursuant to
the Indenture or the Guaranties, after such deduction or withholding, shall
equal the respective amounts of principal, premium, if any, or interest as
specified in the Notes to which such Holders or the Trustee are entitled. The
Indenture further provides that the obligation to pay Additional Amounts shall
not apply to:
(1) any present or future taxes, levies, imposts or other
governmental charges which would not have been so imposed,
assessed, levied or collected but for the fact that the Holder
or beneficial owner of the relevant Note is or has been a
domiciliary, national or resident of, engages or has been
engaged in business, maintains or has maintained a permanent
establishment, or is or has been physically present in, the
United Kingdom or the Other Jurisdiction, or otherwise has or
has had some connection with the United Kingdom or the Other
Jurisdiction (other than the holding or ownership of a Note, or
the collection of principal of, premium, if any, and interest
on, or the enforcement of, a Note or the Guaranty);
(2) any present or future taxes, levies, imposts or other
governmental charges which would not have been so imposed,
assessed, levied or collected but for the fact that, where
presentation is required, the relevant Note was presented more
than thirty days after the date such payment became due or was
provided for, whichever is later;
(3) any present or future taxes, levies, imposts or other
governmental charges which are payable otherwise than by
deduction or withholding on or in respect of the relevant Note
or Guaranty;
(4) any present or future taxes, levies, imposts or other
governmental charges which would not have been so imposed,
assessed, levied or collected but for the failure to comply, on
a sufficiently timely basis, with any certification,
identification or other
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reporting requirements concerning the nationality, residence,
identity or connection with the United Kingdom or the Other
Jurisdiction or any other relevant jurisdiction of the Holder or
beneficial owner of the relevant Note, if such compliance is
required by a statute or regulation of the United Kingdom or the
Other Jurisdiction, or by a relevant treaty, as a condition to
relief or exemption from such taxes, levies, imposts or other
governmental charges;
(5) any present or future taxes, levies, imposts or other government
charges (a) which would not have been so imposed, assessed,
levied or collected if the beneficial owner of the relevant Note
had been the Holder of such Note, or (b) which, if the
beneficial owner of such Note had held the Note as the Holder of
such Note, would have been excluded pursuant to clauses (1)
through (4) above; or
(6) any estate, inheritance, gift, sale, transfer, personal property
or similar tax, assessment or other governmental charge.
(ss. 301 of the Indenture)
The Indenture does not provide for the payment of Additional Amounts
with respect to the Indenture or the Guaranties due to any deduction or
withholding requirement imposed by any governmental unit other than the United
Kingdom, an Other Jurisdiction or a taxing authority or political subdivision
thereof.
EVENTS OF DEFAULT, NOTICE AND WAIVER
The Indenture provides that if an Event of Default (other than an Event
of Default of the type described in clause (4) below, with respect to the
Company or the Issuer) with respect to the Notes shall have happened and be
continuing, the Holders of not less than 25% in aggregate principal amount of
the Notes then outstanding under the Indenture may declare the principal of all
the Notes and any accrued interest thereon to be due and payable immediately,
and if an Event of Default of the type described in clause (4) (with respect to
the Company or the Issuer) below shall occur, the principal of all the Notes and
any accrued interest thereon shall automatically be due and payable immediately
(an "Acceleration"). (ss. 502 of the Indenture)
Events of Default in respect of the Notes are defined in the Indenture
as being: (1) default for 30 days in payment of any interest installment on the
Notes when due and payable; (2) default in payment of principal of (or premium,
if any, on), or the Redemption Price, the Tax Redemption Price or Additional
Amounts with respect to, any Note when due and payable; (3) default for 60 days,
after notice to the Issuer and the Company by the Trustee or to the Issuer, the
Company and the Trustee by Holders of not less than 25% in aggregate principal
amount of the Notes at the time outstanding, in the performance of any other
covenant or agreement in the Indenture; (4) certain events of bankruptcy,
insolvency and reorganization with respect to the Issuer, the Company or any
Restricted Subsidiary; (5) a default or defaults under any bond(s),
debenture(s), note(s) or other evidence(s) of Debt by the Issuer, the Company or
any Restricted Subsidiary or under any mortgage(s), indenture(s) or
instrument(s) under which there may be issued or by which there may be secured
or evidenced any Debt by the Issuer, the Company or any Restricted Subsidiary
with a principal amount then outstanding, individually or in the aggregate, in
excess of $25 million, whether such Debt now exists or shall hereafter be
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Incurred, which default or defaults shall constitute a failure to pay at final
maturity the principal of such Debt when due and payable after the expiration of
any applicable notice and grace period with respect thereto, or shall have
resulted in such Debt becoming or being declared due and payable prior to the
date on which it would otherwise have become due and payable and such
acceleration shall not have been rescinded or annulled, or such accelerated Debt
shall not have been discharged, within five Business Days (as defined) of such
acceleration; (6) the rendering of a final judgment or judgments (not subject to
appeal) against the Issuer, the Company or any Restricted Subsidiary in an
aggregate amount in excess of $25 million which remains unstayed, undischarged
or unbonded for a period of 60 days thereafter; and (7) a final, nonappealable
determination by the applicable governmental authority that the Company has
failed to maintain its dual tax residency in the United States and the United
Kingdom provided that such failure could reasonably be expected to have a
material adverse effect on (i) the operations, business or financial condition
of the Issuer and its Subsidiaries taken as a whole or (ii) the ability of the
Company or the Issuer to perform any of its payment obligations under the
Guaranties or the Notes, respectively. (ss. 501 of the Indenture)
The Indenture provides that the Trustee will, within 90 days after
receiving notice of the occurrence of a default with respect to the Notes, give
to the Holders of the Notes notice of all uncured and unwaived defaults known to
it; provided, however, that, except in the case of default in the payment of
principal of, premium, if any, or interest on any of the Notes, the Trustee will
be protected in withholding such notice if it in good faith determines that the
withholding of such notice is in the interest of the Holders of the Notes. The
term "default" for the purpose of this provision only means the happening of any
of the Events of Default with respect to the Notes, except that any grace period
and/or notice requirement of such Event of Default is eliminated.
(ss. 602 of the Indenture)
Before proceeding to exercise any right or power under the Indenture at
the request, order or direction of any Holders of the Notes, the Trustee is
entitled to be indemnified by such Holders subject to the duty of the Trustee
during an Event of Default to act with the required standard of care. (ss. 603
of the Indenture)
The Indenture provides that the Holders of not less than a majority in
aggregate principal amount of the Notes at the time outstanding may direct the
time, method and place of conducting proceedings for remedies available to the
Trustee, or exercising any trust of power conferred on the Trustee in respect of
the Notes, subject to provisions for indemnification and certain other rights of
the Trustee. (ss. 512 of the Indenture)
The Indenture includes a covenant that the Issuer within 120 days after
the end of each fiscal year with the Trustee a certificate of no default, or
specifying any default that exists.
(ss. 1012 of the Indenture)
In certain cases, the Holders of not less than a majority in aggregate
principal amount of the Notes then outstanding may on behalf of the Holders of
all the Notes annul an Acceleration and its consequences. Prior to an
Acceleration, the Holders of not less than a majority in aggregate principal
amount of the Notes then outstanding may on behalf of the Holders of all the
Notes waive any past default with respect to the Notes and its consequences,
except, among other
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things, a default in the payment of the principal of, premium, if any, or
interest on the Notes. (ss.ss. 502 and 513 of the Indenture)
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company, the Issuer
and the Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Notes then outstanding, (1) to execute
supplemental indentures adding any provisions to or amending, modifying or
changing or eliminating any of the provisions of the Indenture or modifying the
rights of the Holders of the Notes to be affected or (2) to waive compliance
with any provisions in the Indenture, except that no such supplemental indenture
may (a) among other things, change the stated maturity of any Notes, or reduce
the principal amount thereof (or premium, if any, thereon), reduce the
Redemption Price, Tax Redemption Price or Additional Amounts, or reduce the rate
or change the time of payment of interest thereon, or change the place or medium
of payment of the principal amount thereof, or interest thereon, or impair
certain rights of Holders of the Notes to institute suit for payment, without
the consent of all the Holders of the Notes so affected, (b) reduce the
percentage of the Notes, the consent of the Holders of which is required for any
such supplemental indenture, without the consent of all the Holders of the Notes
so affected, or (c) amend the Guaranties in a manner adverse to the Holders of
the Notes. (ss. 902 of the Indenture)
Modifications of and amendments to the Indenture, the Notes and the
Guaranties may be made by the Trustee without the consent of any Holder of Notes
or the Issuer or the Company, among other things, to cure any ambiguity, defect
or inconsistency, to provide for the assumption of the Issuer's or the Company's
obligations to the Holders of Notes as contemplated above under
"--Consolidation, Merger or Certain Sales of Assets of the Issuer or the
Company" or to make any change that does not materially adversely affect the
rights of any Holder of Notes.
(ss. 901 of the Indenture)
TRANSFER AND EXCHANGE
A Holder may transfer or exchange Notes in accordance with the
Indenture. Upon any transfer or exchange, the Security Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law. The Security Registrar
need not transfer or exchange any Note previously selected for redemption. A
registered Holder of a Note shall be treated as the owner thereof for all
purposes. No Note shall be valid until the Trustee or an authenticating agent
manually signs the certificate of authentication on the Note. Each Note shall
become effective on the date upon which it is so signed. (ss. 303 of the
Indenture)
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BOOK-ENTRY; DELIVERY AND FORM
Except as set forth below, the Notes will initially be represented by
one or more permanent global certificates in definitive, fully registered form
(each a "Global Note"). Each Global Note will be deposited on the Exchange Date
with, or on behalf of, DTC and registered in the name of Cede & Co., as nominee
of DTC.
Holders of Notes who elect to take physical delivery of their
certificates instead of holding their interests through the Global Note
(collectively referred to herein as the "Non-Global Holders") will be issued in
registered form (a "Certificated Note"). Upon the transfer of any Certificated
Note initially issued to a Non-Global Holder, such Certificated Note will,
unless the transferee requests otherwise or a Global Note has previously been
exchanged in whole for Certificated Notes, be exchanged for an interest in such
Global Note.
DTC has advised the Company that it is (i) a limited purpose trust
company organized under the laws of the State of New York, (ii) a member of the
Federal Reserve System, (iii) a "clearing corporation" within the meaning of the
Uniform Commercial Code, as amended and (iv) a "clearing agency" registered
pursuant to Rule 17A of the Exchange Act. DTC was created to hold securities for
DTC Participants and facilitates the clearance and settlement of securities
transactions between DTC Participants through electronic book-entry changes to
the accounts of DTC Participants, thereby eliminating the need for physical
transfer and delivery of certificates. DTC Participants include securities
brokers and dealers (including the BA Securities), banks and trust companies,
clearing corporations and certain other organizations. Access to the DTC's
system is also available to other entities such as banks, brokers, dealers and
trust companies (collectively, the "Indirect Participants") that clear through
or maintain a custodial relationship with a Participant, either directly or
indirectly. Holders of Notes who are not participants may beneficially own
securities held by or on behalf of DTC only through DTC Participants or Indirect
Participants.
Global Note. The Issuer expects that pursuant to procedures established
by DTC (i) upon the issuance of the Global Note, DTC or its custodian will
credit the accounts of DTC Participants designated by BA Securities with an
interest in the Global Note and (ii) ownership of beneficial interests in the
Global Note will be shown on, and the transfer of ownership thereof will be
effected only through, records maintained by DTC or its nominee (with respect to
the interests of DTC Participants) and the records of DTC Participants and the
Indirect Participants (with respect to interests of persons other than DTC
Participants).
So long as DTC or its nominee is the registered owner of the Global
Note, DTC or such nominee, as the case may be, will be considered the sole owner
or Holder of the Notes represented by the Global Note for all purposes under the
Indenture. No beneficial owner of an interest in the Global Note will be able to
transfer that interest except in accordance with DTC's procedures, in addition
to those provided for under the Indenture with respect to the Notes.
Payments with respect to the principal of, premium, if any, and
interest on any Notes represented by the Global Note on the applicable record
date will be payable by the Trustee to or at the direction of DTC or its nominee
in its capacity as the registered Holder of the Global Note
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representing such Notes under the Indenture. None of the Issuer, the Trustee or
any paying agent will have any responsibility or liability for any aspect of the
records relating to or payments made on account of Notes by DTC, or for
maintaining, supervising or reviewing any records of DTC relating to such Notes.
The Issuer expects that DTC or its nominee, upon receipt of any payment of
principal, premium, if any, or interest in respect of the Global Note will
credit DTC Participants' accounts with payments in amounts proportionate to
their respective beneficial interests in the principal amount of the Global Note
as shown on the records of DTC or its nominee. Payments by the DTC Participants
and the Indirect Participants to the beneficial owners of the Notes will be
governed by standing instructions and customary practice, as is now the case
with securities held for the account of customers registered in the names of
nominees for such customers, and will be the responsibility of the DTC
Participants or the Indirect Participants, as the case may be.
Transfers between DTC Participants will be effected in the ordinary way
through DTC's funds system in accordance with DTC's rules and will be settled in
federal funds. If a Holder requires physical delivery of a Certificated Note for
any reason, including to sell Notes to persons in states that require physical
delivery of the Notes, or to pledge such securities, such Holder must transfer
its interest in the Global Note in accordance with the normal procedures of DTC
and the procedures set forth in the Indenture.
DTC has advised the Issuer that it will take any action permitted to be
taken by a Holder of Notes (including the presentation of Notes for exchange as
described below) only at the direction of one or more DTC Participants to whose
account DTC's interests in the Global Note are credited and only in respect of
such portion of the aggregate principal amount of Notes as to which such DTC
Participant or DTC Participants has or have given such direction. However, if
there is an Event of Default under the Indenture, DTC will exchange the Global
Note for Certificated Notes, which it will distribute to DTC Participants.
Although DTC has agreed to the foregoing procedures in order to
facilitate transfers of interests in the Global Note among DTC Participants, it
is under no obligation to perform such procedures, and such procedures may be
discontinued at any time. Neither the Issuer nor the Trustee nor any paying
agent will have any responsibility for the performance by DTC or DTC
Participants or Indirect Participants of their respective obligations under the
rules and procedures governing their operations.
Certificated Notes. If (i) the Issuer notifies the Trustee in writing
that the DTC is no longer willing or able to act as a depository and the Issuer
is unable to locate a qualified successor depository within 90 days or (ii) the
Issuer, at is option, notifies the Trustee in writing that it elects to cause
the issuance of Notes in definitive form under the Indenture, then, upon
surrender by DTC of the Global Note, Certificated Notes will be issued to each
person that DTC identifies as the beneficial owner of the Notes represented by
the Global Note.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made in immediately available funds.
All payments of principal, premium, if any, and interest will be made by the
Issuer in immediately available
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funds. The Notes will trade in the Same-Day Settlement System of DTC until
maturity and, to the extent that secondary market trading activity in the Notes
is effected through the facilities of DTC, such trades will be settled in
immediately available funds.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of the
Issuer or the Company, as such, shall have any liability for any obligations of
the Issuer or the Company under the Notes, the Guaranties or the Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder of Notes by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for
issuance of the Notes and the Guaranties. Such waiver may not be effective to
waive liabilities under the federal securities laws and it is the view of the
Commission that such waiver is against public policy. (ss. 118 of the Indenture)
DEFEASANCE OR COVENANT DEFEASANCE OF INDENTURE
The Issuer may, at its option and at any time, elect to have the
obligations of the Issuer, the Company and any other obligor upon the Notes
discharged with respect to the outstanding Notes ("defeasance"). If defeasance
occurs the Issuer, the Company and any other obligor under the Indenture shall
be deemed to have paid and discharged the entire Debt represented by the
outstanding Notes, except for (i) the rights of Holders of such outstanding
Notes to receive, solely from the trust fund described below, payments in
respect of the principal of, premium, if any, and interest on such Notes, when
such payments are due from the trust referred to below, (ii) the Issuer's
obligations with respect to the Notes concerning issuing temporary Notes,
registration of Notes, mutilated, destroyed, lost or stolen Notes, and the
maintenance of an office or agency for payment and money for security payments
held in trust, (iii) the rights, powers, trusts, duties and immunities of the
Trustee, and (iv) the defeasance provisions of the Indenture.
Alternatively, the Issuer may, at its option and at any time, elect to
have the obligations of the Issuer released with respect to certain covenants
that are described in the Indenture ("covenant defeasance"). If covenant
defeasance occurs any omission to comply with those obligations shall not
constitute a Default or an Event of Default with respect to the Notes.
(ss.ss. 1201, 1202 and 1203 of the Indenture)
In order to exercise either defeasance or covenant defeasance:
(1) the Issuer must irrevocably deposit or cause to be deposited
with the Trustee, as trust funds in trust, for the benefit of
the Holders of the Notes, cash in United States dollars, U.S.
Government Obligations (as defined in the Indenture), or a
combination thereof, in such amounts as will be sufficient, in
the opinion of a nationally recognized firm of independent
public accountants or a nationally recognized investment banking
firm, to pay and discharge the principal of, premium, if any,
and interest on the outstanding Notes, on the Stated Maturity of
such principal, premium, if any, or interest;
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(2) in the case of defeasance, the Issuer shall have delivered to
the Trustee an opinion of independent counsel to the Issuer in
the United States stating that (a) the Issuer has received from,
or there has been published by, the Internal Revenue Service a
ruling, or (b) since the date of the Indenture, there has been a
change in the applicable federal income tax law, in either case
to the effect that, and based thereon such opinion of
independent counsel in the United States shall confirm that, the
Holders of the outstanding Notes, will not recognize income,
gain or loss for federal income tax purposes as a result of such
defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have
been the case if such defeasance had not occurred;
(3) in the case of covenant defeasance, the Issuer shall have
delivered to the Trustee an opinion of independent counsel in
the United States to the effect that the Holders of the
outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such covenant
defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have
been the case if such covenant defeasance had not occurred;
(4) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as clause (4)
under the second paragraph under "--Events of Default, Notice
and Waiver" are concerned, at any time during the period ending
on the 91st day after the date of deposit (other than a Default
or Event of Default resulting from the borrowing of funds to be
applied to such deposit);
(5) such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a Default under, any
material agreement or instrument (other than the Indenture) to
which the Issuer, the Company or any Subsidiary is a party or by
which it is bound;
(6) the Issuer will have delivered to the Trustee an opinion of
independent counsel in the United States to the effect that
after the 91st day following the deposit, the trust funds will
not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors'
rights generally;
(7) the Issuer shall have delivered to the Trustee an officers'
certificate stating that the deposit was not made by the Issuer
with the intent of preferring the Holders of the Notes or the
Guaranties over the other creditors of the Issuer or the Company
with the intent of defeating, hindering, delaying or defrauding
creditors of the Issuer, the Company or others;
(8) no event or condition shall exist that would prevent the Issuer
or the Company from making payments of the principal of,
premium, if any, and interest on the Notes on the date of such
deposit or at any time ending on the 91st day after the date of
such deposit; and
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(9) the Issuer will have delivered to the Trustee an officers'
certificate and an opinion of independent counsel, each stating
that all conditions precedent required for either defeasance or
the covenant defeasance, have been complied with. (ss. 1204 of
the Indenture)
SATISFACTION AND DISCHARGE
The Indenture will be discharged and will cease to be of further effect
(except as to surviving rights of registration of transfer or exchange of the
Notes, as expressly provided for in the Indenture) as to all outstanding Notes
and Guaranties, under the Indenture when:
(1) either (a) all such Notes, theretofore authenticated and
delivered (except lost, stolen or destroyed Notes which have
been replaced or paid or Notes whose payment has been deposited
in trust or segregated and held in trust by the Issuer and
thereafter repaid to the Issuer or discharged from such trust as
provided for in the Indenture), have been delivered to the
Trustee for cancellation or (b) all Notes, not theretofore
delivered to the Trustee for cancellation (x) have become due
and payable, or (y) will become due and payable at their Stated
Maturity within one year; and the Issuer or the Company has
irrevocably deposited or caused to be deposited with the Trustee
as trust funds in trust an amount in United States dollars
sufficient to pay and discharge the entire indebtedness on the
Notes, not theretofore delivered to the Trustee for
cancellation, including principal of, premium, if any, and
accrued interest on such Note at such Maturity or Stated
Maturity;
(2) the Issuer or the Company has paid or caused to be paid all
other sums payable under the Indenture by the Issuer and the
Company; and
(3) the Issuer has delivered to the Trustee an officers' certificate
and an opinion of independent counsel, each stating that (a) all
conditions precedent under the Indenture relating to the
satisfaction and discharge of the Indenture have been complied
with, and (b) such satisfaction and discharge will not result in
a breach or violation of, or constitute a default under, the
Indenture or any other material agreement or instrument to which
the Issuer, the Company or any Subsidiary is a party or by which
the Issuer, the Company or any Subsidiary is bound. (ss. 401 of
the Indenture)
GOVERNING LAW
The Indenture, the Notes and the Guaranties will be governed by, and
construed in accordance with, the laws of the State of New York, without giving
effect to the conflicts of law principles thereof. (ss. 113 of the Indenture)
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CONCERNING THE TRUSTEE
The Indenture provides that, except during the continuance of an Event
of Default, the Trustee will perform only such duties as are specifically set
forth in the Indenture. If an Event of Default has occurred and is continuing,
the Trustee will exercise such rights and powers vested in it under the
Indenture and use the same degree of care and skill in its exercise as a prudent
person would exercise under the circumstances in the conduct of such person's
own affairs. (ss. 601 of the Indenture)
The Indenture and provisions of the Trust Indenture Act incorporated by
reference therein contain limitations on the rights of the Trustee, should it
become a creditor of the Company or the Issuer, to obtain payment of claims in
certain cases or to realize on certain property received by it in respect of any
such claims as security or otherwise. The Trustee is permitted to engage in
other transactions; provided, however, that if it acquires any conflicting
interest, it must eliminate such conflict or resign. (ss.ss. 608 and 613 of the
Indenture)
The Issuer may from time to time maintain lines of credit, and have
other customary banking relationships, with PNC Bank, National Association, the
Trustee under the Indenture, or its Affiliates. PNC Bank, National Association
also is a lender under the New Credit Facility.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following discussion of taxation is intended only as a summary and
does not purport to be a complete analysis of all potential tax effects relevant
to the New Notes. The statements of United States and United Kingdom tax law set
forth below are based on the laws, regulations and administrative and judicial
decisions applicable as of the date of this Prospectus, and are subject to any
changes in relevant United Kingdom or United States authorities, or in the
income tax treaty between the United States and the United Kingdom occurring
after that date. Any such changes, which could be retroactive, could affect the
continuing validity of this discussion.
Prospective holders of New Notes should consult their own tax advisors
concerning the application of United States federal and United Kingdom income
tax laws, as well as the laws of any state, local, or other taxing jurisdiction
applicable to their particular situations.
UNITED STATES FEDERAL INCOME TAXATION
The following general discussion summarizes certain of the material
U.S. federal income tax aspects of the acquisition, ownership and disposition of
the New Notes. This discussion is a summary for general information only and
does not consider all aspects of U.S. federal income tax that may be relevant to
the purchase, ownership and disposition of the New Notes by a prospective
investor in light of such investor's personal circumstances. This discussion
also does not address the U.S. federal income tax consequences of ownership of
New Notes not held as capital assets within the meaning of Section 1221 of the
Internal Revenue Code of 1986, as amended (the "Code"), or the U.S. federal
income tax consequences to investors subject to special treatment under the U.S.
federal income tax laws, such as dealers in securities or foreign
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currency, tax-exempt entities, banks, thrifts, insurance companies, persons that
hold the New Notes as part of a "straddle", a "hedge" against currency risk of a
"conversion transaction", persons that have a "functional currency" other than
the U.S. dollar, and investors in pass-through entities. In addition, this
discussion is generally limited to the U.S. federal income tax consequences to
initial holders. It does not address any consequences arising out of the tax
laws of any state, local or foreign jurisdiction.
This discussion is based upon the Code, existing and proposed
regulations thereunder, and current administrative rulings and court decisions.
All of the foregoing is subject to change, possibly on a retroactive basis, and
any such change could affect the continuing validity of this discussion.
U.S. Holders
The following discussion is limited to the U.S. federal income tax
consequences relevant to a holder of a New Note that is (i) a citizen or
resident (as defined in Section 7701(b)(1) of the Code) of the United States,
(ii) a corporation organized under the laws of the United States or any
political subdivision thereof or therein or (iii) an estate or trust, the income
of which is subject to U.S. federal income tax regardless of the source (a "U.S.
Holder"). For taxable years beginning after December 31, 1996 (or for the
immediately preceding taxable year if the trustee of a trust so elects), a trust
is a U.S. Holder for U.S. federal income tax purposes, if, and only if a court
within the United States is able to exercise primary supervision over the
administration of the trust for U.S. federal income tax purposes and one or more
United States trustees have the authority to control all substantial decisions
of the trust. Certain U.S. federal income tax consequences relevant to a holder
other than a U.S. Holder are discussed separately below.
Exchange Offer. The exchange of the Existing Notes for New Notes
pursuant to the Exchange Offer should not be a taxable exchange for U.S. federal
income tax purposes. As a result, there should be no U.S. federal income tax
consequences to a U.S. Holder exchanging an Existing Note for a New Note
pursuant to the Exchange Offer. A U.S. Holder should have the same adjusted
basis and holding period in the New Note as it had in the Existing Note
immediately before the exchange.
Interest. Interest on a New Note will be taxable to a U.S. Holder as
ordinary interest income at the time it accrues or is received, in accordance
with such holder's method of accounting for tax purposes. The Company is
obligated to pay Additional Amounts to the holders of New Notes under certain
circumstances involving taxation described above. Such Additional Amounts should
be taxable to U.S. Holders at the time it accrues or is received in accordance
with each such holders' method of accounting.
Market Discount. If a New Note is acquired at a "market discount," some
or all of any gain realized upon a sale, other disposition or payment at
maturity (or earlier) of such New Note, or some or all of the proceeds of a
partial principal repayment before maturity of such New Note, may be treated as
ordinary income, as described below. For this purpose, "market discount" is the
excess, if any, of the stated redemption price at maturity over the purchase
price, subject to a statutory de minimis exception. Unless a U.S. Holder has
elected to include market
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discount in income as it accrues, any gain realized on a disposition of such a
New Note (other than in connection with certain nonrecognition transactions) or
payment at maturity (or earlier), or some or all of the proceeds of a partial
repayment before maturity, will generally be treated as ordinary income to the
extent of the market discount accrued during the period the New Note was held.
Such a U.S. Holder may also be required to defer deductions for any interest
paid on indebtedness allocable to that New Note until such income is realized.
Bond Premium. In general, if a New Note is purchased at a price
exceeding the principal amount of that New Note, the New Note has "bond
premium." A U.S. Holder may generally elect to amortize bond premium over the
remaining term of that New Note (or, in certain circumstances, until an earlier
call date).
An election to amortize premium will apply to amortizable bond premium
on all New Notes and other taxable debt securities held by the electing U.S.
Holder on or after the beginning of the U.S. Holder's first taxable year to
which the election applies, and may be revoked only with the consent of the
Internal Revenue Service.
Sale, Exchange or Redemption of New Notes. Upon the disposition of a
New Note by sale, exchange or redemption, a U.S. Holder will generally recognize
gain or loss equal to the difference between (i) the amount realized on the
disposition (other than amounts attributable to accrued interest) and (ii) the
U.S. Holder's tax basis in the New Note. A U.S. Holder's tax basis in a New Note
generally will equal the cost of the New Note (net of any accrued interest paid
at purchase) to the U.S. Holder, increased by any amounts includible in income
as market discount (if the holder elects to include market discount on a current
basis), and reduced by any amortized bond premium.
Provided the New Note is held as a capital asset, gain or loss on the
disposition of a New Note (except as otherwise provided by the market discount
rules) will generally constitute capital gain or loss and will be long-term
capital gain or loss if the U.S. Holder has held the New Note for more than one
year.
Backup Withholding and Information Reporting. Under the Code, a U.S.
Holder of a New Note may be subject, under certain circumstances, to information
reporting and/or backup withholding at a 31% rate with respect to cash payments
in respect of interest or the gross proceeds from dispositions thereof. This
withholding applies only if the holder (i) fails to furnish its social security
or other taxpayer identification number ("TIN") within a reasonable time after a
request therefor, (ii) furnishes an incorrect TIN, (iii) fails to report
interest properly, or (iv) fails, under certain circumstances, to provide a
certified statement, signed under penalty of perjury, that the TIN provided is
its correct number and that it is not subject to backup withholding. Any amount
withheld from a payment to a U.S. Holder under the backup withholding rules is
allowable as a credit (and may entitle such holer to a refund) against such
holder's U.S. federal income tax liability, provided that the required
information is furnished to the Internal Revenue Service. Certain persons are
exempt from backup withholding, including corporations and financial
institutions. U.S. Holders of New Notes should consult their tax advisors as to
their qualification for exemption from withholding and the procedure for
obtaining such exemption.
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Non-U.S. Holders
The following discussion is limited to the U.S. federal income tax
consequences relevant to a beneficial owner of a New Note that is not a U.S.
Holder (a "Non-U.S. Holder").
The discussion does not deal with all aspects of U.S. federal income
and estate taxation that may be relevant to the purchase, ownership or
disposition of a New Note by a particular Non-U.S. Holder in light of such
Non-U.S. Holder's particular circumstances, including, e.g., the holding of New
Notes through a partnership, trust or estate. For example, persons who are
partners in foreign partnerships or beneficiaries of foreign trusts or estates
and are subject to U.S. federal income tax because of their own status, such as
nonresidents engaged in a trade or business in the United States, may be subject
to U.S. federal income tax on income and gain from the New Notes, even though
the entity is not so taxable.
For purposes of the following discussion, interest and gain on the
sale, exchange or other disposition of the New Note will be considered "U.S.
trade or business income" if such income or gain is (i) effectively connected
with the conduct of a U.S. trade or business or (ii) in the case of a Non-U.S.
Holder entitled to the benefit of a U.S. income tax treaty, attributable to a
U.S.
permanent establishment (or to a fixed base) in the United States.
Interest. Generally, interest on a New Note paid to a Non-U.S. Holder
that is not U.S. trade or business income will not be subject to U.S. federal
income tax if the interest qualifies as "portfolio interest." Generally,
interest on the New Notes will qualify as portfolio interest if (i) the Non-U.S.
Holder does not actually or constructively own 10% or more of the total voting
power of all voting stock of the Company and is not a "controlled foreign
corporation" with respect to which the Company is a "related person" within the
meaning of the Code, and (ii) the beneficial owner, under penalty of perjury,
certifies that the beneficial owner is not a United States person and such
certificate provides the beneficial owner's name and address.
The gross amount of payments to a Non-U.S. Holder of interest that do
not qualify for the portfolio interest exception and that are not U.S. trade or
business income will be subject to U.S. federal income tax at the rate of 30%,
unless a U.S. income tax treaty applies to reduce or eliminate withholding. U.S.
trade or business income will be taxed at regular U.S. income tax rates rather
than the 30% withholding rate. To claim the benefit of a tax treaty or to claim
exemption from withholding because the income is U.S. trade or business income,
the Non-U.S. Holder must provide a properly executed Form 1001 or 4224 (or such
successor forms as the IRS designates), as applicable, prior to the payment of
interest. These forms must be periodically updated. Under proposed regulations,
the Forms 1001 and 4224 will be replaced by Form W-8. Also under proposed
regulations, a Non-U.S. Holder who is claiming the benefits of a treaty may be
required to obtain a U.S. taxpayer identification number and to provide certain
documentary evidence issued by foreign governmental authorities to prove
residence in the foreign country.
Sale, Exchange or Redemption of New Notes. Except as described below,
any gain realized by a Non-U.S. Holder on the sale, exchange or redemption of a
New Note generally will not be subject to U.S. federal income tax, unless (i)
that gain is U.S. trade or business
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income, (ii) subject to certain exceptions, the Non-U.S. Holder is an individual
who holds the New Note as a capital asset and is present in the United States
for 183 days or more in the taxable year of the disposition, or (iii) the
Non-U.S. Holder is subject to tax pursuant to the provisions of U.S. tax law
applicable to certain U.S. expatriates.
Federal Estate Tax. New Notes held (or treated as held) by an
individual who is a Non- U.S. Holder at the time of his or death will not be
subject to U.S. federal estate tax, provided that (i) the individual does not
actually or constructively own 10% or more of the total voting power of all
voting stock of the Company and (ii) income on the New Notes was not U.S. trade
or business income.
Information Reporting and Backup Withholding. The Company must report
annually to the Internal Revenue Service and to each Non-U.S. Holder any
interest that is subject to withholding or that is exempt from U.S. withholding
tax pursuant to a tax treaty or the portfolio interest exception. Copies of
these information returns may also be made available, pursuant to the provisions
of certain tax treaties or agreements, to the tax authorities of the country in
which the Non-U.S. Holder resides (or is otherwise subject to tax).
The regulations provide that backup withholding and information
reporting will not apply to payments of principal on the New Notes by the
Company to a Non-U.S. Holder, if the Holder certifies as to its non-U.S. status
under penalties of perjury or otherwise establishes an exemption (provided that
neither the Company nor its paying agent has actual knowledge that the holder is
a United States person or that the conditions of any other exemption are not, in
fact, satisfied).
The payment of the proceeds from the disposition of New Notes to or
through the United States office of any broker, U.S. or foreign, will be subject
to information reporting and possible backup withholding unless the owner
certifies as to its non-U.S. status under penalty of perjury or otherwise
establishes an exemption, provided that the broker does not have actual
knowledge that the Holder is a U.S. person or that the conditions of any other
exemption are not, in fact, satisfied. The payment of the proceeds from the
disposition of a New Note to or through a non- U.S. office of a non-U.S. broker
that is not a U.S. related person will not be subject to information reporting
or backup withholding. For this purpose, a "U.S. related person" is (i) a
"controlled foreign corporation" for federal income tax purposes or (ii) a
foreign person 50% or more of whose gross income from all sources for the
three-year period ending with the close of its taxable year preceding the
payment (or for such part of the period that the broker has been in existence)
is derived from activities that are effectively connected with the conduct of a
United States trade or business.
In the case of the payment of proceeds from the disposition of New
Notes to or through a non-U.S. office of a broker that is either a U.S. person
or a U.S. related person, the regulations require information reporting on the
payment unless the broker has documentary evidence in its files that the owner
is a Non-U.S. Holder and the broker has no knowledge to the contrary. Backup
withholding will not apply to payments made through foreign offices of a broker
that is a U.S. person or a U.S. related person (absent actual knowledge that the
payee is a U.S. person).
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Any amounts withheld under the backup withholding rules from a payment
to a Non-U.S. Holder will be allowed as a refund or a credit against such
Non-U.S. Holder's U.S. federal income tax liability, provided that the requisite
procedures are followed.
UNITED KINGDOM INCOME TAXATION
Payments of principal and interest on a New Note by the Company under
the Guaranties received by a beneficial owner not otherwise taxable in the
United Kingdom will generally be exempt from United Kingdom tax. However, the
Company's understanding of current Inland Revenue practice is that where a
United Kingdom company is obliged to make a payment of interest under a guaranty
which in default would be enforced in the United Kingdom, that payment will have
a United Kingdom source. Accordingly, the payment will be subject to United
Kingdom withholding tax in the absence of an available exemption under an
applicable double taxation treaty or convention.
Such an exemption should be available under the double taxation treaty
between the United States and the United Kingdom to beneficial owners of New
Notes who timely satisfy the conditions for exemption therein and who comply
with the relevant administrative arrangements. If, however, an exemption is not
available and a United Kingdom withholding tax is imposed on a payment in
respect of interest (or any additional interest) under the Company Guaranties,
subject to the exceptions set forth above under "Description of the New
Notes--Payment of Additional Amounts," the Company or its successors or assigns
will be obligated to pay or cause to be paid such Additional Amounts in respect
of the relevant interest as may be necessary in order that the net amount of
interest paid to a Holder of a New Note shall equal the amount of interest to
which such Holder is entitled. If the Company is required to pay Additional
Amounts by reason of current Inland Revenue practice, the Issuer could not
redeem the Notes (see "Description of the New Notes--Redemption").
Beneficial owners of New Notes should consult their own tax advisors as
to the conditions for exemption and the relevant administrative arrangements.
PLAN OF DISTRIBUTION
The Existing Notes were issued and sold on December 12, 1996 in a
transaction exempt from the registration requirements of the Securities Act and
applicable state securities laws and may not be offered or sold in the United
States unless so registered or pursuant to an applicable exemption under the
Securities Act and applicable state securities laws. The New Notes are being
offered hereunder in order to satisfy certain obligations of the Issuer and the
Company contained in the Registration Rights Agreement. Based on an
interpretation of the Securities Act by the staff of the Commission set forth in
several no-action letters to third parties, including Exxon Capital, Morgan
Stanley and similar letters, the Issuer believes that the New Notes issued
pursuant to the Exchange Offer in exchange for Existing Notes may be offered for
resale, resold and otherwise transferred by Holders thereof (other than any such
Holder that is an Affiliate of the Issuer), without further compliance with the
registration and prospectus delivery requirements of the Securities Act,
provided that such New Notes are acquired in the ordinary course of such
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Holders' business and such Holders are not engaged in, have no arrangement or
understanding with any person to participate in, and do not intend to engage in
any distribution of, the New Notes. However, the Issuer has not sought a
no-action letter with respect to the Exchange Offer and there can be no
assurance that the Staff of the Commission would make a similar determination
with respect to the Exchange Offer. Each holder of Existing Notes, other than a
broker-dealer, must acknowledge that it is not engaged in, has no arrangement or
understanding with any person to participate in, and does not intend to engage
in a distribution of New Notes. Any holder who tenders in the Exchange Offer for
the purpose of participating in a distribution of New Notes (i) will not be able
to rely on the interpretations of the staff of the Commission set forth in the
above-referenced no-action letters, (ii) will not be able to validly tender
Existing Notes in the Exchange Offer and (iii) must comply with the registration
and prospectus delivery requirements of the Securities Act in connection with
any sale or transfer of the New Notes, unless such sale or transfer is made
pursuant to an exemption from, or in a transaction not subject to, such
requirements.
In addition, each broker-dealer that receives New Notes for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Notes. The Letter of
Transmittal accompanying this Prospectus states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
acting in the capacity of an "underwriter" within the meaning of Section 2(11)
of the Securities Act. This Prospectus, as it may be amended or supplemented
from time to time, may be used by a broker-dealer in connection with resales of
New Notes received in exchange for Existing Notes where such Existing Notes were
acquired by such broker-dealer as a result of market-making activities or other
trading activities. Pursuant to the Registration Rights Agreement, the Issuer
has agreed that it will make this Prospectus available to any broker-dealer for
use in connection with any such resale.
The Company will not receive any proceeds from any sale of New Notes by
Participating Broker-Dealers. New Notes received by Participating Broker-Dealers
for their own account pursuant to the Exchange Offer may be sold from time to
time in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the New Notes or a combination
of such methods of resale, at market prices prevailing at the time of resale, at
prices related to such prevailing market prices or negotiated prices. Any such
resale may be made directly to purchasers or to or through brokers or dealers
who may receive compensation in the form of commissions or concessions from any
Participating Broker-Dealer and/or the purchasers of any such New Notes. Any
Participating Broker-Dealer that resells New Notes that were received by it for
its own account pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such New Notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit on any
such resale of New Notes and any commissions or concessions received by any such
persons may be deemed to be underwriting compensation under the Securities Act.
The Letter of Transmittal states that by acknowledging that it will deliver and
by delivering a prospectus, a Participating Broker-Dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act.
The Company will promptly send additional copies of this Prospectus and
any amendment or supplement to this Prospectus to any broker-dealer that
requests such documents in the Letter
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of Transmittal. The Company has agreed to pay all expenses incident to the
Exchange Offer other than commissions or concessions of any broker-dealers and
will indemnify holders of the Notes (including any broker-dealers) against
certain liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
The validity of the New Notes will be passed upon for the Issuer and
the Company by Weil, Gotshal & Manges LLP, New York, New York.
EXPERTS
The consolidated financial statements and schedule of U.S. Industries,
Inc. in its Annual Report on Form 10-K for the year ended September 28, 1996,
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon included therein and incorporated herein by reference.
Their report is based in part on the reports of Price Waterhouse LLP and
Deloitte & Touche LLP. Such consolidated financial statements and schedule are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
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NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE ISSUER OR THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY SECURITY OTHER THAN THE NEW
NOTES OFFERED BY THIS PROSPECTUS, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY THE NEW NOTES BY ANYONE IN ANY JURISDICTION
WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS
BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF
THE ISSUER OR THE COMPANY SINCE THE DATE HEREOF.
TABLE OF CONTENTS
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Available Information............................................... 3
Disclosure Regarding Forward-Looking
Statements......................................................... 3
Incorporation of Certain Documents
by Reference...................................................... 4
Important........................................................... 5
Summary............................................................. 6
Risk Factors........................................................ 19
Recent Developments................................................. 22
Use of Proceeds..................................................... 24
Ratio of Earnings to Fixed Changes.................................. 25
Capitalization ..................................................... 26
Selected Financial Data............................................. 27
The Exchange Offer ................................................. 29
Procedures for Tendering Existing Notes............................. 34
Description of the New Notes........................................ 40
Certain Federal Income Tax
Considerations..................................................... 66
Plan of Distribution................................................. 71
Legal Matters........................................................ 73
Experts.............................................................. 73
UNTIL JULY , 1997 (90 DAYS AFTER THE DATE OF THIS PROSPECTUS) ALL DEALERS
EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
PROSPECTUS
USI AMERICAN
HOLDINGS, INC.
U.S. INDUSTRIES, INC.
OFFER TO EXCHANGE
$125,000,000 OF THE ISSUER'S
7 1/4% SENIOR NOTES DUE 2006,
SERIES B, WHICH HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT, FOR
$125,000,000 OF ITS
OUTSTANDING 7 1/4% SENIOR NOTES
DUE 2006, SERIES A
UNCONDITIONALLY GUARANTEED
BY THE COMPANY
APRIL __, 1997
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Issuer and the Company are Delaware corporations. Section 145 of
the Delaware General Corporation Law (the "DGCL") provides that a Delaware
corporation has the power to indemnify its officers and directors in certain
circumstances.
Subsection (a) of Section 145 of the DGCL empowers a corporation to
indemnify any director or officer, or former director or officer, who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of his service as director, officer, employee or agent of the
corporation, or his service, at the corporation's request, as a director,
officer, employee or agent of another corporation or enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with such action, suit
or proceeding provided that such director or officer acted in good faith and in
a manner reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding,
provided that such director or officer had no reasonable cause to believe his
conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
director or officer, or former director or officer, who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that such person acted in any of the capacities set forth
above, against expenses (including attorneys' fees) actually and reasonably
incurred in connection with the defense or settlement of such action or suit
provided that such director or officer acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification may be made in respect of any claim,
issue or matter as to which such director or officer shall have been adjudged to
be liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such director or officer is fairly and reasonably
entitled to indemnity for such expenses which the court shall deem proper.
Section 145 further provides that to the extent a director or officer
of a corporation has been successful in the defense of any action, suit or
proceeding referred to in subsections (a) or (b) or in the defense of any claim,
issue or matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith; provided that indemnification provided for by Section 145 or granted
pursuant thereto shall not be deemed exclusive of any other rights to which the
indemnified party may be entitled;
II-1
<PAGE>
and empowers the corporation to purchase and maintain insurance on behalf of a
director of officer of the corporation against any liability asserted against
him or incurred by him in any such capacity or arising out of his status as such
whether or not the corporation would have the power to indemnify him against
such liabilities under Section 145.
In addition, Section 102(b)(7) of the DGCL permits Delaware
corporations to include a provision in their certificates of incorporation
eliminating or limiting the personal liability of a director to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, provided that such provisions shall not eliminate or limit the
liability of a director (i) for any breach of the director's duty of loyalty to
the corporation or its stockholders, (ii) for acts or omissions not in good
faith or that involved intentional misconduct or a knowing violation of law,
(iii) for unlawful payment of dividends or other unlawful distributions, or (iv)
for any transactions from which the director derived an improper personal
benefit.
Each of the Issuer's and the Company's Certificate of Incorporation
currently provides that each Director shall not be personally liable to each
respective corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director and require each respective corporation to
indemnify its directors and officers to the fullest extent permitted by the
DGCL.
The By-Laws of the Issuer provide that the Issuer may, and the By-Laws
of the Company provide that the Company must, provide to any director or officer
advances for expenses incurred in defending an action, suit or proceeding
brought against such person because of his or her status as an officer or
director upon receipt of an undertaking to repay such advances unless it is
ultimately determined that he or she is entitled to indemnification by the
respective corporation.
The directors and officers of each of the Issuer and the Company are
insured against certain civil liabilities, including liabilities under federal
securities laws, which might be incurred by them in such capacity.
ITEM 21. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
EXHIBIT NO. DESCRIPTION OF DOCUMENT
3.1(a) Certificate of Incorporation of the Issuer.**
3.1(b) Amended and Restated Certificate of Incorporation of the
Company (filed as Exhibit 1 to the Company's Quarterly Report
on Form 10-Q for the fiscal quarter ended July 1, 1995).*
3.2(a) Bylaws of the Issuer.**
3.2(b) Amended and Restated Bylaws of the Company (filed as Exhibit
3.2 to the Company's Registration Statement on Form 10, dated
April 21, 1995).*
II-2
<PAGE>
4.1 Indenture, dated as of December 12, 1996, among the Issuer,
the Company and PNC Bank, National Association, as Trustee.**
4.2 Specimen New Notes (included in Exhibit 4.1).**
5.1 Opinion of Weil, Gotshal & Manges LLP.**
10.1 Credit Agreement, dated December 12, 1996, among the Issuer,
the Company, Various Banks named therein, Bank of America
National Trust and Savings Association, as Issuing Bank,
Swingline Bank and Agent, and BA Securities, Inc., as
Arranger.**
12.1 Computation of Ratio of Earnings to Fixed Charges.**
23.1 Consent of Ernst & Young LLP.**
23.2 Consent of Price Waterhouse LLP.**
23.3 Consent of Deloitte & Touche LLP.**
23.4 Consent of Weil, Gotshal & Manges LLP (included in Exhibit
5.1).**
24.1 Powers of Attorney.**
25.1 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of the Trustee under the Indenture.**
99.1 Registration Rights Agreement, dated December 12, 1996, among
the Issuer, the Company and BA Securities.**
99.2 Form of Letter of Transmittal.**
99.3 Form of Notice of Guaranteed Delivery.**
99.4 Form of Letter to Brokers.**
99.5 Form of Letter to Clients.**
-------------
* Incorporated Herein By Reference
** Filed Herewith
(b) Financial Statement Schedules.
II. Valuation and Qualifying Accounts (included in Item 8 of
the Company's 1996 Annual Report, which is incorporated
herein by reference.
(c) Not applicable.
ITEM 22. UNDERTAKINGS
(a)(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
II-3
<PAGE>
(ii) To reflect in the prospectus any facts of events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum
aggregate offering price set forth in the Calculation of
Registration Fee" table in the effective registration
statement.
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
(a)(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act
of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934 (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by
reference in the Registration Statement shall be deemed to be
a new registration statement relating to the securities
offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof.
(a)(e) The undersigned Registrant hereby undertakes to deliver or
cause to be delivered with the Prospectus, to each person to
whom the Prospectus is sent or given, the latest annual
report, to security holders that is incorporated by reference
in the Prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information
required to be presented by Article 3 of Regulation S-X is not
set forth in the Prospectus, to deliver, or cause to be
delivered to each person to whom the Prospectus is sent or
given, the latest quarterly report that is
II-4
<PAGE>
specifically incorporated by reference in the Prospectus to
provide such interim financial information.
(a)(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
(b) The undersigned Registrant hereby undertakes to respond to
requests for information that is incorporated by reference
into the Prospectus pursuant to Item 4, 10(b), 11, or 13 of
this form, within one business day of receipt of such request,
and to send the incorporated documents by first class mail or
other equally prompt means. This includes information
contained in documents filed subsequent to the effective date
of the Registration Statement through the date of responding
to the request.
(c) The undersigned Registrant hereby undertakes to supply by
means of a post-effective amendment all information concerning
a transaction, and the company being acquired involved
therein, that was not the subject of and included in the
Registration Statement when it became effective.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the
Registrants named below have duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Iselin, State of New Jersey, on April 23, 1997.
USI AMERICAN HOLDINGS, INC.
U.S. INDUSTRIES, INC.
By: /s/ George H. MacLean
------------------------------
Name: George H. MacLean
Title: Senior Vice President, General
Counsel and Secretary
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
USI AMERICAN HOLDINGS, INC.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Chairman of the Board and Chief April __, 1997
- ------------------------------------------ Executive Officer (Principal Executive
David H. Clarke Officer)
* President, Chief Operating Officer and
- ------------------------------------------ Director April 23, 1997
John G. Raos
/s/ George H. MacLean Senior Vice President, General Counsel, April 23, 1997
- ------------------------------------------ Secretary and Director
George H. MacLean
/s/ Frank R. Reilly Senior Vice President and Chief Financial April 23, 1997
- ------------------------------------------ Officer (Principal Financial Officer)
Frank R. Reilly
/s/ James O'Leary Vice President -- Corporate Controller April 23, 1997
- ------------------------------------------ (Principal Accounting Officer)
James O'Leary
</TABLE>
II-6
<PAGE>
U.S. INDUSTRIES, INC.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Chairman of the Board and Chief April 23, 1997
- ------------------------------------------ Executive
David H. Clarke Officer (Principal Executive Officer)
* President, Chief Operating Officer and April 23, 1997
- ------------------------------------------ Director
John G. Raos
/s/ Frank R. Reilly Senior Vice President, Chief Financial April 23, 1997
- ------------------------------------------ Officer and Director (Principal Financial
Frank R. Reilly Officer)
* Director
- ------------------------------------------
Sir Harry Solomon April 23, 1997
* Director
- ------------------------------------------
Mark Vorder Bruegge April 23, 1997
* Director
- ------------------------------------------
Brian C. Beazer April 23, 1997
* Director
- ------------------------------------------
John J. McAtee, Jr. April 23, 1997
* Director
- ------------------------------------------
The Hon. Charles H. Price II April 23, 1997
* Director
- ------------------------------------------
Royall Victor, III April 23, 1997
/s/ James O'Leary Vice President - Corporate Controller April 23, 1997
- ------------------------------------------ (Principal Accounting Officer)
James O'Leary
</TABLE>
- --------------------------------
* By: /s/ George H. MacLean
---------------------------
George H. MacLean
Attorney-in-Fact
II-7
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION OF DOCUMENT
3.1(a) Certificate of Incorporation of the Issuer.**
3.1(b) Amended and Restated Certificate of Incorporation of the
Company (filed as Exhibit 1 to the Company's Quarterly Report
on Form 10-Q for the fiscal quarter ended July 1, 1995).*
3.2(a) Bylaws of the Issuer.**
3.2(b) Amended and Restated Bylaws of the Company (filed as Exhibit
3.2 to the Company's Registration Statement on Form 10, dated
April 21, 1995).*
4.1 Indenture, dated as of December 12, 1996, among the Issuer,
the Company and PNC Bank, National Association, as Trustee.**
4.2 Specimen New Notes (included in Exhibit 4.1).**
5.1 Opinion of Weil, Gotshal & Manges LLP.**
10.1 Credit Agreement, dated December 12, 1996, among the Issuer,
the Company, Various Banks named therein, Bank of America
National Trust and Savings Association, as Issuing Bank,
Swingline Bank and Agent, and BA Securities, Inc., as
Arranger.**
12.1 Computation of Ratio of Earnings to Fixed Charges.**
23.1 Consent of Ernst & Young LLP.**
23.2 Consent of Price Waterhouse LLP.**
23.3 Consent of Deloitte & Touche LLP.**
23.4 Consent of Weil, Gotshal & Manges LLP (included in Exhibit
5.1).**
24.1 Powers of Attorney.**
25.1 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of the Trustee under the Indenture.**
99.1 Registration Rights Agreement, dated December 12, 1996, among
the Issuer, the Company and BA Securities.**
99.2 Form of Letter of Transmittal.**
99.3 Form of Notice of Guaranteed Delivery.**
99.4 Form of Letter to Brokers.**
99.5 Form of Letter to Clients.**
-------------
* Incorporated Herein By Reference
** Filed Herewith
II-8
EXHIBIT 3.1(a)
CERTIFICATE OF INCORPORATION
OF
USI AMERICAN HOLDINGS, INC.
The undersigned, a natural person, for the purpose of organizing a
corporation for the conduct of the business and promotion of the purposes
hereinafter stated, under the provisions of and subject to the requirements of
the laws of the State of Delaware (particularly Chapter 1, Title 8 of the
Delaware Code, identified and referred to as the General Corporation Law of
Delaware), hereby certifies that:
FIRST: The name of the corporation is:
USI AMERICAN HOLDINGS, INC.
SECOND: The address of the corporation's registered office in the
State of Delaware is 1209 Orange Street, Wilmington, County of New Castle,
Delaware 19801. The name of the registered agent of the corporation at such
address is The Corporation Trust Company.
THIRD: The purpose of the corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of Delaware.
FOURTH: The total number of shares of stock which the corporation
shall have authority to issue is one thousand (1,000), all of which shall be
without par value.
FIFTH: The name and mailing address of the incorporator is Inge
Lepore, 99 Wood Avenue South, 10th Floor, Iselin, New Jersey 08830.
SIXTH: The corporation is to have perpetual existence.
SEVENTH: Whenever a compromise or arrangement is proposed between
this corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any
<PAGE>
creditor or stockholders thereof or on the application of any receiver or
receivers appointed for this corporation under the provisions of Section 291 of
Title 8 of the Delaware Code or on the application of trustees in dissolution or
of any receiver or receivers appointed for this corporation under the provisions
of Section 279 of Title 8 of the Delaware Code, order a meeting of the creditors
or class of creditors, and/or of the stockholders or class of stockholders of
this corporation, as the case may be, to be summoned in such manner as the said
court directs. If a majority in number representing three-fourths in value of
the creditors or class of creditors, and/or of the stockholders or class of
stockholders of this corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of this corporation as consequence of such
compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or on
all the stockholders or class of stockholders, of this corporation, as the case
may be, and also on this corporation.
EIGHTH: In furtherance and not in limitation of the powers conferred
by Section 109(a) of the General Corporation Law of Delaware, the board of
directors is expressly authorized to adopt, amend or repeal the by-laws of the
corporation.
NINTH: The corporation shall indemnify, to the full extent permitted
by Section 145 of the General Corporation Law of Delaware, as amended from time
to time, all persons whom it may indemnify pursuant thereto. The corporation may
adopt by-laws or enter into agreements with any such person for the purpose of
providing for such indemnification. No director shall be personally liable to
the corporation or any stockholder for monetary damages for breach of fiduciary
duty as a director, except for liability (i) pursuant to Section 174 of the
General Corporation Law of Delaware, (ii) for any breach of the director's duty
of loyalty to the corporation or its stockholders, (iii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law or (iv) for any transaction for which the director derived an improper
personal benefit. Neither the amendment nor repeal of this Article NINTH nor the
adoption of any provision of the Certificate of Incorporation inconsistent with
this Article NINTH, shall eliminate or reduce the effect of this Article NINTH
in respect of any matter occurring, or any
2
<PAGE>
cause of action, suit or claim that, but for this Article NINTH, would accrue or
arise, prior to such amendment, repeal or adoption of an inconsistent provision.
TENTH: Election of directors need not be by written ballot.
ELEVENTH: The corporation reserves the right to amend, alter, change
or repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereinafter prescribed by statute, and all rights conferred on the
stockholders herein are granted subject to this reservation.
IN WITNESS WHEREOF, the undersigned has duly executed this
Certificate of Incorporation this 3rd day of March, 1995.
/s/ Inge Lepore
-----------------------
Inge Lepore
Incorporator
3
NYFS11...:\95\78595\0012\1860\CRT1207W.430
BY-LAWS
OF
USI AMERICAN HOLDINGS, INC.
(a Delaware corporation)
ARTICLE I
Stockholders
SECTION 1. Annual Meetings. (a) All annual meetings of the
Stockholders for the election of directors shall be held at such place as shall
be designated from time to time by the Board of Directors and stated in the
notice of the meeting. Special meetings of Stockholders for any other purpose
may be held at such time and place as shall be stated in the notice of the
meeting or in a duly executed waiver of notice thereof.
(b) Annual meetings of Stockholders shall be held on such date and
at such time as shall be designated from time to time by the Board of Directors
and stated in the notice of the meeting, at which they shall elect by a
plurality vote a Board of Directors and transact such other business as may
properly be brought before the meeting.
(c) Written notice of the annual meeting stating the place, date,
and hour of the meeting shall be given to each Stockholder entitled to vote at
such meeting not less than ten days nor more than sixty days prior to the date
of the meeting. A written waiver of any such notice signed by the person
entitled thereto, whether before or after the time stated therein, shall be
deemed equivalent to notice. Attendance of a person at a meeting shall
constitute a waiver of notice of such meeting, except when the person attends
the meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened.
<PAGE>
(d) The officer who has charge of the stock ledger of the
Corporation shall prepare and make, at least ten days before every meeting of
Stockholders, a complete list of the Stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
Stockholder and the number of shares registered in the name of each Stockholder.
Such list shall be open to the examination of any Stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any Stockholder who is
present. The stock ledger shall be the only evidence as to the Stockholders
entitled to examine the stock ledger, the list required by this section or the
books of the Corporation, or to vote in person or by proxy at any meeting of
Stockholders.
SECTION 2. Special Meetings. (a) Special meetings of the
Stockholders, for any purpose or purposes, unless otherwise prescribed by
statute or by the certificate of incorporation of the Corporation, may be called
by the Board of Directors or by the Stockholders holding together at least a
majority of all shares of the Corporation entitled to vote at the meeting. Such
request shall state the purpose or purposes of the proposed meeting.
(b) Written notice of a special meeting stating the place, date, and
hour of the meeting and, in general terms, the purpose or purposes for which the
meeting is called, shall be given not less than ten days nor more than sixty
days prior to the date of the meeting, to each Stock holder entitled to vote at
such meeting. Special meetings may be held at such place as shall be designated
by the Board of Directors. Whenever the directors shall fail to fix such place,
the meeting shall be held at the principal executive offices of the Corporation.
(c) Business transacted at any special meeting of Stockholders,
other than procedural matters and matters
2
<PAGE>
relating to the conduct of the meeting, shall be limited to the purpose or
purposes stated in the notice.
SECTION 3. Quorums. (a) The holders of a majority of the stock
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the Stock
holders for the transaction of business except as otherwise provided by the
Delaware General Corporation Law ("Delaware Law") or by the Certificate of
Incorporation. Unless these By-Laws otherwise require, when a meeting is
adjourned to another time or place, whether or not a quorum is present, notice
need not be given of the adjourned meeting if the time and place thereof are
announced at the meeting at which the adjournment is taken. At the adjourned
meeting, the Corporation may transact any business which might have been
transacted at the original meeting. If the adjournment is for more than thirty
days, or if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each Stockholder of
record entitled to vote at the meeting. When a quorum is once present it is not
broken by the subsequent withdrawal of any Stockholder.
(b) When a quorum is present at any meeting, the vote of the holders
of a majority of the stock having voting power present in person or represented
by proxy shall decide any question brought before such meeting, unless the ques
tion is one on which, by express provision of Delaware Law or of the Certificate
of Incorporation, a different vote is required, in which case such express
provision shall govern and control the decision of such question.
SECTION 4. Organization. Meetings of Stockholders shall be presided
over by the Chairman, if any, or if none or in the Chairman's absence, the
President, if any, or if none or in the President's absence, by a Chairman to be
chosen by the Stockholders entitled to vote who are present in person or by
proxy at the meeting. The Secretary of the Corporation, or in the Secretary's
absence an Assistant Secretary, shall act as Secretary of every meeting and keep
the minutes thereof, but if neither the Secretary nor an Assistant Secretary is
present, the presiding officer
3
<PAGE>
of the meeting shall appoint any person present to act as secretary of the
meeting. The order of business at all meetings of stockholders shall be as
determined by the Chairman of the meeting.
SECTION 5. Voting; Proxies; Required Vote. (a) At each meeting of
Stockholders, every Stockholder shall be entitled to vote in person or by proxy
appointed by an instrument in writing, subscribed by such Stockholder or by such
Stockholder's duly authorized attorney-in-fact (but no such proxy shall be voted
or acted upon after three years from its date, unless the proxy provides for a
longer period) and, unless Delaware Law or the Certificate of Incorporation
provides otherwise, shall have one vote for each share of stock entitled to vote
registered in the name of such Stockholder on the books of the Corporation on
the applicable record date fixed pursuant to these By-Laws. At all elections of
directors the voting may but need not be by ballot and a plurality of the votes
cast there shall elect directors. Except as otherwise required by law or the
Certificate of Incorporation, any other action shall be authorized by a majority
of the votes cast.
(b) Where a separate vote by a class or classes, a majority of the
outstanding shares of such class or classes, present in person or represented by
proxy, shall constitute a quorum entitled to vote on that matter, the
affirmative vote of the majority of shares of such class or classes present in
person or represented by proxy at the meeting shall be the act of such class,
unless otherwise provided in the Certificate of Incorporation.
SECTION 6. Inspector of Election. The Board of Directors, in advance
of any meeting, may, but need not, appoint one or more inspectors of election to
act at the meeting or any adjournment thereof. If an inspector or inspectors are
not so appointed, the person presiding at the meeting may, but need not, appoint
one or more inspectors. In case any person who may be appointed as an inspector
fails to appear or act, the vacancy may be filled by appointment made by the
directors in advance of the meeting or at the meeting by the person presiding
thereat. Each inspector, if any, before entering upon the discharge of his
4
<PAGE>
or her duties, shall take and sign an oath faithfully to execute the duties of
inspector at such meeting with strict impartiality and according to the best of
his ability. The inspectors, if any, shall determine the number of shares of
stock outstanding and the voting power of each, the shares of stock represented
at the meeting, the existence of a quorum, and the validity and effect of
proxies, and shall receive votes, ballots or consents, hear and determine all
challenges and questions arising in connection with the right to vote, count and
tabulate all votes, ballots or consents, determine the result, and do such acts
as are proper to conduct the election or vote with fairness to all Stockholders.
On request of the person presiding at the meeting, the inspector or inspectors,
if any, shall make a report in writing of any challenge, question or matter
determined by such inspector or inspectors and execute a certificate of any fact
found by such inspector or inspectors.
SECTION 7. Action by Written Consent. Any action required or
permitted to be taken at any meeting of the Stockholders may be taken without a
meeting, without prior notice and without a vote, if a consent or consents in
writing, setting forth the action so taken, shall be signed by the holders of
outstanding stock of the Corporation having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted and shall be
filed with the minutes of proceedings of the Stockholders.
ARTICLE II
Board of Directors
SECTION 1. General Powers. The business, property and affairs of the
Corporation shall be managed by, or under the direction of, the Board of
Directors.
SECTION 2. Qualification; Number; Term; Remuneration. (a) Each
director shall be at least 18 years of age. A director need not be a
stockholder, a citizen of the United States, or a resident of the State of
Delaware.
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The number of directors constituting the entire Board shall be such number as
may be fixed from time to time by the Board of Directors or the stockholders.
One of the directors may be selected by the Board of Directors to be its
Chairman, who shall preside at meetings of the Stock holders and the Board of
Directors and shall have such other duties, if any, as may from time to time be
assigned by the Board of Directors. In the absence of formal selection, the
President of the Corporation shall serve as Chairman. The use of the phrase
"entire Board" herein refers to the total number of directors which the
Corporation would have if there were no vacancies.
(b) Directors may be paid their expenses, if any, of attendance at
each meeting of the Board of Directors and may be paid a fixed sum for
attendance at each meeting of the Board of Directors or a stated salary as
director. No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor. Members
of special or standing Committees may be allowed like compensation for attending
Committee meetings.
SECTION 3. Quorum and Manner of Voting. Except as otherwise provided
by law, a majority of the entire Board of Directors shall constitute a quorum. A
majority of the directors present, whether or not a quorum is present, may
adjourn a meeting from time to time to another time and place without notice.
The vote of the majority of the directors present at a meeting at which a quorum
is present shall be the act of the Board of Directors. When a meeting is
adjourned to another time or place, whether or not a quorum is present, notice
need not be given of the adjourned meeting if the time and place thereof are
announced at the meeting at which the adjournment is taken. At the adjourned
meeting, the Board of Directors may transact any business which might have been
transacted at the original meeting. If a quorum shall not be present at any
meeting of the Board of Directors, the directors present thereat may adjourn the
meeting, from time to time, without notice other than announcement at the
meeting, until a quorum is present.
SECTION 4. Places of Meetings. Meetings of the Board of Directors
shall be held at such times and such
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place as may be fixed from time to time by resolution of the Board of Directors,
or may be specified in the notice of meeting.
SECTION 5. Annual Meeting. At the next regular meeting following the
annual meeting of Stockholders, the newly elected Board of Directors shall meet
for the purpose of the election of officers and the transaction of such other
business as may properly come before the meeting.
SECTION 6. Regular Meetings. Regular meetings of the Board of
Directors shall be held at such times as the Board of Directors shall from time
to time by resolution determine. After the place and time of regular meetings of
the Board of Directors shall have been determined and notice thereof shall have
been once given to each member of the Board of Directors, regular meetings may
be held without further notice being given.
SECTION 7. Special Meetings. Notice of the date, time and place of
each special meeting shall be mailed by regular mail to each director at his
designated address at least six days before the meeting; or sent by overnight
courier to each director at his designated address at least two days before the
meeting (with delivery scheduled to occur no later than the day before the
meeting); or given orally by telephone or other means, or by telegraph or
telecopy, or by any other means comparable to any of the foregoing, to each
director at his designated address at least 24 hours before the meeting. The
notice of the special meeting shall state the general purpose of the meeting,
but other routine business may be conducted at the special meeting without such
matter being stated in the notice.
SECTION 8. Organization. At all meetings of the Board of Directors,
the Chairman or in the Chairman's absence or inability to act, the President, or
in the President's absence, a Chairman chosen by the directors, shall preside.
The Secretary of the Corporation shall act as secretary at all meetings of the
Board of Directors when present, and, in the Secretary's absence, the presiding
officer may appoint any person to act as Secretary.
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SECTION 9. Resignation. Any director may resign at any time upon
written notice to the Corporation and such resignation shall take effect upon
receipt thereof by the Chairman, the President or Secretary, unless otherwise
specified in the resignation.
SECTION 10. Vacancies. Unless otherwise provided in these By-Laws,
vacancies on the Board of Directors, whether caused by resignation, death,
disqualification, removal, an increase in the authorized number of directors or
otherwise, may be filled by the affirmative vote of a majority of the remaining
directors, although less than a quorum, or by a sole remaining director.
SECTION 11. Action by Written Consent. Any action required or
permitted to be taken at any meeting of the Board of Directors may be taken
without a meeting if all the directors consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the Board of
Directors.
SECTION 12. Electronic Communication. Any member or members of the
Board of Directors may participate in a meeting of the Board of Directors by
means of conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear and speak to each other.
ARTICLE III
Committees
SECTION 1. Appointment. The Board of Directors may, by resolution
passed by a majority of the whole board, designate one or more Committees, each
Committee to consist of one or more of the directors of the Corporation. The
Board of Directors may designate one or more directors as alternate members of
any Committee, who may replace any absent or disqualified member at any meeting
of the Committee. Any such Committee, to the extent provided in the resolution,
shall have and may exercise the powers of the Board of Directors in the
management of the business and
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affairs of the Corporation, and may authorize the seal of the Corporation to be
affixed to all papers which may require it. Such Committee or Committees shall
have such name or names as may be determined from time to time by resolution
adopted by the Board of Directors.
SECTION 2. Procedures, Quorum and Manner of Acting. Each Committee
shall fix its own rules of procedure, and shall meet where and as provided by
such rules or by resolution of the Board of Directors. Except as otherwise
provided by law, the presence of a majority of the then appointed members of a
Committee shall constitute a quorum for the transaction of business by that
Committee, and in every case where a quorum is present the affirmative vote of a
majority of the members of the Committee present shall be the act of the
Committee. Each Committee shall keep minutes of its proceedings, and actions
taken by a Committee shall be reported to the Board of Directors.
SECTION 3. Action by Written Consent. Any action required or
permitted to be taken at any meeting of any Committee of the Board of Directors
may be taken without a meeting if all the members of the Committee consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the Committee.
SECTION 4. Electronic Communication. Any member or members of a
Committee of the Board of Directors may participate in a meeting of a Committee
by means of conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear and speak to each other.
SECTION 5. Termination. In the event any person shall cease to be a
director of the Corporation, such person shall simultaneously therewith cease to
be a member of any Committee appointed by the Board of Directors.
ARTICLE IV
Officers
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SECTION 1. Election and Qualifications. The Board of Directors at
its first meeting held after each annual meeting of Stockholders shall elect the
officers of the Corporation, which shall include a President and a Secretary,
and may include, by election or appointment, a Chairman of the Board, one or
more Vice-Presidents (any one or more of whom may be given an additional
designation of rank or function), a Treasurer and such Assistant Secre taries,
such Assistant Treasurers and such other officers as the Board of Directors may
from time to time deem proper. Each officer shall have such powers and duties as
may be prescribed by these By-Laws and as may be assigned by the Board of
Directors or the President. Any two or more offices may be held by the same
person.
SECTION 2. Term of Office and Remuneration. The term of office of
all officers shall be until their respective successors have been elected and
qualified or their earlier death, resignation or removal. The remunera tion of
all officers of the Corporation may be fixed by the Board of Directors or in
such manner as the Board of Directors shall provide.
SECTION 3. Resignation; Removal. Any officer may resign at any time
upon written notice to the Corporation and such resignation shall take effect
upon receipt thereof by the President or Secretary, unless otherwise specified
in the resignation. Any officer shall be subject to removal, with or without
cause, at any time by the Board of Directors. Any vacancy in any office shall be
filled in such manner as the Board of Directors shall determine.
SECTION 4. Powers and Duties of Officers.
(a) The Chairman of the Board of Directors, if there be one, shall
preside at all meetings of the Board of Directors and shall have such other
powers and duties as may from time to time be assigned by the Board of
Directors. The Chairman of the Board of Directors, if there be one, shall be the
chief executive officer of the Corporation and shall preside at all meetings of
the Stockholders and the Board of Directors and shall have general management of
and supervisory authority over the property, business and
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affairs of the Corporation and its other officers. The Chairman of the Board may
execute and deliver in the name of the Corporation powers of attorney,
contracts, bonds and other obligations and instruments, and shall have such
other authority and perform such other duties as from time to time may be
assigned by the Board of Directors. The Chairman of the Board shall see that all
orders and resolutions of the Board of Directors are carried into effect and
shall perform such additional duties that usually pertain to the office of chief
executive officer.
(b) If there be no Chairman of the Board, the President shall be the
chief executive officer and shall exercise the powers listed in (a) above.
Otherwise, the President may execute and deliver in the name of the Corporation
powers of attorney, contracts, bonds and other obligations and instruments, and
shall have such other authority and perform such other duties as from time to
time may be assigned by the Board of Directors or the Chairman of the Board.
(c) A Vice President may execute and deliver in the name of the
Corporation powers of attorney, contracts, bonds and other obligations and
instruments, and shall have such other authority and perform such other duties
as from time to time may be assigned by the Board of Directors, the Chairman of
the Board or the President.
(d) The Treasurer shall in general have all duties and authority
incident to the position of Treasurer and such other duties and authority as may
be assigned by the Board of Directors, the Chairman of the Board or the
President. The Treasurer shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the Corporation in
such depositories as may be designated by or at the direction of the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, the Chairman of the Board or the President,
and shall render, upon request, an account of all such transactions.
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(e) The Secretary shall in general have all the duties and authority
incident to the position of Secretary and such other duties and authority as may
be assigned by the Board of Directors, the Chairman of the Board or the
President. The Secretary shall attend all meetings of the Board of Directors and
all meetings of Stockholders and record all the proceedings thereat in a book or
books to be kept for that purpose. The Secretary shall give, or cause to be
given, notice of all meetings of the Stockholders and special meetings of the
Board of Directors. The Secretary shall have custody of the seal of the
Corporation and any officer of the Corporation shall have authority to affix the
same to any instrument requiring it and when so affixed, it may be attested by
the signature of the Secretary or any other officer.
(f) Any assistant officer shall have such duties and authority as
the officer such assistant officer assists and, in addition, such other duties
and authority as the Board of Directors, the Chairman of the Board or President
shall from time to time assign.
ARTICLE V
Contracts, Etc.
SECTION 1. Contracts. The Board of Directors may authorize any
person or persons, in the name and on behalf of the Corporation, to enter into
or execute and deliver any and all deeds, bonds, mortgages, contracts and other
obliga tions or instruments, and such authority may be general or confined to
specific instances.
SECTION 2. Proxies; Powers of Attorney; Other Instruments. (a) The
Chairman, the President, any Vice President, the Treasurer, the Secretary or any
other person designated by any of them shall have the power and authority to
execute and deliver proxies, powers of attorney and other instruments on behalf
of the Corporation in connection with the execution of contracts, the purchase
of real or personal property, the rights and powers incident to the ownership of
stock by the Corporation and such other situations as the
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Chairman, the President, such Vice President, the Treasurer or the Secretary
shall approve, such approval to be conclusively evidenced by the execution of
such proxy, power of attorney or other instrument on behalf of the Corporation.
(b) The Chairman, the President, any Vice President, the Treasurer,
the Secretary or any other person authorized by proxy or power of attorney
executed and delivered by any of them on behalf of the Corporation may attend
and vote at any meeting of stockholders of any company in which the Corporation
may hold stock, and may exercise on behalf of the Corporation any and all of the
rights and powers incident to the ownership of such stock at any such meeting,
or otherwise as specified in the proxy or power of attorney so authorizing any
such person. The Board of Directors, from time to time, may confer like powers
upon any other person.
ARTICLE VI
Books and Records
SECTION 1. Location. The books and records of the Corporation may be
kept at such place or places as the Board of Directors or the respective
officers in charge thereof may from time to time determine. The record books
containing the names and addresses of all stockholders, the number and class of
shares of stock held by each and the dates when they respectively became the
owners of record thereof shall be kept by the Secretary as prescribed in the
By-Laws or by such officer or agent as shall be designated by the Board of
Directors.
SECTION 2. Addresses of Stockholders. Notices of meetings and all
other corporate notices may be delivered personally or mailed to each
Stockholder at the Stockholder's address as it appears on the records of the
Corporation.
SECTION 3. Fixing Date for Determination of Stockholders of Record.
(a) In order that the Corporation
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may determine the Stockholders entitled to notice of or to vote at any meeting
of Stockholders or any adjournment thereof, the Board of Directors may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Directors and which
record date shall not be more than 60 days nor less than 10 days before the date
of such meeting. If no record date is fixed by the Board of Directors, the
record date for determining Stockholders entitled to notice of or to vote at a
meeting of Stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or, if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held. A determination of Stockholders of record entitled to notice of or to vote
at a meeting of Stock holders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
(b) In order that the Corporation may determine the Stockholders
entitled to receive payment of any dividend or other distribution or allotment
of any rights or the Stockholders entitled to exercise any rights in respect of
any change, conversion or exchange of stock, or for the purpose of any other
lawful action not contemplated by paragraph (a) of this Section 3, the Board of
Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted and which record
date shall be not more than 60 days prior to such action. If no record date is
fixed, the record date for determining Stockholders for any such purpose shall
be at the close of business on the day on which the Board of Directors adopts
the resolution relating thereto.
ARTICLE VII
Certificates Representing Stock
SECTION 1. Certificates; Signatures. The shares
of the Corporation shall be represented by certificates,
provided that the Board of Directors of the Corporation may
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provide by resolution or resolutions that some or all of any or all classes or
series of its stock shall be uncertifi cated shares. Any such resolution shall
not apply to shares represented by a certificate until such certificate is
surrendered to the Corporation. Notwithstanding the adop tion of such a
resolution by the Board of Directors, every holder of stock represented by
certificates and upon request every holder of uncertificated shares shall be
entitled to have a certificate, signed by or in the name of the Corporation by
the Chairman or Vice-Chairman of the Board of Directors, or the President or any
Vice-President, and by the Treasurer or an Assistant Treasurer, or the Secretary
or an Assistant Secretary of the Corporation, representing the number of shares
registered in certificate form. Any or all of the signatures on any such
certificate may be a fac simile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if such person were such officer, transfer agent or registrar at
the date of issue.
SECTION 2. Record Ownership. The name of the holder of record of the
shares represented thereby, with the number of such shares and the date of issue
thereof, shall be entered on the books of the Corporation. The Corporation shall
be entitled to treat the holder of record of any share of stock as the holder in
fact thereof, and accordingly shall not be bound to recognize any equitable or
other claim to or interest in any share on the part of any other person, whether
or not it shall have express or other notice thereof, except as required by
Delaware Law. The Board of Directors shall have power and authority to make all
such rules and regulations as it may deem expedient concerning the issue,
transfer and registration of certificates representing shares of the
Corporation.
SECTION 3. Transfer of Record Ownership. Transfer of stock shall be
made on the books of the Corpora tion only by direction of the person named in
the certifi cate or such person's attorney, lawfully constituted in writing, and
only upon the surrender of the certificate
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therefor and a written assignment of the shares evidenced thereby, which
certificate shall be canceled before the new certificate is issued.
SECTION 4. Fractional Shares. The Corporation may, but shall not be
required to, issue certificates for fractions of a share where necessary to
effect authorized transactions, or the Corporation may pay in cash the fair
value of fractions of a share as of the time when those entitled to receive such
fractions are determined, or it may issue scrip in registered or bearer form
over the manual or facsimile signature of an officer of the Corporation or of
its agent, exchangeable as therein provided for full shares, but such scrip
shall not entitle the holder to any rights of a Stockholder except as therein
provided.
SECTION 5. Lost, Stolen or Destroyed Certificates. The Corporation
may issue a new certificate in place of any certificate theretofore issued by
it, alleged to have been lost, stolen or destroyed, and the Board of Directors
may require the owner of any lost, stolen or destroyed certificate, or his legal
representative, to give the Corporation a bond sufficient to indemnify the
Corporation against any claim that may be made against it on account of the
alleged loss, theft or destruction of any such certificate or the issuance of
any such new certificate.
SECTION 6. Transfer Agents; Registrants; Rules Respecting
Certificates. The Board of Directors may appoint, or authorize any officer or
officers to appoint, one or more transfer agents and one or more registrars. The
Board of Directors may make such further rules and regula tions as it may deem
expedient concerning the issue, trans fer and registration of stock certificates
of the Corporation.
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ARTICLE VIII
Dividends
Subject to the provisions of Delaware Law and the Certificate of
Incorporation, the Board of Directors shall have full power to declare and pay
dividends on the capital stock of the Corporation. Before payment of any
dividend, there may be set aside out of any funds of the Corporation available
for dividends such sum or sums as the Board of Directors from time to time, in
its absolute discretion, may determine for any proper purpose, and the Board of
Directors may modify or abolish any such reserve.
ARTICLE IX
Ratification
Any transaction, questioned in any lawsuit on the ground of lack of
authority, defective or irregular execu tion, adverse interest of director,
officer or Stockholder, non-disclosure, miscomputation, or the application of
improper principles or practices of accounting, may be ratified before or after
judgment, by the Board of Directors or by the Stockholders, and if so ratified
shall have the same force and effect as if the questioned transaction had been
originally duly authorized. Such ratification shall be binding upon the
Corporation and its Stockholders and shall constitute a bar to any claim or
execution of any judgment in respect of such questioned transaction.
ARTICLE X
Corporate Seal
The corporate seal shall be in form of a circular inscription which
contains the words "Corporate Seal" or such other text as the officer inscribing
such seal shall determine in such officer's sole discretion. The corporate seal
may be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise displayed or it may be manually inscribed.
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ARTICLE XI
Fiscal Year
The fiscal year of the Corporation shall be fixed, and shall be
subject to change, by the Board of Directors. Unless otherwise fixed by the
Board of Directors, the fiscal year of the Corporation shall end on the Saturday
closest to September 30.
ARTICLE XII
Waiver of Notice
Whenever notice is required to be given by these By-Laws or by the
Certificate of Incorporation or by law, a written waiver thereof, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent to notice.
ARTICLE XIII
Amendments
By-Laws may be adopted, amended or repealed by either the Board of
Directors or the affirmative vote of the holders of a majority of the voting
power of all shares of the Corporation's capital stock then entitled to vote
generally in the election of directors.
ARTICLE XIV
Indemnification
SECTION 1. Right to Indemnification. Each person who was or is made
a party or is threatened to be made a party to or is otherwise involved in any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (a "Proceeding"),
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by reason of the fact (a) that he or she is or was a director or officer of the
Corporation, or (b) that he or she, being at the time a director or officer of
the Corporation, is or was serving at the request of the Corporation as a
director, officer, member, employee, fiduciary or agent of another corporation
or of a partner ship, joint venture, trust or other enterprise, including
service with respect to an employee benefit plan (collec tively, "another
enterprise" or "other enterprise"), shall be indemnified and held harmless by
the Corporation to the fullest extent permitted by Delaware Law as the same
exists or may hereafter be amended (but, in the case of any such amendment, with
respect to alleged action or inaction occurring prior to such amendment, only to
the extent that such amendment permits the Corporation to provide broader
indemnification rights than permitted prior thereto, against all expense,
liability and loss (including, without limita tion, attorneys' and other
professionals' fees and expenses, claims, judgments, fines, ERISA excise taxes
or penalties and amounts paid in settlement) actually and reasonably incurred or
suffered by such person in connection therewith ("Losses"). Without diminishing
the scope of indemnifica tion provided by this Section 1, such persons shall
also be entitled to the further rights set forth below.
SECTION 2. Actions, Suits Or Proceedings Other Than Those By Or In
The Right Of The Corporation. Subject to the terms and conditions of this
Article, the Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any Proceeding (other than an action by or in
the right of the Corporation) by reason of the fact that such person is or was a
director or officer of the Corporation, or, being at the time a director or
officer of the Corporation, is or was serving at the request of the Corporation
as a director, officer, member, employee, fiduciary or agent of another
enterprise, against all Losses, actually and reasonably incurred or suffered by
such person in connection with such Proceeding if such person acted in good
faith and in a manner reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe the conduct was unlawful. The
termination of any Proceeding by
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judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that the conduct
was unlawful.
SECTION 3. Actions, Suits Or Proceedings By Or In The Right Of The
Corporation. Subject to the terms and conditions of this Article, the
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any Proceeding by or in the right of the Corpora tion to
procure a judgment in its favor by reason of the fact that such person is or was
a director or officer of the Corporation, or being at the time a director or
officer of the Corporation, is or was serving at the request of the Corporation
as a director, officer, member, employee, fiduciary or agent of another
enterprise against all Losses actually and reasonably incurred or suffered by
such person in connection with the defense or settlement of such action or suit
if such person acted in good faith and in a manner reasonably believed to be in
or not opposed to the best interests of the Corporation except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.
SECTION 4. Authorization of Indemnification. Any indemnification
under this Article (unless ordered by a court) shall be made by the Corporation
only as authorized in the specific case upon a determination that indemnifica
tion of a person is proper in the circumstances because such person has met the
applicable standard of conduct required by Section 1 or set forth in Section 2
or 3 of this Article, as the case may be. Such determination shall be made in a
reasonably prompt manner (i) by the Board of Directors by a
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majority vote of directors who were not parties to such action, suit or
proceeding, whether or not they constitute a quorum of the Board of Directors,
(ii) if there are no such directors, or if such directors so direct, by
independent legal counsel in a written opinion, (iii) by the stock holders or
(iv) as Delaware Law may otherwise permit. To the extent, however, that a
director or officer of the Corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding described above, or in
defense of any claim, issue or matter therein, such person shall be indemnified
against expenses (including attorneys' and other professionals' fees) actually
and reasonably incurred by such person in connection therewith, without the
necessity of authorization in the specific case.
SECTION 5. Good Faith Defined. For purposes of any determination
under Section 4 of this Article, a person shall be deemed to have acted in good
faith if the action is based on (a) the records or books of account of the
Corpora tion or another enterprise, or on information supplied to such person by
the officers of the Corporation or another enterprise in the course of their
duties or on (b) the advice of legal counsel for the Corporation or another
enterprise, or on information or records given or reports made to the
Corporation or another enterprise by an independent certified public accountant,
independent financial adviser, appraiser or other expert selected with
reasonable care by the Corporation or the other enterprise. The provisions of
this Section 5 shall not be deemed to be exclusive or to limit in any way the
circumstances in which a person may be deemed to have met the applicable
standard of conduct.
SECTION 6. Proceedings Initiated by Indemnified Persons.
Notwithstanding any provisions of this Article to the contrary, the Corporation
shall not indemnify any person or make advance payments in respect of Losses to
any person pursuant to this Article in connection with any Proceeding (or
portion thereof) initiated against the Corporation by such person unless such
Proceeding (or portion thereof) is authorized by the Board of Directors or its
designee; provided, however, that this prohibition shall not apply to a
counterclaim, cross-claim or third-party claim brought in
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any Proceeding or to any claims provided for in Section 7 of this Article.
SECTION 7. Indemnification By A Court. Notwith standing any contrary
determination in the specific case under Section 4 of this Article, and
notwithstanding the absence of any determination thereunder, any director or
officer may apply to any court of competent jurisdiction for indemnification to
the extent otherwise permissible under Section 1, 2 or 3 of this Article. Notice
of any application for indemnification pursuant to this Section 7 shall be given
to the Corporation promptly upon the filing of such application.
SECTION 8. Losses Payable In Advance. Losses reasonably incurred by
an officer or director in defending any threatened or pending Proceeding may be
paid by the Corporation in advance of the final disposition of such Proceeding
if the Board of Directors determines that such advancement of expenses is
appropriate and upon such terms and conditions, if any, as the Board of
Directors deems appropriate.
SECTION 9. Non-exclusivity and Survival of Indemnification. The
indemnification and advancement of expenses provided by or granted pursuant to
this Article shall not be deemed exclusive of any other rights to which those
seeking indemnification or advancement of expenses may be entitled under the
Certificate of Incorporation, any ByLaw, agreement, contract, vote of
Stockholders or of disinterested directors, or pursuant to the direction
(howsoever embodied) of any court of competent jurisdiction or otherwise. The
provisions of this Article shall not be deemed to preclude the indemnification
of any person who is not specified in Section 1, 2 or 3 of this Article but whom
the Corporation has the power or obligation to indemnify under the provisions of
Delaware Law, or otherwise. The rights conferred by this Article shall continue
as to a person who has ceased to be a director or officer and shall inure to the
benefit of such person and the heirs, executors, administrators and other
comparable legal representatives of such person. The rights conferred in this
Article shall be enforceable as contract rights, and
22
<PAGE>
shall continue to exist after any rescission or restrictive modification hereof
with respect to events occurring prior thereto. No rights are conferred in this
Article for the benefit of any person (including, without limitation, officers
or directors of subsidiaries of the Corporation) in any capacity other than as
explicitly set forth herein.
SECTION 10. Meaning of certain terms in connection with Employee
Benefit Plans, etc. For purposes of this Article, references to "fines" shall
include any excise taxes assessed on a person with respect to an employee
benefit plan; references to "serving at the request of the Corporation" shall
include any service as a director or officer of the Corporation which imposes
duties on, or involves services by, such director or officer, with respect to an
employee benefit plan, its participants or beneficiaries; and a person who has
acted in good faith and in a manner reasonably believed to be in the interest of
the participants and beneficiaries of an employee benefit plan shall be deemed
to have acted in a manner "not opposed to the best interests of the Corporation"
as referred to in this Article.
SECTION 11. Insurance. The Corporation may, but shall not be
required to, purchase and maintain insurance on behalf of any person who is or
was a director, officer or employee of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, member, employee,
fiduciary or agent of another against any liability asserted against such person
and incurred by such person in any such capacity, or arising out of such
person's status as such, whether or not the Corporation would have the power or
the obligation to indemnify such person against such liability under the
provisions of this Article.
Dated: March 15, 1995.
23
USI AMERICAN HOLDINGS, INC., as Issuer,
U.S. INDUSTRIES, INC., as Parent Guarantor
and
PNC BANK, NATIONAL ASSOCIATION, as Trustee
INDENTURE
Dated as of December 12, 1996
$125,000,000
7 1/4% SENIOR NOTES DUE DECEMBER 1, 2006
<PAGE>
Reconciliation and tie between Trust Indenture Act of 1939, as amended, and
Indenture dated as of December 12, 1996
Trust Indenture Indenture
Act Section Section
ss. 310(a)(1)...............................................609
(a)(2)................................................609
(a)(5)................................................609
(b)...................................................607, 608, 610
ss. 311(a)..................................................613
ss. 312(a)..................................................701
(c)...................................................702
ss. 313(a)..................................................703
(b)(2)................................................703
(c)...................................................703, 704
(d)...................................................703(b)
ss. 314(a)..................................................704
(a)(4)................................................1012
(c)(1)................................................103
(c)(2)................................................103
(e)...................................................103
ss. 315(a)..................................................601(b)
(b)...................................................602
(c)...................................................601(a)
(d)...................................................601(c), 603
(e)...................................................514
ss. 316(a)(last sentence)...................................101 ("Outstanding")
(a)(1)(A).............................................512
(a)(1)(B).............................................513
(b)...................................................508
(c)...................................................105(e)
ss. 317(a)(1)...............................................503
(a)(2)................................................504
(b)...................................................1003
ss. 318(a)..................................................108
__________
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of this Indenture.
(i)
<PAGE>
TABLE OF CONTENTS
PAGE
PARTIES......................................................................1
RECITALS.....................................................................1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 101. Definitions...................................................2
"Affiliate"................................................2
"Agent Member".............................................2
"Applicable Procedures"....................................2
"Asset Sale"...............................................3
"Attributable Debt"........................................3
"Bankruptcy Law"...........................................3
"Board of Directors".......................................3
"Board Resolution".........................................3
"Business Day".............................................3
"Capital Lease Obligation".................................4
"Capital Stock"............................................4
"Cash Equivalents".........................................4
"Cedel"....................................................4
"Commission"...............................................4
"Comparable Treasury Issue"................................4
"Comparable Treasury Price"................................5
"Consolidated Net Income"..................................5
"Consolidated Net Tangible Assets".........................5
"Consolidation"............................................6
"Corporate Trust Office"...................................6
"Credit Agreement".........................................6
"Debt".....................................................6
"Default"..................................................6
"Depositary"...............................................7
"DTC"......................................................7
"Equity Interest"..........................................7
"Existing Funded Debt".....................................7
"Euroclear"................................................7
"Exchange Act".............................................7
(ii)
<PAGE>
PAGE
"Exchange Offer"...........................................7
"Exchange Offer Registration Statement"....................7
"Fair Market Value"........................................7
"Funded Debt"..............................................7
"GAAP".....................................................7
"Global Security"..........................................8
"Guaranty".................................................8
"Holder"...................................................8
"Incur"....................................................8
"Indenture"................................................8
"Independent Investment Banker"............................8
"Initial Purchaser"........................................8
"Initial Regulation S Securities"..........................9
"Intangible Assets"........................................9
"Interest Payment Date"....................................9
"Issue Date"...............................................9
"Issuer"...................................................9
"Issuer Request" or "Issuer Order".........................9
"Lien".....................................................9
"Maturity".................................................9
"Moody's"..................................................9
"Net Cash Proceeds"........................................9
"New York Corporate Trust Office".........................10
"Officers' Certificate"...................................10
"Opinion of Counsel"......................................10
"Opinion of Independent Counsel"..........................11
"Other Securities"........................................11
"Outstanding".............................................11
"Parent Guaranties".......................................12
"Parent Guarantor"........................................12
"Paying Agent"............................................12
"Person"..................................................12
"Place of Payment"........................................12
"Predecessor Security"....................................12
"Principal Property"......................................13
"Purchase Agreement"......................................13
"Redeemable Capital Stock"................................13
"Redeemable Stock"........................................13
"Redemption Date".........................................13
"Redemption Price"........................................13
"Reference Treasury Dealer"...............................13
"Reference Treasury Dealer Quotations"....................13
(iii)
<PAGE>
PAGE
"Registered Securities"...................................14
"Registration Rights Agreement"...........................14
"Registration Statement"..................................14
"Regular Record Date".....................................14
"Regulation S"............................................14
"Regulation S Certificate"................................14
"Regulation S Legend".....................................14
"Regulation S Securities".................................14
"Responsible Officer".....................................14
"Restricted Period".......................................14
"Restricted Securities"...................................15
"Restricted Securities Certificate".......................15
"Restricted Securities Legend"............................15
"Restricted Subsidiary"...................................15
"Rule 144A"...............................................15
"Rule 144A Securities"....................................15
"S&P".....................................................15
"Securities Act"..........................................15
"Securities Act Legend"...................................15
"Shelf Registration Statement"............................15
"Special Purpose Funding Subsidiary"......................15
"Special Record Date".....................................15
"Stated Maturity".........................................15
"Subsidiary"..............................................16
"Successor Security"......................................16
"Temporary Cash Investments"..............................16
"Transfer Notice".........................................16
"Treasury Rate"...........................................16
"Trust Indenture Act".....................................17
"Trustee".................................................17
"Unrestricted Securities Certificate".....................17
"Unrestricted Subsidiary".................................17
"Voting Stock"............................................17
"Wholly-Owned Subsidiary".................................17
Section 102. Other Definitions............................................17
Section 103. Compliance Certificates and Opinions.........................18
Section 104. Form of Documents Delivered to Trustee.......................19
Section 105. Acts of Holders..............................................20
Section 106. Notices, etc., to the Trustee, the Issuer and
the Parent Guarantor...................................21
Section 107. Notice to Holders; Waiver....................................22
Section 108. Conflict with Trust Indenture Act............................23
(iv)
<PAGE>
PAGE
Section 109. Effect of Headings and Table of Contents.....................23
Section 110. Successors and Assigns.......................................23
Section 111. Separability Clause..........................................23
Section 112. Benefits of Indenture........................................23
Section 113. Governing Law................................................23
Section 114. Legal Holidays...............................................24
Section 115. Independence of Covenants....................................24
Section 116. Schedules, Exhibits and Annexes..............................24
Section 117. Counterparts.................................................24
Section 118. No Personal Liability of Directors, Officers,
Incorporators, Employees and
Stockholders...........................................24
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally..............................................25
Section 202. Form of Face of Security.....................................26
Section 203. Form of Reverse of Securities................................36
Section 204. Form of Trustee's Certificate of
Authentication.........................................41
ARTICLE THREE
THE SECURITIES
Section 301. Title and Terms..............................................44
Section 302. Denominations................................................46
Section 303. Execution, Authentication, Delivery and
Dating.................................................47
Section 304. Temporary Securities.........................................49
Section 305. Global Securities............................................49
Section 306. Registration, Registration of Transfer and
Exchange Generally; Certain Transfers
and Exchanges; Securities Act Legends..................51
Section 307. Mutilated, Destroyed, Lost and Stolen
Securities.............................................56
Section 308. Payment of Interest; Interest Rights
Preserved..............................................57
Section 309. CUSIP Numbers................................................59
Section 310. Persons Deemed Owners........................................59
Section 311. Cancellation.................................................59
Section 312. Computation of Interest......................................60
(v)
<PAGE>
PAGE
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture......................60
Section 402. Application of Trust Money...................................61
ARTICLE FIVE
REMEDIES
Section 501. Events of Default............................................62
Section 502. Acceleration of Maturity; Rescission and
Annulment..............................................64
Section 503. Collection of Debt and Suits for
Enforcement by Trustee.................................65
Section 504. Trustee May File Proofs of Claim.............................66
Section 505. Trustee May Enforce Claims without
Possession of Securities...............................67
Section 506. Application of Money Collected...............................67
Section 507. Limitation on Suits..........................................67
Section 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest........................68
Section 509. Restoration of Rights and Remedies...........................69
Section 510. Rights and Remedies Cumulative...............................69
Section 511. Delay or Omission Not Waiver.................................69
Section 512. Control by Holders...........................................69
Section 513. Waiver of Past Defaults......................................70
Section 514. Undertaking for Costs........................................70
Section 515. Waiver of Stay, Extension or Usury Laws......................71
Section 516. Remedies Subject to Applicable Law...........................71
ARTICLE SIX
THE TRUSTEE
Section 601. Duties of Trustee............................................71
Section 602. Notice of Defaults...........................................73
Section 603. Certain Rights of Trustee....................................73
Section 604. Trustee Not Responsible for Recitals,
Dispositions of Securities or Application
of Proceeds Thereof....................................75
Section 605. Trustee and Agents May Hold Securities;
Collections; etc.......................................75
Section 606. Money Held in Trust..........................................75
(vi)
<PAGE>
PAGE
Section 607. Compensation and Indemnification of
Trustee and Its Prior Claim............................75
Section 608. Conflicting Interests........................................76
Section 609. Corporate Trustee Required; Eligibility......................76
Section 610. Resignation and Removal; Appointment of
Successor Trustee......................................77
Section 611. Acceptance of Appointment by Successor.......................78
Section 612. Merger, Conversion, Consolidation or
Succession to Business.................................79
Section 613. Preferential Collection of Claims Against
Issuer.................................................80
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY
TRUSTEE AND ISSUER
Section 701. Issuer to Furnish Trustee Names and
Addresses of Holders...................................80
Section 702. Disclosure of Names and Addresses of
Holders................................................80
Section 703. Reports by Trustee...........................................81
Section 704. Reports by Issuer and the Parent Guarantor...................81
Section 705. Officers' Certificate with Respect to Change
in Interest Rate.......................................82
ARTICLE EIGHT
CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
Section 801. Issuer and Parent Guarantor May
Consolidate, etc., Only on Certain Terms...............82
Section 802. Successor Substituted........................................84
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures and Agreements
without Consent of Holders.............................85
Section 902. Supplemental Indentures and Agreements
with Consent of Holders................................86
Section 903. Execution of Supplemental Indentures and
Agreements.............................................87
Section 904. Effect of Supplemental Indentures............................87
(vii)
<PAGE>
PAGE
Section 905. Conformity with Trust Indenture Act..........................88
Section 906. Reference in Securities to Supplemental
Indentures.............................................88
Section 907. Notice of Supplemental Indentures............................88
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Interest................88
Section 1002. Maintenance of Office or Agency...........................88
Section 1003. Money for Security Payments to Be Held in
Trust..................................................89
Section 1004. Corporate Existence.......................................91
Section 1005. Payment of Taxes and Other Claims.........................91
Section 1006. Maintenance of Properties.................................91
Section 1007. Limitation on Liens.......................................92
Section 1008. Limitation on Sale and Leaseback
Transactions...........................................94
Section 1009. Limitation on Restricted Subsidiary Funded
Debt...................................................96
Section 1010. Limitation on Restricted Payments.........................97
Section 1011. Provision of Financial Statements.........................99
Section 1012. Statement by Officers as to Default......................100
Section 1013. Waiver of Certain Covenants..............................100
ARTICLE ELEVEN
PARENT GUARANTIES OF SECURITIES
Section 1101. Unconditional Parent Guaranties..........................101
Section 1102. Execution of Parent Guaranties...........................102
Section 1103. Form of Parent Guaranties................................102
ARTICLE TWELVE
DEFEASANCE AND COVENANT DEFEASANCE
Section 1201. Issuer's Option to Effect Defeasance or
Covenant Defeasance...................................104
Section 1202. Defeasance and Discharge.................................104
Section 1203. Covenant Defeasance......................................105
Section 1204. Conditions to Defeasance or Covenant
Defeasance............................................105
Section 1205. Deposited Money and U.S. Government
Obligations to be Held in Trust; Other
Miscellaneous Provisions..............................108
Section 1206. Reinstatement............................................108
(viii)
<PAGE>
PAGE
ARTICLE THIRTEEN
TAX REDEMPTION OF SECURITIES
Section 1301. Tax Redemption...........................................109
Section 1302. Applicability of Article.................................110
Section 1303. Election to Redeem; Notice to Trustee....................110
Section 1304. Notice of Tax Redemption.................................110
Section 1305. Deposit of Tax Redemption Price..........................111
Section 1306. Securities Payable on Tax Redemption Date................111
ARTICLE FOURTEEN
REDEMPTION OF SECURITIES
Section 1401. Applicability of Article.................................112
Section 1402. Election to Redeem; Notice to Trustee....................112
Section 1403. Selection by Trustee of Securities to Be
Redeemed..............................................112
Section 1404. Notice of Redemption.....................................113
Section 1405. Deposit of Redemption Price..............................114
Section 1406. Securities Payable on Redemption Date....................114
Section 1407. Securities Redeemed in Part..............................114
TESTIMONIUM, SIGNATURES AND SEALS..........................................115
ACKNOWLEDGMENTS
EXHIBIT A Form of Regulation S Security Certificate
EXHIBIT B Form of Restricted Securities Certificate
EXHIBIT C Form of Unrestricted Securities Certificate
EXHIBIT D Form of Transfer Notice
(ix)
<PAGE>
INDENTURE, dated as of December 12, 1996, among USI AMERICAN
HOLDINGS, INC., a Delaware corporation, as issuer (the "Issuer"), U.S.
INDUSTRIES, INC., a Delaware corporation, as guarantor (the "Parent Guarantor"),
and PNC BANK, NATIONAL ASSOCIATION, as trustee (the "Trustee").
RECITALS OF THE ISSUER AND PARENT GUARANTOR
The Issuer has duly authorized the creation of an issue of 7 1/4%
Senior Notes Due December 1, 2006, Series A (the "Series A Securities" or the
"Initial Securities"), and an issue of 7 1/4% Senior Notes Due December 1, 2006,
Series B (the "Series B Securities" or the "Exchange Securities", and together
with the Initial Securities, the "Securities"), of substantially the tenor and
amount hereinafter set forth, and to provide therefor the Issuer has duly
authorized the execution and delivery of this Indenture and the Securities.
The Parent Guarantor owns beneficially and of record 100% of the
Capital Stock of the Issuer and the Parent Guarantor will derive direct and
indirect economic benefit from the issuance of the Securities. Accordingly, the
Parent Guarantor has duly authorized the execution and delivery of this
Indenture to provide for the Parent Guaranties with respect to the Securities as
set forth in this Indenture.
This Indenture is subject to, and shall be governed by, the
provisions of the Trust Indenture Act that are required to be part of and to
govern indentures qualified under the Trust Indenture Act.
All acts and things necessary have been done to make (i) the
Securities, when duly issued and executed by the Issuer and authenticated and
delivered hereunder, the valid obligations of the Issuer, (ii) the Parent
Guaranties, when duly issued and executed by the Parent Guarantor and delivered
hereunder, the valid obligations of the Parent Guarantor, and (iii) this
Indenture a valid agreement of the Issuer and the Parent Guarantor in accordance
with the terms of this Indenture.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
<PAGE>
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well as the
singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(d) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision;
(e) all references to $, US$, dollars or United States dollars
shall refer to the lawful currency of the United States of America; and
(f) all references herein to particular Sections or Articles
refer to this Indenture unless otherwise so indicated.
"Affiliate" means, with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by, or under direct or indirect
common control with, such specified Person. For purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent Member" means any member of, or participant in, the Depositary.
"Applicable Procedures" means, with respect to any transfer or transaction
involving a Global Security or beneficial interest therein, the rules and
procedures of the Depositary for such Global Security, Euroclear and Cedel, in
each case to the extent applicable to such transaction and as in effect from
time to time.
2
<PAGE>
"Asset Sale" means, with respect to any Person, the sale, lease,
conveyance, disposition or other transfer by such Person of all or substantially
all of the properties and assets of any division or line of business of such
Person or any other properties or assets of such Person other than in the
ordinary course of business (including by way of a sale-and-leaseback and
including the sale or other transfer of any of the Capital Stock of any
Subsidiary of such Person), in a single transaction or through a series of
related transactions. For the purposes of this definition, the term "Asset Sale"
shall not include (x) any transfer of properties and assets (A) that is governed
by Section 801(a) or (B) that is from the Issuer to any Subsidiary or from any
Subsidiary to the Issuer or another Subsidiary of the Issuer or (y) the transfer
of properties and assets (other than in the ordinary course of business) in any
given fiscal year if the aggregate Fair Market Value (as determined in good
faith by the Board of Directors of the Issuer) of all such properties and assets
transferred (other than in the ordinary course of business) in such fiscal year
is less than $1,000,000, it being understood that if such aggregate Fair Market
Value exceeds $1,000,000, the entire aggregate Fair Market Value shall be
included.
"Attributable Debt" means, as to any particular lease under which either
the Issuer or any Restricted Subsidiary is at any time liable as lessee and at
any date as of which the amount thereof is to be determined, the total net
obligations of the lessee for rental payments during the remaining term of the
lease (including any period for which such lease has been extended or may, at
the option of the lessor, be extended) discounted from the respective due dates
thereof to such date at a rate per annum equivalent to the interest rate
inherent in such lease (as determined in good faith by the Board of Directors of
the Issuer), compounded semiannually.
"Bankruptcy Law" means title 11, United States Bankruptcy Code of 1978, as
amended, or any similar United States federal or state law relating to
bankruptcy, insolvency, receivership, winding up, liquidation, reorganization or
relief of debtors or any amendment to, succession to or change in any such law.
"Board of Directors" means the board of directors of the Issuer or the
Parent Guarantor, as the case may be, or any duly authorized committee of such
board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Issuer or the Parent Guarantor, as the case may
be, to have been duly adopted by its Board of Directors and to be in full force
and effect on the date of such certification, and delivered to the Trustee. A
Board Resolution shall be conclusive evidence of action by such Board of
Directors.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions or trust companies in The City
of
3
<PAGE>
New York or the city in which the Corporate Trust Office of the Trustee is
located are authorized or obligated by law, regulation or executive order to
close.
"Capital Lease Obligation" of any Person means the obligation to pay rent
or other payment amounts under a lease of (or other Debt arrangements conveying
the right to use) real or personal property of such Person which is required to
be classified and accounted for as a capital lease or a liability on the face of
a balance sheet of such Person in accordance with GAAP; for the purposes hereof
the amount of such obligations shall be the capitalized amount reflected on such
balance sheet.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of corporate stock of
such Person.
"Cash Equivalents" means (i) any evidence of Debt, maturing not more than
six months after the date of acquisition, issued by the United States of
America, or an instrumentality or agency thereof and guaranteed fully as to
principal, premium, if any, and interest by the United States of America, (ii)
any certificate of deposit, time deposit, money market account or bankers'
acceptance, maturing not more than six months after the date of acquisition,
issued by any commercial banking institution that is a member of the Federal
Reserve System and that has combined capital and surplus and undivided profits
of not less than $500,000,000, whose debt has a rating, at the time as of which
any investment therein is made, of "P-1" (or higher) according to Moody's or
"A-1" (or higher) according to S&P, or (iii) commercial paper, maturing not more
than three months after the date of acquisition, issued by any corporation
(other than an Affiliate of the Issuer) organized and existing under the laws of
the United States of America with a rating, at the time as of which any
investment therein is made, of "P-1" (or higher) according to Moody's or "A-1"
(or higher) according to S&P.
"Cedel" means Cedel Bank, S.A. (or any successor securities clearing
agency).
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker which would be utilized, at the
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the Securities.
4
<PAGE>
"Comparable Treasury Price" means, with respect to any Redemption Date (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such Redemption Date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities," or (ii) if such release (or any successor release) is
not published or does not contain such prices on such Business Day (A) the
average of the Reference Treasury Dealer Quotations for such Redemption Date,
after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (B) if the Trustee obtains fewer than three such Reference
Treasury Dealer Quotations, the average of all such Quotations.
"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate net income (or loss) of such Person and its Subsidiaries for such
period, before extraordinary items and the cumulative effect of a change in
accounting principles (as each such term is defined under GAAP) of such Person
and its Subsidiaries, on a consolidated basis, determined in accordance with
GAAP adjusted by excluding (i) any net gains or losses in respect of Asset
Sales; (ii) the net income or loss of any Person acquired by such Person or any
Subsidiary of such Person in a pooling-of-interests transaction for any period
prior to the date of such transaction; (iii) any gains or losses from currency
exchange transactions; (iv) any gains or losses realized upon the termination of
any employee pension benefit plan; (v) any gains or losses realized upon the
refinancing of any of such Person's Debt; (vi) any settlements or judgments with
respect to any litigation not in the ordinary course of business; (vii) any
gains or losses arising from the destruction of property due to fire or other
casualty; (viii) any gains or losses arising from the revaluation of property or
assets; (ix) the net income (or loss) accounted for by the equity method of
accounting, except for dividends or other distributions actually received by
such Person or its Subsidiaries; and (x) the net income of any Subsidiary of
such Person to the extent that such net income has any restrictions on making
dividends or other distributions to such Person, it being understood that the
net income of any Subsidiary incorporated or otherwise organized in a
jurisdiction outside of the United States shall not be excluded to the extent
that annual dividends to such Person are permitted pursuant to applicable law,
but shall be net of any withholding requirements pursuant to or reserves
established in connection with the restrictions of such applicable law.
"Consolidated Net Tangible Assets" means, at any date, the total amount of
assets appearing on the most recent Consolidated balance sheet of the Parent
Guarantor and its Subsidiaries, prepared in accordance with GAAP, less (i) all
current liabilities (due within one year) as shown on such balance sheet
(excluding current maturities of long-term indebtedness and intercompany items),
(ii) applicable depreciation, amortization and
5
<PAGE>
other valuation reserves not already reflected in such total amount of assets
and (iii) Intangible Assets and liabilities relating thereto.
"Consolidation" means, with respect to any Person, the consolidation of the
accounts of such Person and each of its Subsidiaries if and to the extent the
accounts of such Person and each of its Subsidiaries would normally be
consolidated with those of such Person, all in accordance with GAAP. The term
"Consolidated" shall have a similar meaning.
"Corporate Trust Office" means the office of the Trustee or an Affiliate
thereof at which at any particular time the corporate trust business for the
purposes of this Indenture shall be principally administered, which office at
the date of execution of this Indenture is located at 27th Floor, One Oliver
Plaza, 210 Sixth Avenue, Pittsburgh, PA 15222-2602, Attn.: Corporate Trust Dept.
"Credit Agreement" means the Credit Agreement, dated as of December 12,
1996, among USI American Holdings, Inc., USI Funding, Inc., as borrowers, U.S.
Industries, Inc. as guarantor, Bank of America Illinois, as Issuing Bank and
Swingline Bank, the additional financial institutions set forth therein, as
lenders, Bank of America National Trust and Savings Association, as Agent, and
BA Securities, Inc., as Arranger, as such agreement may be amended from time to
time (or any one or more renewals, extension, refinancings, or refundings
thereof).
"Debt" means (without duplication), with respect to any Person, whether
recourse is to all or a portion of the assets of such Person and whether or not
contingent, (i) every obligation of such Person for money borrowed, (ii) every
obligation of such Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) every reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for the
account of such Person, (iv) every obligation of such Person issued or assumed
as the deferred purchase price of property or services, if and to the extent
that such obligation would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP (but excluding trade accounts payable or
accrued liabilities arising in the ordinary course of business), (v) every
Capital Lease Obligation of such Person, (vi) the maximum fixed redemption or
repurchase price of Redeemable Stock of such Person at the time of determination
and (vii) every obligation of the type referred to in clauses (i) through (vi)
of another Person and all Debt of another Person the payment of which, in either
case, such Person has Guaranteed or for which such Person is responsible or
liable, directly or indirectly, as obligor, Guarantor or otherwise.
"Default" means any event which is, or after notice or passage of any time
or both would be, an Event of Default.
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"Depositary" means, with respect to the Securities issued in the form of
one or more Global Securities, DTC, its nominees and successors, or another
Person designated as Depositary by the Issuer, which must be a clearing agency
registered under the Exchange Act.
"DTC" means The Depository Trust Company, a New York corporation.
"Equity Interest" means Capital Stock or warrants, options or other rights
to acquire Capital Stock (but excluding any debt security which is convertible
into, or exchangeable for, Capital Stock).
"Existing Funded Debt" means all Funded Debt (other than Funded Debt
outstanding pursuant to the Credit Agreement) existing on the date of this
Indenture.
"Euroclear" means the Euroclear Clearance System (or any successor
securities clearing agency).
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor statute.
"Exchange Offer" means the exchange offer by the Issuer of Exchange
Securities for Series A Securities to be effected pursuant to Section 2.1 of the
Registration Rights Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"Fair Market Value" means, with respect to any asset or property, the sale
value that would be obtained in an arm's-length transaction between an informed
and willing seller under no compulsion to sell and an informed and willing buyer
under no compulsion to buy.
"Funded Debt" means Debt that by its terms (i) matures more than one year
from the date of original issuance or creation or (ii) matures within one year
from such date but is renewable or extendible at the option of any obligor to a
date more than one year from such date.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as approved by a significant segment of the accounting profession
in the United States, from time to time.
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"Global Security" means a Security that is registered in the Security
Register in the name of a Depositary or a nominee thereof.
"Guaranty" by any Person means any obligation, contingent or otherwise, of
such Person guaranteeing any Debt of any other Person (the "primary obligor") in
any manner, whether directly or indirectly, and including, without limitation,
any obligation of such Person (i) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Debt or to purchase (or to advance or
supply funds for the purchase of) any security for the payment of such Debt,
(ii) to purchase property, securities or services for the purpose of assuring
the holder of such Debt of the payment of such Debt, or (iii) to maintain
working capital, equity capital or other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Debt (and "Guaranteed", "Guaranteeing" and "Guarantor" shall have meanings
correlative to the foregoing); provided, however, that the Guaranty by any
Person shall not include endorsements by such Person for collection or deposit,
in either case, in the ordinary course of business.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Incur" means, with respect to any Debt of any Person, to create, issue,
incur (by conversion, exchange or otherwise), assume, Guarantee or otherwise
become, directly or indirectly, liable in respect of such Debt or the recording,
as required pursuant to GAAP or otherwise, of any such Debt on the balance sheet
of such Person (and "Incurrence", "Incurred", "Incurrable" and "Incurring" shall
have meanings correlative to the foregoing); provided, however, that a change in
GAAP that results in an obligation of such Person that exists at such time
becoming Debt shall not be deemed an Incurrence of such Debt.
"Indenture" means this instrument as originally executed (including all
annexes thereto) and as it may from time to time be supplemented or amended by
one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof, including, for all purposes of this instrument and
any such supplemental indenture, the provisions of the Trust Indenture Act that
are deemed to be a part of and govern this instrument and any such supplemental
indenture, respectively.
"Independent Investment Banker" means one of the Reference Treasury Dealers
appointed by the Trustee after consultation with the Issuer.
"Initial Purchaser" means BA Securities, Inc.
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"Initial Regulation S Securities" means the Securities sold by the Initial
Purchaser in the initial offering contemplated by the Purchase Agreement in
reliance on Regulation S.
"Intangible Assets" means the value (net of any applicable reserves), as
shown on or reflected in such balance sheet, of: (A) all trade names,
trademarks, licenses, patents, copyrights, service marks, goodwill and other
like intangibles; and (B) unamortized debt discount and expense, less
unamortized premium.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Issue Date" means December 12, 1996.
"Issuer" means USI American Holdings, Inc., a corporation incorporated
under the laws of Delaware, until a successor corporation shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter "Issuer"
shall mean such successor corporation.
"Issuer Request" or "Issuer Order" means a written request or order signed
in the name of the Issuer by any one of its Chairman of the Board, its Vice
Chairman, its President, its Chief Executive Officer, its Chief Operating
Officer, its Chief Financial Officer or a Vice President, and by any one of its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"Lien" means, with respect to any property or assets, any mortgage or deed
of trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement, encumbrance, preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
on or with respect to such property or assets (including, without limitation,
any conditional sale or other title retention agreement having substantially the
same economic effect as any of the foregoing).
"Maturity" means, when used with respect to any Security, the date on which
the principal of such Securities becomes due and payable as therein provided or
as provided in this Indenture, whether at the Stated Maturity or by declaration
of acceleration, call for redemption or otherwise.
"Moody's" means Moody's Investors Service, Inc., and its successors.
"Net Cash Proceeds" means (a) with respect to any Asset Sale by any Person,
the proceeds thereof in the form of cash or Temporary Cash Investments including
payments in respect of deferred payment obligations when received in the form
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of, or stock or other assets when disposed for, cash or Temporary Cash
Investments (except to the extent that such obligations are financed or sold
with recourse to the Parent Guarantor, the Issuer or any Restricted Subsidiary)
net of (i) brokerage commissions and other actual fees and expenses (including
fees and expenses of counsel and investment bankers) related to such Asset Sale,
(ii) provisions for all taxes payable as a result of such Asset Sale, (iii)
payments made to retire Debt where payment of such Debt is secured by the assets
or properties which are the subject of such Asset Sale, (iv) amounts required to
be paid to any Person (other than the Parent Guarantor, Issuer or any Subsidiary
of the Parent Guarantor or Issuer) owning a beneficial interest in the assets
subject to the Asset Sale and (v) appropriate amounts to be provided by the
Issuer or Restricted Subsidiary, as the case may be, as a reserve, in accordance
with GAAP, against any liabilities associated with such Asset Sale and retained
by the Issuer or Restricted Subsidiary, as the case may be, after such Asset
Sale, including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale, all as
reflected in an Officers' Certificate delivered to the Trustee and (b) with
respect to any issuance or sale of Capital Stock or options, warrants or rights
to purchase Capital Stock, or Debt or Capital Stock that have been converted
into or exchanged for Capital Stock, the proceeds of such issuance or sale in
the form of cash or Temporary Cash Investments, including payments in respect of
deferred payment obligations when received in the form of, or stock or other
assets when disposed for, cash or Temporary Cash Investments (except to the
extent that such obligations are financed or sold with recourse to the Parent
Guarantor, the Issuer or any Restricted Subsidiary), net of attorneys' fees,
accountants' fees and brokerage, consultation, underwriting and other fees and
expenses actually incurred in connection with such issuance or sale and net of
taxes paid or payable as a result thereof.
"New York Corporate Trust Office" means The Depository Trust Company at 55
Water Street, New York, NY 10041-0099.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, Vice Chairman, the President, the Chief Executive Officer, the Chief
Operating Officer, the Chief Financial Officer or a Vice President, and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of
the Issuer or the Parent Guarantor, as the case may be, and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Issuer, the Parent Guarantor or the Trustee, unless an Opinion of
Independent Counsel is required pursuant to the terms of this Indenture, and who
shall be acceptable to the Trustee.
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"Opinion of Independent Counsel" means a written opinion of counsel, who
may be regular outside counsel for the Issuer, but which is issued by a Person
who is not an employee or consultant (other than non-employee legal counsel) of
the Issuer or the Parent Guarantor, and who shall be reasonably acceptable to
the Trustee.
"Other Securities" means the Securities sold by the Initial Purchaser in
the initial offering contemplated by the Purchase Agreement in reliance on an
exemption from the registration requirements of the Securities Act other than
Rule 144A and Regulation S.
"Outstanding" when used with respect to Securities means, as of the date of
determination, all Securities theretofore authenticated and delivered under this
Indenture, except:
(a) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities, or portions thereof, payment for which money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Issuer) in trust or set aside and segregated
in trust by the Issuer (if the Issuer shall act as the Paying Agent) for
the Holders of such Securities;
(c) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Issuer or the Parent Guarantor) in trust or set aside and
segregated in trust by the Issuer or the Parent Guarantor (if the Issuer or
the Parent Guarantor shall act as its own Paying Agent) for the Holders of
such Securities; provided, however, that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
(d) Securities, except to the extent provided in Sections 1202 and
1203, with respect to which the Issuer has effected defeasance or covenant
defeasance as provided in Article Twelve; and
(e) Securities which have been paid pursuant to Section 308 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee and the
Issuer proof reasonably satisfactory to each of them that such Securities
are held by a bona fide purchaser in whose hands the Securities are valid
obligations of the Issuer;
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provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities
owned by the Issuer, the Parent Guarantor or any other obligor upon the
Securities or any Affiliate of the Issuer, the Parent Guarantor or such
other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in relying upon
any such request, demand, authorization, direction, notice, consent or
waiver, only Securities which the Trustee knows to be so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the reasonable
satisfaction of the Trustee the pledgee's right so to act with respect to
such Securities and that the pledgee is not the Issuer, the Parent
Guarantor or any other obligor upon the Securities or any Affiliate of the
Issuer, the Parent Guarantor or such other obligor.
"Parent Guaranties" means the unconditional guaranty by U.S. Industries,
Inc. of the due and punctual payment of principal or premium, if any, of, and
interest on, the Securities, as provided pursuant to Article Eleven.
"Parent Guarantor" means U.S. Industries, Inc., a Delaware corporation,
until a successor corporation shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Parent Guarantor" shall mean such
successor corporation.
"Paying Agent" means any Person (including the Issuer or the Parent
Guarantor) authorized by the Issuer to pay the principal or premium, if any, of,
or interest on, any Securities on behalf of the Issuer.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Place of Payment" means, when used with respect to the Securities, the
place or places where the principal of and any premium, if any, and interest on
the Securities are payable as specified as contemplated by Section 301.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security. For purposes of this definition, any Security authenticated
and delivered under Section 307 in exchange for a mutilated Security or in lieu
of a lost, destroyed or stolen Security shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Security.
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"Principal Property" means any real property (including related fixtures),
plant or equipment owned or leased by the Issuer or any Restricted Subsidiary,
other than real property, plant or equipment that, in the good faith
determination of the Board of Directors of the Issuer (whose determination shall
be conclusive and evidenced by a Board Resolution), is not of material
importance to the respective businesses conducted by the Issuer or any
Restricted Subsidiary as of the date of such determination; provided, however,
that, unless otherwise specified by the Board of Directors of the Issuer, any
real property (including related fixtures), plant or equipment with a Fair
Market Value of less than $5,000,000 (as determined in good faith by the Board
of Directors of the Issuer) shall not be a Principal Property.
"Purchase Agreement" means the Purchase Agreement dated as of December 6,
1996, among the Issuer, the Parent Guarantor and the Initial Purchaser, as such
agreement may be amended from time to time.
"Redeemable Capital Stock" means any Equity Interest which, by its terms
(or by the terms of any security into which it is convertible or for which it is
exchangeable before the stated maturity of the Notes), or upon the happening of
any event, matures or is mandatorily redeemable, in whole or in part, prior to
the stated maturity of the Notes.
"Redeemable Stock" of any Person means any equity security of such Person
that by its terms or otherwise is required to be redeemed for cash prior to the
final Stated Maturity of the Securities or is redeemable for cash at the option
of the holder thereof at any time prior to the final Stated Maturity of the
Securities.
"Redemption Date" means, when used with respect to any Security to be
redeemed, the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price" means, when used with respect to any Security to be
redeemed, the price at which such Security is to be redeemed pursuant to this
Indenture.
"Reference Treasury Dealer" means BA Securities, Inc. and its successors
and/or such other primary U.S. Government securities dealers in New York City (a
"Primary Treasury Dealer") as shall be designated by the Issuer from time to
time, in each case provided that such entity continues to be a Primary Treasury
Dealer .
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third Business Day preceding such Redemption Date.
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"Registered Securities" means the Exchange Securities and all other
Securities sold or otherwise disposed of pursuant to an effective registration
statement under the Securities Act, together with their respective Successor
Securities.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of December 12, 1996, among the Issuer, the Parent Guarantor and the
Initial Purchaser, as such agreement may be amended from time to time.
"Registration Statement" means an Exchange Offer Registration Statement or
a Shelf Registration Statement.
"Regular Record Date" for the interest payable on any Interest Payment Date
means the May 15 or November 15 (whether or not a Business Day) next preceding
such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act (or any
successor provision), as it may be amended from time to time.
"Regulation S Certificate" means a certificate substantially in the form
set forth in Annex A hereto.
"Regulation S Legend" means a legend substantially in the form of the
legend required in the form of Security set forth in Section 202 to be placed
upon a Regulation S Global Security.
"Regulation S Securities" means all Securities required pursuant to Section
306(c) to bear a Regulation S Legend. Such term includes the Regulation S Global
Security.
"Responsible Officer" when used with respect to the Trustee means any
officer assigned to the Corporate Trust Office or the New York Corporate Trust
Office or any agent of the Trustee appointed hereunder, including any vice
president, assistant vice president, assistant secretary, or any other officer
or assistant officer of the Trustee or any agent of the Trustee appointed
hereunder to whom any corporate trust matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"Restricted Period" means the period of 41 consecutive days beginning on
and including the later of (i) the day on which Securities are first offered to
persons other than distributors (as defined in Regulation S) in reliance on
Regulation S and (ii) the day on which the
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closing of the offering of Securities pursuant to the Purchase Agreement occurs.
"Restricted Securities" means all Securities required pursuant to Section
306(c) to bear a Restricted Securities Legend. Such term includes the Restricted
Global Note.
"Restricted Securities Certificate" means a certificate substantially in
the form set forth in Annex B hereto.
"Restricted Securities Legend" means a legend substantially in the form of
the legend required in the form of Security set forth in Section 202 to be
placed upon a Restricted Security.
"Restricted Subsidiary" means each Subsidiary of the Issuer other than
Unrestricted Subsidiaries.
"Rule 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.
"Rule 144A Securities" means the Securities purchased by the Initial
Purchasers from the Issuer pursuant to the Purchase Agreement, other than the
Other Securities and the Initial Regulation S Securities.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill,
Inc., and its successors.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, or any successor statute.
"Securities Act Legend" means a Restricted Securities Legend or a
Regulation S Legend.
"Shelf Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"Special Purpose Funding Subsidiary" means a direct Wholly-Owned Subsidiary
of the Issuer (i) that serves as a cash management company for the Issuer and
its Subsidiaries and has no other material operations or business, (ii) that for
every transfer of funds to it, records a corresponding liability on its books
and records to the transferor thereof, and (iii) whose assets do not materially
exceed its liabilities.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 308.
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"Stated Maturity" when used with respect to any Security or any installment
of interest thereon, means the date specified in such Security as the fixed date
on which the principal of such Security or such installment of interest, as the
case may be, is due and payable.
"Subsidiary" of any Person means (i) a corporation more than 50% of the
outstanding Voting Stock of which is owned, directly or indirectly, by such
Person or by one or more other Subsidiaries of such Person or by such Person and
one or more Subsidiaries thereof, (ii) a partnership of which such Person, or
one or more Subsidiaries of such Person or such Person and one or more other
Subsidiaries thereof, directly or indirectly, is the general partner, has at
least a majority ownership and has the power to direct the policies, management
and affairs thereof or (iii) any other Person (other than a corporation or a
partnership) in which such Person, or one or more other Subsidiaries of such
Person or such Person and one or more other Subsidiaries thereof, directly or
indirectly, has at least a majority ownership and power to direct the policies,
management and affairs thereof.
"Successor Security" of any particular Security means every Security issued
after, and evidencing all or a portion of the same Debt as that evidenced by,
such particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 307 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Temporary Cash Investments" means (i) any evidence of Debt issued by the
United States of America, or an instrumentality or agency thereof and Guaranteed
fully as to principal, premium, if any, and interest by the United States of
America, maturing not more than one year after the date of acquisition, (ii) any
certificate of deposit, maturing not more than one year after the date of
acquisition, issued by, or time deposit of, a commercial banking institution
that is a member of the Federal Reserve System and that has combined capital and
surplus and undivided profits of not less than $500,000,000, whose Debt has a
rating, at the time as of which any investment therein is made, of "P-1" (or
higher) according to Moody's or "A-1" (or higher) according to S&P, (iii)
commercial paper, maturing not more than one year after the date of acquisition,
issued by a corporation (other than the Parent Guarantor, the Issuer or a
Subsidiary of the Issuer or the Parent Guarantor) organized and existing under
the laws of the United States of America with a rating, at the time as of which
any investment therein made, of "P-1" (or higher) according to Moody's or "A-1"
(or higher) according to S&P or (iv) any money market deposit accounts issued or
offered by a domestic commercial bank having capital and surplus in excess of
$500,000,000.
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"Transfer Notice" means a certificate substantially in the form set forth
in Annex D hereto.
"Treasury Rate" means, with respect to any Redemption Date, the rate per
annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for such Comparable Treasury Issue (expressed
as a percentage of its principal amount) equal to the Comparable Treasury Price
for such Redemption Date.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended, or
any successor statute.
"Trustee" means, except as set forth in Section 1205, the Person named as
the "Trustee" in the first paragraph of this Indenture, until a successor
trustee shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Trustee" shall mean such successor trustee.
"Unrestricted Securities Certificate" means a certificate substantially in
the form set forth in Annex C hereto.
"Unrestricted Subsidiary" means any Subsidiary of the Issuer that (i) is
organized under the laws of a jurisdiction other than a jurisdiction in the
United States of America or (ii) does not constitute a "significant subsidiary"
of the Parent Guarantor within the meaning of Rule 1-02(w) of Regulation S-X
promulgated under the Exchange Act and any successor provision thereto.
"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
"Wholly-Owned Subsidiary" of any Person means a Subsidiary of such Person
all the outstanding Capital Stock or other ownership interests of which (other
than directors' qualifying shares) shall at the time be owned by such Person or
by one or more Wholly Owned Subsidiaries of such Person or by such Person and
one or more Wholly Owned Subsidiaries of such Person.
Section 102. Other Definitions.
Term Defined in Section
- ---- ------------------
"Additional Amounts" 301
"Act" 105
"covenant defeasance" 1203
"Debt Basket" 1009
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"Defaulted Interest" 308
"defeasance" 1202
"Defeased Securities" 1201
"Event of Default" 501
"Exchange Securities" Recitals
"Initial Securities" Recitals
"Leaseback Basket" 1008
"Lien Basket" 1007
"Other Jurisdiction" 301
"primary obligor" 101
"Regulation S Global Security" 201
"Required Filing Dates" 1011
"Restricted Global Security" 201
"Restricted Payment" 1010
"Securities" Recitals
"Security Register" 306
"Security Registrar" 306
"Series A Securities" Recitals
"Series B Securities" Recitals
"Special Payment Date" 308
"Surviving Entity" 801
"Surviving Guarantor Entity" 801
"Tax Redemption" 1301
"Tax Redemption Date" 1301
"Tax Redemption Price" 1301
"U.S. Government Obligations" 1204
Section 103. Compliance Certificates and Opinions.
Upon any application or request by the Issuer or the Parent
Guarantor to the Trustee to take any action under any provision of this
Indenture, the Issuer and the Parent Guarantor (if applicable) and any other
obligor on the Securities (if applicable) shall furnish to the Trustee an
Officers' Certificate in form and substance reasonably acceptable to the Trustee
stating that all conditions precedent, if any, provided for in this Indenture
(including any covenant compliance with which constitutes a condition precedent)
relating to the proposed action have been complied with, and an Opinion of
Counsel in form and substance reasonably acceptable to the Trustee stating that
in the opinion of such counsel all such conditions precedent, if any, have been
complied with, except that, in the case of any such application or request as to
which the furnishing of such certificates or opinions is specifically required
by any provision of this Indenture relating to such particular application or
request, no additional certificate or opinion need be furnished.
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Every certificate or Opinion of Counsel or Opinion of Independent Counsel with
respect to compliance with a condition or covenant provided for in this
Indenture shall comply with the requirements of the Trust Indenture Act.
Every certificate or Opinion of Counsel or Opinion of Independent
Counsel with respect to compliance with a condition or covenant provided for in
this Indenture shall include:
(a) a statement that each individual signing such certificate
or individual or firm signing such opinion has read such covenant or
condition and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such individual
or such firm, he or it has made such examination or investigation as is
necessary to enable him or it to express an informed opinion as to whether
or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
individual or such firm, such condition or covenant has been complied
with.
Section 104. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Issuer, the Parent
Guarantor or other obligor on the Securities may be based, insofar as it relates
to legal matters, upon a certificate or opinion of, or representations by,
counsel, unless such officer knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to the
matters upon which his certificate or opinion is based are erroneous. Any such
certificate or opinion may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, an officer or officers
of the Issuer, the Parent Guarantor or other obligor on the Securities stating
that the information with respect to such factual matters is in the possession
of the Issuer, the
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Parent Guarantor or other obligor on the Securities, unless such officer or
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous. Opinions of Counsel required to be delivered to the Trustee may have
qualifications customary for opinions of the type required and counsel
delivering such Opinions of Counsel may rely on certificates of the Issuer or
government or other officials customary for opinions of the type required,
including certificates certifying as to matters of fact, including that various
financial covenants have been complied with.
Any certificate or opinion of an officer of the Issuer, the Parent
Guarantor or other obligor on the Securities may be based, insofar as it relates
to accounting matters, upon a certificate or opinion of, or representations by,
an accountant or firm of accountants in the employ of the Issuer and the Parent
Guarantor, unless such officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the accounting matters upon which his certificate or opinion may be based are
erroneous. Any certificate or opinion of any independent firm of public
accountants filed with the Trustee shall contain a statement that such firm is
independent with respect to the Issuer and the Parent Guarantor.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 105. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Issuer or the
Parent Guarantor. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Holders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and conclusive in favor of the Trustee, the
Issuer and the Parent Guarantor, if made in the manner provided in this Section
105.
(b) The ownership of Securities shall be proved by the Security
Register.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other Act by the Holder of any Security shall bind every future Holder
of the
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same Security or the Holder of every Security issued upon the transfer thereof
or in exchange therefor or in lieu thereof, in respect of anything done,
suffered or omitted to be done by the Trustee, any Paying Agent or the Issuer,
the Parent Guarantor or any other obligor of the Securities in reliance thereon,
whether or not notation of such action is made upon such Security.
(d) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate of affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(e) If the Issuer shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Issuer may, at its option, by or pursuant to a Board Resolution, fix in advance
a record date for the determination of such Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Issuer shall have no obligation to do so. Notwithstanding Trust
Indenture Act Section 316(c), any such record date shall be the record date
specified in or pursuant to such Board Resolution, which shall be a date not
more than 30 days prior to the first solicitation of Holders generally in
connection therewith and no later than the date such first solicitation is
completed.
If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or after
such record date, but only the Holders of record at the close of business on
such record date shall be deemed to be Holders for purposes of determining
whether Holders of the requisite proportion of Securities then Outstanding have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other Act, and for this purpose the
Securities then Outstanding shall be computed as of such record date; provided,
however, that no such request, demand, authorization, direction, notice,
consent, waiver or other Act by the Holders on such record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.
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Section 106. Notices, etc., to the Trustee, the Issuer and the Parent
Guarantor.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or by the Issuer or the Parent
Guarantor or any other obligor on the Securities shall be sufficient for
every purpose (except as provided in Section 501(c)) hereunder if in
writing and mailed, first-class postage prepaid, or delivered by
recognized overnight courier, to or with the Trustee at its Corporate
Trust Office, Attention: Corporate Trust Department, or at any other
address previously furnished in writing to the Holders or the Issuer, the
Parent Guarantor or any other obligor on the Securities by the Trustee; or
(b) the Issuer or the Parent Guarantor by the Trustee or any
Holder shall be sufficient for every purpose (except as provided in
Section 501(c)) hereunder if in writing and mailed, first-class postage
prepaid, or delivered by recognized overnight courier, to the Issuer or
the Parent Guarantor addressed to it c/o U.S. Industries, Inc., 101 Wood
Avenue South, Iselin, New Jersey 08830, or at any other address previously
furnished in writing to the Trustee by the Issuer or the Parent Guarantor.
Section 107. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, or delivered by
recognized overnight courier, to each Holder affected by such event, at his
address as it appears in the Security Register, not later than the latest date,
and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Any notice when mailed to a Holder in the aforesaid manner shall
be conclusively deemed to have been received by such Holder whether or not
actually received by such Holder. Where this Indenture provides for notice in
any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case, by reason of the suspension of regular mail service or by
reason of any other cause, it shall be impracticable to mail notice of any event
as required by any
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provision of this Indenture, then any method of giving such notice as shall be
reasonably satisfactory to the Trustee shall be deemed to be a sufficient giving
of such notice.
Section 108. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with any
provision of the Trust Indenture Act or another provision which is required or
deemed to be included in this Indenture by any of the provisions of the Trust
Indenture Act, the provision or requirement of the Trust Indenture Act shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or to be
excluded, as the case may be. Until such time as this Indenture shall be
qualified under the Trust Indenture Act, this Indenture, the Issuer, the Parent
Guarantor and the Trustee shall be deemed for all purposes hereof to be subject
to and governed by the Trust Indenture Act to the same extent as would be the
case if this Indenture were so qualified on the date hereof.
Section 109. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
Section 110. Successors and Assigns.
All covenants and agreements in this Indenture by the Issuer and the
Parent Guarantor shall bind their respective successors and assigns, whether so
expressed or not.
Section 111. Separability Clause.
In case any provision in this Indenture or in the Securities shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
Section 112. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person (other than the parties hereto and their successors
hereunder, any Paying Agent or the Holders) any benefit or any legal or
equitable right, remedy or claim under this Indenture.
Section 113. Governing Law.
THIS INDENTURE, THE SECURITIES AND THE PARENT GUARANTIES SHALL BE
GOVERNED BY, AND CONSTRUED IN
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ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAWS PRINCIPLES THEREOF.
Section 114. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date,
Maturity, or Stated Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal or premium, if any, need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the Interest Payment Date, Redemption Date or at the
Maturity or Stated Maturity and no interest shall accrue with respect to such
payment for the period from and after such Interest Payment Date, Redemption
Date, Maturity or Stated Maturity, as the case may be, to the next succeeding
Business Day.
Section 115. Independence of Covenants.
All covenants and agreements in this Indenture shall be given
independent effect so that if a particular action or condition is not permitted
by any such covenants, the fact that it would be permitted by an exception to,
or be otherwise within the limitations of, another covenant shall not avoid the
occurrence of a Default or an Event of Default if such action is taken or
condition exists.
Section 116. Schedules, Exhibits and Annexes.
All schedules, exhibits and annexes attached hereto are by this
reference made a part hereof with the same effect as if herein set forth in
full.
Section 117. Counterparts.
This Indenture may be executed with counterpart signature pages or
in any number of counterparts, each of which counterparts shall be an original;
but such counterparts shall together constitute but one and the same instrument.
Section 118. No Personal Liability of Directors, Officers, Incorporators,
Employees and Stockholders.
No recourse under or upon any obligation, covenant or agreement of
this Indenture or any indenture supplemental hereto or of any Security or Parent
Guaranties, or for any claim based thereon or otherwise in respect thereof,
shall be had against any incorporator, stockholder, officer, director or
employee, as such, past, present or future, of the Issuer or the Parent
Guarantor or any of their respective Affiliates or of any successor
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corporation thereof, either directly or through the Issuer, the Parent Guarantor
or any of their respective Affiliates or any such successor corporation, whether
by virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise; it being expressly understood that this
Indenture and the obligations issued hereunder are solely corporate obligations,
and that no such personal liability whatever shall attach to, or is or shall be
incurred by, the incorporators, stockholders, officers, directors or employees,
as such, of the Issuer or the Parent Guarantor or any of their respective
Affiliates or of any successor corporation thereof, or any of them, because of
the creation of the Debt hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Securities or the Parent Guaranties or implied therefrom; and that any and
all such personal liability of every name and nature, either at common law or in
equity or by constitution or statute, of, and any and all such rights and claims
against, every such incorporator, stockholder, officer, director or employee, as
such, because of the creation of the indebtedness hereby authorized, or under or
by reason of the obligations, covenants or agreements contained in this
Indenture or in any of the Securities or the Parent Guaranties or implied
therefrom, are hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of such
Securities and the Parent Guaranties.
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally.
The Securities and the Trustee's certificate of authentication
thereon shall be in substantially the forms set forth in this Article Two, with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted hereby and may have such letters, numbers or other
marks of identification and such legends or endorsements placed thereon as may
be required to comply with the rules of any securities exchange, any
organizational document or governing instrument or applicable law or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities. Any portion of the text of
any Security may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Security.
The definitive Securities and the Parent Guaranties to be endorsed
thereon shall be printed, lithographed or engraved or produced by any
combination of these methods or may be produced in any other manner permitted by
the rules of any securities exchange on which the Securities may be listed, all
as determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
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Upon their original issuance, Rule 144A Securities shall be issued in the form
of one or more Global Securities registered in the name of DTC, as Depositary,
or its nominee and deposited with the Trustee, as custodian for DTC, for credit
by DTC to the respective accounts of beneficial owners of the Securities
represented thereby (or such other accounts as they may direct). Such Global
Securities, together with their Successor Securities which are Global Securities
other than the Regulation S Global Security, are collectively herein called the
"Restricted Global Security".
Upon their original issuance, Initial Regulation S Securities shall
be issued in the form of one or more Global Securities registered in the name of
DTC, as Depositary, or its nominee and deposited with the Trustee, as custodian
for DTC, for credit by DTC to the respective accounts of beneficial owners of
the Securities represented thereby (or such other accounts as they may direct),
provided that upon such deposit all such Securities shall be credited to or
through accounts maintained at DTC by or on behalf of Euroclear or Cedel. Such
Global Securities, together with their Successor Securities which are Global
Securities other than the Restricted Global Security, are collectively herein
called the "Regulation S Global Security".
Upon their original issuance, Other Securities shall not be issued
in the form of a Global Security or in any other form intended to facilitate
book-entry trading in beneficial interests in such Securities.
The terms and provisions contained in the form of the Securities set
forth in Section 202 shall constitute, and are hereby expressly made, a part of
this Indenture and, to the extent applicable, the Issuer and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
Section 202. Form of Face of Security.
(a) The form of the face of any Initial Securities authenticated and
delivered hereunder shall be substantially as follows:
[IF THE SECURITY IS A RESTRICTED SECURITY, THEN INSERT -- THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE OR FOREIGN SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE
RELYING ON
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THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY
AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (A) TO THE ISSUER (B) PURSUANT TO A REGISTRATION STATEMENT
THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS
THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING
OF RULE 501(A)(1),(2),(3) OR (7) UNDER THE SECURITIES ACT THAT IS ACQUIRING THE
SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE
SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR
OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE PARENT GUARANTOR'S, THE
ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i)
PURSUANT TO CLAUSES C, D, E AND F TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM,
AND (ii) IN THE CASE OF THE FOREGOING CLAUSE (E), TO REQUIRE THAT A TRANSFER
NOTICE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE ISSUER, THE PARENT
GUARANTOR AND THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
[IF THE SECURITY IS A REGULATION S SECURITY, THEN INSERT -- THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT") AND MAY NOT BE
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OFFERED, SOLD, OR DELIVERED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, ANY U.S. PERSON, UNLESS THIS SECURITY IS REGISTERED UNDER THE
SECURITIES ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREOF IS
AVAILABLE.]
[IF THE SECURITY IS A GLOBAL SECURITY, THEN INSERT -- THIS SECURITY
IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS
SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND
NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME
OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.]
[IF THE SECURITY IS A GLOBAL SECURITY AND DTC IS TO BE THE
DEPOSITARY THEREFOR, THEN INSERT -- UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
USI AMERICAN HOLDINGS, INC.
7 1/4% SENIOR NOTE DUE DECEMBER 1, 2006, SERIES A
GUARANTEED AS TO PAYMENT OF PRINCIPAL
AND INTEREST BY U.S. INDUSTRIES, INC.
[IF RESTRICTED GLOBAL SECURITY -- CUSIP Number [ ]]
[IF REGULATION S GLOBAL SECURITY -- CUSIP Number [ ]]
[IF NON-GLOBAL SECURITY -- CUSIP Number [ ]]
No. [ ] $_______________
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7 1/4% SENIOR NOTE DUE DECEMBER 1, 2006, SERIES A
GUARANTEED AS TO PAYMENT OF PRINCIPAL
AND INTEREST BY U.S. INDUSTRIES, INC.
CUSIP NO. ______________
No. __________ $_______________
USI American Holdings, Inc., a Delaware corporation (the "Issuer",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to _______________ or
registered assigns, the principal sum of $_______________ United States dollars
[IF THE SECURITY IS A GLOBAL SECURITY, THEN INSERT -- or such other principal
amount (which, when taken together with the principal amounts of all other
Outstanding Securities, shall not exceed $125,000,000 in the aggregate at any
one time) as may be set forth in the records of the Trustee hereinafter referred
to in accordance with the Indenture], on December 1, 2006, at the office or
agency of the Issuer referred to below, and to pay interest thereon from
December 12, 1996, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, semiannually on June 1 and December
1 in each year, commencing June 1, 1997 at the rate of 7 1/4% per annum, subject
to adjustments as described in the second following paragraph, in United States
dollars, until the principal or premium, if any, hereof is paid or duly provided
for. Interest shall be computed on the basis of a 360-day year comprised of
twelve 30-day months.
The Holder of this Series A Security is entitled to the benefits of
the Registration Rights Agreement dated as of December 12, 1996, among the
Issuer, the Parent Guarantor and the Initial Purchaser, pursuant to which,
subject to the terms and conditions thereof, the Issuer and the Parent Guarantor
are obligated to consummate the Exchange Offer pursuant to which the Holder of
this Security shall have the right to exchange this Security for 7 1/4% Senior
Notes Due December 1, 2006, Series B (the "Series B Securities") in like
principal amount as provided therein. The Series A Securities and the Series B
Securities are together referred to as the "Securities". The Series A Securities
rank pari passu in right of payment with the Series B Securities.
If (i) the Exchange Offer Registration Statement is not filed with
the Commission on or prior to the 45th day following the date of original issue
of the Series A Securities, (ii) the Exchange Offer Registration Statement is
not declared effective on or prior to the 135th day following the date of
original issue of the Series A Securities, (iii) neither the Exchange Offer is
consummated nor the Shelf Registration Statement is declared effective on or
prior to the 165th day following the date of original issue of the Series A
Securities, or (iv) a Shelf Registration Statement is required to be filed
because
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of the request of the Initial Purchaser, 45 days following the request by the
Initial Purchaser that the Issuer file the Shelf Registration Statement (or 90
days in the event that the Shelf Registration Statement is reviewed by the
Commission), then the interest rate borne by this Security (except in the case
of clause (iv), in which case only the Series A Securities which have not been
exchanged in the Exchange Offer) shall be increased by 0.50% per annum. Upon (w)
the filing of the Exchange Offer Registration Statement in the case of clause
(i) above, (x) the effectiveness of the Exchange Offer Registration Statement in
the case of clause (ii) above, (y) the date of the consummation of the Exchange
Offer or the effectiveness of the Shelf Registration Statement in the case of
clause (iii) above, or (z) the effective date of the Shelf Registration
Statement in the case of clause (iv) above, the interest rate on the Securities
from the date of such filing, effectiveness or the date of such consummation or
effectiveness, as the case may be, will be reduced to the original interest rate
on the Securities; provided, however, that, if after any such reduction in
interest rate a different event specified in clause (i), (ii), (iii) or (iv)
above occurs, the interest rate shall again be increased pursuant to the
foregoing provisions.
Any amount of interest on this Security which is overdue shall bear
interest (to the extent that payment thereof shall be legally enforceable) at
the rate per annum then
borne by this Security from the date such amount is due to the day it is paid or
made available for payment, and such overdue interest shall be payable on
demand.
The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or any Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest, which
shall be the May 15 or November 15 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date; provided, however, that any
accrued and unpaid interest (including increased and additional interest as
aforesaid) on this Security upon the issuance of a Series B Security in exchange
for this Security shall cease to be payable to the Holder hereof and shall be
payable on the next Interest Payment Date for such Series B Security to the
Holder thereof on the related Regular Record Date. Any such interest not so
punctually paid or duly provided for shall forthwith cease to be payable to the
Holder on the relevant Regular Record Date, and may either be paid to the Person
in whose name this Security (or any Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities not less than 10 days prior to such Special Record Date, or be paid
at any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, all as more fully provided in said
Indenture.
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The principal or premium, if any, of, and interest on, and the Tax
Redemption Price and Additional Amounts with respect to, this Security shall be
payable in immediately available funds and, exchange or transfer of this
Security, will be made at the office or agency of the Issuer in The City of New
York maintained for that purpose (which initially will be the New York Corporate
Trust Office of the Trustee), or at such other office or agency as may be
maintained for such purpose, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
option of the Issuer by check mailed to the address of the Person entitled
thereto as such address shall appear on the Security Register.
The Securities are subject to redemption at the election of the
Issuer upon not less than 30 days' notice by mail, in whole or in part but only
in multiples of $1,000, at any one or more times, at a Redemption Price equal to
the greater of (i) 100% of the principal amount of the Securities to be
redeemed, or (ii) the sum of the present values of the remaining scheduled
payments of principal and interest thereon discounted to the Redemption Date on
a semiannual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Treasury Rate plus 10 basis points, plus, in each case, accrued but
unpaid interest to the Redemption Date. The Securities are also subject to
redemption at the election of the Issuer at the Tax Redemption Price under the
circumstances set forth in Article Thirteen of the Indenture. On and after the
Redemption Date, interest will cease to accrue on the Securities or portions of
Securities called for redemption on such Redemption Date. The Securities shall
not have the benefit of any sinking fund obligations.
Additional Amounts in respect of principal, premium, if any, and
interest, may be paid by the Parent Guarantor under circumstances relating to
tax withholding by certain foreign jurisdictions as set forth in Section 301 of
the Indenture.
This Security is entitled to the benefits of the Parent Guaranties
made in favor of the Holders, which Parent Guaranties are subject to release.
Reference is hereby made to Article Eleven of the Indenture for a statement of
the respective rights, limitations of rights, duties and obligations under the
Parent Guaranties. Each Holder, by holding this Security, agrees to all terms
and provisions of the Parent Guaranties.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof or by the
authenticating agent appointed as provided in the Indenture by manual signature
of an authorized signer, this Security shall
31
<PAGE>
not be entitled to any benefit under the Indenture, or be valid or obligatory
for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by the manual or facsimile signature of its authorized officers and its
corporate seal to be affixed or reproduced hereon.
Dated: _______________ USI AMERICAN HOLDINGS, INC.
By:___________________________________
[SEAL] Name:
Title:
Attest:
_____________________________________
Authorized Officer
(b) The form of the face of any Series B Securities authenticated
and delivered hereunder shall be substantially as follows:
[IF THE SECURITY IS A GLOBAL SECURITY, THEN INSERT -- THIS SECURITY
IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS
SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND
NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME
OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.]
[IF THE SECURITY IS A GLOBAL SECURITY AND DTC IS TO BE THE
DEPOSITARY THEREFOR, THEN INSERT -- UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY SUCH CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL
32
<PAGE>
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
USI AMERICAN HOLDINGS, INC.
7 1/4% SENIOR NOTE DUE DECEMBER 1, 2006, SERIES B
GUARANTEED AS TO PAYMENT OF PRINCIPAL AND
INTEREST BY U.S. INDUSTRIES, INC.
[IF RULE 144A SECURITY -- CUSIP Number [ ]]
[IF REGULATION S GLOBAL SECURITY -- CUSIP Number [ ]]
[IF NON-GLOBAL SECURITY -- CUSIP Number [ ]]
No. [ ] $_______________
USI American Holdings, Inc., a Delaware corporation (the "Issuer",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to _______________ or
registered assigns, the principal sum of $_______________ United States dollars
[IF THE SECURITY IS A GLOBAL SECURITY, THEN INSERT -- or such other principal
amount (which, when taken together with the principal amounts of all other
Outstanding Securities, shall not exceed $125,000,000 in the aggregate at any
one time) as may be set forth in the records of the Trustee hereinafter referred
to in accordance with the Indenture], on December 1, 2006, at the office or
agency of the Issuer referred to below, and to pay interest thereon from
December 12, 1996 or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, semiannually on June 1 and December
1 in each year, commencing June 1, 1997 at the rate of 7 1/4% per annum, in
United States dollars, until the principal hereof is paid or duly provided for;
provided, however, that to the extent interest has not been paid or duly
provided for with respect to the Series A Security exchanged for this Series B
Security, interest on this Series B Security shall accrue from the most recent
Interest Payment Date to which interest on the Series A Security which was
exchanged for this Series B Security has been paid or duly provided for.
Interest shall be computed on the basis of a 360-day year comprised of twelve
30-day months.
This Series B Security was issued pursuant to the Exchange Offer
pursuant to which 7 1/4% Senior Notes Due December 1, 2006, Series A (the
"Series A Securities") in like principal amount were exchanged for Series B
Securities. The Series B Securities rank pari passu in right of payment with the
Series A Securities.
33
<PAGE>
Any amount of interest on this Security which is overdue shall bear interest (to
the extent that payment thereof shall be legally enforceable) at the rate per
annum then
borne by this Security from the date such amount is due to the day it is paid or
made available for payment, and such overdue interest shall be payable on
demand.
The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or any Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest, which
shall be the May 15 or November 15 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date. Any such interest not so
punctually paid, or duly provided for, and interest on such defaulted interest
at the interest rate borne by the Series B Securities, to the extent lawful,
shall forthwith cease to be payable to the Holder on the relevant Regular Record
Date, and may either be paid to the Person in whose name this Security (or any
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture.
The principal or premium, if any, of, and interest on, and the Tax
Redemption Price and Additional Amounts, with respect to this Security shall be
payable in immediately available funds and, exchange or transfer of this
Security, will be made at the office or agency of the Issuer in The City of New
York maintained for that purpose (which initially will be the New York Corporate
Trust Office of the Trustee), or at such other office or agency as may be
maintained for such purpose, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
option of the Issuer by check mailed to the address of the Person entitled
thereto as such address shall appear on the Security Register.
The Securities are subject to redemption at the election of the
Issuer upon not less than 30 days' notice by mail, in whole or in part but only
in multiples of $1,000, at any one or more times, at a Redemption Price equal to
the greater of (i) 100% of the principal amount of the Securities to be
redeemed, or (ii) the sum of the present values of the remaining scheduled
payments of principal and interest thereon discounted to the Redemption Date on
a semiannual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Treasury Rate plus 10 basis points, plus, in each case, accrued but
unpaid interest to the Redemption Date. The Securities are also subject to
redemption at the election of the Issuer at the Tax Redemption Price under the
circumstances set forth in
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<PAGE>
Article Thirteen of the Indenture. On and after the Redemption Date, interest
will cease to accrue on the Securities or portions of Securities called for
redemption on such Redemption Date. The Securities shall not have the benefit of
any sinking fund obligations.
Additional Amounts in respect of principal, premium, if any, and
interest, may be paid by the Parent Guarantor under circumstances relating to
tax withholding by certain foreign jurisdictions, as set forth in Section 301 of
the Indenture.
This Security is entitled to the benefits of the Parent Guaranties
made in favor of the Holders, which Parent Guaranties are subject to release.
Reference is hereby made to Article Eleven of the Indenture for a statement of
the respective rights, limitations of rights, duties and obligations under the
Parent Guaranties. Each Holder, by holding this Security, agrees to all terms
and provisions of the Parent Guaranties.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof or by the
authenticating agent appointed as provided in the Indenture by manual signature
of an authorized signer, this Security shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by the manual or facsimile signature of its authorized officers and its
corporate seal to be affixed or reproduced hereon.
Dated: _______________ USI AMERICAN HOLDINGS, INC.
By:_____________________________________
[SEAL] Name:
Title:
Attest:
___________________________________
Authorized Officer
35
<PAGE>
Section 203. Form of Reverse of Securities.
(a) The form of the reverse of the Series A Securities shall be
substantially as follows:
USI AMERICAN HOLDINGS, INC.
7 1/4% SENIOR NOTE DUE DECEMBER 1, 2006, SERIES A
GUARANTEED AS TO PAYMENT OF PRINCIPAL
AND INTEREST BY U.S. INDUSTRIES, INC.
This Security is one of a duly authorized issue of Securities of the
Issuer designated as its 7 1/4% Senior Notes Due December 1, 2006 (the
"Securities"), limited (except as otherwise provided in the Indenture referred
to below) in aggregate principal amount to $125,000,000, issued under and
subject to the terms of an indenture (the "Indenture") dated as of December 12,
1996 among the Issuer, U.S. Industries, Inc. (the "Parent Guarantor", which term
includes any successor corporation under the Indenture) and PNC Bank, National
Association, as trustee (the "Trustee", which term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties, obligations and immunities thereunder of the
Issuer, the Parent Guarantor, the Trustee and the Holders of the Securities, and
of the terms upon which the Securities, with the Parent Guaranties endorsed
thereon, are, and are to be, authenticated and delivered.
The Indenture contains provisions for defeasance at any time of (a)
the entire Debt on the Securities, and (b) certain restrictive covenants and
related Defaults and Events of Default, in each case upon compliance with
certain conditions set forth therein.
If an Event of Default shall occur and be continuing, the principal
amount and premium, if any, of all the Securities may be declared due and
payable in the manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions (including certain
amendments permitted without the consent of any Holders) as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the Parent Guarantor and the rights of the Holders of the Securities
under the Indenture at any time by the Issuer, the Parent Guarantor and the
Trustee with the consent of the Holders of not less than a majority in aggregate
principal amount of the Securities at the time Outstanding. The Indenture also
contains provisions permitting the Holders of specified percentages in aggregate
principal amount of the Securities at the time Outstanding, on
36
<PAGE>
behalf of the Holders of all the Securities, to waive compliance by the Issuer
and the Parent Guarantor with certain provisions of the Indenture and certain
past Defaults under the Indenture and their consequences. Any such consent or
waiver by or on behalf of the Holder of this Security shall be conclusive and
binding upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the Issuer,
the Parent Guarantor or any other obligor on the Securities (if the Parent
Guarantor or such other obligor is obligated to make payments in respect of the
Securities), which is absolute and unconditional, to pay the principal or
premium, if any, of, and interest on, and Tax Redemption price and Additional
Amounts (if applicable) with respect to this Security at the times, place and
rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the obligations of the Issuer under the Indenture and this
Security are guaranteed pursuant to Parent Guaranties endorsed hereon as
provided in the Indenture. Each Holder, by holding this Security, agrees to all
the terms and provisions of the Parent Guaranties.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities, the Holders of not less than 25% in principal amount of the
Securities at the time Outstanding shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default as Trustee
and offered the Trustee reasonable indemnity and the Trustee shall not have
received from the Holders of a majority in principal amount of Securities at the
time Outstanding a direction inconsistent with such request and shall have
failed to institute any such proceeding for 60 days after receipt of such
notice, request and offer of indemnity. The foregoing shall not apply to certain
suits described in the Indenture, including any suit instituted by the Holder of
this Security for the enforcement of any payment of principal or premium, if
any, hereof or interest hereon on or after the respective due dates expressed
herein.
At any time when neither the Issuer nor the Parent Guarantor is
subject to Sections 13 or 15(d) of the Exchange Act, upon the written request of
a Holder of a Series A Security, the Issuer will promptly furnish or cause to be
furnished such information as is specified pursuant to Rule 144A(d)(4) under the
Securities Act (or any successor
37
<PAGE>
provision thereto) to such Holder or to a prospective purchaser of such Series A
Security who such Holder informs the Issuer is reasonably believed to be a
Qualified Institutional Buyer, as the case may be, in order to permit compliance
by such Holder with Rule 144A under the Securities Act.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Issuer may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Issuer in The City of New York, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Issuer and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Securities are issuable only in registered form without coupons
in denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Securities are
exchangeable for a like aggregate principal amount of Securities of a different
authorized denomination, as requested by the Holder surrendering the same.
Prior to due presentment of this Security for registration of
transfer, the Issuer, the Parent Guarantor, the Trustee and any agent of the
Issuer, the Parent Guarantor or the Trustee may treat the Person in whose name
this Security is registered as the owner hereof for all purposes, whether or not
this Security is overdue, and neither the Issuer, the Parent Guarantor, the
Trustee nor any such agent shall be affected by notice to the contrary.
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES THEREOF.
All terms used in this Security which are defined in the Indenture
and not otherwise defined herein shall have the meanings assigned to them in the
Indenture.
(b) The form of the reverse of the Series B Securities shall be
substantially as follows:
38
<PAGE>
USI AMERICAN HOLDINGS, INC.
7 1/4% SENIOR NOTE DUE DECEMBER 1, 2006, SERIES B
GUARANTEED AS TO PAYMENT OF PRINCIPAL
AND INTEREST BY U.S. INDUSTRIES, INC.
This Security is one of a duly authorized issue of Securities of the
Issuer designated as its 7 1/4% Senior Notes Due December 1, 2006 (the
"Securities"), limited (except as otherwise provided in the Indenture referred
to below) in aggregate principal amount to $125,000,000, issued under and
subject to the terms of an indenture (the "Indenture") dated as of December 12,
1996 among the Issuer, U.S. Industries, Inc. (the "Parent Guarantor", which term
includes any successor corporation under the Indenture) and PNC Bank, National
Association, as trustee (the "Trustee", which term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties, obligations and immunities thereunder of the
Issuer, the Parent Guarantor, the Trustee and the Holders of the Securities, and
of the terms upon which the Securities, with the Parent Guaranties endorsed
thereon, are, and are to be, authenticated and delivered.
The Indenture contains provisions for defeasance at any time of (a)
the entire Debt on the Securities, and (b) certain restrictive covenants and
related Defaults and Events of Default, in each case upon compliance with
certain conditions set forth therein.
If an Event of Default shall occur and be continuing, the principal
amount of all the Securities may be declared due and payable in the manner and
with the effect provided in the Indenture.
The Indenture permits, with certain exceptions (including certain
amendments permitted without the consent of any Holders) as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the Parent Guarantor and the rights of the Holders of the Securities
under the Indenture at any time by the Issuer and the Trustee with the consent
of the Holders of not less than a majority in aggregate principal amount of the
Securities at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Securities at the time Outstanding, on behalf of the Holders of all the
Securities, to waive compliance by the Issuer and the Parent Guarantor with
certain provisions of the Indenture and certain past Defaults under the
Indenture and their consequences. Any such consent or waiver by or on behalf of
the Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of
39
<PAGE>
this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the Issuer,
the Parent Guarantor or any other obligor on the Securities (in the event the
Parent Guarantor or such other obligor is obligated to make payments in respect
of the Securities), which is absolute and unconditional, to pay the principal or
premium, if any, of, and interest on, and Tax Redemption Price and Additional
Amounts (if applicable) with respect to this Security at the times, place and
rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the obligations of the Issuer under the Indenture and this
Security are guaranteed pursuant to Parent Guaranties endorsed hereon as
provided in the Indenture. Each Holder, by holding this Security, agrees to all
the terms and provisions of the Parent Guaranties.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities, the Holders of not less than 25% in principal amount of the
Securities at the time Outstanding shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default as Trustee
and offered the Trustee reasonable indemnity and the Trustee shall not have
received from the Holders of a majority in principal amount of Securities at the
time Outstanding a direction inconsistent with such request and shall have
failed to institute any such proceeding for 60 days after receipt of such
notice, request and offer of indemnity. The foregoing shall not apply to certain
suits described in the Indenture, including any suit instituted by the Holder of
this Security for the enforcement of any payment of principal or premium, if
any, hereof or interest hereon on or after the respective due dates expressed
herein.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Issuer may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Issuer in The City of New York, duly endorsed by, or
accompanied by a written instrument of transfer in form
40
<PAGE>
satisfactory to the Issuer and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities are issuable only in registered form without coupons
in denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Securities are
exchangeable for a like aggregate principal amount of Securities of a different
authorized denomination, as requested by the Holder surrendering the same.
Prior to due presentment of this Security for registration of
transfer, the Issuer, the Parent Guarantor, the Trustee and any agent of the
Issuer, the Parent Guarantor or the Trustee may treat the Person in whose name
this Security is registered as the owner hereof for all purposes, whether or not
this Security is overdue, and neither the Issuer, the Parent Guarantor, the
Trustee nor any such agent shall be affected by notice to the contrary.
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES THEREOF.
All terms used in this Security which are defined in the Indenture
and not otherwise defined herein shall have the meanings assigned to them in the
Indenture.
Section 204. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be included on the
form of the face of the Securities substantially in the following form:
41
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
[SERIES A SECURITIES]
This is one of the 7 1/4% Senior Notes Due December 1, 2006, Series
A referred to in the within-mentioned Indenture.
PNC BANK, NATIONAL ASSOCIATION,
as Trustee
By:
Authorized Signatory
42
<PAGE>
[SERIES B SECURITIES]
This is one of the 7 1/4% Senior Notes Due December 1, 2006, Series
B referred to in the within-mentioned Indenture.
PNC BANK, NATIONAL ASSOCIATION,
as Trustee
By:
Authorized Signatory
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<PAGE>
ARTICLE THREE
THE SECURITIES
Section 301. Title and Terms.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $125,000,000 in
principal amount of Securities, except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Securities of the same aggregate principal amount pursuant to Section 303,
304, 305, 306, 307 or 906. The Issuer may issue Exchange Securities from time to
time pursuant to an Exchange Offer, in each case pursuant to a Board Resolution
and subject to Section 303, in authorized denominations in exchange for a like
principal amount of Initial Securities. Upon any such exchange the Initial
Securities shall be cancelled in accordance with Section 311 and shall no longer
be deemed Outstanding for any purpose. In no event shall the aggregate principal
amount of Initial Securities and Exchange Securities Outstanding exceed
$125,000,000.
The Securities shall be known and designated as the "7 1/4% Senior
Notes Due December 1, 2006" of the Issuer. The Stated Maturity of the Securities
shall be December 1, 2006, and the Securities shall each bear interest at the
rate of 7 1/4% per annum, as such interest rate may be adjusted as set forth in
the Security, from December 12, 1996, or from the most recent Interest Payment
Date to which interest has been paid, payable semiannually in arrears on June 1
and December 1 in each year, commencing June 1, 1997, to persons who are
registered Holders of the Securities at the close of business on the May 15 or
November 15 immediately preceding such interest payment date until the principal
thereof is paid or duly provided for. Interest on any overdue principal shall be
payable on demand. Pursuant to the Registration Rights Agreement, and as set
forth on the face of the Securities, under certain circumstances, the interest
rate borne by the Series A Securities may increase by 0.50% per annum, and if so
increased may thereafter decrease to the initial rate set forth on the face of
the Securities.
The principal or premium, if any, of, and interest on, and the Tax
Redemption Price and Additional Amounts with respect to, the Securities shall be
payable in immediately available funds and, subject to the limitations
applicable to the Global Securities, the Securities will be exchangeable and
transferable at an office or agency of the Issuer in The City of New York
maintained for such purposes (which initially will be the New York Corporate
Trust Office of the Trustee) or at such other office or agency as may be
maintained for such purpose, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
option of the Issuer by
44
<PAGE>
check mailed to addresses of the Persons entitled thereto as such addresses
shall appear on the Security Register.
Any amounts paid, or caused to be paid, by the Parent Guarantor or
its assignee (or any successor to the Parent Guarantor or such assignee as
permitted under this Indenture) under the Parent Guaranties, or paid by any
successor to the Issuer under this Indenture, will be paid without deduction or
withholding for any and all present and future taxes, levies, imposts or other
governmental charges whatsoever imposed, assessed, levied or collected by or for
the account of the United Kingdom (including any political subdivision or taxing
authority thereof) or the jurisdiction of incorporation or residence (other than
the United States or any political subdivision or taxing authority thereof) of
any assignee of the Parent Guarantor or any successor to the Issuer or the
Parent Guarantor, or any political subdivision or taxing authority thereof (an
"Other Jurisdiction"), or, if deduction or withholding of any taxes, levies,
imposts or other governmental charges shall at any time be required by the
United Kingdom or an Other Jurisdiction, the Parent Guarantor, its assignee or
any relevant successor will (subject to timely compliance by the Holders or
beneficial owners of the relevant Securities with any relevant administrative
requirements) pay or cause to be paid such additional amounts ("Additional
Amounts") in respect of principal, premium, if any, or interest as may be
necessary in order that the net amounts paid to the Holders of the Securities or
the Trustee under this Indenture, as the case may be, pursuant to this Indenture
or the Parent Guaranties, after such deduction or withholding, shall equal the
respective amounts of principal, premium, if any, or interest as specified in
the Securities to which such Holders or the Trustee are entitled; provided,
however, that the foregoing shall not apply to (i) any present or future taxes,
levies, imposts or other governmental charges which would not have been so
imposed, assessed, levied or collected but for the fact that the Holder or
beneficial owner of the relevant Security is or has been a domiciliary, national
or resident of, engages or has been engaged in business, maintains or has
maintained a permanent establishment, or is or has been physically present in,
the United Kingdom or the Other Jurisdiction, or otherwise has or has had some
connection with the United Kingdom or the Other Jurisdiction (other than the
holding or ownership of a Security, or the collection of principal of, premium,
if any, and interest on, or the enforcement of, a Security or Parent
Guaranties), (ii) any present or future taxes, levies, imposts or other
governmental charges which would not have been so imposed, assessed, levied or
collected but for the fact that, where presentation is required, the relevant
Security was presented more than thirty days after the date such payment became
due or was provided for, whichever is later, (iii) any present or future taxes,
levies, imposts or other governmental charges which are payable otherwise than
by deduction or withholding from payments on or in respect of the relevant
Security or Parent Guaranties, (iv) any present or future taxes, levies, imposts
or other governmental charges which would not have been so imposed, assessed,
levied or collected but for the failure to comply, on a sufficiently timely
basis,
45
<PAGE>
with any certification, identification or other reporting requirements
concerning the nationality, residence, identity or connection with the United
Kingdom or the Other Jurisdiction or any other relevant jurisdiction of the
Holder or beneficial owner of the relevant Security, if such compliance is
required by a statute or regulation of the United Kingdom or the Other
Jurisdiction, or by a relevant treaty, as a condition to relief or exemption
from such taxes, levies, imposts or other governmental charges, (v) any present
or future taxes, levies, imposts or other governmental charges (A) which would
not have been so imposed, assessed, levied or collected if the beneficial owner
of the relevant Security had been the Holder of such Security, or (B) which, if
the beneficial owner of such Security had held the Security as the Holder of
such Security, would have been excluded pursuant to clauses (i) through (iv)
above, or (vi) any estate, inheritance, gift, sale, transfer, personal property
or similar tax, assessment or other governmental charge.
No payments of Additional Amounts pursuant to this Indenture or the
Parent Guaranties will be made with respect to any deduction or withholding
requirement imposed by any governmental unit other than the United Kingdom, an
Other Jurisdiction or a taxing authority or political subdivision thereof.
The Securities shall be subject to Tax Redemption in accordance with
Article Thirteen and to redemption as provided in Article Fourteen and shall not
have the benefit of any sinking fund obligations.
The Securities shall be subject to defeasance or covenant defeasance
at the option of the Issuer in accordance with Article Twelve.
The Securities shall be guaranteed by the Parent Guaranties in
accordance with Article Eleven including, without limitation, the provision for
the release of the Parent Guaranties under the provisions provided for therein.
For all purposes hereunder, the Series A Securities and the Series B
Securities will be treated as one class, including with respect to any
amendment, waiver, acceleration or any other Act of the Holders, and are
together referred to as the "Securities". The Series A Securities and Series B
Securities rank pari passu in right of payment of principal, premium, if any,
and interest with each other and rank pari passu in
right of payment of principal, premium, if any, and interest with all other
existing and future unsecured and unsubordinated indebtedness of, the Issuer and
Parent Guarantor.
Section 302. Denominations.
The Securities shall be issuable only in fully registered form
without coupons, in denominations of $1,000 and any integral multiple thereof.
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Section 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Issuer by one of
its Chairman of the Board, its President, its Chief Executive Officer, its Chief
Operating Officer, its Chief Financial Officer or one of its Vice Presidents
under its corporate seal reproduced thereon attested by its Secretary or one of
its Assistant Secretaries. The signatures of any of these officers on the
Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery
of this Indenture, the Issuer may deliver Securities executed by the Issuer to
the Trustee (with the Parent Guaranties endorsed thereon) for authentication,
together with a Issuer Order for the authentication and make available for
delivery of such Securities; and the Trustee in accordance with such Issuer
Order shall authenticate and deliver such Securities as provided in this
Indenture and not otherwise.
Each Security shall be dated the date of its authentication.
No Security or Parent Guaranties endorsed thereon shall be entitled
to any benefit under this Indenture or be valid or obligatory for any purpose
unless there appears on such Security a certificate of authentication
substantially in the form provided for herein duly executed by the Trustee by
manual signature of an authorized signatory, and such certificate upon any
Security or Parent Guaranty shall be conclusive evidence, and the only evidence,
that such Security or Parent Guaranty has been duly authenticated and delivered
hereunder and is entitled to the benefits of this Indenture.
In case the Issuer, pursuant to Article Eight, shall, in a single
transaction or through a series of related transactions, be consolidated or
merged with or into any other Person or shall sell, assign, convey, transfer,
lease or otherwise dispose of all or substantially all of its properties and
assets on a Consolidated basis to any Person, and the successor Person resulting
from such consolidation or surviving such merger, or into which the Issuer or
the Parent Guarantor shall have been merged, or the successor Person which shall
have participated in the sale, assignment, conveyance, transfer, lease or other
disposition as aforesaid, shall have executed an indenture supplemental hereto,
in a form satisfactory to the Trustee, with the Trustee pursuant to Article
Eight, any of the Securities authenticated or delivered prior to such
consolidation, merger, sale, assignment, conveyance, transfer, lease or other
disposition may, from time to time, at the
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request of the successor Person, be exchanged for other Securities executed in
the name of the successor Person with such changes in phraseology and form as
may be appropriate, but otherwise in substance of like tenor as the Securities
surrendered for such exchange and of like principal amount; and the Trustee,
upon Issuer Request of the successor Person, shall authenticate and deliver
Securities as specified in such request for the purpose of such exchange. If
Securities shall at any time be authenticated and delivered in any new name of a
successor Person pursuant to this Section 303 in exchange or substitution for or
upon registration of transfer of any Securities, such successor Person, at the
option of the Holders but without expense to them, shall provide for the
exchange of all Securities at the time Outstanding for Securities authenticated
and delivered in such new name.
At any time and from time to time after the execution and delivery
of this Indenture and after the effectiveness of a Registration Statement under
the Securities Act with respect thereto, the Issuer may deliver Exchange
Securities executed by the Issuer and having endorsed thereon the Parent
Guaranties executed under Section 1102 by the Parent Guarantor, to the Trustee
for authentication, together with an Issuer Order for the authentication and
delivery of such Exchange Securities and a like principal amount of Initial
Securities for cancellation in accordance with Section 311, and the Trustee in
accordance with the Issuer Order shall authenticate and deliver such Securities,
with the Parent Guaranties endorsed thereon. Prior to authenticating such
Exchange Securities, and accepting any additional responsibilities under this
Indenture in relation to such Securities, the Trustee shall be entitled to
receive, if requested, and (subject to Section 601) shall be fully protected in
relying upon, an Opinion of Counsel stating in substance:
(1) that all conditions hereunder precedent to the authentication
and delivery of such Exchange Securities with the Parent Guaranties
endorsed thereon have been complied with and that such Exchange Securities
and the Parent Guaranties endorsed thereon, when such Securities have been
duly authenticated and delivered by the Trustee (and subject to any other
conditions specified in such Opinion of Counsel), have been duly issued
and delivered and will constitute valid and legally binding obligations of
the Issuer and the Parent Guarantor, respectively, enforceable in
accordance with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles; and
(2) that the issuance of the Exchange Securities in exchange for
Initial Securities has been effected in compliance with the Securities
Act.
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No Security or Parent Guaranties endorsed thereon shall be entitled to any
benefit under this Indenture or be valid or obligatory for any purpose unless
there appears on such Security a certificate of authentication substantially in
the form provided for herein executed by the Trustee by manual signature, and
such certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated an delivered hereunder
and that the Parent Guaranties endorsed thereon has been duly endorsed thereon
and delivered hereunder.
If an officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates such Security such Security shall
be valid nevertheless.
If an officer whose signature is on this Indenture no longer holds
office at the time the Trustee authenticates a Security, such Security shall be
valid nevertheless.
Section 304. Temporary Securities.
Subject to limitations with respect to Global Securities, pending
the preparation of definitive Securities with the Parent Guaranties endorsed
thereon, the Issuer and the Parent Guarantor may execute, and upon Issuer Order
the Trustee shall authenticate and make available for delivery, temporary
Securities with temporary Parent Guaranties endorsed thereon, which are printed,
lithographed, typewritten or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities with the Parent
Guaranties endorsed thereon in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Securities may determine, as conclusively evidenced by
their execution of such Securities.
If temporary Securities are issued, the Issuer and the Parent
Guarantor will cause definitive Securities to be prepared without unreasonable
delay. After the preparation of definitive Securities, the temporary Securities
shall be exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Issuer designated for such purpose
pursuant to Section 1002, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities, the Issuer shall execute
and the Trustee shall authenticate and make available for delivery in exchange
therefor a like principal amount of definitive Securities of authorized
denominations with the Parent Guaranties endorsed thereon. Until so exchanged
the temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
Section 305. Global Securities.
(a) Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary designated by Issuer and the Parent
Guarantor
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for such Global Security or a nominee thereof and delivered to such Depositary
or a nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(b) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security or a nominee
thereof unless (i) such Depositary (A) has notified the Issuer and the Parent
Guarantor that it is unwilling or unable to continue as Depositary for such
Global Security, or (B) has ceased to be a clearing agency registered as such
under the Exchange Act, (ii) there shall have occurred and be continuing an
Event of Default or any event which after notice or lapse of time or both would
be an Event of Default with respect to such Global Security, or (iii) the Issuer
executes and delivers to the Trustee an Issuer Order stating that all Global
Securities shall be exchanged in whole for Securities that are not Global
Securities (in which case such exchange shall be effected by the Trustee). Upon
the occurrence in respect of any Global Security of any one or more of the
conditions specified in clauses (i), (ii) or (iii) of the preceding sentence,
such Global Security may be registered for transfer or exchange for Securities
registered in the name of, or authenticated and delivered to, such Persons as
the Depositary shall direct. All or any portion of a Global Security may be
exchanged for a Security that has a like aggregate principal amount and is not a
Global Security, upon 20 days' prior request made by the Depositary or its
authorized representative to the Trustee.
(c) If any Global Security is to be exchanged for other Securities
or cancelled in whole, it shall be surrendered by or on behalf of the Depositary
or its nominee to the Trustee, as Security Registrar, for exchange or
cancellation as provided in this Article Three. If any Global Security is to be
exchanged for other Securities or cancelled in part, or if another Security is
to be exchanged in whole or in part for a
beneficial interest in any Global Security, then either (i) such Global Security
shall be so surrendered for exchange or cancellation as provided in this Article
Three, or (ii) the principal amount thereof shall be reduced or increased by an
amount equal to the portion thereof to be so exchanged or cancelled, or equal to
the principal amount of such other Security to be so exchanged for a beneficial
interest therein, as the case may be, by means of an appropriate adjustment made
on the records of the Trustee, as Security Registrar, whereupon the Trustee, in
accordance with the Applicable Procedures, shall instruct the Depositary or its
authorized representative to make a corresponding adjustment to its records.
Upon any such surrender or adjustment of a Global Security, the Trustee shall,
subject to Section 305(b) and as otherwise provided in this Article Three,
authenticate and make available for delivery any Securities issuable in exchange
for such Global Security (or any portion thereof) to or upon the order of, and
registered in such names as may be directed by, the Depositary or its authorized
representative. Upon the request of the Trustee in connection with the
occurrence of any of the events specified in Section
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305(b), the Issuer shall promptly make available to the Trustee a reasonable
supply of Securities that are not in the form of Global Securities. The Trustee
shall be entitled to rely upon any order, direction or request of the Depositary
or its authorized representative which is given or made pursuant to this Article
Three if such order, direction or request is given or made in accordance with
the Applicable Procedures.
(d) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any portion
thereof, whether pursuant to this Article Three, Section 906 or otherwise, shall
be authenticated and delivered in the form of, and shall be, a Global Security,
unless such Security is registered in the name of a Person other than the
Depositary for such Global Security or a nominee thereof.
(e) The Depositary or its nominee, as registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under
this Indenture, the Securities and the Parent Guaranties, and owners of
beneficial interests in a Global Security shall hold such interests pursuant to
the Applicable Procedures. Accordingly, any such owner's beneficial interest in
a Global Security will be shown only on, and the transfer of such interest shall
be effected only through, records maintained by the Depositary or its nominee or
its Agent Members.
Section 306. Registration, Registration of Transfer and Exchange Generally;
Certain Transfers and Exchanges; Securities Act Legends.
(a) Registration, Registration of Transfer and Exchange Generally.
The Issuer shall cause to be kept at the Corporate Trust Office of the Trustee a
register (the register maintained in such office and in any other office or
agency designated pursuant to Section 1002 being herein sometimes collectively
referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Issuer shall provide for the registration
of Securities and of transfers and exchanges of Securities. The Trustee is
hereby appointed "Security Registrar" for the purpose of registering Securities
and transfers and exchanges of Securities as herein provided. Such Security
Register shall distinguish between Initial Securities and Exchange Securities.
Subject to the limitations applicable to Global Securities, upon
surrender for registration of transfer of any Security at an office or agency of
the Issuer designated pursuant to Section 1002 for such purpose, the Issuer
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of any
authorized denominations, of a like aggregate principal amount and tenor and
bearing such restrictive legends as may be required by this Indenture, each such
new Security having endorsed thereon the Parent Guaranties executed by the
Parent Guarantor.
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At the option of the Holder, Securities (except Global Securities) may be
exchanged for other Securities of any authorized denominations, of a like
aggregate principal amount and tenor and bearing such restrictive legends as may
be required by this Indenture, each such new Security having endorsed thereon
the Parent Guaranties executed by the Parent Guarantor, upon surrender of the
Securities to be exchanged at such office or agency. Whenever any Securities are
so surrendered for exchange, the Issuer shall execute, and the Trustee shall
authenticate and make available for delivery, the Securities having endorsed
thereon the Parent Guaranties executed by the Parent Guarantor which the Holder
making the exchange is entitled to receive.
All Securities and the Parent Guaranties endorsed thereon issued
upon any registration of transfer or exchange of Securities shall be the valid
obligations of the Issuer and the Parent Guarantor, evidencing the same debt,
and (except for the differences between Initial Securities and Exchange
Securities provided for herein) entitled to the same benefits under this
Indenture, as the Securities and Parent Guaranties endorsed thereon,
respectively, surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by Issuer or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Issuer may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 303, 304, 305, 306 or 906 not involving any
transfer.
The Issuer shall not be required (i) to issue, register the transfer
of or exchange Securities during a period beginning at the opening of business
15 days before the day of the mailing of a notice of redemption of Securities
selected for redemption under Section 1301 or Section 1403 and ending at the
close of business on the day of such mailing or (ii) to register the transfer of
or exchange any Security so selected for redemption in whole or in part, except
the unredeemed portion of any Security being redeemed in part.
(b) Certain Transfers and Exchanges. Notwithstanding any other
provision of this Indenture or the Securities, transfers and exchanges of
Securities and beneficial interests in a Global Security of the kinds specified
in this Section 306(b) shall be made only in accordance with this Section
306(b).
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(i) Restricted Global Security to Regulation S Global Security. If the
owner of a beneficial interest in the Restricted Global Security wishes at
any time to transfer such interest to a Person who wishes to take delivery
thereof in the form of a beneficial interest in the Regulation S Global
Security, such transfer may be effected only in accordance with the
provisions of this clause (b)(i) and clause (b)(vii) below and subject to
the Applicable Procedures. Upon receipt by the Trustee, as Security
Registrar, of (A) an order given by the Depositary or its authorized
representative directing that a beneficial interest in the Regulation S
Global Security in a specified principal amount be credited to a specified
Agent Member's account and that a beneficial interest in the Restricted
Global Security in an equal principal amount be debited from another
specified Agent Member's account, and (B) a Regulation S Certificate,
satisfactory to the Trustee and duly executed by the owner of such
beneficial interest in the Restricted Global Security or his attorney duly
authorized in writing, then the Trustee, as Security Registrar, but
subject to clause (b)(vii) below, shall reduce the principal amount of the
Restricted Global Security and increase the principal amount of the
Regulation S Global Security by such specified principal amount as
provided in Section 305(c).
(ii) Regulation S Global Security to Restricted Global
Security. If the owner of a beneficial interest in the Regulation S Global
Security wishes at any time to transfer such interest to a Person who
wishes to take delivery thereof in the form of a beneficial interest in
the Restricted Global Security, such transfer may be effected only in
accordance with this clause (b)(ii) and subject to the Applicable
Procedures. Upon receipt by the Trustee, as Security Registrar, of (A) an
order given by the Depositary or its authorized representative directing
that a beneficial interest in the Restricted Global Security in a
specified principal amount be credited to a specified Agent Member's
account and that a beneficial interest in the Regulation S Global Security
in an equal principal amount be debited from another specified Agent
Member's account, and (B) if such transfer is to occur during the
Restricted Period, a Restricted Securities Certificate, satisfactory to
the Trustee and duly executed by the owner of such beneficial interest in
the Regulation S Global Security or his attorney duly authorized in
writing, then the Trustee, as Security Registrar, shall reduce the
principal amount of the Regulation S Global Security and increase the
principal amount of the Restricted Global Security by such specified
principal amount as provided in Section 305(c).
(iii) Restricted Non-Global Security to Restricted Global
Security or Regulation S Global Security. If the Holder of a Restricted
Security (other than a Global Security) wishes at any time to transfer all
or any portion of such Security to a Person who wishes to take delivery
thereof in the form of a beneficial interest in the Restricted Global
Security or the Regulation S Global Security, such transfer may be
effected only in accordance with the provisions of this clause (b)(iii)
and
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clause (b)(vii) below and subject to the Applicable Procedures. Upon
receipt by the Trustee, as Security Registrar, of (A) such Security as
provided in Section 306(a) and instructions satisfactory to the Trustee
directing that a beneficial interest in the Restricted Global Security or
Regulation S Global Security in a specified principal amount not greater
than the principal amount of such Security be credited to a specified
Agent Member's account, and (B) a Restricted Securities Certificate, if
the specified account is to be credited with a beneficial interest in the
Restricted Global Security, or a Regulation S Certificate, if the
specified account is to be credited with a beneficial interest in the
Regulation S Global Security, in either case satisfactory to the Trustee
and duly executed by such Holder or his attorney duly authorized in
writing, then the Trustee, as Security Registrar but subject to clause
(b)(vii) below, shall cancel such Security (and issue a new Security in
respect of any untransferred portion thereof) as provided in Section
306(a) and increase the principal amount of the Restricted Global Security
or the Regulation S Global Security, as the case may be, by the specified
principal amount as provided in Section 305(c).
(iv) Regulation S Non-Global Security to Restricted Global
Security or Regulation S Global Security. If the Holder of a Regulation S
Security (other than a Global Security) wishes at any time to transfer all
or any portion of such Security to a Person who wishes to take delivery
thereof in the form of a beneficial interest in the Restricted Global
Security or the Regulation S Global Security, such transfer may be
effected only in accordance with this clause (b)(iv) and clause (b)(vii)
below and subject to the Applicable Procedures. Upon receipt by the
Trustee, as Security Registrar, of (A) such Security as provided in
Section 306(a) and instructions satisfactory to the Trustee directing that
a beneficial interest in the Restricted Global Security or Regulation S
Global Security in a specified principal amount not greater than the
principal amount of such Security be credited to a specified Agent
Member's account, and (B) if the transfer is to occur during the
Restricted Period and the specified account is to be credited with a
beneficial interest in the Restricted Global Security, a Restricted
Securities Certificate satisfactory to the Trustee and duly executed by
such Holder or his attorney duly authorized in writing, then the Trustee,
as Security Registrar but subject to clause (b) (vii) below, shall cancel
such Security (and issue a new Security in respect of any untransferred
portion thereof) as provided in Section 306(a) and increase the principal
amount of the Restricted Global Security or the Regulation S Global
Security, as the case may be, by the specified principal amount as
provided in Section 305(c).
(v) Non-Global Security to Non-Global Security. A Security that
is not a Global Security may be transferred, in whole or in part, to a
Person who takes delivery in the form of another Security that is not a
Global Security as
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provided in Section 306(a), provided that, if the Security to be
transferred in whole or in part is a Restricted Security, or is a
Regulation S Security and the transfer is to occur during the Restricted
Period, then the Trustee shall have received (A) a Restricted Securities
Certificate, satisfactory to the Trustee and duly executed by the
transferor Holder or his attorney duly authorized in writing, in which
case the transferee Holder shall take delivery in the form of a Restricted
Security, or (B) a Regulation S Certificate, satisfactory to the Trustee
and duly executed by the transferor Holder or his attorney duly authorized
in writing, in which case the transferee Holder shall take delivery in the
form of a Regulation S Security (subject in each case to Section 306(c)).
(vi) Exchanges between Global Security and Non-Global
Security. A beneficial interest in a Global Security may be exchanged for
a Security that is not a Global Security as provided in Section 305,
provided that, if such interest is a beneficial interest in the Restricted
Global Security, or if such interest is a beneficial interest in the
Regulation S Global Security and such exchange is to occur during the
Restricted Period, then such interest shall be exchanged for a Restricted
Security (subject in each case to Section 306(c)). A Security that is not
a Global Security may be exchanged for a beneficial interest in a Global
Security only if (A) such exchange occurs in connection with a transfer
effected in accordance with clause (b)(iii) or clause (b)(iv) above, or
(B) such Security is a Regulation S Security and such exchange occurs
after the Restricted Period.
(vii) Regulation S Global Security to be Held Through
Euroclear or Cedel during Restricted Period. The Issuer shall use its best
efforts to cause the Depositary to ensure that, until the expiration of
the Restricted Period, beneficial interests in the Regulation S Global
Security may be held only in or through accounts maintained at the
Depositary by Euroclear or Cedel (or by Agent Members acting for the
account thereof), and no Person shall be entitled to effect any transfer
or exchange that would result in any such interest being held otherwise
than in or through such an account; provided that this clause (b)(vii)
shall not prohibit any transfer or exchange of such an interest in
accordance with clause (b)(ii) or clause (b)(vi) above.
(viii) Transfers to Certain Institutional Accredited
Investors. In addition to the requirements set forth in clauses (i)
through (vii) above, if a Restricted Security is to be transferred in
whole or in part to an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act),
which is not a "Qualified Institutional Buyer" (as defined in Rule 144A
under the Securities Act), in a transaction that is not outside of the
United States (within the meaning of Regulation S under the Securities
Act),
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then the Trustee shall have received a Transfer Notice, satisfactory to
the Trustee and duly executed by the transferee Holder or his attorney
duly authorized in writing, unless the requested transfer is at least
three years after the Issue Date.
(c) Securities Act Legends. Rule 144A Securities, Other Securities
and their respective Successor Securities shall bear a Restricted Securities
Legend, and Initial Regulation S Securities and their Successor Securities shall
bear a Regulation S Legend, subject to the following:
(i) subject to the following clauses of this Section 306(c), a
Security or any portion thereof which is exchanged, upon transfer or
otherwise, for a Global Security or any portion thereof shall bear the
Securities Act Legend borne by such Global Security while represented
thereby;
(ii) subject to the following clauses of this Section 306(c),
a new Security which is not a Global Security and is issued in exchange
for another Security (including a Global Security) or any portion thereof,
upon transfer or otherwise, shall bear the Securities Act Legend borne by
such other Security, provided that, if such new Security is required
pursuant to Section 306(b)(v) or 306(b)(vi) to be issued in the form of a
Restricted Security, it shall bear a Restricted Securities Legend and, if
such new Security is so required to be issued in the form of a Regulation
S Security, it shall bear a Regulation S Legend;
(iii) Registered Securities shall not bear a Securities Act
Legend;
(iv) after December 12, 1999, a new Security which does not
bear a Securities Act Legend may be issued in exchange for or in lieu of a
Security (other than a Global Security) or any portion thereof which bears
such a legend if the Trustee has received an Unrestricted Securities
Certificate, satisfactory to the Trustee and duly executed by the Holder
of such legended Security or his attorney duly authorized in writing, and
after such date and receipt of such certificate, the Trustee shall
authenticate and deliver such a new Security in exchange for or in lieu of
such other Security as provided in this Article Three;
(v) a new Security which does not bear a Securities Act Legend
may be issued in exchange for or in lieu of a Security (other than a
Global Security) or any portion thereof which bears such a legend if, in
the Issuer's judgment, placing such a legend upon such new Security is not
necessary to ensure compliance with the registration requirements of the
Securities Act, and the Trustee, at the direction of the Issuer, shall
authenticate and deliver such a new Security as provided in this Article
Three; and
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(vi) notwithstanding the foregoing provisions of this Section 306(c), a
Successor Security of a Security that does not bear a particular form of
Securities Act Legend shall not bear such form of legend unless the Issuer
has reasonable cause to believe that such Successor Security is a
"restricted security" within the meaning of Rule 144, in which case the
Trustee, at the direction of the Issuer, shall authenticate and deliver a
new Security bearing a Restricted Securities Legend in exchange for such
Successor Security as provided in this Article Three.
Section 307. Mutilated, Destroyed, Lost and Stolen Securities.
If (a) any mutilated Security is surrendered to the Trustee, or (b)
the Issuer and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and there is delivered to the
Issuer, the Parent Guarantor and the Trustee, such security or indemnity, in
each case, as may be required by them to save each of them harmless, then, in
the absence of actual notice to the Issuer, the Parent Guarantor or the Trustee
that such Security has been acquired by a bona fide purchaser, the Issuer shall
execute and upon a Issuer Request the Trustee shall authenticate and make
available for delivery, in exchange for any such mutilated Security or in lieu
of any such destroyed, lost or stolen Security, a replacement Security of like
tenor and principal amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Issuer in its discretion may,
instead of issuing a replacement Security, pay such Security.
Upon the issuance of any replacement Securities under this Section,
the Issuer may require the payment of a sum sufficient to pay all documentary,
stamp or similar issue or transfer taxes or other governmental charges that may
be imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith.
Every replacement Security issued pursuant to this Section 307 in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Issuer and the Parent Guarantor,
whether or not the destroyed, lost or stolen Security shall be at any time
enforceable by anyone, and shall be entitled to all benefits of this Indenture
equally and proportionately with any and all other Securities duly issued
hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
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Section 308. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on the Stated Maturity of such interest shall be paid to the
Person in whose name the Security (or any Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest payment
date.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on the Stated Maturity of such interest, and interest
on such defaulted interest at the then applicable interest rate borne by the
Securities, to the extent lawful (such defaulted interest and interest thereon
herein collectively called "Defaulted Interest") shall forthwith cease to be
payable to the Holder on the Regular Record Date; and such Defaulted Interest
may be paid by the Issuer, at its election in each case, as provided in
subsection (a) or (b) below:
(a) The Issuer may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or any
relevant Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Issuer
shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security and the date (not less
than 30 days after such notice) of the proposed payment (the
"Special Payment Date"), and at the same time the Issuer shall
deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit
prior to the Special Payment Date, such money when deposited to be
held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this subsection provided. Thereupon the
Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the Special Payment Date and not
less than 10 days after the receipt by the Trustee of the notice of
the proposed payment. The Trustee shall promptly notify the Issuer
in writing of such Special Record Date. In the name and at the
expense of the Issuer, the Trustee shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record
Date therefor to be mailed, first-class postage prepaid, to each
Holder at his address as it appears in the Security Register, not
less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record
Date and Special Payment Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the
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Securities are registered on such Special Record Date and shall no
longer be payable pursuant to the following subsection (b).
(b) The Issuer may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities may be listed, and
upon such notice as may be required by such exchange, if, after
written notice given by the Issuer to the Trustee of the proposed
payment pursuant to this subsection, such payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section 307 each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu
of any other Security shall carry the rights to interest accrued and unpaid, and
to accrue, which were carried by such other Security.
Section 309. CUSIP Numbers.
The Issuer in issuing the Securities may use "CUSIP" numbers (if
then generally in use), and the Issuer, or the Trustee on behalf of the Issuer,
shall use CUSIP numbers in notices of exchange or notices of redemption as a
convenience to Holders; provided, however, that any such notice shall state that
no representation is made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of exchange and that
reliance may be placed only on the other identification numbers printed on the
Securities; provided, further, any such redemption or exchange shall not be
affected by any defect in or omission of such CUSIP numbers in any notice of
exchange or notice of redemption.
Section 310. Persons Deemed Owners.
Prior to due surrender of a Security for registration of transfer,
the Issuer, the Parent Guarantor, the Trustee and any agent of the Issuer, the
Parent Guarantor or the Trustee may treat the Person in whose name any Security
is registered as the owner of such Security for the purpose of receiving payment
of principal of, premium, if any, and (subject to Section 308) interest on, such
Security and for all other purposes whatsoever, whether or not such Security is
overdue, and neither the Issuer, the Parent Guarantor, the Trustee nor any agent
of the Issuer, the Parent Guarantor or the Trustee shall be affected by notice
to the contrary.
No holder of any beneficial interest in any Global Security held on
its behalf by a Depositary shall have any rights under this Indenture with
respect to such Global Security, and such Depositary may be treated by the
Issuer, the Parent Guarantor, the Trustee, and any agent of the Issuer, the
Parent Guarantor or the Trustee as the owner of such Global Security for all
purposes whatsoever. None of the Issuer, the Parent
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Guarantor, the Trustee nor any agent of the Issuer, the Parent Guarantor or the
Trustee will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests of a
Global Security or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
Section 311. Cancellation.
All Securities surrendered for payment, redemption, purchase,
registration of transfer or exchange shall be delivered to the Trustee and, if
not already cancelled, shall be promptly cancelled by it. The Issuer and the
Parent Guarantor may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Issuer or
the Parent Guarantor may have acquired in any manner whatsoever, and all
Securities so delivered shall be promptly cancelled by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Securities held by the Trustee shall be destroyed and
certification of their destruction delivered to the Issuer, unless by a Issuer
Order received by the Trustee prior to such destruction, the Issuer shall direct
that the cancelled Securities be returned to it. The Trustee shall provide the
Issuer a list of all Securities that have been cancelled from time to time as
requested by the Issuer.
Section 312. Computation of Interest.
Interest on the Securities shall be computed on the basis of a
360-day year comprised of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture.
This Indenture, the Securities and the Parent Guaranties shall be
discharged and shall cease to be of further effect (except, if applicable, as to
(a) the surviving rights of registration of transfer or exchange of Securities,
as expressly provided for herein or (b) the right to receive Additional Amounts)
as to all Outstanding Securities hereunder, and the Trustee, upon Issuer Request
and at the expense of the Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(a) either
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(1) all such Securities theretofore, authenticated and
delivered (other than (i) lost, stolen or destroyed Securities which have
been replaced or paid as provided in Section 307 or (ii) all Securities
for whose payment in United States dollars have theretofore been deposited
in trust or segregated and held in trust by the Issuer and thereafter
repaid to the Issuer or discharged from such trust, in accordance with
Section 1003) have been delivered to the Trustee for cancellation; or
(2) all such Securities not theretofore delivered to the
Trustee for cancellation (i) have become due and payable, (ii) will become
due and payable at their Stated Maturity within one year or (iii) are to
be called for redemption within one year under arrangements satisfactory
to the Trustee for the giving of notice of redemption by the Trustee in
the name, and at the expense, of the Issuer, or the Issuer in the case of
(i), (ii) or (iii) above, has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust an amount in United
States dollars sufficient to pay and discharge the entire Debt on such
Securities, theretofore delivered to the Trustee cancelled or for
cancellation, including the principal of, premium, if any, and accrued
interest on (and, if applicable, the Tax Redemption Price and Additional
Amounts with respect to) such Securities at such Maturity or Stated
Maturity or Tax Redemption Date, as the case may be;
(b) the Issuer or the Parent Guarantor has paid or caused to
be paid all other sums payable hereunder by the Issuer and the Parent
Guarantor with respect to such Securities; and
(c) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Independent Counsel, in form and substance
reasonably satisfactory to the Trustee, each stating that (i) all
conditions precedent herein relating to the satisfaction and discharge
hereof have been complied with, and (ii) such satisfaction and discharge
will not result in a breach or violation of, or constitute a default
under, this Indenture or any other material agreement or instrument to
which the Issuer, the Parent Guarantor or any Subsidiary is a party or by
which the Issuer, the Parent Guarantor or any Subsidiary is bound.
Upon compliance by the Issuer with this Section 401, and if the
Issuer has paid or caused to be paid all sums payable under this Indenture, this
Indenture, the Securities and any Parent Guaranties issued hereunder shall cease
to be of any effect (except as otherwise provided herein).
Notwithstanding the satisfaction and discharge hereof, the
obligations of the Issuer to the Trustee under Section 607 and, if United States
dollars shall have been
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deposited with the Trustee pursuant to subclause (2) of subsection (a) of this
Section 401, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
Section 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all
United States dollars deposited with the Trustee pursuant to Section 401 shall
be held in trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Issuer acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal of,
premium, if any, interest on and Tax Redemption Price or Additional Amounts, if
applicable, with respect to, the Securities for whose payment such United States
dollars have been deposited with the Trustee.
ARTICLE FIVE
REMEDIES
Section 501. Events of Default.
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(a) there shall be a default in the payment of any interest on
any Security when it becomes due and payable, and such default shall
continue for a period of 30 days;
(b) there shall be a default in the payment of the principal
of (or premium, if any, on), or the Redemption Price, Tax Redemption Price
or Additional Amounts with respect to, any Security when due and payable;
(c) there shall be a default in the performance, or breach, of
any covenant or agreement of the Issuer or the Parent Guarantor under this
Indenture (other than a default in the performance, or breach, of a
covenant or agreement which is specifically dealt with in clauses (a) or
(b) of this Section 501) and such default or breach shall continue for a
period of 60 days, after written notice has been given, by certified mail,
(i) to the Issuer and the Parent Guarantor by the Trustee, or (ii) to the
Issuer, the Parent Guarantor and the Trustee by the Holders
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of not less than 25% in aggregate principal amount of the Outstanding
Securities, which notice shall specify that it is a "Notice of Default"
and shall demand that such a default be remedied;
(d) there shall be a default or defaults under any bond(s),
debenture(s), note(s) or other evidence(s) of Debt by the Issuer, the
Parent Guarantor or any Restricted Subsidiary or under any mortgage(s),
indenture(s) or instrument(s) under which there may be issued or by which
there may be secured or evidenced any Debt by the Issuer, the Parent
Guarantor or any Restricted Subsidiary with a principal amount then
outstanding, individually or in the aggregate, in excess of $25,000,000,
whether such Debt now exists or shall hereafter be Incurred, which default
or defaults shall constitute a failure to pay at final maturity the
principal of such Debt when due and payable after the expiration of any
applicable notice and grace period with respect thereto, or shall have
resulted in such Debt becoming or being declared due and payable prior to
the date on which it would otherwise have become due and payable and such
acceleration shall not have been rescinded or annulled, or such
accelerated Debt shall not have been discharged, within five Business Days
of such acceleration;
(e) the rendering of a final judgment or judgments (not
subject to appeal) against the Issuer, the Parent Guarantor or any
Restricted Subsidiary in an aggregate amount in excess of $25,000,000
which remains unstayed, undischarged or unbonded for a period of 60 days
thereafter;
(f) there shall have been the entry by a court of competent
jurisdiction of (i) a decree or order for relief in respect of the Issuer,
the Parent Guarantor or any Restricted Subsidiary in an involuntary case
or proceeding under any applicable Bankruptcy Law, or (ii) a decree or
order adjudging the Issuer, the Parent Guarantor or any Restricted
Subsidiary bankrupt or insolvent, or ordering reorganization, arrangement,
adjustment or composition of or in respect of the Issuer, the Parent
Guarantor or any Restricted Subsidiary under any applicable federal or
state law, or appointing a custodian, receiver, liquidator, assignee,
trustee or sequestrator (or other similar official) of the Issuer, the
Parent Guarantor or any Restricted Subsidiary or of any substantial part
of their respective properties, or ordering the winding up or liquidation
of their respective affairs, and any such decree or order for relief shall
continue to be in effect, or any such other decree or order shall be
unstayed and in effect, for a period of 75 consecutive days;
(g) (i) the Issuer, the Parent Guarantor or any Restricted
Subsidiary commences a voluntary case or proceeding under any applicable
Bankruptcy Law or any other case or proceeding to be adjudicated bankrupt
or insolvent, (ii) the Issuer, the Parent Guarantor or any Restricted
Subsidiary
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consents in writing to the entry of a decree or order for relief against
the Issuer, the Parent Guarantor or such Restricted Subsidiary in an
involuntary case or proceeding under any applicable Bankruptcy Law or to
the commencement of any bankruptcy or insolvency case or proceeding
against it, (iii) the Issuer, the Parent Guarantor or any Restricted
Subsidiary files a petition or answer or consent seeking reorganization or
relief under any applicable Bankruptcy Law, (iv) the Issuer, the Parent
Guarantor or any Restricted Subsidiary (A) consents to the filing of such
petition or the appointment of, or taking possession by, a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar official
of the Issuer, the Parent Guarantor or such Restricted Subsidiary or of
any substantial part of their respective properties, (B) makes an
assignment for the benefit of creditors, or (C) admits in writing its
inability to pay its debts generally as they become due, or (v) the
Issuer, the Parent Guarantor or any Restricted Subsidiary takes any
corporate action in furtherance of any such actions in this clause (g); or
(h) there shall be a final, nonappealable determination by the
applicable governmental authority that the Parent Guarantor has failed to
maintain its dual tax residency in the United States and the United
Kingdom; provided that such failure could reasonably be expected to have a
material adverse effect on (i) the operations, business or financial
condition of the Issuer and its Subsidiaries taken as a whole or (ii) the
ability of the Parent Guarantor or the Issuer to perform any of its
payment obligations under the Parent Guaranties or the Securities,
respectively.
Section 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
Sections 501(f) and (g) with respect to the Issuer or the Parent Guarantor) with
respect to the Securities shall occur and be continuing, then and in every such
case the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Securities then Outstanding may, and the Trustee at the request of
such Holders shall, declare all unpaid principal of, premium, if any, and
accrued interest on and, if applicable, the Tax Redemption Price or Additional
Amounts in respect of, all Securities then Outstanding, to be due and payable
immediately, by a notice in writing to the Issuer (and to the Trustee if given
by the Holders of the Securities) specifying the relevant Event of Default and
that it is a "notice of acceleration", and upon any such declaration, such
principal and interest shall become immediately due and payable. If an Event of
Default specified in Section 501(f) or 501(g) with respect to the Issuer or the
Parent Guarantor occurs and is continuing, then all the Securities shall ipso
facto become and be due and payable immediately in an amount equal to the
principal amount of the Securities and premium, if any, together with accrued
and unpaid interest, if any, to the date the Securities become due and payable,
and, if applicable, the Tax Redemption Price or Additional Amounts
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without any declaration or other act on the part of the Trustee or any Holder.
Thereupon, the Trustee may, at his or her discretion, proceed to protect and
enforce the rights of the Holders of the Securities by appropriate judicial
proceedings.
After such declaration of acceleration with respect to the
Securities, but before a judgment or decree for payment of the money due has
been obtained by the Trustee as hereinafter in this Article provided, the
Holders of a majority in aggregate principal amount of the Securities
Outstanding by written notice to the Issuer and the Trustee, may rescind and
annul such declaration and its consequences if:
(a) the Issuer has paid or deposited with the Trustee a sum
sufficient to pay
(i) all sums paid or advanced by the Trustee under
Section 607 and the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel,
(ii) all overdue interest on all Outstanding Securities,
(iii) the principal of any Outstanding Securities which
have become due otherwise than by such declaration of acceleration
and interest thereon at the rate borne by the Securities, and
(iv) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate borne by the
Securities; and
(b) all Events of Default, other than the non-payment of
principal of the Securities which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 513.
No such rescission shall affect any subsequent Default or impair any right
consequent thereon.
Section 503. Collection of Debt and Suits for Enforcement by Trustee.
The Issuer and the Parent Guarantor covenant that if:
(a) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default
continues for a period of 30 days, or
(b) default is made in the payment of the principal or
premium, if any, of any Security at the Stated Maturity thereof,
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then the Issuer and the Parent Guarantor will, upon demand of the Trustee, pay
to the Trustee, for the benefit of the Holders of such Securities, the whole
amount then due and payable on such Securities for principal, premium, if any,
and interest, with interest upon the overdue principal and, to the extent that
payment of such interest shall be legally enforceable, upon overdue installments
of interest, at the rate borne by the Securities; and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Issuer or the Parent Guarantor, as the case may be, fails to
pay such amounts forthwith upon such demand, the Trustee, in its own name and as
trustee of an express trust, may institute a judicial proceeding for the
collection of the sums so due and unpaid and may prosecute such proceeding to
judgment or final decree, and may enforce the same against the Issuer or the
Parent Guarantor or any other obligor upon the Securities and collect the moneys
adjudged or decreed to be payable in the manner provided by law out of the
property of the Issuer, the Parent Guarantor or any other obligor upon the
Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders under this Indenture or the Parent Guaranties by such appropriate
private or judicial proceedings as the Trustee shall deem most effectual to
protect and enforce such rights, including, without limitation, seeking recourse
against the Parent Guarantor pursuant to the terms of the Parent Guaranties,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein or therein, or
to enforce any other proper remedy, subject, however, to Section 512. No
recovery of any such judgment upon any property of the Issuer or the Parent
Guarantor shall affect or impair any rights, powers or remedies of the Trustee
or the Holders.
Section 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Issuer or any other obligor, including
the Parent Guarantor, upon the Securities or the property of the Issuer or of
such other obligor or their creditors, the Trustee (irrespective of whether the
principal of the Securities shall then be due and payable as therein expressed
or by declaration or otherwise and irrespective of whether the Trustee shall
have made any demand on the Issuer for the payment of overdue principal or
interest) shall be entitled and empowered, by intervention in such proceeding or
otherwise, to file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Securities and to file such other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any
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claim for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel) and of the Holders allowed in such judicial
proceeding and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or similar official in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly to the
Holders, to pay the Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 505. Trustee May Enforce Claims without Possession of Securities.
All rights of action and claims under this Indenture, the Securities
or the Parent Guaranties may be prosecuted and enforced by the Trustee without
the possession of any of the Securities or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name and as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Securities in
respect of which such judgment has been recovered.
Section 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article or
otherwise on behalf of the Holders or the Trustee pursuant to this Article or
through any proceeding or any arrangement or restructuring in anticipation or in
lieu of any proceeding contemplated by this Article shall be applied, subject to
applicable law, in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607;
SECOND: To the payment of the amounts then due and unpaid upon
the Securities for principal, premium, if any, Tax Redemption Price, if
any, Additional Amounts, if any, and interest, in respect of which or for
the benefit of
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which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
Securities; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto, including the Issuer and the Parent Guarantor, provided that all
sums due and owing to the Holders and the Trustee have been paid in full
as required by this Indenture.
Section 507. Limitation on Suits.
No Holder of any Securities shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture or the
Securities, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(a) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(b) the Holders of not less than 25% in principal amount of
the then Outstanding Securities shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in
its own name as trustee hereunder;
(c) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice,
request and offer (and if requested, provision) of indemnity has failed to
institute any such proceeding; and
(e) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture, any Security or the Parent Guaranties to affect, disturb or
prejudice the rights of any other Holders, or to obtain or to seek to obtain
priority or preference over any other Holders or to enforce any right under this
Indenture, any Security or the Parent Guaranties, except in the manner provided
in this Indenture and for the equal and ratable benefit of all the Holders.
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Section 508. Unconditional Right of Holders to Receive Principal, Premium
and Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right based on the terms stated herein, which is
absolute and unconditional, to receive payment of the principal of, premium, if
any, and (subject to Section 308) interest on, such Security on the respective
Stated Maturities expressed in such Security or, in the case of redemption or
Tax Redemption, on the Redemption Date or the Tax Redemption Date, as the case
may be, and to institute suit for the enforcement of any such payment, and such
rights shall not be impaired without the consent of such Holder.
Section 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture or the Parent Guaranties and
such proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case the Issuer, the Parent Guarantor, any other obligor on the Securities, the
Trustee and the Holders shall, subject to any determination in such proceeding,
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
307, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
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Section 512. Control by Holders.
The Holders of not less than a majority in aggregate principal
amount of the then Outstanding Securities shall have the right to direct the
time, method and place of conducting any proceeding for exercising any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee, provided that:
(a) such direction shall not be (i) in conflict with any rule
of law or with this Indenture (including, without limitation, Section
507), or (ii) be unduly prejudicial to Holders not joining therein; and
(b) subject to the provisions of Trust Indenture Act Section
315, the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
Section 513. Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities may on behalf of the Holders of all
Outstanding Securities waive any past Default hereunder and its consequences,
except a Default:
(a) in the payment of the principal of, premium, if any, or
interest on, or Tax Redemption Price or Additional amounts with respect
to, any Security; or
(b) in respect of a covenant or a provision hereof which under
Section 902 cannot be modified or amended without the consent of the
Holder of each Security Outstanding, affected by such modification or
amendment.
Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
Section 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion
require, in any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
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good faith of the claims or defenses made by such party litigant, but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities,
or to any suit instituted by any Holder for the enforcement of the payment of
the principal of, premium, if any, or interest on, or Tax Redemption Price or
Additional Amounts with respect to, any Security on or after the respective
Stated Maturities expressed in such Security.
Section 515. Waiver of Stay, Extension or Usury Laws.
Each of the Issuer and the Parent Guarantor covenants (to the extent
that it may lawfully do so) that it will not at any time insist upon, or plead,
or in any manner whatsoever claim or take the benefit or advantage of, any stay
or extension law or any usury or other law wherever enacted, now or at any time
hereafter in force, which would prohibit or forgive the Issuer or the Parent
Guarantor from paying all or any portion of the principal of, premium, if any,
or interest on, or Tax Redemption Price or Additional Amounts with respect to,
the Securities contemplated herein or in the Securities or which may affect the
covenants or the performance of this Indenture; and each of the Issuer and the
Parent Guarantor (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
Section 516. Remedies Subject to Applicable Law.
All rights, remedies and powers provided by this Article Five may be
exercised only to the extent that the exercise thereof does not violate any
applicable provision of law in the premises, and all the provisions of this
Indenture are intended to be subject to all applicable mandatory provisions of
law which may be controlling in the premises and to be limited to the extent
necessary so that they will not render this
Indenture invalid, unenforceable or not entitled to be recorded, registered or
filed under the provisions of any applicable law.
ARTICLE SIX
THE TRUSTEE
Section 601. Duties of Trustee.
Subject to the provisions of the Trust Indenture Act Sections 315(a)
through 315(d):
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(a) if a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers
vested in it by this Indenture and use the same degree of care and skill
in its exercise thereof as a prudent person would exercise or use under
the circumstances in the conduct of his own affairs.
(b) except during the continuance of a Default or an Event of
Default:
(1) the Trustee need perform only those duties as are
specifically set forth in this Indenture and no covenants or
obligations shall be implied in this Indenture that are adverse to
the Trustee; and
(2) in the absence of bad faith or willful misconduct on
its part, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein,
upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However, in the
case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) the Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this subsection (c) does not limit the effect of
subsection (b) of this Section 601;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(3) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith, in accordance with a
direction of the Holders of a majority in principal amount of
Outstanding Securities, relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power confirmed upon the Trustee under
this Indenture.
(d) no provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability
in the
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performance of any of its duties hereunder or in the exercise of any of
its rights or powers if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(e) whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is
subject to subsections (a), (b), (c) and (d) of this Section 601.
(f) the Trustee shall not be liable for interest on any money
or assets received by it except as the Trustee may agree with the Issuer.
Assets held in trust by the Trustee need not be segregated from other
assets except to the extent required by law.
Section 602. Notice of Defaults.
Within 90 days after a Responsible Officer of the Trustee receives
notice of the occurrence of any Default, the Trustee shall transmit by mail to
all Holders and any other persons entitled to receive reports pursuant to
Section 313(c) of the Trust Indenture Act, as their names and addresses appear
in the Security Register, notice of such Default hereunder known to the Trustee,
unless such Default shall have been cured or waived; provided, however, that,
except in the case of a Default in the payment of the principal of, premium, if
any, or interest on, any Security (or if applicable Tax Redemption Price or
Additional Amounts, if any), the Trustee shall be protected in withholding such
notice if and so long as a trust committee of Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
interest of the Holders.
Section 603. Certain Rights of Trustee.
Subject to the provisions of Section 601 and Trust Indenture Act
Sections 315(a) through 315(d):
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of Debt or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request or direction of the Issuer mentioned herein
shall be sufficiently evidenced by a Issuer Request or Issuer Order and
any resolution of the Board of Directors may be sufficiently evidenced by
a Board Resolution;
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(c) the Trustee may consult with counsel of its selection and any written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon
in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee security or indemnity
satisfactory to the Trustee against the costs, expenses and liabilities
which might be incurred therein or thereby in compliance with such request
or direction;
(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or within
the discretion, rights or powers conferred upon it by this Indenture other
than any liabilities arising out of the negligence, bad faith or willful
misconduct of the Trustee;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, approval, appraisal, bond, debenture, note, coupon,
security or other paper or document unless requested in writing to do so
by the Holders of not less than a majority in aggregate principal amount
of the Securities then Outstanding; provided, however, that, if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to
the Trustee by the security afforded to it by the terms of this Indenture,
the Trustee may require reasonable indemnity against such expenses or
liabilities as a condition to proceeding; the reasonable expenses of every
such investigation shall be paid by the Issuer or, if paid by the Trustee
or any predecessor Trustee, shall be repaid by the Issuer upon demand;
provided further, however, the Trustee in its discretion may make such
further inquiry or investigation into such facts or matters as it may deem
fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Issuer, personally or by agent or attorney;
(g) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the Trustee
(unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon an Officers' Certificate; and
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(h) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
Section 604. Trustee Not Responsible for Recitals, Dispositions of
Securities or Application of Proceeds Thereof.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Issuer and the Parent Guarantor, and the Trustee assumes no responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities, except that the Trustee
represents that it is duly authorized to execute and deliver this Indenture,
authenticate the Securities and perform its obligations hereunder and that the
statements made by it in any Statement of Eligibility on Form T-1 supplied to
the Issuer are true and accurate subject to the qualifications set forth
therein. The Trustee shall not be accountable for the use or application by the
Issuer of Securities or the proceeds thereof.
Section 605. Trustee and Agents May Hold Securities; Collections; etc.
The Trustee, any Paying Agent, Security Registrar or any other agent
of the Issuer, in its individual or any other capacity, may become the owner or
pledgee of Securities, with the same rights it would have if it were not the
Trustee, Paying Agent, Security Registrar or such other agent and, subject to
Sections 608 and 613 and Trust Indenture Act Sections 310 and 311, may otherwise
deal with the Issuer and the Parent
Guarantor and receive, collect, hold and retain collections from the Issuer and
the Parent Guarantor with the same rights it would have if it were not the
Trustee, Paying Agent, Security Registrar or such other agent.
Section 606. Money Held in Trust.
All moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received,
but need not be segregated from other funds except to the extent required by
mandatory provisions of law. Except for funds or securities deposited with the
Trustee pursuant to Article Twelve, the Trustee shall be required to invest all
moneys received by the Trustee, until used or applied as herein provided, in
Cash Equivalents upon receipt of, and in accordance with, the specific written
directions of the Issuer.
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Section 607. Compensation and Indemnification of Trustee and Its Prior
Claim.
The Issuer covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation for all
services rendered by it hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust) and the Issuer covenants and agrees to pay or reimburse the Trustee and
each predecessor Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by or on behalf of the Trustee in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all agents and other persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence, bad faith or
willful misconduct. The Issuer also covenants and agrees to indemnify the
Trustee and each predecessor Trustee for, and to hold it harmless against, any
claim, loss, liability, tax, assessment or other governmental charge (other than
taxes applicable to the Trustee's compensation hereunder) or expense incurred
without negligence, bad faith or willful misconduct on its part, arising out of
or in connection with the acceptance or administration of this Indenture or the
trusts hereunder and its duties hereunder, including enforcement of this Section
and also including any liability which the Trustee may incur as a result of
failure to withhold, pay or report any tax, assessment or other governmental
charge, and the costs and expenses of defending itself against or investigating
any claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder. The obligations of the Issuer under this Section
to compensate and indemnify the Trustee and each predecessor Trustee and to pay
or reimburse the Trustee and each predecessor Trustee for reasonable expenses,
disbursements and advances shall constitute an additional obligation hereunder
and shall survive the satisfaction and discharge of this Indenture and the
resignation or removal of the Trustee and each predecessor Trustee.
Section 608. Conflicting Interests.
The Trustee shall comply with the provisions of Section 310(b) of
the Trust Indenture Act.
Section 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
corporation that is eligible to act as trustee under Trust Indenture Act Section
310(a)(5) and which shall have an office in The City of New York, a combined
capital and surplus of at least $100,000,000, to the extent there is an
institution eligible and willing to serve. If the Trustee does not have an
office in The City of New York, the Trustee shall appoint an agent in The City
of New York reasonably acceptable to the Issuer (which may be an Affiliate of
the Trustee) to conduct any activities which the Trustee may be required
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under this Indenture to conduct in The City of New York. If the Trustee
publishes reports of condition at least annually, pursuant to law or to the
requirements of federal, state, territorial or District of Columbia supervising
or examining authority, then for the purposes of this Section, the combined
capital and surplus of the Trustee shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published. If
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
Section 610. Resignation and Removal; Appointment of Successor Trustee.
(a) No resignation or removal of the Trustee and no appointment of a
successor trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor trustee under Section 611.
(b) The Trustee, or any trustee or trustees hereafter appointed, may
at any time resign by giving written notice thereof to the Issuer. Upon
receiving such notice or resignation, the Issuer shall promptly appoint a
successor trustee by written instrument executed by authority of the Board of
Directors, a copy of which shall be delivered to the resigning Trustee and a
copy to the successor trustee. If an instrument of acceptance by a successor
trustee shall not have been delivered to the Trustee within 30 days after the
giving of such notice of resignation, the resigning Trustee may, or any Holder
who has been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor trustee. Such court
may thereupon, after such notice, if any, as it may deem proper, appoint a
successor trustee.
(c) The Trustee may be removed at any time for any cause or for no
cause by an Act of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities, delivered to the Trustee and to
the Issuer. If an instrument of acceptance by a successor trustee shall not have
been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may, or any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor trustee.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of
Trust Indenture Act Section 310(b) after written request therefor by the
Issuer or by any Holder who has been a bona fide Holder of a Security for
at least six months,
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(2) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by the Issuer or
by any Holder who has been a bona fide Holder of a Security for at least
six months, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any case, (i) the Issuer by a Board Resolution may remove the Trustee,
or (ii) subject to Section 514, the Holder of any Security who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Issuer, by a Board Resolution, shall promptly appoint a successor trustee and
shall comply with the applicable requirements of Section 611. If, within one
year after such resignation, removal or incapability, or the occurrence of such
vacancy, the Issuer has not appointed a successor Trustee, a successor trustee
shall be appointed by the Act of the Holders of a majority in principal amount
of the Outstanding Securities delivered to the Issuer and the retiring Trustee.
Such successor trustee so appointed shall forthwith upon its acceptance of such
appointment become the successor trustee and supersede the successor trustee
appointed by the Issuer. If no successor trustee shall have been so appointed by
the Issuer or the Holders of the Securities and accepted appointment in the
manner hereinafter provided, the Holder of any Security who has been a bona fide
Holder for at least six months may, subject to Section 514, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the appointment of a successor trustee.
(f) The Issuer shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor trustee by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Securities as their names and addresses appear in the Security
Register. Each notice shall include the name of the successor trustee and the
address of its Corporate Trust Office or agent hereunder.
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Section 611. Acceptance of Appointment by Successor.
Every successor trustee appointed hereunder shall execute,
acknowledge and deliver to the Issuer and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee as if originally named as
Trustee hereunder; but, nevertheless, on the written request of the Issuer or
the successor trustee, upon payment of its charges pursuant to Section 607 then
unpaid, such retiring Trustee shall pay over to the successor trustee all moneys
at the time held by it hereunder and shall execute and deliver an instrument
transferring to such successor trustee all such rights, powers, duties and
obligations. Upon request of any such successor trustee, the Issuer shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor trustee all such rights and powers.
No successor trustee with respect to the Securities shall accept
appointment as provided in this Section 611 unless at the time of such
acceptance such successor trustee shall be eligible to act as trustee under the
provisions of Trust Indenture Act Section 310(a) and this Article Six and shall
have a combined capital and surplus of at least $100,000,000 and have a
Corporate Trust Office or an agent selected in accordance with Section 609.
Upon acceptance of appointment by any successor trustee as provided
in this Section 611, the Issuer shall give notice thereof to the Holders of the
Securities, by mailing such notice to such Holders at their addresses as they
shall appear on the Security Register. If the acceptance of appointment is
substantially contemporaneous with the resignation, then the notice called for
by the preceding sentence may be combined with the notice called for by Section
610. If the Issuer fails to give such notice within 10 days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be given at the expense of the Issuer.
Section 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee (including the trust created by this Indenture) shall be the
successor of the Trustee hereunder, provided such corporation shall be eligible
under Trust Indenture Act Section 310(a) and this Article Six and shall have a
combined capital and surplus of at least $100,000,000 and have a Corporate Trust
Office or an agent selected in accordance with Section 609,
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without the execution or filing of any paper or any further act on the part of
any of the parties hereto.
In case at the time such successor to the Trustee shall succeed to
the trusts created by this Indenture any of the Securities shall have been
authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor Trustee and deliver such Securities so
authenticated; and, in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor trustee; and in all such cases such certificate shall have the full
force which it is anywhere in the Securities or in this Indenture provided that
the certificate of the Trustee shall have; provided that the right to adopt the
certificate of authentication of any predecessor Trustee or to authenticate
Securities in the name of any predecessor Trustee shall apply only to its
successor or successors by merger, conversion or consolidation.
Section 613. Preferential Collection of Claims Against Issuer.
If and when the Trustee shall be or become a creditor of the Issuer
(or other obligor under the Securities), the Trustee shall be subject to the
provisions of the Trust
Indenture Act regarding the collection of claims against the Issuer (or any such
other obligor). A Trustee who has resigned or been removed shall be subject to
the Trust Indenture Act Section 311(a) to the extent indicated therein.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND ISSUER
Section 701. Issuer to Furnish Trustee Names and Addresses of Holders.
The Issuer will furnish or cause to be furnished to the Trustee:
(a) semiannually, not more than 10 days after each Regular
Record Date, a list, in such form as the Trustee may reasonably require,
of the names and addresses of the Holders as of such Regular Record Date;
and
(b) at such other times as the Trustee may reasonably request
in writing, within 30 days after receipt by the Issuer of any such
request, a list of similar form and content to that in subsection (a)
hereof as of a date not more than 15 days prior to the time such list is
furnished;
provided, however, that if and so long as the Trustee shall be the Security
Registrar, no such list need be furnished.
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Section 702. Disclosure of Names and Addresses of Holders.
Holders may communicate pursuant to Trust Indenture Act Section
312(b) with other Holders with respect to their rights under this Indenture or
the Securities, and the Trustee shall comply with Trust Indenture Act Section
312(b). The Issuer, the Parent Guarantor, the Trustee, the Security Registrar
and any other Person shall have the protection of Trust Indenture Act Section
312(c). Further, every Holder of Securities, by
receiving and holding the same, agrees with the Issuer, the Parent Guarantor and
the Trustee that neither the Issuer, the Parent Guarantor nor the Trustee or any
agent of any of them shall be held accountable by reason of the disclosure of
any information as to the names and addresses of the Holders in accordance with
Trust Indenture Act Section 312, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Trust Indenture
Act Section 312.
Section 703. Reports by Trustee.
(a) Within 60 days after June 1 of each year commencing with the
first June 1 after the issuance of Securities, the Trustee, if so required under
the Trust Indenture Act, shall transmit by mail to all Holders, in the manner
and to the extent provided in Trust Indenture Act Section 313(c), a brief report
dated as of such June 1 in accordance with and with respect to the matters
required by Trust Indenture Act Section 313(a). The Trustee shall also transmit
by mail to all Holders, in the manner and to the extent provided in Trust
Indenture Act Section 313(c), a brief report in accordance with and with respect
to the matters required by Trust Indenture Act Section 313(b)(2).
(b) A copy of each report transmitted to Holders pursuant to this
Section 703 shall, at the time of such transmission, be mailed to the Issuer and
the Parent Guarantor and filed with each stock exchange, if any, upon which the
Securities are listed and also with the Commission. The Issuer will notify the
Trustee promptly if the Securities are listed on any stock exchange.
Section 704. Reports by Issuer and the Parent Guarantor.
The Issuer and the Parent Guarantor, as the case may be, shall:
(a) file with the Trustee and the Commission, in accordance
with the rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with
respect to compliance by the Issuer or the Parent Guarantor, as the case
may be, with the conditions and covenants of this Indenture as are
required from time to time by such rules and regulations (including such
information, documents and reports referred to in Trust Indenture Act
Section 314(a));
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(b) within 15 days after the filing thereof with the Trustee,
transmit by mail to all Holders in the manner and to the extent provided
in Trust Indenture Act Section 313(c), such summaries of any information,
documents and reports required to be filed by the Issuer or the Parent
Guarantor, as the case may be, pursuant to Section 1011 hereunder and
subsections (a) and (b) of this Section as are required by rules and
regulations prescribed from time to time by the Commission; and
(c) file with the Trustee and the Commission, and transmit to
Holders such other information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act
at the times and in the manner provided pursuant to such Act; provided
that information, documents or reports required to be filed with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act
shall be filed with the Trustee within 15 days after the same is so
required to be filed with the Commission.
Section 705. Officers' Certificate with Respect to Change in Interest Rate.
Within five days after the day on which any increase or decrease in
the rate of interest borne by the Securities occurs pursuant to the Registration
Rights Agreement as set forth on the face of the Securities, the Issuer shall
deliver an Officers' Certificate to the Trustee stating the interest rate
thereupon in effect for the Securities and the date on which such rate became
effective.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. Issuer and Parent Guarantor May Consolidate, etc., Only on
Certain Terms.
(a) The Issuer shall not, in a single transaction or through a
series of related transactions, consolidate with or merge with or into any other
Person or sell, assign, convey, transfer, lease or otherwise dispose of all or
substantially all of its properties and assets on a Consolidated basis to any
Person, or permit any of its Subsidiaries to enter into any such transaction or
series of related transactions if such transaction or series of related
transactions, in the aggregate, would result in a sale, assignment, conveyance,
transfer, lease or disposition of all or substantially all of the properties and
assets of the Issuer and its Subsidiaries on a Consolidated basis to any other
Person, unless at the time and after giving effect thereto:
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(1) either (A) in the case of a merger or consolidation the Issuer will be
the surviving Person or (B) in the case of a merger or consolidation where
the Issuer is not the surviving Person and in the case of a sale,
assignment, conveyance, transfer, lease or other disposition, the Person
formed by such consolidation or into which the Issuer is merged or the
Person which acquires by sale, assignment, conveyance, transfer, lease or
disposition all or substantially all of the properties and assets of the
Issuer and its Subsidiaries on a Consolidated basis (the "Surviving
Entity") will each be a corporation, partnership, trust or other entity
duly organized and validly existing under the laws of the United States of
America, any state thereof or the District of Columbia and will expressly
assume, by a supplemental indenture, in a form satisfactory to the
Trustee, the due and punctual payment of the principal of, premium, if
any, and interest on (and, if applicable, the Tax Redemption Price or
Additional Amounts in respect of) the Securities and the performance and
observance of all the covenants and conditions of the Indenture to be
performed and observed by the Issuer, and the Securities and this
Indenture, as the case may be, will remain in full force and effect as so
supplemented;
(2) immediately after giving effect to such transaction on a
pro forma basis, no Default or Event of Default will have occurred and be
continuing; and
(3) at the time of the transaction, the Issuer or the
Surviving Entity will have delivered, or caused to be delivered, to the
Trustee, in form and substance reasonably satisfactory to the Trustee, an
Officers' Certificate and an Opinion of Counsel, each to the effect that
such consolidation, merger, transfer, sale, assignment, conveyance,
transfer, lease or other disposition and the supplemental indenture in
respect thereof comply with this Indenture and that all conditions
precedent herein provided for relating to such transaction have been
complied with. In delivering any such Opinion of Counsel, counsel may rely
as to factual matters on certificates of officers of the Issuer.
(b) The Parent Guarantor shall not in a single transaction or
through a series of related transactions, consolidate with or merge with or into
any other Person or sell, assign, convey, transfer, lease or otherwise dispose
of all or substantially all of its properties and assets on a Consolidated basis
to any Person or permit any of its Subsidiaries to enter into any such
transaction or series of related transactions if such transaction or series of
related transactions, in the aggregate, would result in a sale, assignment,
conveyance, transfer, lease or disposition of all or substantially all of the
properties and assets of the Parent Guarantor and its Subsidiaries on a
Consolidated basis to any other Person, unless at the time and after giving
effect thereto:
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(1) either (A) in the case of merger or consolidation, the Parent
Guarantor will be the surviving Person or (B) in the case of a merger or
consolidation where the Issuer is not the surviving Person and in the case
of a sale, assignment, conveyance, transfer, lease or other disposition,
the Person formed by such consolidation or into which the Parent Guarantor
is merged or the Person which acquires by sale, assignment, conveyance,
transfer, lease or disposition all or substantially all of the properties
and assets of the Parent Guarantor and its Subsidiaries on a Consolidated
basis (the "Surviving Guarantor Entity") will each be a corporation,
partnership, trust or other entity duly organized and validly existing
under the laws of the United States of America, any state thereof or the
District of Columbia and each such Person and will expressly assume, by a
supplemental indenture, in a form satisfactory to the Trustee, the Parent
Guaranties and the performance and observance of all the covenants and
conditions of the Indenture to be performed and observed by the Parent
Guarantor, and such Parent Guaranties will remain in full force and
effect;
(2) immediately before and immediately after giving effect to
such transaction, on a pro forma basis, no Default or Event of Default
shall have occurred and be continuing; and
(3) at the time of the transaction the Parent Guarantor or the
Surviving Guarantor Entity will have delivered, or caused to be delivered,
to the Trustee, in form and substance reasonably satisfactory to the
Trustee, an Officers' Certificate and an Opinion of Counsel, each to the
effect that such consolidation, merger, transfer, sale, assignment,
conveyance, lease or other transaction and the supplemental indenture in
respect thereof comply with this Indenture and that all conditions
precedent therein provided for relating to such transaction have been
complied with, and thereafter all obligations of the predecessor shall
terminate.
Section 802. Successor Substituted.
Upon any consolidation or merger, or any sale, assignment,
conveyance, transfer, lease or disposition of all or substantially all of the
properties and assets of the Issuer or the Parent Guarantor, if any, in
accordance with Section 801, the successor Person formed by such consolidation
or into which the Issuer or the Parent Guarantor, as the case may be, is merged
or the successor Person or Persons to which such sale, assignment, conveyance,
transfer, lease or disposition is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Issuer or the Parent Guarantor,
as the case may be, under this Indenture, the Securities and/or the Parent
Guaranties, as the case may be, with the same effect as if such successor had
been named as the Issuer or the Parent Guarantor, as the case may be, herein, in
the Securities and/or in the Parent Guaranties, as the case may be. When a
successor (other than a successor
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that is a direct or indirect Subsidiary of the Parent Guarantor) assumes all the
obligations of its predecessor under this Indenture, the Securities or the
Parent Guaranties, as the case may be, the predecessor shall be released from
those obligations and covenants hereof and the Securities. In addition, if the
acquiring or successor Person to or of the Issuer is not a direct or indirect
Subsidiary of the Parent Guarantor, all obligations of the Parent Guarantor
under this Indenture and the Securities shall terminate and be of no further
force and effect and all obligations of the Parent Guarantor under this
Indenture and the Parent Guaranties shall be released.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures and Agreements without Consent of
Holders.
Without the consent of any Holders, the Issuer, the Parent Guarantor
and any other obligor upon the Securities when authorized by a Board Resolution,
and the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto or agreements or other instruments with respect
to the Parent Guaranties, in form and substance satisfactory to the Trustee, for
any of the following purposes:
(a) to evidence the succession of another Person to the
Issuer, the Parent Guarantor or any other obligor upon the Securities, and
the assumption by any such successor of the covenants of the Issuer, the
Parent Guarantor or another obligor herein and in the Securities or in the
Parent Guaranties in accordance with Article Eight;
(b) to add to the covenants of the Issuer, the Parent
Guarantor or any other obligor upon the Securities for the benefit of the
Holders, or to surrender any right or power conferred upon the Issuer or
the Parent Guarantor or any other obligor upon the Securities, as
applicable, herein, in the Securities or in the Parent Guaranties;
(c) to cure any ambiguity, or to correct or supplement any
provision herein or in any supplemental indenture, the Securities or the
Parent Guaranties which may be defective or inconsistent with any other
provision herein or in any supplemental indenture, the Securities or the
Parent Guaranties or to make any other provisions with respect to matters
or questions arising under this Indenture or any supplemental indenture,
the Securities or the Parent Guaranties;
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provided that, in each case, such provisions shall not materially
adversely affect the interest of the Holders;
(d) to comply with the requirements of the Commission in order
to effect or maintain the qualification of this Indenture under the Trust
Indenture Act, as contemplated by Section 905 or otherwise;
(e) to evidence and provide the acceptance of the appointment
of a successor trustee hereunder; or
(f) to mortgage, pledge, hypothecate or grant a security
interest in favor of the Trustee for the benefit of the Holders, as
additional security for the payment and performance of the Issuer's or the
Parent Guarantor's obligations hereunder, in any property or assets,
including any of which are required to be mortgaged, pledged or
hypothecated, or in which a security interest or other Lien is required to
be granted to the Trustee pursuant to this Indenture or otherwise.
Section 902.Supplemental Indentures and Agreements with Consent of Holders.
Except as permitted by Section 901, with the consent of the Holders
of not less than a majority in aggregate principal amount of the Outstanding
Securities, by Act of said Holders delivered to the Issuer, the Parent Guarantor
and the Trustee, the Issuer and the Parent Guarantor, when authorized by Board
Resolutions, and the Trustee may (1) enter into an indenture or indentures
supplemental hereto in form and substance satisfactory to the Trustee, for the
purpose of adding any provisions to or amending, modifying or changing in any
manner or eliminating any of the provisions of this Indenture, the Securities or
the Parent Guaranties (including, but not limited to, for the purpose of
modifying in any manner the rights of the Holders under this Indenture, the
Securities or the Parent Guaranties), or (2) waive compliance with any provision
in this Indenture, the Securities or the Parent Guaranties (other than waivers
of past Defaults covered by Section 513 and waivers of covenants which are
covered by Section 1013); provided, however, that no such supplemental
indenture, agreement or instrument shall, without the consent of the Holder of
each Outstanding Security affected thereby:
(a) change the Stated Maturity of the principal of, or any
installment of interest on, any such Security, or reduce the principal
amount thereof (or premium, if any, thereon) or the rate of interest
thereon, or change the obligation of the Issuer or the Parent Guarantor to
pay (or reduce the amount) of any Additional Amounts with respect to any
Security, or change the place where, or the coin or currency in which, the
principal of any Security or the interest thereon is payable, or impair
the right to institute suit for the enforcement of any such payment on or
after the Stated Maturity thereof;
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(b) reduce the percentage of the Securities, the consent of the Holders of
which is required for any such supplemental indenture, or the consent of
whose Holders is required for any waiver or compliance with certain
provisions of this Indenture;
(c) modify any of the provisions of this Section 902 or
Section 513 or 1013, except to increase the percentage of such Outstanding
Securities required for any such actions or to provide that certain other
provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each such Security affected thereby;
(d) except as otherwise permitted under Article Eight, consent
to the assignment or transfer by the Issuer or the Parent Guarantor of any
of its rights and obligations hereunder;
(e) reduce the Redemption Price or, Tax Redemption Price of
any Security;
(f) amend the Parent Guaranties in a manner adverse to the
Holders of the Securities.
Upon the written request of the Issuer and the Parent Guarantor
accompanied by copies of Board Resolutions authorizing the execution of any such
supplemental indenture and upon the filing with the Trustee of evidence of the
consent of Holders as aforesaid, the Trustee shall join with the Issuer and the
Parent Guarantor in the execution of such supplemental indenture.
It shall not be necessary for any Act of Holders under this Section
902 to approve the particular form of any proposed supplemental indenture or
agreement, but it shall be sufficient if such Act shall approve the substance
thereof.
Section 903. Execution of Supplemental Indentures and Agreements.
In executing, or accepting the additional trusts created by, any
supplemental indenture, agreement, instrument or waiver permitted by this
Article Nine or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to the Trust
Indenture Act Sections 315(a) through 315(d) and Section 602) shall be fully
protected in relying upon, an Opinion of Counsel and an Officers' Certificate
stating that the execution of such supplemental indenture, agreement or
instrument is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture, agreement
or instrument which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
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Section 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article Nine
shall conform to the requirements of the Trust Indenture Act as then in effect.
Section 906. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article Nine may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Issuer shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Board of Directors, to any such supplemental indenture may be prepared and
executed by the Issuer and the Parent Guarantor and authenticated and delivered
by the Trustee in exchange for Outstanding Securities.
Section 907. Notice of Supplemental Indentures.
Promptly after the execution by the Issuer, the Parent Guarantor and
the Trustee of any supplemental indenture pursuant to the provisions of Section
902, the Issuer shall give notice thereof to the Holders of each Outstanding
Security affected, in the manner provided for in Section 106, setting forth in
general terms the substance of such supplemental indenture. Any failure of the
Issuer to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture.
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Interest.
The Issuer shall duly and punctually pay the principal of, premium,
if any, and interest on, and the Tax Redemption Price and Additional Amounts, if
any, with respect to the Securities in accordance with the terms of the
Securities and this Indenture.
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Section 1002. Maintenance of Office or Agency.
The Issuer shall maintain an office or agency where, subject to the
limitations applicable to Global Securities, Securities may be presented or
surrendered for payment. The Issuer also will maintain in The City of New York
an office or agency where Securities, subject to the limitations applicable to
Global Securities, may be surrendered for registration of transfer, or exchange
and where notices and demands to or upon the Issuer in respect of the Securities
and this Indenture may be served. The New York Corporate Trust Office of the
Trustee shall be such office or agency of the Issuer, unless the Issuer shall
designate and maintain some other office or agency for one or more of such
purposes. The Issuer will give prompt written notice to the Trustee of the
location and any change in the location of any such offices or agencies. If at
any time the Issuer shall fail to maintain any such required offices or
agencies, such presentations, surrenders, notices and demands may be made or
served at the office of the Trustee and the Issuer hereby appoints the Trustee
such agent as its agent to receive all such presentations, surrenders, notices
and demands.
The Issuer may from time to time designate one or more other offices
or agencies (in or outside of The City of New York) where, subject to the
limitations applicable to Global Securities, the Securities may be presented or
surrendered for any or all such purposes, and may from time to time rescind such
designation. The Issuer will give prompt written notice to the Trustee of any
such designation or rescission and any change in the location of any such office
or agency.
The Trustee shall initially act as Paying Agent for the Securities.
Section 1003. Money for Security Payments to Be Held in Trust.
If the Issuer or any of its Affiliates shall at any time act as
Paying Agent, it will, on or before each due date of the principal of, premium,
if any, or interest on, any of the Securities, segregate and hold in trust for
the benefit of the Holders entitled thereto a sum sufficient to pay the
principal, premium, if any, interest or the Tax Redemption Price or Additional
Amounts, if applicable, so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided, and will promptly notify
the Trustee of its action or failure so to act.
If the Issuer or any of its Affiliates is not acting as Paying
Agent, the Issuer will, on or before each due date of the principal of, or
interest on, any of the Securities, deposit with a Paying Agent a sum in
immediately available funds sufficient to pay the principal, premium, if any,
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium, if any, or interest, and (unless
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such Paying Agent is the Trustee) the Issuer will promptly notify the Trustee of
such action or any failure so to act.
If the Issuer is not acting as Paying Agent, the Issuer will cause
each Paying Agent other than the Trustee to execute and deliver to the Trustee
an instrument in which such Paying Agent shall agree with the Trustee, subject
to the provisions of this Section, that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal
of, premium, if any, or interest on, the Securities in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any Default by the Issuer or
the Parent Guarantor (or any other obligor upon the Securities) in the
making of any payment of principal, premium, if any, or interest on the
Securities;
(c) at any time during the continuance of any such Default,
upon the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all aspects
with the provisions of this Indenture relating to the duties, rights and
disabilities of such Paying Agent.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Issuer Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Issuer or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Issuer or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Issuer, in trust for the payment of the principal of, premium, if
any, or interest on, any Security and remaining unclaimed for two years after
such principal, premium, if any, or interest has become due and payable shall
promptly be paid to the Issuer on Issuer Request, or (if then held by the
Issuer) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Issuer as trustee thereof,
shall thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Issuer cause to be published once, in the
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New York Times and The Wall Street Journal (national edition), and mail to each
such Holder, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
notification, publication and mailing, any unclaimed balance of such money then
remaining will promptly be repaid to the Issuer.
Section 1004. Corporate Existence.
Subject to Article Eight, the Issuer and the Parent Guarantor shall
do or cause to be done all things necessary to preserve and keep in full force
and effect the corporate existence and related rights and franchises (charter
and statutory) of the Parent Guarantor, the Issuer and the Issuer's
Subsidiaries; provided, however, that the Parent Guarantor, the Issuer and the
Issuer's Subsidiaries shall not be required to preserve any such right or
franchise or the corporate existence of any such Subsidiary if the Board of
Directors of the Issuer shall determine that the preservation thereof is no
longer necessary or desirable in the conduct of the business of the Parent
Guarantor, the Issuer and the Issuer's Subsidiaries taken as a whole and that
the loss thereof would not reasonably be expected to have a material adverse
effect on the ability of the Issuer or the Parent Guarantor to perform its
obligations hereunder.
Section 1005. Payment of Taxes and Other Claims.
The Issuer and the Parent Guarantor shall pay or discharge or cause
to be paid or discharged, on or before the date the same shall become due and
payable, (a) all taxes, assessments and governmental charges levied or imposed
upon the Issuer, the Parent Guarantor, or any of the Issuer's Subsidiaries shown
to be due on any return of the Issuer, the Parent Guarantor or any of the
Issuer's Subsidiaries or otherwise assessed or upon the income, profits or
property of the Issuer, the Parent Guarantor or any of the Issuer's Subsidiaries
if failure to pay or discharge the same could reasonably be expected to have a
material adverse effect on the ability of the Issuer or the Parent Guarantor to
perform its obligations hereunder and (b) all lawful claims for labor, materials
and supplies, which, if unpaid, would by law become a Lien upon the property of
the Issuer, the Parent Guarantor or any of the Issuer's Subsidiaries, except for
any Lien permitted to be incurred under Section 1007, if failure to pay or
discharge the same could reasonably be expected to have a material adverse
effect on the ability of the Issuer or the Parent Guarantor to perform its
obligations hereunder; provided, however, that the Issuer and the Parent
Guarantor or any of the Issuer's Subsidiaries shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings properly instituted and diligently conducted and in
respect of which appropriate reserves (in the good faith judgment of management
of the Issuer and the Parent Guarantor) are being maintained in accordance with
GAAP.
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Section 1006. Maintenance of Properties.
The Issuer and the Parent Guarantor shall cause all material
properties owned by the Issuer, the Parent Guarantor or any of the Issuer's
Subsidiaries or used or held for use in the conduct of their respective business
to be maintained and kept in good condition, repair and working order (ordinary
wear and tear excepted) and supplied with all necessary equipment and will cause
to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the reasonable judgment of the Issuer and the
Parent Guarantor may be consistent with sound business practice and necessary so
that the business carried on in connection therewith may be properly conducted
at all times; provided, however, that nothing in this Section shall prevent the
Issuer and the Parent Guarantor from discontinuing the maintenance of any of
such properties if such discontinuance is, in the reasonable judgment of the
Issuer and the Parent Guarantor, desirable in the conduct of the business of the
Issuer, the Parent Guarantor and the Issuer's Subsidiaries, taken as a whole,
and not reasonably expected to have a material adverse effect on the ability of
the Issuer or the Parent Guarantor to perform its obligations hereunder;
provided further, that the foregoing shall not prohibit a sale, transfer or
conveyance of a Subsidiary or any properties or assets in compliance with the
terms of this Indenture.
Section 1007. Limitation on Liens.
The Issuer shall not, and shall not permit any Restricted Subsidiary
to, Incur any Lien upon any property or assets of the Issuer or any Restricted
Subsidiary, now owned or hereinafter acquired, to secure any Debt without
making, or causing such Restricted Subsidiary to make, effective provision for
securing the Securities (and, if the Issuer shall so determine, any other Debt
of the Issuer which is not subordinate in right of payment to the Securities)
(x) equally and ratably with (or prior to) such Debt as to such property or
assets for so long as such Debt shall be so secured, or (y) in the event such
Debt is subordinate in right of payment to the Securities, prior to such Debt as
to such property or assets for so long as such Debt shall be so secured.
The foregoing restrictions will not apply to:
(1) Liens securing only the Securities or the Parent
Guaranties;
(2) Liens in favor of only the Parent Guarantor, the Issuer or
a Restricted Subsidiary;
(3) Liens existing on the date of this Indenture;
(4) Liens on property of a Person existing at the time such
Person is merged into or consolidated with the Issuer or a Restricted
Subsidiary or
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becomes a Restricted Subsidiary (and not in anticipation of or in
connection with such event); provided that the Debt secured by such Lien
is otherwise permitted to be Incurred under this Indenture;
(5) Liens on property existing immediately prior to the time
of acquisition thereof from a non-Affiliate (and not Incurred in
anticipation of or in connection with the financing of such acquisition);
provided that the Debt secured by such Lien is otherwise permitted to be
Incurred under this Indenture;
(6) Liens to secure Debt Incurred for the purpose of financing
all or any part of the purchase price or the cost of construction or
improvement of the property subject to such Liens (including carrying
charges) and, in the case of a Restricted Subsidiary all or substantially
all of whose assets consist of such property, any Lien on ownership
interests or investments in such Restricted Subsidiary Incurred or assumed
in connection with the acquisition or construction of such property;
provided that the Incurrence of such Debt is otherwise permitted under
this Indenture and such Debt is Incurred prior to, at the time of, or
within 180 days after, the acquisition of such property, the completion of
such construction or the making of such improvements;
(7) Liens on property of the Issuer or any of its Restricted
Subsidiaries in favor of the United States of America or any state
thereof, or any instrumentality of either, to secure certain payments
pursuant to any contract or statute;
(8) Liens for taxes or assessments or other governmental
charges or levies which are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted or for which a
reserve or other appropriate provision, if any, as shall be required in
accordance with GAAP shall have been made;
(9) Liens to secure obligations under workmen's compensation,
temporary disability, social security, retiree health or similar laws or
under unemployment insurance;
(10) Liens Incurred to secure the performance of statutory
obligations, bids, tenders, leases, contracts (other than contracts for
the repayment of Debt), surety or appeal bonds, performance or
return-of-money bonds or other obligations of a like nature Incurred in
the ordinary course of business;
(11) Judgment and attachment Liens not giving rise to a
Default or Event of Default;
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(12) Any Lien arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods in the ordinary
course of business in accordance with industry practice;
(13) Liens securing documentary letters of credit; provided
such Liens attach only to the property or goods to which such letter of
credit relates;
(14) Liens arising from filing financing statements under the
Uniform Commercial Code for precautionary purposes in connection with true
leases of personal property that are otherwise permitted under this
Indenture and under which the Parent Guarantor, the Issuer or any
Restricted Subsidiary is a lessee; or
(15) Liens to secure Debt Incurred to extend, renew, refinance
or refund (or successive extensions, renewals, refinancings or
refundings), in whole or in part, Debt secured by any Lien referred to in
the foregoing clauses (1) through (14) inclusive, so long as such Lien
does not extend to any additional property (other than property
attributable to improvements, alterations and repairs) and the principal
amount of the Debt so secured pursuant to this clause (15) shall not
exceed the principal amount of Debt so extended, renewed, refinanced or
refunded (assuming all available amounts were borrowed) plus the aggregate
amount of premiums, other payments, costs and expenses required to be paid
or Incurred in connection with such extension, renewal, refinancing or
refunding at the time of such extension, renewal, refinancing or
refunding.
In addition to the foregoing, the Issuer and its Restricted
Subsidiaries may Incur a Lien to secure any Debt, without securing the
Securities, if, after giving effect thereto, the sum, without duplication, of
(i) the aggregate principal amount of all outstanding Debt secured by Liens
Incurred by the Issuer and its Restricted Subsidiaries (with the exception of
secured Debt which is excluded pursuant to clauses (1) through (15) inclusive of
this Section 1007) and (ii) the aggregate amount of all Attributable Debt of all
sale and leaseback transactions involving Principal Properties (with the
exception of Attributable Debt excluded pursuant to clauses (1) through (5)
inclusive of Section 1008) does not exceed 10% of Consolidated Net Tangible
Assets (the "Lien Basket"); provided, however, that the Lien Basket shall be
reduced, without duplication, by the amount of outstanding Debt Incurred from
time to time pursuant to the Debt Basket.
Section 1008. Limitation on Sale and Leaseback Transactions.
The Issuer shall not, and shall not permit any Restricted Subsidiary
to, enter into any arrangement with any Person providing for the leasing by the
Issuer or any Restricted Subsidiary of any Principal Property of the Issuer or
any Restricted Subsidiary,
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which Principal Property has been or is to be sold or transferred by the Issuer
or such Restricted Subsidiary to such Person (herein referred to as a "sale and
leaseback transaction"), unless, after giving effect thereto, the sum, without
duplication, of (i) the aggregate amount of all Attributable Debt in respect of
all such sale and leaseback transactions involving Principal Properties (with
the exception of Attributable Debt excluded pursuant to clauses (1) through (5)
inclusive of this Section 1008) and (ii) the aggregate principal amount of all
outstanding Debt secured by Liens Incurred by the Issuer and its Restricted
Subsidiaries (with the exception of secured Debt which is excluded pursuant to
clauses (1) through (15) inclusive of Section 1007) does not exceed 10% of
Consolidated Net Tangible Assets (the "Leaseback Basket").
This covenant shall not apply to, and there shall be excluded from
Attributable Debt in any computation under this covenant or under Section 1007,
Attributable Debt with respect to any sale and leaseback transaction if:
(1) The lease in such sale and leaseback transaction is for a
period, including renewals, of not more than three years;
(2) Such sale and leaseback transaction is entered into in
respect of a Principal Property within 180 days of the acquisition thereof
or the completion of construction and commencement of operation thereof,
whichever is later;
(3) The proceeds of the sale or transfer of the Principal
Property in such sale and leaseback transaction are at least equal to the
Fair Market Value of such Principal Property (as determined in good faith
by the Board of Directors of the Issuer) and the Issuer or a Restricted
Subsidiary within 180 days after such sale or transfer applies to the
retirement of Funded Debt that is not subordinated to the Securities or
the Parent Guaranties an amount equal to the greater of (a) the net
proceeds of such sale and (b) the Attributable Debt in respect of such
sale and leaseback transaction;
(4) The Issuer or a Restricted Subsidiary applies the net
proceeds of the sale or transfer of the Principal Property in such sale
and leaseback transaction to an investment in another Principal Property
within 180 days prior or subsequent to such sale or transfer; provided,
however, that this exception shall apply only if such proceeds invested in
such other Principal Property shall not exceed the total acquisition,
alteration, repair and construction cost of the Issuer or any Restricted
Subsidiary in such other Principal Property less amounts secured by any
purchase money or construction mortgage on such other Principal Property;
or
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(5) Such sale and leaseback transaction is entered into between the Issuer
and a Restricted Subsidiary, between the Parent Guarantor and the Issuer,
or between Restricted Subsidiaries.
Section 1009. Limitation on Restricted Subsidiary Funded Debt.
The Issuer shall not permit any Restricted Subsidiary of the Issuer
to Incur any Funded Debt. Notwithstanding the foregoing, any Restricted
Subsidiary may Incur the following Funded Debt:
(1) Funded Debt of any Restricted Subsidiary constituting
Existing Funded Debt;
(2) Funded Debt Incurred by a Special Purpose Funding
Subsidiary, provided that such Restricted Subsidiary remains at all times
a Special Purpose Funding Subsidiary;
(3) Funded Debt owed by a Restricted Subsidiary to the Parent
Guarantor, the Issuer or a Wholly-Owned Subsidiary of the Issuer (provided
that such Funded Debt is at all times held by the Parent Guarantor, the
Issuer or a Person which is a Wholly-Owned Subsidiary of the Issuer);
provided, however, that upon either (a) the transfer or other disposition
by the Parent Guarantor, the Issuer or such Wholly-Owned Subsidiary of any
Funded Debt so permitted to a Person other than the Parent Guarantor, the
Issuer or another Wholly-Owned Subsidiary of the Issuer, or (b) the
issuance (other than directors' qualifying shares), sale, lease, transfer
or other disposition of shares of Capital Stock (including by
consolidation or merger) of such Wholly-Owned Subsidiary to a Person other
than the Parent Guarantor, the Issuer or another such Wholly-Owned
Subsidiary, the provisions of this clause (3) shall no longer be
applicable to such Funded Debt and such Funded Debt shall be deemed to
have been Incurred at the time of such transfer or other disposition;
(4) Funded Debt Incurred by a Person before such Person became
a Restricted Subsidiary in an acquisition by the Issuer from a
non-Affiliate (whether through a stock acquisition, merger, consolidation
or otherwise) after the date of this Indenture (provided such Funded Debt
was not Incurred in anticipation of or in connection with and was
outstanding prior to such acquisition);
(5) Funded Debt Incurred in connection with the acquisition,
purchase, improvement or development of property or assets used or held by
any Subsidiary of the Issuer prior to, or within 180 days after, the time
of such acquisition, purchase, improvement or development; or
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(6) Funded Debt Incurred to extend, renew, refinance or refund (or
successive extensions, renewals, refinancings or refundings) in whole or
in part, of any Funded Debt referred to in the foregoing clauses (1), (4)
and (5), provided that the principal amount of the Funded Debt Incurred
pursuant to this clause (6) shall not exceed the principal amount of
Funded Debt so extended, renewed, refinanced or refunded plus the
aggregate amount of premiums, other payments, costs and expenses required
to be paid or incurred in connection with such extension, renewal,
refinancing or refunding at the time of such extension, renewal,
refinancing or refunding.
In addition to the foregoing, any Restricted Subsidiary may Incur
Funded Debt if, immediately after the Incurrence thereof, the aggregate
principal amount of such Funded Debt plus all other Funded Debt (without
duplication) of all Restricted Subsidiaries of the Issuer then outstanding
(other than Funded Debt permitted by clauses (1) through (6) of this Section
1009) does not exceed 10% of Consolidated Net Tangible Assets (the "Debt
Basket"); provided, however, that the Debt Basket shall be reduced, without
duplication, by the amount of Debt secured pursuant to the Lien Basket and by
the amount of Attributable Debt Incurred pursuant to the Leaseback Basket, in
each case to the extent such secured Debt and such Attributable Debt may from
time to time be outstanding.
Section 1010. Limitation on Restricted Payments.
(a) Until such time as the Securities are rated Baa2 by Moody's or
BBB by S&P, or higher, the Issuer will not, and will not permit any Restricted
Subsidiary to, directly or indirectly:
(i) declare or pay any dividend on, or make any
distribution in respect of, the Issuer's or any Restricted
Subsidiary's Capital Stock or other Equity Interests, except to the
extent any such dividend or distribution is actually received by the
Issuer or a Subsidiary of the Issuer;
(ii) purchase, redeem or otherwise acquire or retire for
consideration any Capital Stock or other Equity Interests of the
Issuer or a Restricted Subsidiary, except to the extent such
consideration is actually received by the Issuer or a Subsidiary of
the Issuer; or
(iii) voluntarily purchase, redeem or otherwise acquire
or retire for consideration, prior to a scheduled mandatory sinking
fund payment date, mandatory amortization or mandatory prepayment or
maturity date (including, but not limited to, by legal defeasance),
any Debt of the Issuer that is junior in right of payment to the
Securities, other than in connection
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with the refinancing of such Debt to the extent permitted by this
Indenture (each such declaration, distribution, purchase,
redemption, acquisition or retirement described in clauses (i)
through (iii) being referred to as a "Restricted Payment") if, at
the time of such action, or after giving effect to such Restricted
Payment, (1) an Event of Default shall have occurred and be
continuing; (2) the Issuer could not incur $1.00 of additional Debt
pursuant to the Debt Basket under Section 1009; or (3) such
Restricted Payment, together with the aggregate amount of all other
Restricted Payments declared or made after the Issue Date, exceeds
the sum of:
(A) 50% of the aggregate cumulative Consolidated
Net Income of the Issuer accrued on a cumulative basis during
the period beginning on September 29, 1996 and ending on the
last day of the Issuer's last fiscal quarter ending prior to
the date of the Restricted Payment (or, if such aggregate
cumulative Consolidated Net Income shall be a loss, minus 100%
of such loss);
(B) the aggregate Net Cash Proceeds and the Fair
Market Value (as determined in good faith by the Board of
Directors of the Issuer) of marketable securities and other
property, if any, received by the Issuer or a Wholly-Owned
Subsidiary of the Issuer (other than from a Restricted
Subsidiary) from the issuance and sale of either Capital Stock
(other than Redeemable Capital Stock) or Debt that is
convertible into Capital Stock, to the extent such Debt is
converted into Capital Stock after the Issue Date;
(C) the Fair Market Value (as determined in good
faith by the Board of Directors of the Issuer) of any shares
of Capital Stock (other than Redeemable Capital Stock) or
options in respect thereof of the Issuer issued after the
Issue Date, pursuant to a plan or other arrangement approved
by the Compensation Committee of the Board of Directors of the
Issuer, to or for the benefit of any employee or director of
the Issuer or any Subsidiary of the Issuer or to or by any
stock ownership plan or similar trust for the benefit of any
such employee or director, in each case to the extent such
Fair Market Value is includable as compensation expense in the
computation of Consolidated Net Income;
(D) 50% of the aggregate Net Cash Proceeds
received after September 29, 1996 by the Issuer, or a
Wholly-Owned Subsidiary of the Issuer, from an Asset Sale; and
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(E) $50,000,000.
(b) Notwithstanding the foregoing, so long as no Event of Default
shall have occurred and be continuing, the foregoing provisions shall not
prohibit the following actions:
(i) the payment of any dividend within 60 days after the
date of the declaration, if at the date of declaration thereof such
payment would comply with such provisions, or
(ii) the declaration or payment of any dividend on or
purchase, redemption or retirement of shares of Capital Stock
payable solely in shares of Capital Stock (other than Redeemable
Stock) of the Issuer, or any Subsidiary which does not constitute a
"significant subsidiary" of the Issuer within the meaning of Rule
1-02(w) of Regulation S-X promulgated under the Exchange Act and any
successor provision thereto.
Section 1011. Provision of Financial Statements.
Whether or not the Issuer is subject to Section 13(a) or 15(d) of
the Exchange Act (or any successor provision thereto), the Issuer will, to the
extent permitted under the Exchange Act, file with the Commission the annual
reports, quarterly reports and other documents which the Issuer would have been
required to file with the Commission pursuant to such Section 13(a) or 15(d) (or
any successor provision thereto) if the Issuer were so subject, such documents
to be filed with the Commission on or prior to the respective dates (the
"Required Filing Dates") by which the Issuer would have been required so to file
such documents if the Issuer were so subject. The Issuer also will: (1) within
15 days of each Required Filing Date, file with the Trustee copies of the annual
reports, quarterly reports and other documents (excluding exhibits) which the
Issuer would have been required to file with the Commission pursuant to Section
13(a) or 15(d) of the Exchange Act if the Issuer were subject to such Sections;
and (2) if filing such documents by the Issuer with the Commission is not
permitted under the Exchange Act, promptly upon written request supply copies of
such documents to any Holder. The Issuer will be deemed to have satisfied the
requirements set forth above if (i) the Parent Guarantor prepares, files, mails
and supplies reports and other documents prepared on a Consolidated basis of the
types required above, in each case within the applicable time periods and (ii)
the Issuer is not required to file such reports and other documents separately
under the applicable rules and regulations of the Commission (after giving
effect to any exemptive relief) because of the filings by the Parent Guarantor.
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Section 1012. Statement by Officers as to Default.
(a) The Issuer will deliver to the Trustee, on or before a date not
more than 120 days after the end of each fiscal year of the Issuer ending after
the date hereof, a written statement signed by two executive officers of the
Issuer, one of whom shall be the principal executive officer, principal
financial officer or principal accounting officer of the Issuer, as to
compliance herewith, including whether or not, after a review of the activities
of the Issuer during such year and of the Issuer's and the Parent Guarantor's
performance under this Indenture, to the best knowledge, based on such review,
of the signers thereof, the Issuer and the Parent Guarantor have fulfilled all
of their respective obligations and are in compliance with all conditions and
covenants under this Indenture throughout such year, and, if there has been a
Default specifying each Default and the nature and status thereof and any
actions being taken by the Issuer with respect thereto.
(b) When any Default or Event of Default has occurred and is
continuing, or if the Trustee or any Holder or the trustee for or the holder of
any other evidence of Debt of the Issuer or any Subsidiary gives any notice or
takes any other action with respect to a claimed default relating to a Debt in
an amount aggregating in excess of $25,000,000, the Issuer shall deliver to the
Trustee by registered or certified mail or facsimile transmission followed by
hard copy an Officers' Certificate specifying such Default, Event of Default,
notice or other action, the status thereof and what actions the Issuer is taking
or proposes to take with respect thereto, within five Business Days of becoming
aware of its occurrence.
Section 1013. Waiver of Certain Covenants.
The Issuer may omit in any particular instance to comply with any
covenant or provision set forth in Sections 1007 through 1012 inclusive, if,
before or after the time for such compliance, the Holders of not less than a
majority in aggregate principal amount of the Securities at the time Outstanding
shall, by Act of such Holders, waive such compliance in such instance with such
covenant or provision, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Issuer and the duties of
the Trustee in respect of any such covenant or condition shall remain in full
force and effect.
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ARTICLE ELEVEN
PARENT GUARANTIES OF SECURITIES
Section 1101. Unconditional Parent Guaranties.
The Parent Guarantor hereby irrevocably and unconditionally
guarantees to each Holder of a Security authenticated and delivered by the
Trustee, and to the Trustee, the performance under, and punctual payment of the
principal of, premium, if any, and interest on (and, if applicable, the Tax
Redemption Price and Additional Amounts in respect of) such Security, when and
as the same shall become due and payable, whether upon maturity, acceleration,
call for redemption or otherwise in accordance with the terms of such Security
and of this Indenture.
The Parent Guarantor hereby agrees that its obligations hereunder
shall be absolute and unconditional and as if it were principal debtor and not
merely surety, irrespective of, and shall be unaffected by, any invalidity,
irregularity or unenforceability of any such Security or this Indenture, any
failure to enforce the provisions of any such Security or this Indenture, any
waiver, modification, or indulgence granted to the Issuer with respect thereto,
by the Holder of such Security or the Trustee, or any other circumstances which
may otherwise constitute a legal or equitable discharge of a surety or
guarantor; provided, however, that, notwithstanding the foregoing, no such
waiver, modification, indulgence or circumstance shall, without the consent of
the Parent Guarantor, increase the principal amount of a Security, the premium,
if any, or the interest rate thereon (and, if applicable, the Tax Redemption
Price or Additional Amounts in respect thereof) except as provided in such
Security. The Parent Guarantor hereby agrees that these Parent Guaranties shall
be enforceable without any demand, suit or proceeding first against the Issuer.
The Parent Guarantor hereby waives diligence, presentment, demand of payment,
filing of claims with a court in the event of merger or bankruptcy of the
Issuer, any right to require a proceeding first against the Issuer, protest or
notice with respect to any such Security or the indebtedness evidenced thereby
and all demands whatsoever, and covenants that the Parent Guaranties will not be
discharged as to any such Security except by payment in full of the principal
of, premium, if any, and interest on such Security or as set forth below.
The Parent Guaranties set forth in this Section 1101 shall not be
valid or become obligatory for any purpose with respect to a Security until the
certificate of authentication on such Security shall have been manually signed
by the Trustee.
If the obligations of the Issuer under this Indenture are assumed by
an acquiring or successor Person (other than a direct or indirect Subsidiary of
the Parent Guarantor) pursuant to Section 801 or upon the release of the Parent
Guaranties in
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accordance with the provisions of Section 902, the Parent Guaranties shall
terminate (without any action or consent required by the Holders or the Trustee)
and be of no further force and effect and the obligations of the Parent
Guarantor thereunder and under the Indenture shall be released and the Parent
Guarantor shall cease to be a party to, or have rights or obligations under,
this Indenture.
Section 1102. Execution of Parent Guaranties.
Subject to Section 201, the Parent Guarantor hereby agrees to
execute the Parent Guaranties in substantially the form set forth in Section
1103 to be endorsed on each Security authenticated and delivered by the Trustee.
The Parent Guaranties shall be executed and the corporate seal of the Parent
Guarantor shall be affixed, prior to the authentication of the Security on which
it is endorsed, and the delivery of such Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the Parent
Guaranties on behalf of the Parent Guarantor. Such signature may be a manual or
facsimile signature and may be imprinted or otherwise reproduced on the Parent
Guaranties, and for that purpose the Parent Guarantor may adopt and use the
facsimile signature of any such officer, and in case any such officer who shall
have signed the Parent Guaranties shall cease to be a duly authorized officer of
the Parent Guarantor before the Security on which the Parent Guaranties is
endorsed shall have been authenticated and delivered by the Trustee or disposed
of by the Issuer, such Security nevertheless may be authenticated and delivered
or disposed of as though the officer who signed the Parent Guaranties had not
ceased to be a duly authorized director or attorney of the Parent Guarantor.
Section 1103. Form of Parent Guaranties.
The Parent Guaranties to be endorsed on the Securities shall,
subject to Section 201, be in substantially the form set forth below:
[FORM OF PARENT GUARANTIES]
GUARANTY OF U.S. INDUSTRIES, INC.
For value received, U.S. Industries, Inc., a Delaware corporation
(the "Parent Guarantor"), hereby irrevocably and unconditionally guarantees to
the Holder of the Security upon which this Parent Guaranty is endorsed, the
performance of the Issuer under such Security and the due and punctual payment
of the principal of, premium, if any, and interest on (and, if applicable, the
Tax Redemption Price and Additional Amounts in respect of) such Security, when
and as the same shall become due and payable, whether upon maturity,
acceleration, call for redemption or otherwise in accordance with the terms of
such Security and of the Indenture referred to therein.
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The Parent Guarantor hereby agrees that its obligations hereunder shall be
absolute and unconditional and as if it were principal debtor and not merely
surety, irrespective of, and shall be unaffected by, any invalidity,
irregularity or unenforceability of such Security or said Indenture, any failure
to enforce the provisions of such Security or said Indenture, any waiver,
modification or indulgence granted to the Issuer with respect thereto by the
Holder of such Security or the Trustee, or any other circumstances which may
otherwise constitute a legal or equitable discharge of a surety or guarantor;
provided, however, that, notwithstanding the foregoing, no such waiver,
modification, indulgence or circumstance shall, without the consent of the
Parent Guarantor, increase the principal amount of such Security, the premium,
if any, or the interest rate thereon (and, if applicable, the Tax Redemption
Price or Additional Amounts in respect thereof) except as provided in such
Security. The Parent Guarantor hereby agrees that this Parent Guaranty shall be
enforceable without any demand, suit or proceeding first against the Issuer. The
Parent Guarantor hereby waives diligence, presentment, demand of payment, filing
of claims with a court in the event of merger or bankruptcy of the Issuer, any
right to require a proceeding first against the Issuer, protest or notice with
respect to such Security or the indebtedness evidenced thereby and all demands
whatsoever, and covenants that this Parent Guaranty will not be discharged
except by payment in full of the principal of, premium, if any, and interest on
such Security or pursuant to the provisions of Articles Four, Eight, Nine,
Eleven and Twelve of the Indenture providing for release of this Parent Guaranty
under the conditions provided for therein.
This Parent Guaranty shall not be valid or become obligatory for any
purpose with respect to a Security until the certificate of authentication on
such Security shall have been signed manually by the Trustee under the Indenture
referred to in such Security. Terms used herein which are defined in such
Indenture shall have the respective meanings assigned thereto in the Indenture.
THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES THEREOF.
IN WITNESS WHEREOF, the Parent Guarantor has caused this instrument
to be duly executed by the manual or facsimile signature of its authorized
officers and its corporate seal to be affixed or reproduced hereon.
Dated: _______________ U.S. INDUSTRIES, INC.
By:
Name:
Title:
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[SEAL]
Attest:
Authorized Officer
ARTICLE TWELVE
DEFEASANCE AND COVENANT DEFEASANCE
Section 1201. Issuer's Option to Effect Defeasance or Covenant Defeasance.
The Issuer may, at its option by Board Resolution, at any time, with
respect to the Securities, elect to have either Section 1202 or Section 1203 be
applied to all of the Outstanding Securities (the "Defeased Securities"), upon
compliance with the conditions set forth below in this Article Twelve.
Section 1202. Defeasance and Discharge.
Upon the Issuer's exercise under Section 1201 of the option set
forth in this Section 1202, the Issuer, the Parent Guarantor and any other
obligor upon the Securities, if any, shall be deemed to have been discharged
from its obligations with respect to the Defeased Securities and the Parent
Guaranties on the date the conditions set forth in Section 1204 below are
satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means
that the Issuer, the Parent Guarantor and any other obligor upon the Securities
shall be deemed to have paid and discharged the entire Debt represented by the
Defeased Securities, which shall thereafter be deemed to be "Outstanding" only
for the purposes of Section 1205 and the other Sections of this Indenture
referred to in clauses (a) and (b) below, and to have satisfied all its other
obligations under such Securities and this Indenture insofar as such Securities
are concerned (and the Trustee, at the expense of the Issuer and upon Issuer
Request, shall execute proper instruments acknowledging the same), except for
the following which shall survive until otherwise terminated or discharged
hereunder: (a) the rights of Holders of Defeased Securities to receive, solely
from the trust fund described in Section 1204 and as more fully set forth in
such Section, payments in respect of the principal of premium, if any, and
interest on, such Securities, when such payments are due from the trust referred
to below, (b) the Issuer's obligations with respect to such Defeased Securities
under Sections 304, 306, 307, 1002 and 1003, (c) the rights, powers, trusts,
duties and immunities of the Trustee hereunder, and (d) the defeasance
provisions under this Article Twelve. Subject to compliance with this Article
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Twelve, the Issuer may exercise its option under this Section 1202
notwithstanding the prior exercise of its option under Section 1203 with respect
to the Securities.
Section 1203. Covenant Defeasance.
Upon the Issuer's exercise under Section 1201 of the option set
forth in this Section 1203, the Issuer and the Parent Guarantor and any other
obligor upon the Securities, if any, shall be released from its obligations
under any covenant or provision contained or referred to in Sections 1005
through 1012 inclusive, and the provisions of Sections 801(a) and 801(b), with
respect to the Defeased Securities and the Parent Guaranties on and after the
date the conditions set forth in Section 1204 below are satisfied (hereinafter,
"covenant defeasance"), and the Defeased Securities shall thereafter be deemed
to be not Outstanding for the purposes of any direction, waiver, consent or
declaration or Act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed Outstanding for
all other purposes hereunder. For this purpose, such covenant defeasance means
that, with respect to the Defeased Securities, the Issuer and the Parent
Guarantor and any other obligor upon the Securities, if any, may omit to comply
with and shall have no liability in respect of any term, condition or limitation
set forth in any such Section or Article, whether directly or indirectly, by
reason of any reference elsewhere herein to any such Section or Article or by
reason of any reference in any such Section or Article to any other provision
herein or in any other document and such omission to comply shall not constitute
a Default or an Event of Default under Section 501(c), but, except as specified
above, the remainder of this Indenture and such Defeased Securities shall be
unaffected thereby.
Section 1204. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either
Section 1202 or Section 1203 to the Defeased Securities:
(1) The Issuer shall irrevocably have deposited or caused to
be deposited with the Trustee as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities, (a)
cash in United States dollars, (b) U.S. Government Obligations or (c) a
combination thereof, which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms and with no
further reinvestment will provide, not later than one day before the due
date of any payment, such amounts as will be sufficient, in the opinion of
a nationally recognized firm of independent public accountants or a
nationally recognized investment banking firm expressed in a written
certification thereof delivered to the Trustee, to pay and discharge, and
which shall be applied by the Trustee to pay and discharge, the principal
of, premium, if any, and interest
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on, the Defeased Securities, on the Stated Maturity of such principal,
premium, if any, or interest. For this purpose, "U.S. Government
Obligations" means securities that are (i) direct obligations of the
United States of America for the timely payment of which its full faith
and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United
States of America the timely payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America, which, in either case, are not callable or redeemable at the
option of the issuer thereof, and shall also include a depository receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as
custodian with respect to any such U.S. Government Obligation, or a
specific payment of principal of, premium, if any, or interest on any such
U.S. Government Obligation held by such custodian for the account of the
holder of such depository receipt, provided that (except as required by
law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depository receipt from any amount
received by the custodian in respect of the U.S. Government Obligation or
the specific payment of principal of, premium, if any, or interest on the
U.S. Government Obligation evidenced by such depository receipt;
(2) In the case of an election under Section 1202, the Issuer
shall have delivered to the Trustee an Opinion of Independent Counsel to
the Issuer in the United States stating that (A) the Issuer has received
from, or there has been published by, the Internal Revenue Service a
ruling, or (B) since the date hereof, there has been a change in the
applicable federal income tax law, in either case to the effect that, and
based thereon such Opinion of Independent Counsel in the United States
shall confirm that, the Holders of the Outstanding Securities will not
recognize income, gain or loss for federal income tax purposes as a result
of such defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such defeasance had not occurred;
(3) In the case of an election under Section 1203, the Issuer
shall have delivered to the Trustee an Opinion of Independent Counsel in
the United States to the effect that the Holders of the Outstanding
Securities will not recognize income, gain or loss for federal income tax
purposes as a result of such covenant defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such covenant defeasance had not
occurred;
(4) No Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as Sections 501(f) and
(g) are concerned, at any time during the period ending on the 91st day
after the date of
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deposit (other than a Default or Event of Default resulting from the
borrowing of funds to be applied to such deposit);
(5) Such defeasance or covenant defeasance shall not result in
a breach or violation of, or constitute a Default under, any material
agreement or instrument (other than this Indenture) to which the Issuer,
the Parent Guarantor or any of their respective Subsidiaries is a party or
by which it is bound;
(6) The Issuer shall have delivered to the Trustee an Opinion
of Independent Counsel in the United States to the effect that after the
91st day following the deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar
laws affecting creditors' rights generally;
(7) The Issuer shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the Issuer
with the intent of preferring the holders of the Securities or the Parent
Guaranties over the other creditors of the Issuer or the Parent Guarantor
with the intent of defeating, hindering, delaying or defrauding creditors
of the Issuer, the Parent Guarantor or others; and
(8) No event or condition shall exist that would prevent the
Issuer or the Parent Guarantor from making payments of the principal of,
premium, if any, and interest on the Securities on the date of such
deposit or at any time ending on the 91st day after the date of such
deposit; and
(9) The Issuer shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Independent Counsel, each stating
that all conditions precedent required for either the defeasance under
Section 1202 or the covenant defeasance under Section 1203, have been
complied with.
Opinions of Counsel or Opinions of Independent Counsel required to
be delivered under this Section shall be in form and substance reasonably
satisfactory to the Trustee and may have qualifications customary for opinions
of the type required and counsel delivering such opinions may rely on
certificates of the Issuer or government or other officials customary for
opinions of the type required, which certificates shall be limited as to matters
of fact, including that various financial covenants have been complied with.
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Section 1205. Deposited Money and U.S. Government Obligations to be Held in
Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003, all
United States dollars and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee pursuant to Section 1204 in respect of the
Defeased Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent (excluding the Issuer or
any of its Affiliates acting as Paying Agent), as the Trustee may determine, to
the Holders of such Securities of all sums due and to become due thereon in
respect of principal and interest, but such money need not be segregated from
other funds except to the extent required by law.
The Issuer shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 1204 or the principal, premium, if any, and
interest received in respect thereof other than any such tax, fee or other
charge which by law is imposed, assessed or for the account of the Holders of
the Defeased Securities.
Anything in this Article Twelve to the contrary notwithstanding, the
Trustee shall deliver or pay to the Issuer from time to time upon Issuer Request
any United States
dollars or U.S. Government Obligations held by it as provided in Section 1204
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect defeasance or covenant defeasance.
Section 1206. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or U.S. Government Obligations in accordance with Section 1202 or 1203,
as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Issuer's obligations under this Indenture and the
Securities and the Parent Guarantor's obligations under the Parent Guaranties
shall be revived and reinstated, with present and prospective effect, as though
no deposit had occurred pursuant to Section 1202 or 1203, as the case may be,
until such time as the Trustee or Paying Agent is permitted to apply all such
United States dollars or U.S. Government Obligations in accordance with Section
1202 or 1203, as the case may be; provided, however, that if the Issuer makes
any payment to the Trustee or Paying Agent of principal, premium, if any, or
interest on any Security following the reinstatement of its obligations, the
Trustee or Paying Agent shall promptly pay any such amount to the Holders of the
Securities and the Issuer shall be subrogated to
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the rights of the Holders of such Securities to receive such payment from the
United States dollars and U.S. Government Obligations held by the Trustee or
Paying Agent.
ARTICLE THIRTEEN
TAX REDEMPTION OF SECURITIES
Section 1301. Tax Redemption.
(a) Upon the occurrence of a "Tax Event," the Issuer may, at its
option and subject to the procedures set forth below, redeem (a "Tax
Redemption") the Securities, in whole only, at any time (the "Tax Redemption
Date") at a redemption price (the "Tax Redemption Price") of 100% of the
principal amount thereof plus accrued but unpaid interest to the date fixed for
redemption.
(b) A "Tax Event" occurs if, as the result of any change in or any
amendment to the laws, including any applicable double taxation treaty or
convention, of the United Kingdom (or any Other Jurisdiction) or of any
political subdivision or taxing authority thereof, affecting taxation, or any
change in the application or interpretation of such laws, double taxation treaty
or convention, which change or amendment becomes effective on or
after the original issuance date of the Securities (or such later
date on which any assignee of the Issuer, Parent Guarantor or a successor
corporation to the Issuer or the Parent Guarantor becomes such as permitted
hereby), it is determined, by the Issuer, the Parent Guarantor or such assignee
(which terms, for purposes of the remainder of this paragraph, include any
successor thereto) that (i) the Issuer, the Parent Guarantor or an assignee
would be required to make additional payments in respect of principal, premium,
if any, or interest on the next succeeding date for the payment thereof, or (ii)
based upon an Opinion of Independent Counsel to the Issuer, the Parent Guarantor
or its assignee, as a result of any action taken by any taxing authority of, or
any action brought in a court of competent jurisdiction in, the United Kingdom
(or an Other Jurisdiction), or any political subdivision or taxing authority
thereof or therein (whether or not such action was taken or brought with respect
to the Issuer, the Parent Guarantor or an assignee), which action is taken or
brought on or after the original issuance date of the Securities (or such later
date on which a corporation becomes a successor or an assignee), the
circumstances described in clause (i) would exist.
(c) A Tax Redemption shall be for not less than all of the
Securities.
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Section 1302. Applicability of Article.
Tax Redemption of Securities at the election of the Issuer, the
Parent Guarantor or otherwise shall be made in accordance with the provisions of
the Securities and this Article Thirteen.
Section 1303. Election to Redeem; Notice to Trustee.
The election of the Issuer to redeem Securities pursuant to Section
1301 shall be evidenced by a Board Resolution, an Issuer Order and an Officer's
Certificate. In case of any redemption at the election of the Issuer, the Issuer
shall, not less than 45 nor more than 60 days prior to the Tax Redemption Date
fixed by the Issuer (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee in writing of such Tax Redemption Date.
Section 1304. Notice of Tax Redemption.
In order to redeem the Securities, notice of Tax Redemption must be
given by first-class mail, postage prepaid, mailed not less than 30 nor more
than 60 days prior to the Tax Redemption Date, to each Holder of Securities to
be redeemed, at his address appearing in the Security Register.
All notices of Tax Redemption shall state:
(a) the Tax Redemption Date;
(b) the Tax Redemption Price;
(c) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Tax Redemption Price;
(d) that on the Tax Redemption Date the Tax Redemption Price will
become due and payable upon each such Security, and that (unless the Issuer
shall default in payment of the Tax Redemption Price) interest thereon shall
cease to accrue on and after said date;
(e) subject to procedures with respect to Global Securities, the
place or places where such Securities are to be surrendered for payment of the
Tax Redemption Price; and
(f) the CUSIP number, if any, relating to such Securities.
Notice of redemption of Securities to be redeemed at the election of
the Issuer shall be given by the Issuer or, at the Issuer's written request, by
the Trustee in the
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name and at the expense of the Issuer. If the Issuer elects to give notice of
redemption, it shall provide the Trustee with a certificate stating that such
notice has been given in compliance with the requirements of this Section 1304.
The notice, if mailed in the manner herein provided, shall be
conclusively presumed to have been given, whether or not the Holder receives
such notice. In any case, failure to give such notice by mail or any defect in
the notice to the Holder of any Security designated for repurchase as a whole
shall not affect the validity of the proceedings for the redemption of any other
Security.
Section 1305. Deposit of Tax Redemption Price.
On or prior to any Tax Redemption Date, the Issuer shall deposit
with the Trustee or with a Paying Agent (or, if the Issuer or any of its
Affiliates is acting as Paying Agent, segregate and hold in trust as provided in
Section 1003) an amount of money in immediately available funds sufficient to
pay the Tax Redemption Price of, and (except if the Tax Redemption Date shall be
an Interest Payment Date or Special Payment Date) accrued interest on, all of
the Securities which are to be redeemed on that date. All money earned on funds
held in trust by the Trustee or any Paying Agent shall be remitted to the
Issuer.
Section 1306. Securities Payable on Tax Redemption Date.
Notice of redemption having been given as aforesaid, the Securities
so to be redeemed shall, on the Tax Redemption Date, become due and payable at
the Tax Redemption Price therein specified and from and after such date (unless
the Issuer shall default in the payment of the Tax Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Issuer at the Tax Redemption Price together with accrued interest
to the Tax Redemption Date; provided, however, that installments of interest
whose Stated Maturity is on or prior to the Tax Redemption Date shall be payable
to the Holders of such Securities, or one or more Predecessor Securities,
registered as such on the relevant Regular Record Dates and Special Record Dates
according to their terms and the provisions of Section 308.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Tax Redemption Date at the rate prescribed
therefore in the Security.
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ARTICLE FOURTEEN
REDEMPTION OF SECURITIES
Section 1401. Applicability of Article.
The Securities are redeemable at the election of the Issuer before
their Stated Maturity and shall be redeemable in accordance with their terms and
(except as otherwise provided by Article Thirteen upon a Tax Redemption of the
Securities) in accordance with this Article Fourteen and Section 202.
Section 1402. Election to Redeem; Notice to Trustee.
The election of the Issuer to redeem any Securities pursuant to
Section 1401 shall be evidenced by a Board Resolution, an Issuer's Order and an
Officer's Certificate. In case of any redemption at the election of the Issuer,
the Issuer shall, not less than 45 or more than 60 days prior to the Redemption
Date fixed by the Issuer (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee in writing of such Redemption Date, of the
principal amount of Securities to be redeemed and, if applicable, of the tenor
of the Securities to be redeemed.
Section 1403. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities not previously
called for redemption, by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
(equal to the minimum authorized denomination for Securities or any integral
multiple thereof) of the principal amount of Securities of a denomination larger
than the minimum authorized denomination for Securities.
The Trustee shall promptly notify the Issuer in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any
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Securities redeemed or to be redeemed only in part, to the portion of the
principal amount of such Securities which has been or is to be redeemed.
Section 1404. Notice of Redemption.
In order to redeem the Securities, notice of redemption must be
given by first-class mail, postage prepaid, mailed not less than 30 nor more
than 60 days prior to the Redemption Date, to each Holder of Securities to be
redeemed, at the address appearing in the Security Register.
All notices of redemption shall identify the Securities to be
redeemed (including, subject to Section 309, the CUSIP number) and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if less than all the Outstanding Securities are to be
redeemed, the identification (and, in the case of partial redemption of
any Securities, the principal amounts) of the particular Securities to be
redeemed;
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and, that
(unless the Issuer shall default in payment of the Redemption Price)
interest thereon shall cease to accrue on and after said date; and
(5) subject to procedures with respect to Global Securities,
the place or places where such Securities are to be surrendered for
payment of the Redemption Price.
Notice of redemption of Securities to be redeemed at the election of
the Issuer shall be given by the Issuer or, at the Issuer's request, by the
Trustee in the name and at the expense of the Issuer. If the Issuer elects to
give notice of redemption, it shall provide the Trustee with a certificate
stating that such notice has been given in accordance with the requirements of
this Section 1404.
The notice, if mailed in the manner herein provided, shall be
conclusively presumed to have been given, whether or not the Holder receives
such notice. In any case, failure to give such notice by mail or any defect in
the notice to the Holder of any Security designated for repurchase as a whole
shall not affect the validity of the proceedings for the redemption of any other
Security.
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Section 1405. Deposit of Redemption Price.
On or prior to any Redemption Date, the Issuer shall deposit with
the Trustee or with a Paying Agent (or, if the Issuer or any of its Affiliates
is acting as Paying Agent, segregate and hold in trust as provided in Section
1003) an amount of money in immediately available funds sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date or a Special Payment Date) accrued interest on, all of the
Securities which are to be redeemed on that date. All money earned on funds held
in trust by the Trustee or any Paying Agent shall be remitted to the Issuer.
Section 1406. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities
so to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Issuer shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Issuer at the Redemption Price, together with accrued interest to
the Redemption Date; provided, however, that installments of interest whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such at the close of business on the relevant Regular Record Dates and Special
Record Dates according to their terms and the provisions of Section 308.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security.
Section 1407. Securities Redeemed in Part.
Subject to the provisions applicable to Global Securities, any
Security which is to be redeemed only in part shall be surrendered at a place of
payment therefor (with, if the Issuer or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Issuer and the Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing), and the Issuer shall execute, and the Trustee shall
authenticate and make available for delivery to the Holder of such Security
without service charge, a new Security or Securities and of like tenor, of any
authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed, all as of the day and year first above written.
USI AMERICAN HOLDINGS, INC.
By: /s/ Frank Reilly
Name: Frank Reilly
Title: Senior Vice President, Chief
Financial Officer
Attest: /s/ George H. MacLean
Name: George H. MacLean
Title: Senior Vice President,
General Counsel and Secretary
U.S. INDUSTRIES, INC.
By: /s/ Frank Reilly
Name: Frank Reilly
Title: Senior Vice President, Chief
Financial Officer
Attest: /s/ George H. MacLean
Name: George H. MacLean
Title: Senior Vice President,
General Counsel and Secretary
PNC BANK, NATIONAL ASSOCIATION
By: /s/ F.J. Deramo
Name: F.J. Deramo
Title: Vice President
Attest: /s/ Richard A. Ranii
Name: Richard A. Ranii
Title: Assistant Vice President
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Annex A -- Form of Regulation S Certificate
REGULATION S CERTIFICATE
(For transfers pursuant to ss. 306(b) (i), (iii) and (v) of the Indenture)
PNC Bank, National Association
as Trustee
One Oliver Plaza, 27th Floor
210 Sixth Avenue
Pittsburgh, PA 15222-2602
Re: 7 1/4% Senior Notes due December 1, 2006 of
USI American Holdings, Inc. (the "Securities")
Reference is made to the Indenture dated as of December 12, 1996
(the "Indenture") among USI American Holdings, Inc. (the "Issuer"), U.S.
Industries, Inc. (the "Parent Guarantor") and PNC Bank, National Association, as
Trustee. Terms used herein and defined in the Indenture or in Regulation S or
Rule 144 under the U.S. Securities Act of 1933 (the "Securities Act") are used
herein as so defined.
This certificate relates to U.S. $_______________ principal amount
of Securities, which are evidenced by the following certificate(s) (the
"Specified Securities"):
CUSIP No(s)._____________________________
CERTIFICATE No(s).______________________
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Owner has requested that the Specified Securities be transferred
to a person (the "Transferee") who will take delivery in the form of a
Regulation S Security. In connection with such transfer, the Owner hereby
certifies that, unless such transfer is
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being effected pursuant to an effective registration statement under the
Securities Act, it is being effected in accordance with Rule 904 or Rule 144
under the Securities Act and with all applicable securities laws of the states
of the United States and other jurisdictions.
Accordingly, the Owner hereby further certifies as follows:
(1) Rule 904 Transfers. If the transfer is being effected in
accordance with Rule 904:
(A) the Owner is not a distributor of the Securities, an
affiliate of the Issuer or any such distributor or a person acting on
behalf of any of the foregoing;
(B) the offer of the Specified Securities was not made to a
person in the United States;
(C) either:
(i) at the time the buy order was originated, the
Transferee was outside the United States or the Owner
and any person acting on its behalf reasonably believed
that the Transferee was outside the United States, or
(ii) the transaction is being executed in, on or
through the facilities of the Eurobond market, as
regulated by the Association of International Bond
Dealers, or another designated offshore securities
market and neither the Owner nor any person acting on
its behalf knows that the transaction has been
prearranged with a buyer in the United States;
(D) no directed selling efforts have been made in the United
States by or on behalf of the Owner or any affiliate thereof;
(E) if the Owner is a dealer in securities or has received a
selling concession, fee or other remuneration in respect of the Specified
Securities, and the transfer is to occur during the Restricted Period,
then the requirements of Rule 904(c) (1) have been satisfied; and
(F) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act.
(2) Rule 144 Transfers. If the transfer is being effected pursuant
to Rule 144:
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(A) the transfer is occurring after December 12, 1998 and is
being effected in accordance with the applicable amount, manner of sale
and notice requirements of Rule 144; or
(B) the transfer is occurring after December 12, 1999 and the
Owner is not, and during the preceding three months has not been, an
affiliate of the Issuer.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Issuer, the Parent Guarantor and the Initial
Purchaser.
Dated: [ ]
(Print the name of the Undersigned, as such
term is defined in the second paragraph of
this certificate.)
By:
Name:
Title:
(If the Undersigned is a corporation,
partnership or fiduciary, the title of the
person signing on behalf of the Undersigned
must be stated.)
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<PAGE>
Annex B -- Form of Restricted Securities Certificate
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to ss. 306(b) (ii), (iii), (iv) and (v) of the
Indenture)
PNC Bank, National Association
as Trustee
One Oliver Plaza, 27th Floor
210 Sixth Avenue
Pittsburgh, PA 15222-2602
Re: 7 1/4% Senior Notes Due December 1, 2006 of
USI American Holdings, Inc. (the "Securities")
Reference is made to the Indenture dated as of December 12, 1996
(the "Indenture") among USI American Holdings, Inc. (the "Issuer"), U.S.
Industries, Inc. (the "Parent Guarantor") and PNC Bank, National Association, as
Trustee. Terms used herein and defined in the Indenture or in Rule 144A or Rule
144 under the U.S. Securities Act of 1933 (the "Securities Act") are used herein
as so defined.
This certificate relates to U.S. $_______________ principal amount
of Securities, which are evidenced by the following certificate(s) (the
"Specified Securities"):
CUSIP No(s).
CERTIFICATE No(s).
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Owner has requested that the Specified Securities be transferred
to a person (the "Transferee") who will take delivery in the form of a
Restricted Security. In
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<PAGE>
connection with such transfer, the Owner hereby certifies that, unless such
transfer is being effected pursuant to an effective registration statement under
the Securities Act, it is being effected in accordance with Rule 144A or Rule
144 under the Securities Act and all applicable securities laws of the states of
the United States and other jurisdictions.
Accordingly, the Owner hereby further certifies as:
(1) Rule 144A Transfers. If the transfer is being effected in
accordance with Rule 144A:
(A) the Specified Securities are being transferred to a person
that the Owner and any person acting on its behalf reasonably believe is a
"qualified institutional buyer" within the meaning of Rule 144A, acquiring
for its own account or for the account of a qualified institutional buyer;
and
(B) the Owner and any person acting on its behalf have taken
reasonable steps to ensure that the Transferee is aware that the Owner may
be relying on Rule 144A in connection with the transfer; and
(2) Rule 144 Transfers. If the transfer is being effected pursuant
to Rule 144:
(A) the transfer is occurring after December 12, 1998 and is
being effected in accordance with the applicable amount, manner of sale
and notice requirements of Rule 144; or
(B) the transfer is occurring after December 12, 1999 and the
Owner is not, and during the preceding three months has not been, an
affiliate of the Issuer.
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<PAGE>
This certificate and the statements contained herein are made for your benefit
and the benefit of the Issuer, the Parent Guarantor and the Initial Purchaser.
Dated: [ ]
(Print the name of the Undersigned, as such
term is defined in the second paragraph of
this certificate.)
By:
Name:
Title:
(If the Undersigned is a corporation,
partnership or fiduciary, the title of the
person signing on behalf of the Undersigned
must be stated.)
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<PAGE>
Annex C -- Form of Unrestricted Securities Certificate
UNRESTRICTED SECURITIES CERTIFICATE
(For removal of Securities Act Legends pursuant to ss. 306(c))
PNC Bank, National Association
as Trustee
One Oliver Plaza, 27th Floor
210 Sixth Avenue
Pittsburgh, PA 15222-2602
Re: 7 1/4% Senior Notes Due December 1, 2006 of
USI American Holdings, Inc. (the "Securities")
Reference is made to the Indenture dated as of December 12, 1996
(the "Indenture") among USI American Holdings, Inc. (the "Issuer"), U.S.
Industries, Inc. (the "Parent Guarantor") and PNC Bank, National Association, as
Trustee. Terms used herein and defined in the Indenture or in Rule 144 under the
U.S. Securities Act of 1933 (the "Securities Act") are used herein as so
defined.
This certificate relates to U.S. $_______________ principal amount
of Securities, which are evidenced by the following certificate(s) (the
"Specified Securities"):
CUSIP No(s).
CERTIFICATE No(s).
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Owner has requested that the Specified Securities be exchanged
for Securities bearing no Securities Act Legend pursuant to Section 306(c) of
the Indenture.
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<PAGE>
In connection with such exchange, the Owner hereby certifies that the exchange
is occurring after December 12, 1999 and the Owner is not, and during the
preceding three months has not been, an affiliate of the Issuer. The Owner also
acknowledges that any future transfers of the Specified Securities must comply
with all applicable securities laws of the states of the United States and other
jurisdictions.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Issuer, the Parent Guarantor and the Initial
Purchaser.
Dated: [ ]
(Print the name of the Undersigned, as such
term is defined in the second paragraph of
this certificate.)
By:
Name:
Title:
(If the Undersigned is a corporation,
partnership or fiduciary, the title of the
person signing on behalf of the Undersigned
must be stated.)
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<PAGE>
Annex D -- Form of Transfer Notice
TRANSFER NOTICE
[ ]
[ ]
[ ]
Re: USI American Holdings, Inc. (the "Issuer")--7 1/4%
Senior Notes Due December 1, 2006 (the "Notes")
Dear Sirs:
This certificate is delivered to request a transfer of $
principal amount of the Notes.
Upon transfer, the Notes would be registered in the name of the new
beneficial owner as follows:
Name:
Address:
Taxpayer ID Number:
We represent, warrant and agree with you as follows with regard to the
Notes purchased by us and described in the Offering Memorandum, dated December
6, 1996 (the "Offering Memorandum").
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act")) purchasing for our own account or for the account of such an
institutional "accredited investor," and we are acquiring the Notes not with a
view to, or for offer or sale in connection with, any distribution in violation
of the Securities Act. We have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of our
investment in the Notes and invest in or purchase securities similar to the
Notes in the normal course of our business. We and any accounts for which we are
acting are each able to bear the economic risk of our or its investment.
2. We understand that the Notes have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any investor
account for which
D-1
<PAGE>
we are purchasing Notes to offer, sell or otherwise transfer such Notes prior to
the date which is three years after the later of the date of original issue and
the last date on which the Issuer or any affiliate of the Issuer was the owner
of such Notes (or any predecessor thereto) (the "Resale Restriction Termination
Date") only (a) to the Issuer, (b) pursuant to a registration statement which
has been declared effective under the Securities Act, (c) in a transaction
complying with the requirements of Rule 144A under the Securities Act, to a
person we reasonably believe is a qualified institutional buyer under Rule 144A
(a "QIB") that purchases for its own account or for the account of a QIB to whom
notice is given that the transfer is being made in reliance on Rule 144A, (d)
pursuant to offers and sales that occur outside the United States within the
meaning of Regulation S under the Securities Act, (e) to an institutional
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act that is purchasing for its own account or for the
account of such an institutional "accredited investor," in each case in a
minimum principal amount of Notes of $250,000 or (f) pursuant to any other
available exemption from the registration requirements of the Securities Act,
subject in each of the foregoing cases to any requirement of law that the
disposition of our property or the property of such investor account or accounts
be at all time within our or their control and in compliance with any applicable
state securities laws. The foregoing restrictions on resale will not apply
subsequent to the Resale Restriction Termination Date. If any resale or other
transfer of the Notes is proposed to be made pursuant to clause (e) above prior
to the Resale Restriction Termination Date, the transferor shall deliver a
letter from the transferee substantially in the form of this letter to the
Issuer, U.S. Industries, Inc. (the "Parent Guarantor") and the Trustee, which
shall provide, among other things, that the transferee is an institutional
"accredited investor" with the meaning of Rule 501(a)(1), (2), (3) or (7) under
the Securities Act and that it is acquiring such Notes for investment purposes
and not for distribution in violation of the Securities Act. Each purchaser
acknowledges that the Issuer, the Parent Guarantor and the Trustee reserve the
right prior to any offer, sale or other transfer prior to the Resale Termination
Date of the Notes pursuant to clause (f) above to require the delivery of an
opinion of counsel, certifications and/or other information satisfactory to the
Issuer, the Parent Guarantor and the Trustee.
3. We have such knowledge and experience in financial and business matters
that we are capable of evaluating the merits and risks of an investment in the
Notes, and we have received a copy of the Offering Memorandum.
4.We acknowledge that the Notes will bear a legend to the following effect
unless the Issuer determines otherwise consistently with applicable law;
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE OR
FOREIGN SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
D-2
<PAGE>
PARTICIPATION HEREIN MAY BE REOFFERED, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED
BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE
LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
ISSUER OF ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR
ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT TO
A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
A PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE
MEANING OF RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT
IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH
AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN MINIMUM PRINCIPAL
AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH
A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE PARENT GUARANTOR'S, THE ISSUER'S AND THE TRUSTEE'S RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO
D-3
<PAGE>
CLAUSES (C), (D), (E), AND (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM, AND (II) IN THE CASE OF THE FOREGOING CLAUSE (E), A TRANSFER NOTICE
IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE ISSUER, THE PARENT
GUARANTOR AND THE TRUSTEE, THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF
THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
5. If we are acquiring any Notes as a fiduciary or agent for one or more
accounts, we represent that we have sole investment discretion with respect to
each such account and that we have full power to make the foregoing
acknowledgments, representations and agreements with respect to each such
account and as set forth in the "Transfer Restrictions" contained in the
Offering Memorandum.
Very truly yours,
----------------------------------
(Name of Institution)
By:_______________________________
(Authorized Person)
Name:__________________________
Title:____________________________
Receipt acknowledged as date set forth above.
- --------------------------------
[ ]
D-4
WEIL, GOTSHAL & MANGES LLP
A LIMITED LIABILITY PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
767 FIFTH AVENUE * NEW YORK, NEW YORK 10153-0119
(212) 310-8000
(212) 310-8007
APRIL 22, 1997
U.S. Industries, Inc.
USI American Holdings, Inc.
101 Wood Avenue South
Iselin, New Jersey 08830
Ladies and Gentlemen:
We have acted as counsel to U.S. Industries, Inc., a Delaware
corporation (the "Company"), and its wholly-owned subsidiary, USI American
Holdings, Inc., a Delaware corporation (the "Issuer"), in connection with the
preparation and filing with the Securities and Exchange Commission of the
Registration Statement on Form S-4 (the "Registration Statement") of the Issuer
and the Company for registration under the Securities Act of 1933, as amended
(the "Securities Act"), of $125 million aggregate principal amount of the
Issuer's 7 1/4% Senior Notes Due December 1, 2006, Series B (the "New Notes")
and the Company's guaranties in connection therewith (the "Guaranties"), each
issuable in connection with the exchange offer of New Notes for the Issuer's 7
1/4% Senior Notes Due December 1, 2006, Series A, which were not registered
under the Securities Act (the "Existing Notes").
In so acting, we have examined originals or copies, certified
or otherwise identified to our satisfaction, of the Registration Statement, the
Indenture, dated as of December 12, 1996 (the "Indenture"), among the Issuer,
the Company and PNC Bank, National Association, as Trustee (the "Trustee"),
pursuant to which the New Notes will be issued, the form of the New Notes
included as Exhibit 4.2 to the Registration Statement and such corporate
records, agreements, documents and other instruments, and such certificates or
comparable documents of public officials and of officers and representatives of
the Issuer and the Company, and have made such inquiries of such officers and
<PAGE>
U.S. Industries, Inc.
USI American Holdings, Inc.
April 22, 1997
Page 2
representatives, as we have deemed relevant and necessary as a
basis for the opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
documents submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such latter documents. As to all questions of
fact material to this opinion that have not been independently established, we
have relied upon certificates or comparable documents of officers and
representatives of the Issuer and the Company.
Based on the foregoing, and subject to the qualifications
stated herein, we are of the opinion that:
1. The New Notes have been duly authorized by the Issuer and,
when executed on behalf of the Issuer, authenticated by the Trustee and
delivered in accordance with the terms of the Indenture and as contemplated by
the Registration Statement, and upon the exchange by holders of Existing Notes
of Existing Notes for New Notes, will constitute valid and legally binding
obligations of the Issuer entitled to the benefits provided by the Indenture,
enforceable against the Issuer in accordance with their terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws affecting creditors' rights and remedies
generally and, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether sought in a proceeding at law or in equity).
2. The Guaranties have been duly authorized by the Company and
when executed and delivered by the Company in accordance with the terms of the
Indenture and as contemplated by the Registration Statement, will constitute
valid and legally binding obligations of the Company, entitled to the benefits
provided by the Indenture, enforceable against the Company in accordance with
their terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws affecting
creditors' rights and remedies generally and, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether sought in a proceeding at law or
in equity).
<PAGE>
U.S. Industries, Inc.
USI American Holdings, Inc.
April 22, 1997
Page 3
The opinions expressed herein are limited to the laws of the
State of New York, the corporate laws of the State of Delaware and the federal
laws of the United States, and we express no opinion as to the effect on the
matters covered by this opinion of the laws of any other jurisdiction.
We consent to the reference to our name under the caption
"Legal Matters" in the prospectus which is a part of the Registration Statement.
Very truly yours,
WEIL, GOTSHAL & MANGES LLP
CREDIT AGREEMENT
among
USI AMERICAN HOLDINGS, INC.,
USI FUNDING, INC.,
U.S. INDUSTRIES, INC.,
VARIOUS BANKS,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Issuing Bank, Swingline Bank and Agent,
and
BA SECURITIES INC.,
as Arranger
----------------------------------
Dated as of December 12, 1996
----------------------------------
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I.
DEFINITIONS................................................... 1
1.01 Defined Terms........................................... 1
1.02 Other Definitional Provisions........................... 23
1.03 Accounting Principles................................... 24
ARTICLE II.
THE CREDIT FACILITIES......................................... 24
2.01 Amounts and Terms of Commitments........................ 24
(a) The Committed Loans............................... 24
(b) The Swingline Loans............................... 24
2.02 Loan Accounts; Notes.................................... 26
2.03 Procedure for Committed Borrowing....................... 27
2.04 Conversion and Continuation Elections for Committed
Borrowings.............................................. 28
2.05 Bid Borrowings.......................................... 30
2.06 Procedure for Bid Borrowings............................ 30
2.07 Voluntary Reduction and Termination of Commitments...... 35
2.08 Mandatory Reduction of Loan Commitments................. 35
2.09 Voluntary Prepayments of Committed Loans................ 36
2.10 Mandatory Prepayments................................... 37
2.11 Repayment of Principal.................................. 37
(a) The Committed Loans............................... 37
(b) The Swingline Loans............................... 37
2.12 Interest................................................ 38
2.13 Fees.................................................... 40
(a) Facility Fees..................................... 40
(b) Other Fees........................................ 40
(i)
<PAGE>
Page
2.14 Computation of Fees and Interest........................ 41
2.15 Payments by the Borrowers............................... 41
2.16 Payments by the Banks to the Agent...................... 42
2.17 Sharing of Payments, etc................................ 43
2.18 Guaranty................................................ 44
2.19 Termination Date Extensions............................. 44
ARTICLE III.
THE LETTERS OF CREDIT......................................... 45
3.01 The Letter of Credit Subfacility........................ 45
3.02 Issuance, Amendment and Renewal of Letters of Credit.... 46
3.03 Participations, Drawings and Reimbursements............. 48
3.04 Repayment of Participations............................. 50
3.05 Role of the Issuing Bank................................ 50
3.06 Obligations Absolute.................................... 51
3.07 Cash Collateral Pledge.................................. 52
3.08 Letter of Credit Fees................................... 53
3.09 Uniform Customs and Practice............................ 53
ARTICLE IV.
TAXES, YIELD PROTECTION AND ILLEGALITY........................ 53
4.01 Taxes................................................... 53
4.02 Illegality.............................................. 58
4.03 Increased Costs and Reduction of Return................. 59
4.04 Funding Losses.......................................... 60
4.05 Inability to Determine Rates............................ 61
4.06 Reserves on Eurodollar Committed Loans or IBOR Loans.... 61
4.07 Certificates of Banks................................... 62
4.08 Change of Lending Office, Replacement Bank.............. 62
4.09 Survival................................................ 63
ARTICLE V.
CONDITIONS PRECEDENT.......................................... 63
5.01 Conditions to the Effective Date........................ 63
(a) Credit Agreement................................... 63
(b) Resolutions; Incumbency............................ 63
(ii)
<PAGE>
Page
(c) Bring-down Certificate............................. 64
(d) Legal Opinions..................................... 64
(e) Payment of Fees and Expenses....................... 64
(f) Certificates....................................... 64
(g) Senior Notes...................................... 64
(h) Existing Credit Agreement; etc..................... 65
(i) Other Documents.................................... 65
5.02 Conditions to all Borrowings and the Issuance of any Letters of
Credit.................................................. 65
(a) Notice............................................. 65
(b) Continuation of Representations and Warranties..... 65
(c) No Existing Default................................ 65
(d) No Material Adverse Effect......................... 66
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES................................ 66
6.01 Corporate Existence and Power........................... 66
6.02 Corporate Authorization; No Contravention............... 66
6.03 Governmental Authorization.............................. 67
6.04 Binding Effect.......................................... 67
6.05 Litigation.............................................. 67
6.06 No Default.............................................. 68
6.07 ERISA Compliance........................................ 68
6.08 Use of Proceeds; Margin Regulations..................... 69
6.09 Title to Properties..................................... 69
6.10 Taxes................................................... 69
6.11 Financial Statements.................................... 69
6.12 Securities Law, etc.; Compliance........................ 69
6.13 Governmental Regulation................................. 70
6.14 Accuracy of Information................................. 70
6.15 Hazardous Materials..................................... 70
6.16 Senior Notes............................................ 70
ARTICLE VII.
AFFIRMATIVE COVENANTS......................................... 71
7.01 Financial Statements.................................... 71
7.02 Certificates; Other Information......................... 72
(iii)
<PAGE>
Page
7.03 Notices................................................. 72
7.04 Maintenance of Corporate Existence, etc................. 73
7.05 Foreign Qualification, etc.............................. 73
7.06 Payment of Taxes, etc................................... 73
7.07 Maintenance of Property; Insurance...................... 74
7.08 Compliance with Laws, etc............................... 74
7.09 Books and Records....................................... 74
7.10 Use of Proceeds......................................... 74
7.11 End of Fiscal Years; Fiscal Quarters.................... 74
ARTICLE VIII.
NEGATIVE COVENANTS............................................ 75
8.01 Limitation on Liens..................................... 75
8.02 Disposition of Assets................................... 76
8.03 Consolidations, Merger, etc............................. 77
8.04 Limitation on Indebtedness.............................. 78
8.05 Transactions with Affiliates............................ 79
8.06 Use of Credits; Compliance With Margin Regulations...... 79
8.07 Preferred Stock......................................... 79
8.08 Demerger Transaction Documents.......................... 80
8.09 Environmental Liabilities............................... 80
8.10 Financial Covenants.
(a) Consolidated Leverage Ratio....................... 80
(b) Maximum Total Funded Debt......................... 80
8.11 Special Covenants of the Parent......................... 80
ARTICLE IX.
EVENTS OF DEFAULT............................................. 81
9.01 Event of Default........................................ 81
(a) Non-Payment....................................... 81
(b) Representation or Warranty........................ 81
(c) Specific Defaults................................. 81
(d) Other Defaults.................................... 81
(e) Cross-Default..................................... 82
(f) Insolvency; Voluntary Proceedings................. 82
(g) Involuntary Proceedings........................... 82
(iv)
<PAGE>
Page
(h) ERISA............................................. 83
(i) Judgments......................................... 83
(j) Change of Control................................. 83
(k) Guaranty.......................................... 83
(l) Tax Status........................................ 83
9.02 Remedies................................................ 84
9.03 Rights Not Exclusive.................................... 84
ARTICLE X.
THE GUARANTY.................................................. 85
10.01 Guaranty from the Guarantor Parties.................... 85
ARTICLE XI.
THE AGENT, THE ISSUING BANK AND THE ARRANGER.................. 89
11.01 Appointment and Authorization.......................... 89
11.02 Delegation of Duties................................... 89
11.03 Liability of Agent..................................... 90
11.04 Reliance by Agent...................................... 90
11.05 Notice of Default...................................... 91
11.06 Credit Decision........................................ 91
11.07 Indemnification........................................ 92
11.08 Agent in Individual Capacity........................... 93
11.09 Successor Agent........................................ 93
11.10 The Arranger........................................... 93
11.11 Co-Agents; Managing Agents............................. 93
ARTICLE XII.
MISCELLANEOUS................................................. 94
12.01 Amendments and Waivers................................. 94
12.02 Notices................................................ 95
12.03 No Waiver; Cumulative Remedies......................... 96
12.04 Costs and Expenses..................................... 96
12.05 Indemnity.............................................. 97
12.06 Successors and Assigns................................. 98
12.07 Assignments, Participations, etc....................... 98
12.08 Confidentiality........................................100
(v)
<PAGE>
12.09 Set-off................................................101
12.10 Notification of Addresses, Lending Offices, etc........101
12.11 Counterparts...........................................101
12.12 Severability...........................................101
12.13 No Third Parties Benefited.............................101
12.14 Governing Law and Jurisdiction.........................102
12.15 Waiver of Jury Trial...................................102
SCHEDULE 1.01(a) Lending Offices
SCHEDULE 1.01(b) Commitments
SCHEDULE 3.01(b) Existing Letters of Credit
SCHEDULE 6.15 Environmental Matters
SCHEDULE 8.04(a) Existing Indebtedness
EXHIBIT A Form of Notice of Borrowing
EXHIBIT B Form of Notice of Conversion/Continuation
EXHIBIT C Form of Competitive Bid Request
EXHIBIT D Form of Competitive Bid
EXHIBIT E Form of Leverage Ratio Certificate
EXHIBIT F Form of Davis Polk & Wardwell Opinion
EXHIBIT G Form of George MacLean, Esq. Opinion
EXHIBIT H Form of White & Case Opinion
EXHIBIT I Form of Compliance Certificate
EXHIBIT J Form of Assignment and Acceptance
(vi)
<PAGE>
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of December 12, 1996 among USI AMERICAN
HOLDINGS, INC., a Delaware corporation (the "Company"), USI FUNDING, INC. a
Delaware corporation ("USI Funding" and together with the Company, each a
"Borrower" and, collectively, the "Borrowers"), U.S. INDUSTRIES, INC. (the
"Parent"), the several financial institutions from time to time party to this
Agreement (the "Banks"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Issuing Bank, Swingline Bank and Agent, and BA SECURITIES, INC., as Arranger.
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions herein set forth,
the Banks are willing to make available to the Borrowers the respective credit
facilities provided for herein;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE I.
DEFINITIONS
1.01 Defined Terms. As used in this Agreement, the capitalized terms in
the preamble and the recitals hereto shall have the meanings therein given them,
and the following words and terms shall have the meanings specified below:
"Absolute Rate" has the meaning specified in subsection 2.06(c)(ii)(D).
"Absolute Rate Auction" means a solicitation of Competitive Bids setting
forth Absolute Rates pursuant to Section 2.06.
"Absolute Rate Bid Loan" means a Bid Loan that bears interest at a rate
determined with reference to the Absolute Rate.
-1-
<PAGE>
"Adjusted EBITDA" means, for any Measurement Period, EBITDA for such
period, adjusted, on a pro forma basis, to reflect the financial effects of any
Asset Sales and/or asset acquisitions made by the Company or its Subsidiaries
during such period as if such Asset Sales and/or asset acquisitions, as the case
may be, occurred on the first day of such period.
"Affiliate" means, with respect to any Person, any other Person (i)
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person or (ii) that directly or indirectly owns more
than 10% of any class of the capital stock, of or equity interests in, such
Person. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such other Person, whether through the ownership
of voting securities, by contract or otherwise.
"Agent" means Bank of America in its capacity as agent for the Banks
hereunder, and any successor agent.
"Agent-Related Persons" has the meaning specified in Section 11.03.
"Agent's Payment Office" means the address for payments set forth on the
signature page hereto in relation to the Agent or such other address as the
Agent may from time to time specify in accordance with Section 12.02.
"Aggregate Commitment" means the combined Commitments of the Banks, in
the initial amount of $750,000,000, as such amount may be reduced from time to
time pursuant to this Agreement.
"Agreement" means this Credit Agreement as from time to time amended,
modified or supplemented.
"Applicable Margin" means the margin to be added to the Base Rate, IBOR
or LIBOR, as the case may be, in accordance with Section 2.12(a).
"Arranger" has the meaning specified in the preamble hereto.
"Asset Sale" means the direct or indirect sale, lease, transfer,
conveyance or other disposition (including, without limitation, dispositions
pursuant to Sale and Leaseback Transactions), in a single transaction or a
series of transactions, by the Company or any of its Subsidiaries to any Person
(other than the Company or any of its Wholly-Owned Subsidiaries) of any property
of the Company or any of its Subsidiaries, other than (i) assets disposed of in
the ordinary course of business and (ii) inventory, real property or equipment
no longer used or useful in the business of the Company or any of its
-2-
<PAGE>
Subsidiaries provided (A) in any event that "Asset Sale" shall include
dispositions of (x) principal divisions or lines of business of any Person or
capital stock of any Subsidiary of such Person or (y) Investments held on the
Effective Date in Ground Round Restaurants, Inc. and (B) the fair market value
of Asset Sales arising from any Receivables Sale shall be the Receivables Sale
Amount with respect to such Receivables Sale.
"Assignee" has the meaning specified in Section 12.07(a).
"Assignment and Acceptance" has the meaning specified in Section
12.07(a).
"Attorney Costs" means and includes all reasonable documented fees and
disbursements of any law firm or other external counsel and, without
duplication, the allocated cost of internal legal services and all reasonable
disbursements of internal counsel.
"Bank Affiliate" means a Person engaged primarily in the business of
commercial banking that is an Affiliate of a Bank.
"Bank of America" means Bank of America National Trust and Savings
Association, a national banking association, in its individual capacity.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C. ss. 101, et seq.).
"Banks" has the meaning specified in the preamble hereto.
"Base Rate" means, for any day, the higher of (a) the Reference Rate or
(b) the Federal Funds Rate plus 1/2%, in each case as in effect for such day.
"Base Rate Committed Loan" means a Committed Loan that bears interest
based on the Base Rate.
"Base Rate Loan" means any Base Rate Committed Loan, or a Swingline Loan
that bears an interest rate based on the Base Rate.
"Bid Borrowing" means a Borrowing hereunder consisting of one or more
Bid Loans made to a Borrower on the same day by one or more Banks.
"Bid Loan" means a Loan by a Bank to a Borrower under Section 2.05,
which may be a Eurodollar Bid Loan or an Absolute Rate Bid Loan.
"Bid Loan Lender" means, in respect of any Bid Loan, the Bank making
such Bid Loan to a Borrower.
-3-
<PAGE>
"Borrower" has the meaning specified in the preamble hereto.
"Borrowing" means a borrowing hereunder consisting of one or more Loans
made to a Borrower on the same Borrowing Date by the Banks or the Swingline Bank
pursuant to Section 2.01, and may be a Swingline Borrowing, a Committed
Borrowing or a Bid Borrowing.
"Borrowing Date" means, in relation to any Loan, the date of the
borrowing of such Loan as specified in the relevant Notice of Borrowing for a
Committed Borrowing or Competitive Bid Request or request for a Swingline Loan.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks in San Francisco or New York City are authorized or
required by law to close and, if such term is used in relation to any Eurodollar
Loan or IBOR Loan or the Interest Period therefor, any such day on which
dealings are carried on by and between banks in Dollar deposits in the
applicable interbank market.
"Capital" shall mean, at any time, the sum of (x) Total Funded Debt and
(y) Net Worth at such time.
"Capital Adequacy Regulation" means any guideline, request or directive
of any central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, regarding capital adequacy
of any bank or of any corporation controlling a bank.
"Capital Lease" has the meaning specified in the definition of "Capital
Lease Obligations".
"Capital Lease Obligations" means all monetary obligations of the
Company or any of its Subsidiaries under any leasing or similar arrangement
which, in accordance with GAAP, is classified as a capital lease ("Capital
Lease").
"Cash Collateralize" means to pledge and deposit with or deliver to the
Agent, for the benefit of the Agent, the Issuing Bank and the Banks, as
collateral for the Letter of Credit Obligations, cash or deposit account
balances pursuant to documentation in form and substance satisfactory to the
Agent and the Issuing Bank (which documents are hereby consented to by the
Banks). Derivatives of such term shall have corresponding meanings. The relevant
Borrower hereby grants to the Agent, for the benefit of the Agent, the Issuing
Bank and the Banks, a security interest in all such cash and deposit account
balances. Cash collateral shall be invested in Cash Equivalents of a tenor
satisfactory to the Agent and as instructed by such Borrower, which Cash
Equivalents shall be held in the name of such Borrower and under the control of
the Agent in a manner satisfactory to the Agent.
-4-
<PAGE>
"Cash Equivalents" means any or all of the following: (i) obligations
of, or guaranteed as to interest and principal by, the United States Government
maturing within one year after the date on which such obligations are purchased;
(ii) open market commercial paper of any corporation (other than the Parent, the
Company or any of its Subsidiaries) incorporated under the laws of the United
States or any State thereof or the District of Columbia rated P-1 or its
equivalent by Moody's or A-1 or its equivalent or higher by S&P; (iii) time
deposits or certificates of deposit maturing within one year after the issuance
thereof issued by commercial banks organized under the laws of any country which
is a member of the OECD and having a combined capital and surplus in excess of
$250,000,000 or which is a Bank; (iv) repurchase agreements with respect to
securities described in clause (i) above entered into with an office of a bank
or trust company meeting the criteria specified in clause (iii); and (v) money
market funds investing only in investments described in clauses (i) through
(iv).
"Change of Control" means (a) the acquisition by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended) of (i) more than 25% of the outstanding voting
shares of the Parent or (ii) 20% or more of the outstanding voting shares of the
Parent if, following such acquisition, the board of directors of the Parent
shall cease to consist of a majority of Continuing Directors, (b) the Company
shall cease to be a Wholly-Owned Subsidiary of the Parent, (c) USI Funding shall
cease to be a direct or indirect Wholly-Owned Subsidiary of the Company or (d)
the occurrence of a Senior Note Change of Control.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any regulations promulgated thereunder.
"Commitment" means, for each Bank, the amount set forth opposite such
Bank's name under the caption "Commitment" on Schedule 1.01(b), as such amount
may be reduced from time to time pursuant to the provisions hereof.
"Commitment Percentage" means, as to any Bank, the percentage equivalent
of such Bank's Commitment divided by the Commitments of all the Banks, provided
that if the Commitments have been terminated in full, the "Commitment
Percentage" of each Bank shall be determined by dividing such Bank's Commitment
immediately prior to such termination by all the Banks' Commitments immediately
prior to such termination.
"Committed Borrowing" means a Borrowing hereunder consisting of
Committed Loans made on the same day by the Banks ratably according to their
respective pro rata shares and, in the case of Eurodollar Committed Loans,
having the same Interest Periods.
-5-
<PAGE>
"Committed Loan" means a Loan by a Bank to any Borrower under Section
2.01(a), and may be a Eurodollar Committed Loan or a Base Rate Committed Loan
(each, a "Type" of Committed Loan).
"Company" has the meaning specified in the preamble hereto.
"Competitive Bid" means an offer by a Bank to make a Bid Loan in
accordance with subsection 2.06(b).
"Competitive Bid Request" has the meaning provided in Section 2.06(a).
"Compliance Certificate" means the compliance certificate in
substantially the form of Exhibit I, to be executed by a Responsible Officer of
the Company and delivered pursuant to Section 7.02(a).
"Consolidated Leverage Ratio" means, as at the end of any Measurement
Period, the ratio of:
(a) Total Funded Debt on the last day of such period
to
(b) Adjusted EBITDA for such period.
"Consolidated Net Tangible Assets" means, at any date, the total amount
of assets appearing on the most recent consolidated balance sheet of the Parent
and its Subsidiaries, prepared in accordance with generally accepted accounting
principles, less (i) all current liabilities (due within one year) as shown on
such balance sheet (excluding current maturities of long term indebtedness and
intercompany items), (ii) applicable depreciation, amortization and other
valuation reserves not already reflected in such total amount of assets and
(iii) Intangible Assets and liabilities relating thereto. As used in the
previous sentence, the term "Intangible Assets" means the value (net of any
applicable reserves), as shown on or reflected in such balance sheet, of: (a)
all trade names, trademarks, licenses, patents, copyrights, service marks,
goodwill and other like intangibles and (b) unamortized debt discount and
expense, less unamortized premium.
"Continuation Date" means any date on which a Borrower elects to
continue a Eurodollar Committed Loan as a Eurodollar Committed Loan for a
further Interest Period in accordance with the provisions of Section 2.04.
-6-
<PAGE>
"Continuing Directors" means the directors of the Company on the
Effective Date and each other director, if such director's nomination for
election to the board of directors of the Company is recommended by a majority
of the then Continuing Directors.
"Contractual Obligations" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or agreement to
which such Person is a party or by which it or any of its property is bound.
"Conversion Date" means any date on which a Borrower elects to convert a
Base Rate Committed Loan to a Eurodollar Committed Loan, or a Eurodollar
Committed Loan to a Base Rate Committed Loan, in each case in accordance with
the provisions of Section 2.04.
"Default" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured or otherwise remedied
during such time) constitute an Event of Default.
"Demerger Transaction Documents" means each of the agreements and
documents entered into between the Parent and/or any of its Subsidiaries and
Hanson and/or any of its Subsidiaries on or about May 31, 1995 in connection
with the demerger of the Parent from Hanson.
"Disbursement Date" has the meaning specified in Section 3.03(b).
"Dividend" with respect to any Person shall mean that such Person has
declared or paid a dividend or returned any equity capital to its stockholders
as such or made any other distribution, payment or delivery of property or cash
to its stockholders as such, or redeemed, retired, purchased or otherwise
acquired, directly or indirectly, for a consideration any shares of any class of
its capital stock outstanding on or after the Effective Date (or any options or
warrants issued by such Person with respect to its capital stock), or set aside
any funds for any of the foregoing purposes, or shall have permitted any of its
Subsidiaries to purchase or otherwise acquire for a consideration any shares of
any class of the capital stock of such Person outstanding on or after the
Effective Date (or any options or warrants issued by such Person with respect to
its capital stock).
"Dollars" and "$" each mean lawful money of the United States.
"Domestic Lending Office" shall have the meaning provided in the
definition of "Lending Office".
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"EBITDA" means, for any Measurement Period:
(i) the sum for such period of
(a) Net Income;
(b) Net Interest Expense to the extent deducted in
determining such Net Income;
(c) all taxes on or measured by income to the extent
deducted in determining such Net Income;
(d) all charges in respect of foreign currency
translations; and
(e) the aggregate amount of depreciation expense,
amortization expense and other similar non-cash charges
(including, without limitation, losses due to equity
investments) to the extent deducted in determining such Net
Income;
minus
(ii) for any period, the aggregate non-cash gains for such period
from equity investments to the extent added in determining Net Income for
such period;
provided, however, that for purposes of this definition, Net Income shall be
computed without giving effect to (x) non-cash effects of changes to GAAP after
the Effective Date and (y) extraordinary losses or extraordinary gains or gains
or losses arising from Asset Sales.
"Effective Date" means the date on which all conditions precedent
set forth in Section 5.01 are satisfied or waived in accordance with this
Agreement.
"Eligible Assignee" means and includes a commercial bank, financial
institution or other "accredited investor" (as defined in Regulation D of the
Securities Act of 1933).
"Environmental Claims" means all actions, suits, proceedings or
claims by any Governmental Authority or other Person alleging potential
liability or responsibility for violation of any Environmental Law or for
release or injury to the environment or threat to public health, personal injury
(including sickness, disease or death), property damage,
-8-
<PAGE>
natural resources damage, or otherwise alleging liability or responsibility for
damages (punitive or otherwise), cleanup, removal, remedial or response costs,
restitution, civil or criminal penalties, injunctive relief, or other type of
relief, resulting from or based upon (a) the presence, placement, discharge,
emission or release (including intentional and unintentional, negligent and
non-negligent, sudden or non-sudden, accidental or non-accidental placement,
spills, leaks, discharges, emissions or releases) of any Hazardous Material at,
in, or from property, whether or not owned by any Borrower, or (b) any other
circumstances forming the reasonable basis of any violation, or alleged
violation, of any Environmental Law.
"Environmental Law" has the meaning specified in the definition of
"Hazardous Material".
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and the rules and regulations promulgated thereunder as from time to
time in effect.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Parent, the Company or any of their
respective Subsidiaries within the meaning of Section 414(b) or (c) of the Code
(and Sections 414(m) and (o) for purposes of provisions relating to Sections
412, 414(t)(2) and 4971 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan or a Multiemployer Plan which could reasonably be expected to result in a
material liability to the Parent and/or the Company; (b) a withdrawal by the
Parent, the Company or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations which
is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete
or partial withdrawal by the Parent, the Company or any ERISA Affiliate from a
Multiemployer Plan which could reasonably be expected to result in a material
liability to the Parent and/or the Company or notification that a Multiemployer
Plan is insolvent or in reorganization; (d) the filing of a notice of intent to
terminate other than a standard termination pursuant to Section 4041(b) of ERISA
where such standard termination or the process of affecting such standard
termination will not result in a material liability to the Parent, the Company
or an ERISA Affiliate, the treatment of a plan amendment as a termination under
Section 4041 or 4041A of ERISA or the commencement of proceedings by the PBGC to
terminate a Pension Plan or Multiemployer Plan; (e) a failure by the Parent, the
Company or any ERISA Affiliate to make required contributions to a Pension Plan,
Multiemployer Plan or other Plan subject to Section 412 of the Code; (f) an
event or condition which might reasonably be expected to constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; (g) the
imposition of any material liability under Title
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IV of ERISA, other than PBGC premiums due but not delinquent under Section 4007
of ERISA, upon the Company or any ERISA Affiliate; or (h) an application for a
funding waiver or an extension of any amortization period pursuant to Section
412 of the Code with respect to any Plan.
"Eurodollar Auction" means a solicitation of Competitive Bids
setting forth a Eurodollar Bid Margin pursuant to Section 2.06.
"Eurodollar Bid Loan" means any Bid Loan that bears interest at a
rate based on LIBOR.
"Eurodollar Bid Margin" has the meaning specified in subsection
2.06(c)(ii)(C).
"Eurodollar Committed Loan" means a Committed Loan that bears
interest based on LIBOR.
"Eurodollar Lending Office" shall have the meaning provided in the
definition of "Lending Office".
"Eurodollar Loan" means any Eurodollar Bid Loan or any Eurodollar
Committed Loan.
"Event of Default" means any of the events or circumstances
specified in Section 9.01.
"Existing Credit Agreement" shall mean the Credit Agreement, dated
as of May 12, 1995, and amended and restated as of December 21, 1995, among the
Company, USI Funding, the Parent, the several financial institutions party
thereto, Bank of America Illinois, as Issuing Bank and Swingline Bank, Bank of
America National Trust and Savings Association, as Agent, and BA Securities,
Inc., as Arranger, as amended, modified or supplemented through the Effective
Date.
"Federal Funds Rate" means, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, "H.15(519)") for such day opposite the caption "Federal Funds
(Effective)". If on any relevant day the appropriate rate for such previous day
is not yet published in H.15(519), the rate for such day will be the arithmetic
mean of the rates for the last transaction in overnight federal funds arranged
prior to 9:00 a.m. (New York City time) on that day by each of three leading
brokers of federal funds transactions in New York City selected by the Agent.
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"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any successor thereto.
"Form 4224" has the meaning specified in Section 4.01(f).
"Form 1001" has the meaning specified in Section 4.01(f).
"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), or in such other statements by such other entity as may be in
general use by significant segments of the U.S. accounting profession, which are
applicable to the circumstances as of the date of determination.
"Governmental Authority" means any nation or government, any state
or other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Guaranteed Obligations" means (i) with respect to the Parent as a
Guarantor Party, all Obligations of the Borrowers under this Agreement and the
other Loan Documents, and (ii) with respect to the Company as a Guarantor Party,
all Obligations of USI Funding under this Agreement and the other Loan
Documents.
"Guaranteed Party" means (i) with respect to the Parent as a
Guarantor Party, the Borrowers, and (ii) with respect to the Company as a
Guarantor Party, USI Funding.
"Guarantor Party" means, with respect to its obligations under
Article X of this Agreement, each of the Parent and the Company.
"Guaranty Obligation" means, as applied to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness, lease,
dividend, letter of credit or other obligation (the "primary obligations") of
another Person (the "primary obligor"), including any obligation of that Person,
whether or not contingent, (a) to purchase, repurchase or otherwise acquire such
primary obligations or any property constituting direct or indirect security
therefor; (b) to advance or provide funds (i) for the payment or discharge of
any such primary obligation, or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial condition of
the primary obligor; (c) to purchase property, securities or services primarily
for the purpose of assuring the owner of any
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such primary obligation of the ability of the primary obligor to make payment of
such primary obligation; or (d) otherwise to assure or hold harmless the holder
of any such primary obligation against loss in respect thereof; in each case,
including arrangements wherein the rights and remedies of the holder of the
primary obligation are limited to repossession or sale of certain property of
such Person. The amount of any Guaranty Obligation shall be deemed equal to the
stated or determinable amount of the primary obligation in respect of which such
Guaranty Obligation is made (or if less, the stated or determinable amount of
such Guaranty Obligation) or, if not stated or if indeterminable, the maximum
reasonably anticipated liability in respect thereof.
"Hanson" means Hanson PLC, a public limited company incorporated in
England and Wales.
"Hazardous Material" means and includes (a) any asbestos,
urea-formaldehyde, PCBs or dioxins or insulation or other material composed of
or containing asbestos, PCBs or dioxins, (b) crude oil, any fraction thereof,
and any petroleum product, (c) any natural gas, natural gas liquids, liquefied
natural gas or other natural gas product or synthetic gas, and (d) any hazardous
or toxic waste, substance or material or pollutant or contaminant defined as
such in (or for purposes of) or that may result in the imposition of liability
under any "Environmental Law", defined as the Comprehensive Environmental
Response, Compensation and Liability Act, any so-called "Superfund", or any
other applicable Federal, state, local or other statute, law, ordinance, code,
rule, regulation, order or decree, as now or at any time hereafter in effect,
regulating, relating to, or imposing liability concerning the environment, the
impact of the environment on human health, or any hazardous or toxic waste,
substance or material or pollutant or contaminant.
"HMH" means HM Holdings Inc., a Delaware corporation.
"IBOR" means for each Interest Period for a Swingline Loan the rate
of interest per annum at which Dollar deposits in the approximate amount of such
Swingline Loan and having a maturity comparable to such Interest Period would be
offered by Bank of America to major banks in the offshore dollar interbank
market upon request of such banks at the time such request is received by the
Agent on the first day of such Interest Period.
"IBOR Loan" means a Swingline Loan that bears interest based on
IBOR.
"Indebtedness" of any Person means, without duplication, (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than (i)
trade payables entered into in the ordinary course of business pursuant to
ordinary terms and (ii) ordinary course purchase price adjustments); (c) all
reimbursement or payment obligations with respect to letters of
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<PAGE>
credit or non-contingent reimbursement or payment obligations with respect to
bankers' acceptances, surety bonds and similar documents; (d) all obligations
evidenced by notes, bonds, debentures or similar instruments, including
obligations so evidenced incurred in connection with the acquisition of
property, assets or businesses; (e) all indebtedness created or arising under
any conditional sale or other title retention agreement or sales of accounts
receivable, in any such case with respect to property acquired by the Person
(even though the rights and remedies of the seller or bank under such agreement
in the event of default are limited to repossession or sale of such property);
(f) all Capital Lease Obligations; (g) all net obligations with respect to
Interest Rate Protection Agreements; (h) all indebtedness referred to in clauses
(a) through (g) above secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien upon
or in property (including accounts and contracts rights) owned by such Person,
even though such Person has not assumed or become liable for the payment of such
Indebtedness; and (i) all Guaranty Obligations in respect of obligations of the
kinds referred to in clauses (a) through (g) above.
"Indemnification Agreement" means each of the Indemnification
Agreements executed and delivered by the parties thereto substantially in the
form attached to the related Demerger Transaction Documents.
"Indemnified Liabilities" shall have the meaning provided in Section
12.05.
"Indemnified Person" shall have the meaning provided in Section
12.05.
"Insolvency Proceeding" means (a) any case, action or proceeding
before any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (b) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors, or other, similar
arrangement in respect of its creditors generally; in each case undertaken under
U.S. Federal, State or foreign law, including the Bankruptcy Code.
"Interest Payment Date" means, (a) with respect to any Base Rate
Committed Loan or Swingline Loan, the fifteenth day of the last calendar month
of each calendar quarter and the Termination Date, (b) with respect to any
Eurodollar Committed Loan, the last day of each Interest Period applicable to
such Eurodollar Committed Loan and the date such Eurodollar Committed Loan is
repaid or prepaid; provided, however, that if any Interest Period for any
Eurodollar Committed Loan exceeds three months, then also the date which falls
three months after the beginning of such Interest Period and, if applicable, at
three month intervals thereafter shall also be an "Interest Payment Date" and
(c) with respect to any Bid Loan, the last day of the applicable Interest Period
and such intervening dates prior to the maturity thereof as may be specified by
the relevant Borrower and agreed to by the applicable Bid Loan Lender in the
applicable Competitive Bid.
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<PAGE>
"Interest Period" means, (a) in relation to any Eurodollar Loan, the
period commencing on the applicable Borrowing Date or (in the case of any
Eurodollar Committed Loan) any Conversion Date or Continuation Date with respect
thereto and ending on the date one, two, three or six months (and, in the case
of Eurodollar Bid Loans, four or five months) thereafter (or, in the case of
Eurodollar Committed Loans, if the applicable Borrowing Date, Conversion Date or
Continuation Date occurs prior to December 12, 1997, such period consisting of
less than one month as the relevant Borrower may select (a "Non-Standard
Interest Period")), as selected or deemed selected by the relevant Borrower in
its Notice of Borrowing, Notice of Conversion/Continuation or Competitive Bid
Request; (b) in relation to any IBOR Loan, the period commencing on the
Borrowing Date with respect thereto and ending on the date one, two or three
weeks thereafter as selected by the relevant Borrower in its request for IBOR
Loans; and (c) as to any Absolute Rate Bid Loan, a period of not less than 14
days and not more than 365 days as selected by the Borrower in the applicable
Competitive Bid Request; provided that:
(i) if any Interest Period would otherwise end on a day which is not
a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in which event
such Interest Period shall end on the immediately preceding Business Day;
(ii) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month which is
one, two, three or six months (or in the case of IBOR Loans, shall end on
the day that is one, two or three weeks after the Borrowing Date with
respect thereto), as the case may be, after the calendar month in which
such Interest Period began;
(iii) no Interest Period for any Loan shall extend beyond the
Termination Date; and
(iv) the Borrowers shall select, in the aggregate, no more than ten
NonStandard Interest Periods.
"Interest Rate Protection Agreement" means an interest rate swap,
cap, collar or similar arrangement entered into to hedge interest rate risk (and
not for speculative purposes).
"Issuing Bank" means Bank of America National Trust and Savings
Association or any Affiliate thereof in its capacity as issuer of one or more
Letters of Credit hereunder.
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<PAGE>
"Lending Office" means, with respect to any Bank, the office or
offices of such Bank specified as its "Lending Office", "Domestic Lending
Office" or "Eurodollar Lending Office", as the case may be, on Schedule 1.01(a)
hereto, or such other office or offices of the Bank as it may from time to time
notify the Company and the Agent.
"Letter of Credit" means any letter of credit issued by the Issuing
Bank pursuant to Article III.
"Letter of Credit Amendment Application" means an application form
for amendment of outstanding standby or commercial documentary letters of credit
as shall at any time be in use by the Issuing Bank, as the Issuing Bank shall
request.
"Letter of Credit Application" means an application form for
issuances of standby or commercial documentary letters of credit as shall at any
time be in use at the Issuing Bank, as the Issuing Bank shall request.
"Letter of Credit Borrowing" means an extension of credit resulting
from a drawing under any Letter of Credit which shall not have been reimbursed
on the Disbursement Date when made nor converted into a Committed Borrowing
under Section 3.03(b).
"Letter of Credit Commitment" means the commitment of the Issuing
Bank to issue Letters of Credit, the Letter of Credit Obligations in respect
thereof not to exceed in aggregate amount on any date the lesser of (i) the
Aggregate Commitment on such date and (ii) $50,000,000.
"Letter of Credit Obligations" means at any time the sum of (a) the
aggregate undrawn amount of all Letters of Credit then outstanding, plus (b) the
amount of all outstanding Letter of Credit Borrowings.
"Letter of Credit Related Documents" means the Letters of Credit,
the Letter of Credit Applications, the Letter of Credit Amendment Applications
and any other document relating to any Letter of Credit, including any of the
Issuing Bank's standard form documents for letter of credit issuances.
"Leverage Ratio Certificate" means a certificate duly executed by a
Responsible Officer of the Company, substantially in the form of Exhibit E (with
such changes thereto as may be agreed upon from time to time by the Agent and
the Company), and including therein, among other things, calculations supporting
the information contained therein.
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<PAGE>
"LIBOR" means, for each Interest Period for Eurodollar Loans
comprising the same Borrowing, the rate of interest per annum determined by the
Agent to be the arithmetic mean (rounded upward to the nearest whole multiple of
1/16%) of the rates of interest per annum notified to the Agent by each
Reference Bank as the rate at which Dollar deposits for such Interest Period and
in an amount approximately equal to the amount of the Eurodollar Loan of such
Reference Bank during such Interest Period, or in the case of a Non-Standard
Interest Period, in an amount approximately equal to the higher of (x) the
amount of the Eurodollar Loan of such Reference Bank during a one-month Interest
Period and (y) the amount of the Eurodollar Loan of such Reference Bank during a
one-week Interest Period, would be offered by its Eurodollar Lending Office to
major banks in the London interbank market at or about 11:00 a.m. (London time)
on the second Business Day prior to the commencement of such Interest Period.
"Lien" means any interest in any real or personal property or
fixture which secures payment or performance of any obligation and shall include
any mortgage, lien, pledge, encumbrance, charge or other security interest of
any kind, whether arising under a Security Instrument or as a matter of law,
judicial process or otherwise, including the retained security title of a
conditional vendor or lessor.
"Loan" means an extension of credit by a Bank to a Borrower pursuant
to Article II and shall include Committed Loans, Bid Loans and Swingline Loans.
"Loan Documents" means this Agreement (including the guaranty set
forth in Article X) and all other agreements, instruments, certificates or other
documents evidencing the Loans, Letter of Credit Borrowings or the other
obligations of the Parent or any Borrower hereunder.
"Majority Banks" means at any time Banks holding more than 50% of
the then Aggregate Commitment, provided that if the Commitments shall have been
terminated in full, "Majority Banks" shall mean Banks holding (including as a
result of participations pursuant to Sections 2.01(b)(iv) and 3.03(a) and (d))
more than 50% of the then aggregate unpaid amount of the Total Exposure.
"Margin Stock" means "margin stock" as such term is defined in
Regulation G, T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means, relative to any occurrence of
whatever nature (including any adverse determination in any litigation,
arbitration or governmental investigation or proceeding), a material adverse
effect on the operations, business, assets, properties, condition (financial or
otherwise) or prospects of (i) the Parent and its Subsidiaries taken as a whole
or (ii) the Company and its Subsidiaries taken as a whole.
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"Material Subsidiary" of a Person shall mean any Subsidiary
representing 5% or more of the consolidated gross assets of such Person, as
shown on the most recently prepared audited consolidated financial statements of
such Person and its consolidated Subsidiaries. Solely for purposes of
determining whether a Subsidiary represents 5% or more of such consolidated
gross assets, such Subsidiary shall be deemed to own the consolidated gross
assets of its Subsidiaries in which it owns, directly or indirectly, at least
51% of the combined voting power of its then outstanding securities entitled to
vote generally in the election of directors.
"Measurement Period" means any period of four consecutive fiscal
quarters of the Company.
"Moody's" means Moody's Investors Service, Inc., and its successors.
"Multiemployer Plan" means a "multiemployer plan" (within the
meaning of Section 4001(a)(3) of ERISA) and to which the Parent, the Company or
any ERISA Affiliate makes, is making, or is obligated to make contributions or,
during the preceding three calendar years, has made, or been obligated to make,
contributions.
"Negotiated Rate" means an interest rate agreed upon by the relevant
Borrower and the Swingline Bank for a negotiated interest period.
"Negotiated Rate Loan" means a Swingline Loan that bears interest at
the Negotiated Rate for an interest period (not to exceed 30 days) to be agreed
upon by the relevant Borrower and the Swingline Bank.
"Net Income" means, for any Measurement Period, the net income (or
net loss) of the Company and its Subsidiaries for such period on a consolidated
basis in accordance with GAAP.
"Net Interest Expense" means, for any Measurement Period:
(a) the aggregate amount of interest expense of the Company and its
consolidated Subsidiaries for such period, as determined on a consolidated
basis in accordance with GAAP:
less
(b) the sum for such period of:
(i) the aggregate interest income of the Company and its consolidated
Subsidiaries, as determined in accordance with GAAP; and
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(ii) the amortization of all fees (including, other than in connection
with a calculation of the Consolidated Leverage Ratio, upfront costs and
expenses under Interest Rate Protection Agreements fairly allocated to
such Interest Rate Protection Agreements as expenses for such period)
payable in connection with the incurrence of Indebtedness to the extent
included in interest expense.
"Net Worth" means, at any time, all amounts which, in accordance
with GAAP, would be included under shareholders' equity on a consolidated
balance sheet of the Company and its Subsidiaries, without giving effect to (i)
foreign currency translations and (ii) non-cash effects resulting from changes
in GAAP after the Effective Date.
"Non-Standard Interest Period" has the meaning specified in the
definition of "Interest Period".
"Notice of Borrowing" means a notice given by the relevant Borrower
to the Agent pursuant to Section 2.03(a), in substantially the form of Exhibit
A.
"Notice of Conversion/Continuation" means a notice given by the
relevant Borrower to the Agent pursuant to Section 2.04(b), in substantially the
form of Exhibit B.
"Obligations" means all Loans, Letter of Credit Borrowings and other
indebtedness, advances, debts, liabilities, obligations, expenses (including,
without limitation, Attorney Costs), covenants and duties, of any kind or
nature, owing by the Parent or any Borrower to any Bank (or any Bank Affiliate
(or any Affiliate of such Bank engaged in capital market transactions
generally)), the Agent, the Issuing Bank or the Swingline Bank in connection
with (a) this Agreement, or (b) any other Loan Document, or in each case whether
direct or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, and however acquired (including those acquired by
assignment) or arising and whether or not for the payment of money or evidenced
by any note, guarantee or other instrument.
"OECD" means the Organization for Economic Cooperation and
Development.
"Originating Bank" has the meaning provided in Section 12.07(d).
"Other Taxes" has the meaning specified in Section 4.01(b).
"Parent" has the meaning specified in the preamble hereto.
"Participant" has the meaning specified in Section 12.07(d).
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"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any of its principal functions under ERISA.
"Pension Plan" means a pension plan (as defined in Section 3(2) of
ERISA) subject to Title IV of ERISA which the Parent, the Company or any ERISA
Affiliate sponsors or maintains, or to which it makes, is making, or is
obligated to make contributions, or in the case of a multiple employer plan (as
described in Section 4064(a) of ERISA) has made contributions at any time during
the immediately preceding five (5) plan years, but excluding any Multiemployer
Plan.
"Permitted Liens" has the meaning provided in Section 8.01.
"Person" means any natural person, corporation, firm, trust,
partnership, business trust, association, government, governmental agency or
authority, or any other entity, whether acting in an individual, fiduciary, or
other capacity.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which the Parent, the Company or any ERISA Affiliate sponsors or
maintains or to which the Parent, the Company or any ERISA Affiliate makes, is
making, or is obligated to make contributions and includes any Pension Plan or
Multiemployer Plan.
"Qualified Preferred Stock" means any pay-in-kind preferred stock of
the Parent, or any other preferred stock of the Parent which, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event (including an event which
would constitute a Change of Control), cannot mature (excluding any maturity as
the result of an optional redemption by the issuer thereof) and is not
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, and
is not redeemable, or required to be repurchased, at the sole option of the
holder thereof (including, without limitation, upon the occurrence of an event
which would constitute a Change of Control), in whole or in part, on or prior to
the first anniversary of the Termination Date then in effect.
"Receivables Sale" means any Asset Sale consisting of the sale of
accounts or notes receivable and associated assets, other than any such sale in
bulk as part of a sale or other disposition of all or substantially all of the
assets or stock of any Person or of any principal division or lines of business
of any Person.
"Receivables Sale Amount" means in the case of a single sale of
receivables, the cash proceeds received by the transferor, and, in the case of a
revolving receivables sales facility, the cash proceeds received by the seller
representing incremental new funding in excess of any previous level of funding
made available under such facility, net of repay-
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ments of Indebtedness or repurchases under, or proceeds otherwise required to
refinance, any previous receivables sales facility.
"Reference Banks" means Bank of America, The Chase Manhattan Bank
and Citibank, N.A.
"Reference Rate" means the rate of interest publicly announced from
time to time by Bank of America in San Francisco as its "reference rate". It is
a rate set by Bank of America based upon various factors, including Bank of
America's costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be
priced at, above or below such announced rate. Any change in the Reference Rate
announced by Bank of America shall take effect at the opening of business on the
day specified in the public announcement of such change.
"Replaced Bank" has the meaning specified in Section 4.08(b).
"Replacement Bank" has the meaning specified in Section 4.08(b).
"Reportable Event" means, any of the events set forth in Section
4043(c) of ERISA or the regulations thereunder, other than any such event for
which the 30-day notice requirement under ERISA has been waived in regulations
issued by the PBGC.
"Requested Extension Effective Date" has the meaning specified in
Section 2.19.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of a court or of a
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.
"Responsible Officer" means, for the Parent, the Company or any
Subsidiary thereof, its chief executive officer, its president, any
vice-president, its chief financial officer, controller, vice president-finance,
treasurer or assistant treasurer, or any other officer having substantially the
same authority and responsibility.
"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw-Hill Companies, Inc., and its successors.
"Sale and Leaseback Transaction" means any arrangement, directly or
indirectly, with any Person whereby a seller or transferor shall sell or
otherwise transfer any real or personal property and then or thereafter lease,
or repurchase under an extended pur-
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chase contract, conditional sales or other title retention agreement, the same
or similar property.
"Scheduled Commitment Reduction Date" has the meaning provided in
Section 2.08(c).
"Secured Obligations" shall have the meaning provided in Section
8.01(l).
"Security Instrument" means any security agreement, chattel
mortgage, assignment, pledge agreement, financing or similar statement or
notice, continuation statement, other agreement or instrument, or amendment or
supplement to any thereof, providing for, evidencing or perfecting any security
interest.
"Senior Note Change of Control" shall mean a "Change of Control"
under, and as defined in, the Senior Notes Indenture.
"Senior Notes" mean the Senior Notes, issued by the Company, as in
effect on the Effective Date and after giving effect to any changes, amendments
or supplements thereto (and shall include any Senior Notes into which the Senior
Notes are exchanged pursuant to the Senior Notes Documents).
"Senior Notes Documents" shall mean and include each of the Senior
Notes, the Senior Notes Indenture and all securities purchase agreements and
other documents and agreements related thereto, as in effect on the Effective
Date and after giving effect to any changes, amendments or supplements thereto.
"Senior Notes Indenture" shall mean the Indenture dated on or about
the Effective Date, between the Company and a trustee satisfactory to the Agent,
as in effect on the Effective Date and after giving effect to any changes,
amendments or supplements thereto.
"Subscription Agreement" means the Subscription Agreement,
substantially in the form delivered to the Agent prior to the Effective Date.
"Subsidiary" of a Person means any corporation, association,
partnership or other business entity of which more than 50% of the voting stock
or other equity interests (in the case of Persons other than corporations) is
owned or controlled directly or indirectly by such Person, or one or more of the
Subsidiaries of the Person, or a combination thereof; provided that if Jade
Technologies Inc. ("Jade") shall issue shares in a public offering, selling at
least 10% of its shares, Jade and each of its Subsidiaries shall not be deemed
to be a Subsidiary of the Company or the Parent for purposes of Article VI and
Section 8.01, 8.02, 8.03, 8.04, 8.05, 8.07, 8.09, 9.01(e), 9.01(f), 9.01(g) and
9.01(i).
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"Swingline Amount" means an aggregate amount of $50,000,000.
"Swingline Bank" means Bank of America National Trust and Savings
Association.
"Swingline Borrowing" means a Borrowing of a Swingline Loan
hereunder on any Borrowing Date.
"Swingline Loan" means a Loan by the Swingline Bank to any Borrower
pursuant to Section 2.01(b).
"Taxes" has the meaning provided in Section 4.01(a).
"Termination Date" means the earlier to occur of: (a) December 12,
2001, as same may be extended pursuant to Section 2.19; and (b) the date on
which the Commitments shall terminate in accordance with the provisions of this
Agreement.
"Total Exposure" means the sum of all outstanding Loans and Letter
of Credit Obligations.
"Total Funded Debt" means (a) all Loans and Letter of Credit
Borrowings and (b) all other Indebtedness for borrowed money of the Company and
its Subsidiaries (including the current portion of all such Indebtedness).
"Transferee" has the meaning specified in Section 12.08.
"Type" has the meaning specified in the definition of "Committed
Loan".
"Unfunded Pension Liability" means the excess of a Pension Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.
"United States" and "U.S." each means the United States of America.
"USI Funding" has the meaning specified in the preamble hereto.
"Wholly-Owned Subsidiary" means, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's or other
qualifying shares) is at the time owned by such Person and/or one or more
Wholly-Owned Subsidiaries of such Person and (ii) any partnership, association
or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.
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1.02 Other Definitional Provisions.
(a) Defined Terms. Unless otherwise specified herein or therein, all
terms defined in this Agreement shall have such defined meanings when used
in any certificate or other document made or delivered pursuant hereto.
The meaning of defined terms shall be equally applicable to the singular
and plural forms of the defined terms.
(b) The Agreement. The words "hereof", "herein", "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement; and section, subsection, schedule and exhibit references are to
this Agreement unless otherwise specified.
(c) Certain Common Terms.
(i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The terms "including" or "include" are not limiting and
mean "including without limitation" or "include without limitation".
(d) Performance; Time. Subject to the definition of the term
"Interest Period" in Section 1.01, whenever any performance obligation
hereunder shall be stated to be due or required to be satisfied on a day
other than a Business Day, such performance shall be made or satisfied on
the next succeeding Business Day. In the computation of periods of time
from a specified date to a later specified date, the word "from" means
"from and including"; the words "to" and "until" each mean "to but
excluding", and the word "through" means "to and including." If any
provision of this Agreement refers to any action taken or to be taken by
any Person, or which such Person is prohibited from taking, such provision
shall be interpreted to encompass any and all means, direct or indirect,
of taking, or not taking, such action.
(e) Contracts. Unless otherwise expressly provided herein,
references to agreements and other contractual instruments shall be deemed
to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not
prohibited by the terms of any Loan Document.
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(f) Laws. References to any statute or regulation are to be
construed as including all statutory and regulatory provisions
consolidating, amending or replacing such statute or regulation.
1.03 Accounting Principles. Except as provided to the contrary
herein, all accounting terms used herein shall be interpreted in accordance with
GAAP. Unless the context otherwise clearly requires, all financial computations
required under this Agreement shall be made in accordance with GAAP; provided
that, if the Company notifies the Agent that the Company wishes to amend any
covenant in Article VIII or the definition of any term used therein to eliminate
the effect of any change in GAAP occurring after the Effective Date or the
operation of such covenant (or if the Agent notifies the Company that the
Majority Banks wish to amend Article VIII or any such definition for such
purpose), then the Company's compliance with such covenant shall be determined
on the basis of GAAP in effect immediately before the relevant change in GAAP
became effective, until either such notice is withdrawn or such covenant or
definition is amended in a manner satisfactory to the Company and the Majority
Banks.
ARTICLE II.
THE CREDIT FACILITIES
2.01 Amounts and Terms of Commitments.
(a) The Committed Loans. Each Bank severally agrees, on the terms
and conditions hereinafter set forth, to make Committed Loans to any
Borrower from time to time on any Business Day during the period from the
Effective Date to the Termination Date, in an aggregate amount not to
exceed at any time outstanding the amount of such Bank's Commitment;
provided, however, that, after giving effect to any Committed Borrowing,
the aggregate principal amount of all outstanding Committed Loans together
with (x) the aggregate principal amount of all outstanding Swingline
Loans, plus (y) the aggregate principal amount of all outstanding Bid
Loans, plus (z) all outstanding Letter of Credit Obligations, shall not
exceed the Aggregate Commitment. Within such limits, and subject to the
other terms and conditions hereof, each Borrower may borrow Committed
Loans under this Section 2.01(a), prepay pursuant to Section 2.09 or
2.10(a) and reborrow pursuant to this Section 2.01(a).
(b) The Swingline Loans. (i) The Swingline Bank agrees, on the terms
and conditions hereinafter set forth, to make Swingline Loans to any
Borrower on any Business Day during the period from the Effective Date to
the Termination Date, in an aggregate amount not to exceed at any time
outstanding the Swingline
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Amount (provided, however, that on the Effective Date the Swingline Bank
shall be permitted to make a Swingline Loan up to an amount equal to the
Aggregate Commitment provided that any Interest Period related thereto
shall not exceed one week); provided further, however, that after giving
effect to any Swingline Borrowing, the aggregate principal amount of all
outstanding Swingline Loans together with (x) the aggregate principal
amount of all outstanding Committed Loans, plus (y) the aggregate
principal amount of all outstanding Bid Loans, plus (z) all outstanding
Letter of Credit Obligations, shall not exceed the Aggregate Commitment.
Within such limits, and subject to the other terms and conditions hereof,
each Borrower may borrow Swingline Loans under this Section 2.01(b), repay
pursuant to Section 2.11(b) or prepay pursuant to Section 2.09 or 2.10(a)
and reborrow pursuant to this Section 2.01(b).
(ii) The Swingline Bank shall not be responsible for or liable to
any Bank for determining whether (A) any representation or warranty of any
Borrower in connection with any request for a Swingline Loan is correct or
(B) any Default or Event of Default exists or would result from the making
of any such Swingline Loan; provided, however, that the Swingline Bank
shall not make any Swingline Loan after receiving a written notice from
any Borrower or any Bank stating that a Default or an Event of Default
exists and is continuing until such time as the Swingline Bank shall have
received written notice from the Agent that such Default or Event of
Default has been cured or waived.
(iii) Each Swingline Loan shall reduce the available Aggregate
Commitment. It is understood that the aggregate principal amount of
Swingline Loans at any time outstanding may exceed the otherwise
unutilized portion of the Commitment of the Swingline Bank.
(iv) Upon demand by the Swingline Bank, the relevant Borrower shall
promptly borrow Committed Loans from all the Banks pursuant to Section
2.01(a) in an aggregate principal amount equal to the principal amount of
outstanding Swingline Loans made to such Borrower, and such Borrower and
the Banks hereby irrevocably authorize the Agent to apply the proceeds of
such Committed Loans to the repayment of such Swingline Loans (and solely
for the purpose of such a Borrowing (i) the conditions precedent set forth
in Section 5.02 need not be met, (ii) the minimum borrowing denominations
set forth in Section 2.03(a) need not be met and (iii) the borrowing
limitations set forth in this Agreement need not be met to the extent the
Aggregate Commitment has been terminated or reduced after the making of
Swingline Loans which are so being repaid). If any Borrower fails to repay
any Swingline Loan within one Business Day after such a demand, or to
repay any Swingline Loan when due, then each Bank shall irrevocably and
unconditionally purchase from the Swingline Bank, without recourse or
warranty, an un-
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divided interest and participation in such Swingline Loan in an amount
equal to such Bank's Commitment Percentage, by forthwith paying such
amount to the Swingline Bank in Dollars and in immediately available
funds, and such payment shall be made whether or not a Default or an Event
of Default is then continuing (including any Event of Default under
Sections 9.01(f) and (g)) or any other condition precedent set forth in
Section 5.02 is then met, whether or not such Borrower has requested a
Borrowing or whether the Aggregate Commitment has been terminated or
reduced below the amount of such Swingline Loan prior to the time of such
payment. If such amount is not paid to the Swingline Bank by any Bank, the
Swingline Bank shall be entitled to recover such amount on demand from
such Borrower or such Bank, together with accrued interest thereon from
the date of demand therefor (if made prior to 12:00 noon (New York City
time) on any Business Day (or, if made at a later time on a Business Day
or on a day which is not a Business Day, from the next Business Day) until
the date such amount is paid to the Swingline Bank by such Bank at the
Federal Funds Rate for the first three Business Days and thereafter at the
Base Rate. The failure of any Bank to pay such amount to the Swingline
Bank shall not relieve any other Bank of its obligation to make the
payment to be made by it.
2.02 Loan Accounts; Notes.
(a) The Loans made by each Bank shall be evidenced by one or more loan
accounts maintained by such Bank and the Agent in the ordinary course of
business. The loan accounts maintained by the Agent shall, in the event of a
discrepancy between the entries in the Agent's books and any Bank's books
relating to such loan accounts, be controlling and, absent manifest error,
shall be conclusive as to the amount of the Loans made by the Banks to the
Borrowers, the interest and payments thereon and any other amounts owing in
respect of this Agreement. Any failure to make a notation in any such loan
account or any error in doing so shall not limit or otherwise affect the
obligations of the Borrowers hereunder to pay any amount owing with respect
to the Loans.
(b) If requested by any Bank for purposes of Section 12.07(e), the
Borrowers shall execute and deliver to such Bank (and deliver a copy thereof
to the Agent) one or more promissory notes evidencing the Loans owing to
such Bank pursuant to this Agreement. Any such note shall be in a form
prescribed by the Borrowers and the Agent and shall be entitled to all of
the rights and benefits of this Agreement.
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2.03 Procedure for Committed Borrowing.
(a) Each Committed Borrowing (other than a Borrowing of Committed Loans
pursuant to Section 2.01(b)(iv) or Section 3.03(b)) shall be made upon a
Borrower's irrevocable written notice delivered to the Agent in accordance
with Section 12.02 in the form of a Notice of Borrowing (which notice must
be received by the Agent (i) prior to 1:00 p.m. (New York City time) not
less than three Business Days prior to the requested Borrowing Date, in the
case of Eurodollar Committed Loans; and (ii) prior to 11:00 a.m. (New York
City time) on the requested Borrowing Date, in the case of Base Rate
Committed Loans, specifying:
(A) the amount of the Committed Borrowing, which shall be in an
aggregate minimum principal amount of $5,000,000 or any multiple of
$1,000,000 in excess thereof;
(B) the requested Borrowing Date, which shall be a Business Day;
(C) whether the Committed Borrowing is to be comprised of Eurodollar
Committed Loans or Base Rate Committed Loans; and
(D) the duration of the Interest Period, if any, applicable to such
Committed Loans included in such notice. If the Notice of Borrowing
shall fail to specify the duration of the Interest Period for any
Borrowing comprised of Eurodollar Committed Loans, such Interest Period
shall be one month;
provided that for purposes of borrowing the initial Base Rate Committed
Loans made on the Effective Date, such Notice of Borrowing shall be
effective if received by the Agent not later than 10 a.m. (New York City
time) on the Effective Date.
(b) Upon receipt of the Notice of Borrowing, the Agent will promptly
notify each Bank thereof and of the amount of such Bank's Commitment
Percentage of the Committed Borrowing.
(c) Each Bank will make the amount of its Commitment Percentage of each
Committed Borrowing available to the Agent for the account of the relevant
Borrower at the Agent's Payment Office by 1:00 p.m. (New York City time)
(or, in the case of Base Rate Committed Loans, 2:00 p.m. (New York City
time)) on the Borrowing Date requested by such Borrower in funds immediately
available to the Agent. Unless any applicable condition of Article V has not
been satisfied, the proceeds of all such Committed Loans will then be made
available to such Borrower by the Agent by wire transfer in accordance with
written instructions provided to the Agent by such Borrower.
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(d) Upon the request of the Majority Banks during the existence of an
Event of Default, no Borrower shall elect to have a Committed Loan be made
as a Eurodollar Committed Loan.
(e) After giving effect to any Committed Borrowing, there shall not be
more than fifteen different Interest Periods in effect in respect of all
Committed Loans then outstanding.
(f) (i) Whenever a Borrower desires to make a Swingline Borrowing
hereunder, it shall give the Agent and the Swingline Bank not later than
1:00 p.m. (New York City time) on the date that a Swingline Loan is to be
made, written notice or telephonic notice promptly confirmed in writing of
each Swingline Loan to be made hereunder. Each such notice shall be
irrevocable and specify in each case:
(A) the amount of the Swingline Loan, which shall be in an aggregate
minimum principal amount of $100,000 or any multiple of $50,000 in
excess thereof;
(B) the requested Borrowing Date, which shall be a Business Day;
(C) whether the Swingline Loan is to be a Base Rate Loan, an IBOR
Loan or a Negotiated Rate Loan; and
(D) the duration of the Interest Period, if any, applicable to such
Swingline Loan. If the borrowing request shall fail to specify the
duration of the Interest Period for any Swingline Loan to bear interest
based on IBOR, such Interest Period shall be one week.
(ii) The Swingline Bank shall not incur any liability to any Borrower
in acting upon any telephonic notice which the Swingline Bank believes in
good faith to have been given by officers authorized to act on behalf of
such Borrower.
(iii) The Agent shall notify the Banks on a monthly basis of any
Swingline Borrowings hereunder.
(iv) After giving effect to any Swingline Borrowing, there shall be
no more than ten Borrowings of Swingline Loans outstanding at any time.
2.04 Conversion and Continuation Elections for Committed Borrowings.
(a) A Borrower may upon irrevocable written notice to the Agent in
accordance with paragraph (b) below:
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(i) elect to convert on any Business Day, any Base Rate
Committed Loans (or any part thereof in an amount of not less than
$5,000,000 or an integral multiple of $1,000,000 in excess thereof)
into Eurodollar Committed Loans;
(ii) elect to convert on the last day of the Interest Period
with respect thereto, any Eurodollar Committed Loans (or any part
thereof in an amount of not less than $5,000,000 or an integral
multiple of $1,000,000 in excess thereof) into Base Rate Committed
Loans; or
(iii) elect to continue on the last day of the Interest Period
with respect thereto, any Eurodollar Committed Loans (or any part
thereof in an amount not less than $5,000,000 or an integral
multiple of $1,000,000 in excess thereof);
provided, however, that if the aggregate amount of a Committed Borrowing
comprised of Eurodollar Committed Loans shall have been reduced, by payment,
prepayment, or conversion of part thereof to be less than $1,000,000, the
Eurodollar Committed Loans comprising such Committed Borrowing shall
automatically convert into Base Rate Committed Loans, and on and after such
date the right of such Borrower to continue such Committed Loans as, and
convert such Committed Loans into, Eurodollar Committed Loans shall
terminate.
(b) The relevant Borrower shall deliver a Notice of
Conversion/Continuation in accordance with Section 12.02 to be received by
the Agent not later than (i) 1:00 p.m. (New York City time) not less than
three Business Days in advance of the Conversion Date or Continuation Date,
if the Committed Loans are to be converted into or continued as Eurodollar
Committed Loans and (ii) 1:00 p.m. (New York City time) on the Conversion
Date, if the Committed Loans are to be converted into Base Rate Committed
Loans, specifying:
(A) the proposed Conversion Date or Continuation Date, which shall
be a Business Day;
(B) the aggregate principal amount of Committed Loans to be
converted or continued;
(C) the nature of the proposed conversion or continuation; and
(D) the duration of the requested Interest Period, if applicable.
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(c) If upon the expiration of any Interest Period applicable to
Eurodollar Committed Loans of any Borrower, such Borrower has failed to
select timely a new Interest Period, such Committed Loans shall
automatically convert into Base Rate Committed Loans.
(d) Upon receipt of a Notice of Conversion/Continuation, the Agent will
promptly notify each Bank thereof, or, if no timely notice is provided by
the relevant Borrower, the Agent will promptly notify each Bank of the
details of any automatic conversion. All conversions and continuations shall
be made pro rata according to the respective outstanding principal amounts
of the Committed Loans with respect to which the notice was given.
(e) Upon the request of the Majority Banks during the existence of an
Event of Default, no Borrower shall elect to have a Committed Loan converted
into or continued as a Eurodollar Committed Loan.
(f) Notwithstanding any other provision contained in this Agreement,
after giving effect to any conversion or continuation of any Committed
Loans, there shall not be more than fifteen different Interest Periods in
effect in respect of all Committed Loans then outstanding.
2.05 Bid Borrowings. In addition to Committed Borrowings pursuant to
Section 2.03, each Bank severally agrees that each Borrower may, as set forth in
Section 2.06, from time to time, request the Banks from and after the Effective
Date and prior to the Termination Date to submit offers to make Bid Loans to
such Borrower; provided, however, that the Banks may, but shall have no
obligation to, submit such offers and such Borrower may, but shall have no
obligation to, accept any such offers; and provided further, that, (a) after
giving effect to any Bid Borrowing, the aggregate principal amount of all
outstanding Bid Loans together with (x) the outstanding aggregate principal
amount of all Committed Loans made by all Banks, plus (y) the outstanding
aggregate principal amount of all Swingline Loans made by the Swingline Bank,
plus (z) all outstanding Letter of Credit Obligations, shall not exceed the
Aggregate Commitment.
2.06 Procedure for Bid Borrowings.
(a) When any Borrower wishes to request the Banks to submit offers to
make Bid Loans hereunder, it shall transmit to the Agent by telephone call
followed promptly by facsimile transmission a notice in substantially the
form of Exhibit C (a "Competitive Bid Request") so as to be received no
later than 1:00 p.m. (New York City time) (x) four Business Days prior to
the date of a proposed Bid Borrowing in the case of a Eurodollar Auction, or
(y) two Business Days prior to the date of a proposed Bid Borrowing in the
case of an Absolute Rate Auction, specifying:
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(i) the date of such Bid Borrowing, which shall be a Business Day;
(ii) the aggregate amount of such Bid Borrowing, which shall be a
minimum amount of $5,000,000 or in multiples of $1,000,000 in excess
thereof;
(iii) whether the Competitive Bids requested are to be for
Eurodollar Bid Loans or Absolute Rate Bid Loans or both; and
(iv) the duration of the Interest Period applicable thereto (subject
to the provisions of the definition of "Interest Period" herein).
The Borrowers may not request Competitive Bids for more than three
Interest Periods in a single Competitive Bid Request and may not request
Competitive Bids more than once in any period of five Business Days.
(b) Upon receipt of a Competitive Bid Request, the Agent will
promptly send to the Banks by facsimile transmission an invitation for
Competitive Bids which shall constitute an invitation by the respective
Borrower to each Bank to submit Competitive Bids offering to make the Bid
Loans to which such Competitive Bid Request relates in accordance with
this Section 2.06.
(c) (i) Each Bank may at its sole and absolute discretion submit a
Competitive Bid containing an offer or offers to make Bid Loans in
response to any Invitation for Competitive Bids. Each Competitive Bid must
comply with the requirements of this subsection 2.06(c) and must be
submitted to the Agent by facsimile transmission at the Agent's office for
notices set forth on the signature pages hereto not later than (1) 9:30
a.m. (New York City time) three Business Days prior to the proposed date
of Bid Borrowing, in the case of a Eurodollar Auction or (2) 9:30 a.m.
(New York City time) on the proposed date of Bid Borrowing in the case of
an Absolute Rate Auction; provided that Competitive Bids submitted by the
Agent (or any Affiliate of the Agent) in the capacity of a Bank may be
submitted, and may only be submitted, if the Agent or such Affiliate
notifies the respective Borrower of the terms of the offer or offers
contained therein not later than (A) 9:15 a.m. (New York City time) three
Business Days prior to the proposed date of Bid Borrowing, in the case of
a Eurodollar Auction or (B) 9:15 a.m. (New York City time) on the proposed
date of Bid Borrowing, in the case of an Absolute Rate Auction.
(ii) Each Competitive Bid shall be in substantially the form of
Exhibit D, specifying therein:
(A) the proposed date of Bid Borrowing;
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(B) the principal amount of each Bid Loan for which such
Competitive Bid is being made, which principal amount (x) may be
equal to, greater than or less than the Commitment of the quoting
Bank, (y) must be a minimum principal amount of $5,000,000 or in
multiples of $1,000,000 in excess thereof and (z) may not exceed the
principal amount of Bid Loans for which Competitive Bids were
requested;
(C) in case the respective Borrower elects a Eurodollar
Auction, the margin above or below LIBOR (the "Eurodollar Bid
Margin") offered for each such Bid Loan, expressed as a percentage
(rounded upward to the nearest 1/1000th of 1%) to be added to or
subtracted from the applicable LIBOR and the Interest Period
applicable thereto;
(D) in case the respective Borrower elects an Absolute Rate
Auction, the rate of interest per annum (rounded upward to the
nearest 1/100th of 1%) (the "Absolute Rate") offered for each such
Bid Loan; and
(E) the identity of the quoting Bank.
A Competitive Bid may contain up to three separate offers by the
quoting Bank with respect to each Interest Period specified in the
related Invitation for Competitive Bids.
(iii) Any Competitive Bid shall be disregarded if it:
(A) is not substantially in conformity with Exhibit D or does
not specify all of the information required by subsection (c)(ii) of
this Section;
(B) contains qualifying, conditional or similar language;
(C) proposes terms other than or in addition to those set
forth in the applicable Invitation for Competitive Bids; or
(D) arrives after the time set forth in subsection (c)(i).
(iv) Notwithstanding anything to the contrary contained in
this subsection 2.06(c), a Competitive Bid may be greater than or
less than the respective Commitment of any Bid Loan Lender.
(d) Promptly on receipt and not later than 10:00 a.m. (New York City
time) three Business Days prior to the proposed date of Bid Borrowing in
the case of a Eurodollar Auction, or 10:00 a.m. (New York City time) on
the proposed date
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of Bid Borrowing, in the case of an Absolute Rate Auction, the Agent will
notify the respective Borrower of the terms (i) of any Competitive Bid
submitted by a Bank that is in accordance with subsection 2.06(c), and
(ii) of any Competitive Bid that amends, modifies or is otherwise
inconsistent with a previous Competitive Bid submitted by such Bank with
respect to the same Competitive Bid Request. Any such subsequent
Competitive Bid shall be disregarded by the Agent unless such subsequent
Competitive Bid is submitted solely to correct a manifest error in such
former Competitive Bid and only if received within the times set forth in
subsection 2.06(c). The Agent's notice to the respective Borrower shall
specify (1) the aggregate principal amount of Bid Loans for which offers
have been received for each Interest Period specified in the related
Competitive Bid Request; and (2) the respective principal amounts and
Eurodollar Bid Margins or Absolute Rates, as the case may be, so offered.
Subject only to the provisions of Sections 4.02, 4.05 and 5.02 hereof and
the provisions of this subsection (d), any Competitive Bid shall be
irrevocable except with the written consent of the Agent given on the
written instructions of the respective Borrower.
(e) Not later than 11:00 a.m. (New York City time) three Business
Days prior to the proposed date of Bid Borrowing, in the case of a
Eurodollar Auction, or 10:30 a.m. (New York City time) on the proposed
date of Bid Borrowing, in the case of a Absolute Rate Auction, the
respective Borrower shall notify the Agent of its acceptance or
non-acceptance of the offers so notified to it pursuant to subsection
2.06(d). The respective Borrower shall be under no obligation to accept
any offer and may choose to reject all offers. In the case of acceptance,
such notice shall specify the aggregate principal amount of offers for
each Interest Period that is accepted. The respective Borrower may accept
any Competitive Bid in whole or in part; provided that:
(i) the aggregate principal amount of each Bid Borrowing may not
exceed the applicable amount set forth in the related Competitive Bid
Request;
(ii) the principal amount of each Bid Borrowing must be $5,000,000
or in any multiple of $1,000,000 in excess thereof;
(iii) acceptance of offers may only be made on the basis of
ascending Eurodollar Bid Margins or Absolute Rates within each Interest
Period, as the case may be; and
(iv) the respective Borrower may not accept any offer that is
described in subsection 2.06(c)(iii) or that otherwise fails to comply
with the requirements of this Agreement.
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(f) If offers are made by two or more Banks with the same Eurodollar Bid
Margins or Absolute Rates, as the case may be, for a greater aggregate
principal amount than the amount in respect of which such offers are
accepted for the related Interest Period, the principal amount of Bid Loans
in respect of which such offers are accepted shall be allocated by the Agent
among such Banks as nearly as possible (in such multiples not less than
$1,000,000 as the Agent may deem appropriate) in proportion to the aggregate
principal amounts of such offers. Determination by the Agent of the amounts
of Bid Loans shall be conclusive in the absence of manifest error.
(g) (i) The Agent will promptly notify each Bank having submitted a
Competitive Bid if its offer has been accepted and, if its offer has been
accepted, of the amount of the Bid Loan or Bid Loans to be made by it on the
date of the Bid Borrowing.
(ii) Each Bank which has received notice pursuant to subsection
2.06(g)(i) that its Competitive Bid has been accepted, shall make the
amounts of such Bid Loans available to the Agent for the account of the
respective Borrower at the Agent's Payment Office, by 2:00 p.m. (New York
City time), on such date of Bid Borrowing, in funds immediately available to
the Agent for the account of the respective Borrower at the Agent's Payment
Office.
(iii) Promptly following each Bid Borrowing, the Agent shall notify each
Bank of the ranges of bids submitted and the highest and lowest bids
accepted for each Interest Period requested by the respective Borrower and
the aggregate amount borrowed pursuant to such Bid Borrowing.
(iv) From time to time, the Borrowers and the Banks shall furnish such
information to the Agent as the Agent may request relating to the making of
Bid Loans, including the amounts, interest rates, dates of borrowings and
maturities thereof, for purposes of the allocation of amounts received from
the Borrowers for payment on all amounts owing hereunder.
(h) If, on or prior to the proposed date of the Bid Borrowing, the
Aggregate Commitment has not been terminated and if, on such proposed date
of Bid Borrowing all applicable conditions to funding referenced in Section
4.02, 4.05 and 5.02 hereof are satisfied, the Bank or Banks whose offers the
respective Borrower has accepted will fund each Bid Loan so accepted.
Nothing in this Section 2.06 shall be construed as a right of first offer in
favor of the Banks or to otherwise limit the ability of the Borrowers to
request and accept credit facilities from any Person (including any of the
Banks), provided that no Default or Event of Default would otherwise arise
or exist as a result of the Borrowers executing, delivering or performing
under such credit facilities.
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2.07 Voluntary Reduction and Termination of Commitments.
(a) The Borrowers may, upon not less than five Business Days' prior
notice to the Agent, terminate the Aggregate Commitment (including the
Letter of Credit Commitment) or permanently reduce the Aggregate Commitment
(including the Letter of Credit Commitment) by an aggregate minimum amount
of $5,000,000 or any multiple of $1,000,000 in excess thereof; provided,
however, that no such reduction or termination shall be permitted if after
giving effect thereto and to any prepayment of the Committed Loans, Bid
Loans and/or Swingline Loans made on the effective date thereof, (i) the
then outstanding principal amount of the Committed Loans, Bid Loans and
Swingline Loans plus the outstanding Letter of Credit Obligations would
exceed the Aggregate Commitment then in effect or (ii) the aggregate amount
of Letter of Credit Obligations would exceed the Letter of Credit Commitment
then in effect; and, provided further, that once reduced in accordance with
this Section 2.07, the Aggregate Commitment (including the Letter of Credit
Commitment) may not be increased.
(b) Any reduction of the Aggregate Commitment and the Letter of Credit
Commitment pursuant to this Section 2.07 shall be applied pro rata to each
Bank's Commitment in accordance with such Bank's Commitment Percentage. The
amount of any such reduction of the Aggregate Commitment shall not be
applied to the Letter of Credit Commitment unless otherwise specified by the
Borrowers or required by the definition thereof. All accrued commitment and
letter of credit fees to the effective date of any reduction or termination
of Aggregate Commitment, shall be paid on the effective date of such
reduction or termination. The Agent shall promptly notify the Banks of any
reduction or termination of the Aggregate Commitment.
2.08 Mandatory Reduction of Loan Commitments. (a) The Aggregate
Commitment (and the Commitment of each Bank) shall terminate in its entirety on
December 31, 1996 unless the Effective Date shall have occurred on or prior to
such date.
(b) In addition to any other mandatory commitment reductions pursuant to
this Agreement, the Aggregate Commitment shall terminate in its entirety on the
Termination Date.
(c) In addition to any other mandatory commitment reductions pursuant to
this Agreement, on each date set forth below (each, a "Scheduled Commitment
Reduction Date"), the Aggregate Commitment shall be permanently reduced by the
amount set forth opposite such date:
Scheduled Commitment Reduction Date Amount
December 12, 1999 $100,000,000
December 12, 2000 $150,000,000
December 12, 2001 Remaining Aggregate
Commitment
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(d) Each reduction to the Aggregate Commitment pursuant to this Section
2.08 shall be applied proportionately to reduce the Commitment of each Bank.
2.09 Voluntary Prepayments of Committed Loans.
(a) (i) Each Borrower may, prior to 1:00 p.m. (New York City time),
upon at least three Business Days' notice to the Agent in the case of
Eurodollar Committed Loans, and prior to 10:00 a.m. (New York City time),
upon same Business Day notice in the case of Base Rate Committed Loans,
ratably prepay Committed Loans, in whole or in part, in amounts of
$5,000,000 or an integral multiple of $1,000,000 in excess thereof.
(ii) Each Borrower may at any time prepay Swingline Loans (other
than Swingline Loans maintained as Negotiated Rate Loans), in whole or in
part, in minimum amounts of $100,000 or an integral multiple of $50,000 in
excess thereof; provided, however, that notice of such prepayment shall be
required to be delivered to the Agent and the Swingline Bank by 1:00 p.m.
(New York City time) on the date of such prepayment.
(b) Any notice of prepayment delivered pursuant to this Section 2.09
shall specify the date and amount of such prepayment and the type of Loans
to be prepaid, including in the case of Committed Loans whether such
prepayment is of Base Rate Committed Loans or Eurodollar Committed Loans
or any combination thereof and in the case of any Swingline Loan whether
such prepayment is of a Base Rate Loan or an IBOR Loan or any combination
thereof. Each such notice shall be irrevocable by the relevant Borrower
and the Agent will promptly notify each Bank thereof and of such Bank's
Commitment Percentage of such prepayment, if applicable. If such notice is
given by a Borrower, such Borrower shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the
date specified therein, together with accrued interest to each such date
on the amount prepaid and the amounts, if any, required pursuant to
Section 4.04; provided that interest shall be paid in connection with any
such prepayment of Base Rate Committed Loans (other than a prepayment in
full) on the next occurring Interest Payment Date.
(c) Bid Loans may not be voluntarily prepaid.
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2.10 Mandatory Prepayments.
(a) (i) If on any date (A) the aggregate unpaid principal amount of
outstanding Committed Loans, Bid Loans and Swingline Loans plus the
outstanding Letter of Credit Obligations (to the extent not Cash
Collateralized pursuant to clause (ii) below or as provided for in Section
3.07) exceeds the Aggregate Commitment or (B) the aggregate unpaid
principal amount of Swingline Loans exceeds the Swingline Amount, in each
such case the Borrowers shall immediately prepay the amount of such
excess, which shall be applied, in the case of subclause (A) above, first
to Swingline Loans, second to Committed Loans and third to Bid Loans.
(ii) If on any date the aggregate amount of all Letter of Credit
Obligations shall exceed the Letter of Credit Commitment, the Borrowers
shall Cash Collateralize on such date their obligations in respect of
Letters of Credit in an amount equal to the excess of the Letter of Credit
Obligations over the Letter of Credit Commitment.
(b) The Borrowers shall pay, together with each prepayment made by
the Borrowers under this Section 2.10, accrued interest on the amount
prepaid and any amounts required pursuant to Section 4.04; provided that
interest shall be paid in connection with any such prepayment of Base Rate
Loans (other than a pre-payment in full) on the next occurring Interest
Payment Date.
(c) Any prepayments pursuant to this Section 2.10 made on a day
other than an Interest Payment Date for any Loan shall be applied first to
any Base Rate Loans then outstanding and then to Eurodollar Loans with the
shortest Interest Periods remaining.
2.11 Repayment of Principal.
(a) The Committed Loans. The Borrowers shall repay to the Banks in
full on the Termination Date the aggregate principal amount of the
Committed Loans outstanding on the Termination Date.
(b) The Swingline Loans. Each Swingline Loan shall mature, and the
principal amount thereof shall be due and payable, and the Borrowers shall
repay such Swingline Loan (i) if such Swingline Loan is a Base Rate Loan,
on the date which is 30 days after the relevant Borrowing Date, (ii) if
such Swingline Loan is an IBOR Loan, on the last day of the Interest
Period therefor, (iii) if such Swingline Loan is a Negotiated Rate Loan,
on the last day of the interest period determined by the Borrowers and the
Swingline Bank applicable thereto and (iv) in any event, on the
Termination Date.
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(c) Bid Loans. The Company shall repay each Bid Loan on the last day
of the Interest Period applicable thereto.
2.12 Interest.
(a) Except as provided in paragraphs (c) or (g) below, each Loan
shall bear interest on the outstanding principal amount thereof from the
Borrowing Date applicable thereto until it becomes due at a rate per annum
equal to the Base Rate, IBOR or LIBOR, as the case may be, plus the
Applicable Margin then in effect based on the higher of the senior
unsecured long term debt ratings for the Company as issued by Moody's and
S&P as set forth below:
Senior Unsecured Debt Applicable
Rating Margin
Base
S&P Moody's IBOR/LIBOR Rate
Greater than or equal
to the higher of A- and A3 0.150% 0%
Greater than or equal
to the higher of BBB+ and Baa1 0.185% 0%
Greater than or equal
to the higher of BBB and Baa2 0.225% 0%
Greater than or equal
to the higher of BBB- and Baa3 0.250% 0%
Greater than or equal
to the higher of BB+ and Ba1 0.350% 0%
Greater than or equal
to the higher of BB and Ba2 0.450% 0%
Less than the higher of BB and Ba2 0.625% 0%
(provided, however, that if more than a one level split exists
between the S&P and Moody's ratings, Applicable Margin will be
determined assuming that the Company's senior unsecured long term
debt rating is one level below the higher of the two ratings).
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(b) Any change in the Applicable Margin due to a change in the
Company's senior unsecured debt rating shall be effective on the date of
such rating change and shall apply to all Committed Loans that are
outstanding at any time during the period commencing on the date of such
rating change and ending on the date immediately preceding the next date
of such rating change.
(c) Each Bid Loan shall bear interest on the outstanding principal
amount thereof from the relevant Borrowing Date at a rate per annum equal
to LIBOR plus (or minus) the Eurodollar Bid Margin, or, at the Absolute
Rate, as the case may be, as agreed in the related Competitive Bid
therefor.
(d) Interest on each Loan shall be paid in arrears on each Interest
Payment Date. Interest shall also be paid on the date of any prepayment of
any portion of Committed Loans (excluding Base Rate Committed Loans, on
which such interest shall be paid on the next occurring Interest Payment
Date) for the portion of such Loans so prepaid and upon payment (including
prepayment) of any Committed Loans (including Base Rate Committed Loans)
in full thereof. During the existence of any Event of Default, interest
shall be paid on demand.
(e) If any amount of principal of or interest on any Loan, or any
other regularly scheduled amount payable hereunder or under any other Loan
Document is not paid in full when due, after giving effect to any
applicable grace period (whether at stated maturity, by acceleration,
demand or otherwise), the Borrowers shall pay interest (after as well as
before judgment) on the principal amount of all outstanding Loans at the
applicable rate per annum provided in this Section 2.12 plus 2% and on all
other amounts (including interest), at a rate per annum equal to the Base
Rate plus 2%.
(f) Anything herein to the contrary notwithstanding, the obligations
of the Borrowers hereunder shall be subject to the limitation that
payments of interest shall not be required, for any period for which
interest is computed hereunder, to the extent (but only to the extent)
that contracting for or receiving such payment by the respective Bank
would be contrary to the provisions of any law applicable to such Bank
limiting the highest rate of interest which may be lawfully contracted
for, charged or received by such Bank, and in such event the Borrowers
shall pay such Bank interest at the highest rate permitted by applicable
law.
(g) Each Negotiated Rate Loan shall bear interest on the outstanding
principal amount thereof from the Borrowing Date applicable thereto until
such Negotiated Rate Loan becomes due at the applicable Negotiated Rate.
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2.13 Fees. In addition to fees described at Section 3.08:
(a) Facility Fees.
(i) The Borrowers shall pay to the Agent for the account of
each Bank a facility fee on the average of such Bank's Commitment,
regardless of the utilization thereof, computed on a quarterly basis
in arrears on each Interest Payment Date for Base Rate Committed
Loans based upon the average daily amount of such Bank's Commitment
for the previous three month period as calculated by the Agent and
payable on such date, equal to the rate per annum based on the
higher of the senior unsecured debt ratings for the Company issued
by Moody's and S&P as set forth below:
Facility
Senior Unsecured Debt Rating Fee
S&P Moody's
Greater than or equal
to the higher of A- and A3 0.075%
Greater than or equal
to the higher of BBB+ and Baa1 0.090%
Greater than or equal
to the higher of BBB and Baa2 0.100%
Greater than or equal
to the higher of BBB- and Baa3 0.125%
Greater than or equal
to the higher of BB+ and Ba1 0.150%
Greater than or equal
to the higher of BB and Ba2 0.200%
Less than the higher
of BB and Ba2 0.250%
(provided, however, that if more than a one level split exists
between the S&P and Moody's ratings, the facility fee will be
determined assuming that the Company's senior unsecured long term
debt rating is one level below the higher of the two ratings).
(b) Other Fees. The Borrowers shall pay such fees as have or may be
agreed between the Borrowers and the Agent from time to time.
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2.14 Computation of Fees and Interest.
(a) All computations of interest payable in respect of Base Rate
Loans shall be made on the basis of a year of 365 or 366 days, as the case
may be, and actual days elapsed. All other computations of fees and
interest under this Agreement shall be made on the basis of a 360-day year
and actual days elapsed. Interest and fees shall accrue during each period
during which interest or such fees are computed from the first day thereof
to the last day thereof.
(b) The Agent will promptly notify the Borrowers and the Banks of
each determination of LIBOR; provided, however, that any failure to do so
shall not relieve the Borrowers of any liability hereunder. Any change in
the interest rate on a Loan resulting from a change in the senior debt
rating shall become effective as of the opening of business on the
relevant date of such change. The Agent will promptly notify the Borrowers
and the Banks of the effective date and the amount of each such change,
provided, however, that any failure to do so shall not relieve the
Borrowers of any liability hereunder.
(c) Each determination of an interest rate by the Agent shall be
conclusive and binding on the Borrowers and the Banks in the absence of
manifest error.
(d) If any Reference Bank's Commitment shall terminate (otherwise
than on termination of all the Commitments), or for any reason whatsoever
any Reference Bank shall cease to be a Bank hereunder, or any Reference
Bank, at the request of the Company, elects (at its sole discretion) not
to continue to be a Reference Bank hereunder, that Reference Bank shall
thereupon cease to be a Reference Bank, and LIBOR shall be determined on
the basis of the rates as notified by the remaining Reference Banks or
Reference Bank.
(e) Each Reference Bank shall use its best efforts to furnish
quotations of rates to the Agent as contemplated hereby. If any of the
Reference Banks shall be unable or otherwise fails to supply such rates to
the Agent upon its request, the rate of interest shall be determined on
the basis of the quotations of the remaining Reference Banks or Reference
Bank.
2.15 Payments by the Borrowers.
(a) All payments (including prepayments) to be made by the Borrowers
on account of principal, interest, drawings under Letters of Credit, fees
and other amounts required hereunder shall be made without set-off or
counterclaim and shall, except as otherwise expressly provided with
respect to drawings under Letters of
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Credit and elsewhere herein, be made to the Agent for the ratable account
of the Banks at the Agent's Payment Office, and shall be made in Dollars
and in immediately available funds, no later than 1:00 p.m. (New York City
time) (or 3:00 p.m. (New York City time) in the case of Swingline Loans)
on the date specified herein. The Agent will promptly distribute to each
Bank its share, if any, of such principal, interest, fees or other
amounts, in like funds as received. Any payment which is received by the
Agent later than 1:00 p.m. (New York City time) (or 3:00 p.m. (New York
City time) in the case of Swingline Loans) shall be deemed to have been
received on the immediately succeeding Business Day and any applicable
interest or fee shall continue to accrue until such payment is deemed to
have been received.
(b) Whenever any payment hereunder shall be stated to be due on a
day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of interest or fees, as the case may be
(subject to the provisions set forth in the definition of the term of
"Interest Period" herein).
(c) Unless the Agent shall have received notice from a Borrower
prior to the date on which any payment is due to the Banks hereunder that
such Borrower will not make such payment in full, the Agent may assume
that such Borrower has made such payment in full to the Agent as required
hereunder on such date in immediately available funds and the Agent may
(but shall not be so required), in reliance upon such assumption, cause to
be distributed to each Bank on such due date an amount equal to the amount
then due such Bank. If and to the extent such Borrower shall not have made
such payment in full to the Agent, each Bank shall repay to the Agent on
demand such amount distributed to such Bank, together with interest
thereon for each day from the date such amount is distributed to such Bank
until the date such Bank repays such amount to the Agent, at the Federal
Funds Rate as in effect for each such day.
2.16 Payments by the Banks to the Agent.
(a) Unless the Agent shall have received notice from a Bank on the
Effective Date or, with respect to each Borrowing after the Effective
Date, at least one Business Day prior to the date of any proposed
Borrowing (other than a Borrowing of a Swingline Loan which in accordance
with Section 2.03(f) is funded directly by the Swingline Bank), that such
Bank will not make available to the Agent for the account of the relevant
Borrower the amount of such Bank's Commitment Percentage of the Committed
Loans included in such Borrowing, the Agent may assume that each Bank has
made such amount available to the Agent as required hereunder on the
Borrowing Date and the Agent may (but shall not be so required), in
reliance upon such assumption, make available to such Borrower on
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such date a corresponding amount. If and to the extent any Bank shall not
have made its full amount available to the Agent in immediately available
funds and the Agent in such circumstances has made available to such
Borrower such amount, such Bank shall immediately make such amount
available to the Agent, together with interest at the Federal Funds Rate
from the date of such Borrowing to the date on which the Agent recovers
such amount from such Bank or such Borrower. A notice of the Agent
submitted to any Bank with respect to amounts owing under this Section
2.16(a) shall be conclusive, absent manifest error. If such amount is so
made available, such payment to the Agent shall constitute such Bank's
Loan on the Borrowing Date for all purposes of this Agreement. If such
amount is not made available to the Agent on the next Business Day
following such Borrowing Date, the Agent shall notify such Borrower of
such failure to fund and, upon demand by the Agent, such Borrower shall
pay such amount to the Agent for the Agent's account, together with
interest thereon for each day elapsed since such Borrowing Date, at a rate
per annum equal to the interest rate applicable at the time to the
Committed Loans comprising such Committed Borrowing.
(b) The failure of any Bank to make any Committed Loan on any
Borrowing Date shall not relieve any other Bank of any obligation
hereunder to make a Committed Loan on such Borrowing Date, but no Bank
shall be responsible for the failure of any other Bank to make the
Committed Loan to be made by such other Bank on any Borrowing Date.
2.17 Sharing of Payments, etc.
(a) If, other than as expressly provided elsewhere herein, any Bank
shall obtain on account of the Committed Loans owing to it any payment
(whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its Commitment Percentage of payments
on account of the Obligations of the same kind obtained by all the Banks,
such Bank shall forthwith (i) notify the Agent of such fact, and (ii)
purchase from the other Banks such participations in such Committed Loans
made by them as shall be necessary to cause such purchasing Bank to share
the excess payment ratably with each of them; provided, however, that if
all or any portion of such excess payment is thereafter recovered from the
purchasing Bank, such purchase shall to that extent be rescinded and each
other Bank shall repay to the purchasing Bank the purchase price paid
therefor, together with an amount equal to such paying Bank's Commitment
Percentage (according to the proportion of (A) the amount of such paying
Bank's required repayment to (B) the total amount so recovered from the
purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. The Agent
will keep records (which shall be conclusive and binding in the absence of
manifest error) of participations purchased pursuant
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to this Section 2.17 and will in each case notify the Banks following any
such purchases.
(b) Any Bank having outstanding both Committed Loans and Bid Loans
at any time a right of set-off is exercised by such Bank shall apply the
proceeds of such set-off first to such Bank's Committed Loans, until its
Committed Loans are reduced to zero, and thereafter to its Bid Loans.
(c) Each Borrower agrees that any Bank so purchasing a participation
from another Bank pursuant to this Section 2.17 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right
of set-off, but subject to Section 12.09) with respect to such
participation as fully as if such Bank were the direct creditor of such
Borrower in the amount of such participation.
2.18 Guaranty. All Obligations of the Borrowers under this Agreement
and all other Loan Documents shall be unconditionally guaranteed by the Parent
pursuant to Article X hereof and all Obligations of USI Funding under this
Agreement and the other Loan Documents shall be unconditionally guaranteed by
the Company pursuant to Article X hereof.
2.19 Termination Date Extensions. Not less than 180 days and not
more than 210 days prior to the second anniversary of the Effective Date and
every second anniversary of such second anniversary (the "Requested Extension
Effective Date"), the Company may make a written request to the Agent, who shall
forward a copy of each such request to each of the Banks, that the Termination
Date then in effect be extended to the date which occurs two years after such
Termination Date. Each request pursuant to the first sentence of this Section
2.19 shall also be accompanied by a certificate of an officer of the Company
stating that no Default or Event of Default has occurred and is continuing. Each
Bank, acting in its sole discretion and with no obligation to grant any
extension pursuant to this Section 2.19, shall, by written notice to the Company
and the Agent, such notice to be given on or prior to the Requested Extension
Effective Date, advise the Company and the Agent whether or not such Bank agrees
to such extension, provided that any Bank which fails to so notify the Borrower
and the Agent as provided above shall be deemed to have elected not to grant
such extension. The Agent shall notify the Company and each of the Banks as to
which Banks have agreed to such extension and as to the new Termination Date, if
any, as a result thereof. The extension of the Termination Date pursuant to the
terms of this Section 2.19 must be approved by each Bank.
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ARTICLE III.
THE LETTERS OF CREDIT
3.01 The Letter of Credit Subfacility.
(a) On the terms and conditions set forth herein (i) the Issuing
Bank agrees, (A) from time to time, on any Business Day during the period
from the Effective Date to the date which is 30 days prior to the
Termination Date to issue Letters of Credit for the account of each of the
Borrowers, and to amend or renew Letters of Credit previously issued by
it, in accordance with Sections 3.02(b) and 3.02(d), and (B) to honor
drafts under the Letters of Credit; and (ii) the Banks severally agree to
participate in Letters of Credit issued for the account of each of the
Borrowers; provided, however, that the Issuing Bank shall not issue any
Letter of Credit if as of the date of, and after giving effect to, the
issuance of such Letter of Credit, (x) the sum of (A) the aggregate amount
of all Letter of Credit Obligations plus (B) the aggregate principal
amount of all Committed Loans plus (C) the aggregate principal amount of
all Bid Loans plus (D) the aggregate principal amount of all Swingline
Loans, shall exceed the Aggregate Commitment, or (y) the Letter of Credit
Obligations shall exceed the Letter of Credit Commitment.
(b) Schedule 3.01(b) hereto contains a description of certain
letters of credit issued by an Affiliate of Bank of America prior to the
Effective Date in support of obligations of the Company and/or its
Subsidiaries and which remain outstanding on the Effective Date. Each such
letter of credit, including any extension thereof, issued by such
Affiliate of Bank of America and listed on such Schedule 3.01(b) shall
remain outstanding on and after the Effective Date and constitute a
"Letter of Credit" for all purposes of this Agreement, and shall be deemed
issued on the Effective Date.
(c) The Issuing Bank shall be under no obligation to issue any
Letter of Credit if:
(i) any order, judgment or decree of any Governmental
Authority shall by its terms purport to enjoin or restrain the
Issuing Bank from issuing such Letter of Credit, or any Requirement
of Law applicable to the Issuing Bank or any request or directive
(whether or not having the force of law) from any Governmental
Authority with jurisdiction over the Issuing Bank shall prohibit, or
request that the Issuing Bank refrain from, the issuance of letters
of credit generally or such Letter of Credit in particular or shall
impose upon the Issuing Bank with respect to such Letter of Credit
any restriction, reserve or capital requirement (for which the
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Issuing Bank is not otherwise compensated hereunder) not in effect
on the Effective Date or shall impose upon the Issuing Bank any
unreimbursed loss, cost or expense which was not applicable on the
Effective Date and which the Issuing Bank in good faith deems
material to it;
(ii) the Issuing Bank has received written notice from any
Bank, the Agent or any Borrower on or prior to the Business Day
prior to the requested date of issuance, of such Letter of Credit,
that one or more of the applicable conditions contained in Article V
is not then satisfied;
(iii) the expiry date of any requested Letter of Credit (x) is
more than one year after the date of issuance, unless the Majority
Banks and the Issuing Bank have approved such expiry date in writing
or (y) is later than the Termination Date;
(iv) any requested Letter of Credit is not in form and
substance acceptable to the Issuing Bank, or the issuance, of a
Letter of Credit shall violate any applicable policies of the
Issuing Bank;
(v) any standby Letter of Credit is for the purpose of
supporting the issuance of any letter of credit by any other Person;
or
(vi) such Letter of Credit is in a face amount less than
$250,000 or to be denominated in a currency other than Dollars.
3.02 Issuance, Amendment and Renewal of Letters of Credit.
(a) Each Letter of Credit shall be issued upon the irrevocable
written request of a Borrower received by the Issuing Bank (with a copy
sent by such Borrower to the Agent) at least four days (or such shorter
time as the Issuing Bank may agree in a particular instance in its sole
discretion) prior to the proposed date of issuance. Each such request for
issuance of a Letter of Credit shall be by facsimile, confirmed
immediately in an original writing, in the form of a Letter of Credit
Application, and shall specify in form and detail satisfactory to the
Issuing Bank: (i) the proposed date of issuance of the Letter of Credit
(which shall be a Business Day); (ii) the face amount of the Letter of
Credit; (iii) the expiry date of the Letter of Credit; (iv) the name and
address of the beneficiary thereof; (v) the documents to be presented by
the beneficiary of the Letter of Credit in case of any drawing thereunder;
(vi) the full text of any certificate to be presented by the beneficiary
in case of any drawing thereunder; and (vii) such other matters as the
Issuing Bank may reasonably require.
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(b) From time to time while a Letter of Credit is outstanding and
prior to the Termination Date, the Issuing Bank will, upon the written
request of a Borrower received by the Issuing Bank (with a copy sent by
such Borrower to the Agent) at least five days (or such shorter time as
the Issuing Bank may agree in a particular instance in its sole
discretion) prior to the proposed date of amendment, amend any Letter of
Credit issued by it. Each such request for amendment of a Letter of Credit
shall be made by facsimile, confirmed immediately in an original writing,
made in the form of a Letter of Credit Amendment Application and shall
specify in form and detail satisfactory to the Issuing Bank: (i) the
Letter of Credit to be amended; (ii) the proposed date of amendment of the
Letter of Credit (which shall be a Business Day); (iii) the nature of the
proposed amendment; and (iv) such other matters as the Issuing Bank may
reasonably require. The Issuing Bank shall be under no obligation to amend
any Letter of Credit if: (A) the Issuing Bank would have no obligation at
such time to issue such Letter of Credit in its amended form under the
terms of this Agreement; or (B) the beneficiary of any such Letter of
Credit does not accept the proposed amendment to the Letter of Credit.
(c) The Agent will promptly notify the Banks of the receipt by it of
any Letter of Credit Application or Letter of Credit Amendment
Application.
(d) The Issuing Bank and the Banks agree that, while a Letter of
Credit is outstanding and prior to the Termination Date, at the option of
any Borrower and upon the written request of such Borrower received by the
Issuing Bank (with a copy sent by such Borrower to the Agent) at least
five days (or such shorter time as the Issuing Bank may agree in a
particular instance in its sole discretion) prior to the proposed date of
notification of renewal, the Issuing Bank shall be entitled to authorize
the automatic renewal of any Letter of Credit issued by it. Each such
request for renewal of a Letter of Credit shall be made by facsimile,
confirmed immediately in an original writing, in the form of a Letter of
Credit Amendment Application, and shall specify in form and detail
satisfactory to the Issuing Bank: (i) the Letter of Credit to be renewed;
(ii) the proposed date of notification of renewal of the Letter of Credit
(which shall be a Business Day); (iii) the revised expiry date of the
Letter of Credit; and (iv) such other matters as the Issuing Bank may
reasonably require. The Issuing Bank shall be under no obligation to renew
any Letter of Credit if the Issuing Bank would have no obligation at such
time to issue or amend such Letter of Credit in its renewed form under the
terms of this Agreement. If any outstanding Letter of Credit shall provide
that it shall be automatically renewed unless the beneficiary thereof
receives notice from the Issuing Bank that such Letter of Credit shall not
be renewed, and if at the time of renewal the Issuing Bank would be
entitled to authorize the automatic renewal of such Letter of Credit in
accordance with this Section 3.02(d) upon the request of the relevant
Borrower but the Issuing Bank shall not have received any Letter of Credit
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Amendment Application from such Borrower with respect to such renewal or
other written direction by such Borrower with respect thereto, the Issuing
Bank shall nonetheless be permitted to allow such Letter of Credit to be
renewed, and such Borrower and the Banks hereby authorize such renewal,
and, accordingly, the Issuing Bank shall be deemed to have received a
Letter of Credit Amendment Application from such Borrower requesting such
renewal.
(e) This Agreement shall control in the event of any conflict with
any Letter of Credit Related Document (other than any Letter of Credit).
(f) The Issuing Bank will also deliver to the Agent, concurrently or
promptly following its delivery of a Letter of Credit, or amendment to or
renewal of a Letter of Credit, to an advising bank or a beneficiary, a
true and complete copy of each such Letter of Credit or amendment to or
renewal of a Letter of Credit.
3.03 Participations, Drawings and Reimbursements.
(a) Immediately upon the issuance of each Letter of Credit, each
Bank shall be deemed to, and hereby irrevocably and unconditionally agrees
to, purchase from the Issuing Bank a participation in such Letter of
Credit and each drawing thereunder in an amount equal to the product of
(i) the Commitment Percentage of such Bank times (ii) the maximum amount
available to be drawn under such Letter of Credit and the amount of such
drawing, respectively.
(b) In the event of any request for a drawing under a Letter of
Credit by the beneficiary or transferee thereof, the Issuing Bank will
promptly notify the relevant Borrower. Such Borrower shall reimburse the
Issuing Bank prior to 12:00 noon (New York City time), on each date that
any amount is paid by the Issuing Bank under any Letter of Credit (each
such date, a "Disbursement Date"), in an amount equal to the amount so
paid by the Issuing Bank, provided, that if such drawing occurs after
12:00 noon (New York City time), the Disbursement Date shall be deemed to
be the day following the date of such drawing. In the event any Borrower
shall fail to reimburse the Issuing Bank for the full amount of any
drawing under any Letter of Credit by 12:00 noon (New York City time) on
the Disbursement Date, the Issuing Bank will promptly notify the Agent and
the Agent will promptly notify each Bank thereof, and such Borrower shall
be deemed to have requested that Committed Loans consisting of Base Rate
Committed Loans be made by the Banks (and hereby irrevocably consents to
such deemed request) pursuant to Section 2.01(a) to be disbursed on the
Disbursement Date under such Letter of Credit, subject to the amount of
the unutilized portion of the Aggregate Commitment and subject to the
conditions set forth in Section 5.02. Any notice given by the Issuing Bank
or the Agent pursuant to this Section 3.03(b) may be oral
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if immediately confirmed in writing (including by facsimile); provided,
however, that the lack of such an immediate confirmation shall not affect
the conclusiveness or binding effect of such notice.
(c) Each Bank shall upon receipt of any notice pursuant to Section
3.03(b) make available to the Agent for the account of the Issuing Bank an
amount in Dollars and in immediately available funds equal to its
Commitment Percentage of the amount of the drawing, whereupon the
participating Banks shall (subject to Section 3.03(d)) each be deemed to
have made a Committed Loan consisting of a Base Rate Committed Loan to the
relevant Borrower in that amount. If any Bank so notified shall fail to
make available to the Agent for the account of the Issuing Bank the amount
of such Bank's Commitment Percentage of the amount of the drawing by no
later than 2:00 p.m. (New York City time) on the Disbursement Date, then
interest shall accrue on such Bank's obligation to make such payment, from
the Disbursement Date to the date such Bank makes such payment, at a rate
per annum equal to (i) the Federal Funds Rate in effect from time to time
during the period commencing on the later of the Disbursement Date and the
date such Bank receives notice of the Disbursement Date prior to 2:00 p.m.
(New York City time) on such date and ending on the date three Business
Days thereafter, and (ii) thereafter at the Base Rate as in effect from
time to time. The Agent will promptly give notice of the occurrence of the
Disbursement Date, but failure of the Agent to give any such notice on the
Disbursement Date or in sufficient time to enable any Bank to effect such
payment on such date shall not relieve such Bank from its obligations
under this Section 3.03.
(d) With respect to any unreimbursed drawing which is not converted
into Committed Loans consisting of Base Rate Committed Loans to any
Borrower in whole or in part, because of such Borrower's failure to
satisfy the conditions set forth in Section 5.02 or for any other reason,
such Borrower shall be deemed to have incurred from the Issuing Bank a
Letter of Credit Borrowing in the amount of such drawing, which Letter of
Credit Borrowing shall be due and payable on demand (together with
interest) and shall bear interest at a rate per annum equal to the Base
Rate, plus the Applicable Margin for Base Rate Loans, plus in the case of
any Letter of Credit Borrowing outstanding after the Disbursement Date, 2%
per annum, and each Bank's payment to the Issuing Bank pursuant to Section
3.03(c) shall be deemed payment in respect of its participation in such
Letter of Credit Borrowing.
(e) Each Bank's obligation in accordance with this Agreement to make
the Committed Loans or fund its participation in any Letter of Credit
Borrowing, as contemplated by this Section 3.03, as a result of a drawing
under a Letter of Credit shall be absolute and unconditional and without
recourse to the Issuing Bank
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and shall not be affected by any circumstance, including (i) any set-off,
counterclaim, defense or other right which such Bank may have against the
Issuing Bank, any Borrower or any other Person for any reason whatsoever;
(ii) the occurrence or continuance of a Default, an Event of Default or a
Material Adverse Effect; or (iii) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing.
3.04 Repayment of Participations.
(a) Upon (and only upon) receipt by the Agent for the account of the
Issuing Bank of funds from any Borrower (i) in reimbursement of any
payment made by the Issuing Bank under the Letter of Credit with respect
to which any Bank has paid the Agent for the account of the Issuing Bank
for such Bank's participation in the Letter of Credit pursuant to Section
3.03, or (ii) in payment of interest on amounts described in clause (i),
the Agent will pay to each Bank, in the same funds as those received by
the Agent for the account of the Issuing Bank, the amount of such Bank's
Commitment Percentage of such funds, and the Issuing Bank shall receive
the amount of the Commitment Percentage of such funds of any Bank that did
not so pay the Agent for the account of the Issuing Bank.
(b) If the Agent or the Issuing Bank is required at any time to
return to any Borrower, or to a trustee, receiver, liquidator, custodian,
or any similar official in any Insolvency Proceeding, any portion of the
payments made by such Borrower to the Agent for the account of the Issuing
Bank pursuant to Section 3.04(a) in reimbursement of a payment made under
the Letter of Credit or interest or fee thereon, each Bank shall, on
demand of the Agent, forthwith return to the Agent or the Issuing Bank the
amount of its Commitment Percentage of any amounts so returned by the
Agent or the Issuing Bank plus interest thereon from the date such demand
is made to the date such amounts are returned by such Bank to the Agent or
the Issuing Bank, at a rate per annum equal to the Federal Funds Rate in
effect from time to time.
3.05 Role of the Issuing Bank.
(a) Each Bank and the Borrowers agree that, in paying any drawing
under a Letter of Credit, the Issuing Bank shall not have any
responsibility to obtain any document (other than any sight draft and
certificates expressly required by the Letter of Credit) or to ascertain
or inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document.
(b) Neither the Issuing Bank nor any of the respective
correspondents, participants or assignees of the Issuing Bank shall be
liable to any Bank for: (i) any
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action taken or omitted in connection herewith at the request or with the
approval of the Majority Banks; (ii) any action taken or omitted in the
absence of gross negligence or willful misconduct; or (iii) the due
execution, effectiveness, validity or enforceability of any Letter of
Credit Related Document.
(c) Each Borrower hereby assumes all risks of the acts or omissions
of any beneficiary or transferee with respect to its use of any Letter of
Credit. Neither the Issuing Bank nor any of the respective correspondents,
participants or assignees of the Issuing Bank, shall be liable or
responsible for any of the matters described in clauses (i) through (vii)
of Section 3.06; provided, however, that a Borrower may have a claim
against the Issuing Bank, and the Issuing Bank may be liable to such
Borrower, to the extent, but only to the extent, of any direct, as opposed
to consequential or exemplary, damages suffered by such Borrower which
such Borrower proves were caused by the Issuing Bank's willful misconduct
or gross negligence or the Issuing Bank's willful failure to pay under any
Letter of Credit after the presentation to it by the beneficiary of a
sight draft and certificate(s) strictly complying with the terms and
conditions of a Letter of Credit. In furtherance and not in limitation of
the foregoing: (i) the Issuing Bank may accept documents that appear on
their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary;
and (ii) the Issuing Bank shall not be responsible for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits thereunder
or proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason.
3.06 Obligations Absolute. The obligations of the Borrowers under
this Agreement and any Letter of Credit Related Document to reimburse the
Issuing Bank for a drawing under a Letter of Credit, and to repay any Letter of
Credit Borrowing and any drawing under a Letter of Credit converted into
Committed Loans, shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement and each such other
Letter of Credit Related Document under all circumstances, including the
following:
(i) any lack of validity or enforceability of this Agreement or any
Letter of Credit Related Document;
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the obligations of any Borrower in
respect of any Letter of Credit or any other amendment or waiver of or any
consent to departure from all or any of the Letter of Credit Related
Documents;
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(iii) the existence of any claim, set-off, defense or other right
that any Borrower may have at any time against any beneficiary or any
transferee of any Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the Issuing Bank or any
other Person, whether in connection with this Agreement, the transactions
contemplated hereby or by the Letter of Credit Related Documents or any
unrelated transaction;
(iv) any draft, demand, certificate or other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any
Letter of Credit;
(v) any payment by the Issuing Bank under any Letter of Credit
against presentation of a draft or certificate that does not strictly
comply with the terms of any Letter of Credit; or any payment made by the
Issuing Bank under any Letter of Credit to any Person purporting to be a
trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or successor to
any beneficiary or any transferee of any Letter of Credit, including any
arising in connection with any Insolvency Proceeding;
(vi) any exchange, release or non-perfection of any collateral, or
any release or amendment or waiver of or consent to departure from any
other guaranty, for all or any of the obligations of any Borrower in
respect of any Letter of Credit; or
(vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of, any
Borrower or a guarantor.
3.07 Cash Collateral Pledge. Upon (a) the request of the Agent, (i)
if the Issuing Bank has honored any full or partial drawing request on any
Letter of Credit and such drawing has resulted in a Letter of Credit Borrowing
hereunder, or (ii) if, as of the Termination Date, any Letters of Credit may for
any reason remain outstanding and partially or wholly undrawn, or (b) the
occurrence of the circumstances described in Section 2.10(a) requiring a
Borrower to Cash Collateralize Letters of Credit, then such Borrower shall
immediately Cash Collateralize the Letter of Credit Obligations in an amount
equal to such Letter of Credit Obligations (or in the case of clause (ii) above,
the excess amount required pursuant to Section 2.10(a)) and such cash will be
held as security for all Obligations of the Borrowers to the Banks hereunder in
a cash collateral account to be established by the Agent, and during the
existence of an Event of Default, the Agent may, upon the
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request of the Majority Banks, apply such amounts so held to the payment of such
outstanding Obligations.
3.08 Letter of Credit Fees.
(a) The Borrowers shall pay to the Agent for the account of each
Bank a letter of credit fee with respect to the Letters of Credit computed
on the average daily maximum amount available to be drawn of the
outstanding Letters of Credit, on each Interest Payment Date for Base Rate
Committed Loans based upon Letters of Credit outstanding for the previous
three-month period and such Letter of Credit fee shall be due and payable
in arrears on each such Interest Payment Date for Base Rate Committed
Loans. The letter of credit fee shall be equal to the Applicable Margin
for Loans bearing interest based on IBOR/LIBOR as set forth in Section
2.12(a), as in effect from time to time during the periods of calculation
thereof.
(b) The Borrowers shall pay to the Issuing Bank a letter of credit
fronting fee for each Letter of Credit issued by the Issuing Bank equal to
.0625% per annum of the face amount of such Letter of Credit. Such Letter
of Credit fronting fee shall be due and payable in arrears on each
Interest Payment Date for Base Rate Committed Loans.
(c) The Borrowers shall pay to the Issuing Bank from time to time on
demand the normal issuance, presentation, amendment and other processing
fees, and other standard costs and charges, of the Issuing Bank relating
to letters of credit as from time to time in effect.
3.09 Uniform Customs and Practice. The Uniform Customs and Practice
for Documentary Credits as most recently published by the International Chamber
of Commerce shall in all respects be deemed a part of this Article III as if
incorporated herein and (unless otherwise expressly provided in the Letters of
Credit) shall apply to the Letters of Credit.
ARTICLE IV.
TAXES, YIELD PROTECTION AND ILLEGALITY
4.01 Taxes.
(a) Subject to Section 4.01(g), any and all payments by the Parent
and each Borrower to any Bank or the Agent under this Agreement shall be
made free and clear of, and without deduction or withholding for or on
account of, any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and
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all liabilities with respect thereto, excluding, in the case of each Bank
and the Agent, as the case may be, such taxes (including income taxes or
franchise taxes) as are imposed on or measured by such Person's net income
by the jurisdiction under the laws of which such Person is organized or
has its principal office or maintains a Lending Office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter
referred to as "Taxes").
(b) In addition, the Borrowers and the Parent shall pay any present
or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies which arise from any payment made
hereunder or from the execution, delivery or registration of, or otherwise
with respect to, this Agreement or any other Loan Document (hereinafter
referred to as "Other Taxes").
(c) Subject to Section 4.01(g), the Borrowers and the Parent shall
indemnify and hold harmless each Bank and the Agent for the full amount of
Taxes or Other Taxes (including any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under Section 4.01(d)) paid by such Bank
or the Agent and any liability (including penalties, interest, additions
to tax and expenses) arising therefrom or with respect thereto, whether or
not such Taxes or Other Taxes were correctly or legally asserted.
(d) If any Borrower or the Parent shall be required by law to deduct
or withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to any Bank or the Agent, then, subject to Section 4.01(g):
(i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions
applicable to additional sums payable under this Section 4.01(d))
such Bank or the Agent, as the case may be, receives an amount equal
to the sum it would have received had no such deductions or
withholdings been made;
(ii) the relevant Borrower or the Parent shall make such
deductions; and
(iii) the relevant Borrower or the Parent shall pay the full
amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.
(e) Within 30 days after the date of any payment by any Borrower or
the Parent of Taxes or Other Taxes, such Person shall furnish to the
Agent, at its
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address referred to in Section 12.02, the original or a certified copy of
a receipt evidencing payment thereof, or other evidence of payment
satisfactory to the Agent.
(f) Each Bank which is organized under the laws of a jurisdiction
outside the United States agrees that:
(i) it shall, no later than the Effective Date (or, in the case
of a Bank which becomes a party hereto pursuant to Section 12.07
after the Effective Date, the date upon which such Bank becomes a
party hereto) deliver to each Borrower through the Agent two
accurate and complete signed originals of Internal Revenue Service
Form 4224 or any successor thereto ("Form 4224"), or two accurate
and complete signed originals of Internal Revenue Service Form 1001
or any successor thereto ("Form 1001"), as appropriate, in each case
indicating that such Bank is on the date of delivery thereof
entitled to receive all payments under this Agreement free from
withholding of United States Federal income tax;
(ii) if at any time such Bank makes any changes, including a
change of a Lending Office or its principal office, place of
incorporation or fiscal residence, necessitating a new Form 4224 or
Form 1001, it shall, to the extent it is legally entitled to do so,
promptly deliver to each Borrower through the Agent in replacement
for, or in addition to, the forms previously delivered by it
hereunder, two accurate and complete signed originals of Form 4224
or Form 1001, as appropriate, in each case indicating that such Bank
is on the date of delivery thereof entitled to receive all payments
under this Agreement free from withholding of United States Federal
income tax;
(iii) it shall, to the extent it is legally entitled to do so,
before or promptly after the occurrence of any event (including the
passing of time but excluding any event mentioned in clause (ii)
above) requiring a change in or renewal of the most recent Form 4224
or Form 1001 previously delivered by such Bank, deliver to each
Borrower through the Agent two accurate and complete original signed
copies of Form 4224 or Form 1001 in replacement for the forms
previously delivered by such Bank indicating that such Bank
continues to be entitled to receive all payments under this
Agreement free from any withholding of any United States Federal
income tax; and
(iv) it shall, to the extent it is legally entitled to do so,
promptly upon a Borrower's or the Agent's reasonable request to that
effect, deliver to such Borrower or the Agent (as the case may be)
such other forms or sim-
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ilar documentation as may be required from time to time by any
applicable law, treaty, rule or regulation in order to establish
such Bank's complete exemption from withholding on all payments
under this Agreement;
(v) if such Bank claims or is entitled to claim exemption from
withholding tax under a United States tax treaty by providing a Form
1001 and such Bank sells or grants a participation of all or part of
its rights under this Agreement, such Bank shall notify the Agent of
the percentage amount in which it is no longer the beneficial owner
under this Agreement. To the extent of this percentage amount, the
Agent shall treat such Bank's Form 1001 as no longer in compliance
with this Section 4.01(f). In the event a Bank claiming exemption
from United States withholding tax by filing Form 4224 with the
Agent sells or grants a participation in its rights under this
Agreement, such Bank agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by sections
1441 and 1442 of the Code; and
(vi) without limiting or restricting any Bank's right to
increased amounts under Section 4.01(d) from the Borrowers and the
Parent upon satisfaction of such Bank's obligations under the
provisions of this Section 4.01(f), if such Bank is entitled to a
reduction in the applicable withholding tax, the Agent may (but
shall not be obligated to) withhold from any interest to such Bank
an amount equivalent to the applicable withholding tax after taking
into account such reduction. If the forms or other administrative
documentation required by clause (i) are not delivered to the Agent,
then the Agent shall withhold from any interest payment to Bank not
providing such forms or other documentation, an amount equivalent to
the applicable withholding tax and in addition, the Agent shall also
withhold against periodic payments other than interest payments to
the extent United States withholding tax is not eliminated by
obtaining Form 4224 or Form 1001. The Borrowers shall indemnify and
hold harmless the Agent and each of its officers, directors,
employees, counsel, agents and attorney-in-fact, on an after tax
basis, from and against all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, charges,
expenses or disbursements (including reasonable attorney's fees) of
any kind whatsoever incurred as a result of or in connection with
the Agent's failure to withhold as provided pursuant to the
preceding sentence, unless such failure constitutes gross negligence
or willful misconduct of the Agent itself as the same is determined
by a final judgment of a court of competent jurisdiction and the
obligations in this sentence shall survive payment of all other
Obligations.
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(g) Neither any Borrower nor the Parent will be required to pay any
additional amounts in respect of Taxes imposed by the United States
Federal government pursuant to Sections 4.01(a) or 4.01(d) to any Bank:
(i) if and to the extent the obligation to pay such additional
amounts would not have arisen but for a failure by such Bank to
comply with its obligations under Section 4.01(f) in respect of its
Lending Office;
(ii) if such Bank shall have delivered to the Borrowers a Form
4224 in respect of its Lending Office pursuant to Section
4.01(f)(i)-(iii) or such other forms or similar documentation
pursuant to Section 4.01(f)(iv), to the extent such Bank shall not
at any time be entitled to exemption from all withholding of United
States Federal income tax in respect of payments by the Borrowers or
the Parent hereunder for the account of such Lending Office for any
reason other than a change in United States law or regulations or in
the official interpretation of such law or regulations by any
Governmental Authority charged with the interpretation or
administration thereof (whether or not having the force of law)
after the date of delivery of such Form 4224 or such other forms or
similar documentation; or
(iii) if such Bank shall have delivered to the Borrowers a Form
1001 in respect of its Lending Office pursuant to Section
4.01(f)(i)-(iii) or such other forms or similar documentation
pursuant to Section 4.01(f)(iv), to the extent such Bank shall not
at any time be entitled to exemption from all deductions or
withholding of United States Federal income tax in respect of
payments by any Borrower or the Parent hereunder for the account of
such Lending Office for any reason other than a change in United
States law or regulations or any applicable tax treaty or
regulations or in the official interpretation of any such law,
treaty or regulations by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the
force of law) after the date of delivery of such Form 1001 or such
other forms or similar documentation.
(h) Each Bank agrees that it shall, at any time upon reasonable
advance request in writing by a Borrower or the Agent, promptly deliver
such certification or other documentation as may be required under the law
or regulation in any applicable jurisdiction and which such Bank is
entitled to submit to avoid or reduce withholding taxes on amounts to be
paid by any Borrower or the Parent and received by such Bank pursuant to
this Agreement or any other Loan Document.
(i) The Borrowers and the Parent shall indemnify each Bank and the
Agent, to the extent required by this Section 4.01 within 30 days after
receipt of
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written request from such Bank or the Agent thereof accompanied by a
written statement describing in reasonable detail the Taxes or Other Taxes
that are the subject of the basis for such indemnity and the computation
of the amount payable.
(j) If a Bank or the Agent shall become aware that it is entitled to
claim a refund of any withholding Taxes or Other Taxes paid by the Parent
or any Borrower under this Section 4.01 from the taxing authority imposing
such Taxes or Other Taxes, such Bank or the Agent, as the case may be,
shall, at the expense of the Borrowers, use reasonable efforts to obtain
such refund and upon receipt thereof, shall promptly pay to the Parent or
such Borrower the amount so received.
(k) If any Borrower or the Parent is required to pay additional
amounts to any Bank or the Agent pursuant to Section 4.01(d), then such
Bank shall, upon such Borrower's request, use its reasonable best efforts
(consistent with policy considerations of such Bank) to change the
jurisdiction of its Lending Office so as to reduce or eliminate any such
additional payment which may thereafter accrue if such change in the
reasonable judgment of such Bank is not otherwise disadvantageous to such
Bank.
(l) Each Bank agrees that it will (i) take all reasonable actions
reasonably requested by the Parent or any Borrower (consistent with policy
considerations by such Bank) to maintain all exemptions, if any, available
to it from withholding taxes (whether available by treaty or existing
administrative waiver), and (ii) to the extent reasonable, otherwise
cooperate with the Parent or any Borrower to minimize any amounts payable
by the Parent or any Borrower under this Section 4.01, in any case
described in the preceding clauses (i) and (ii), however, only if such
action or cooperation is not disadvantageous to such Bank in the
reasonable judgment of such Bank.
4.02 Illegality.
(a) If any Bank shall determine that (i) the introduction of any
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration thereof, has made it unlawful, or (ii)
any central bank or other Governmental Authority has asserted that it is
unlawful for any Bank or its Lending Office to make a Eurodollar Loan or
IBOR Loan or to convert any Base Rate Committed Loan to a Eurodollar
Committed Loan, then, on notice thereof by such Bank to the Borrowers
through the Agent, the obligation of such Bank to make or convert any such
Loans (including in respect of any Eurodollar Bid Loan as to which the
Company has accepted such Bank's Competitive Bid, but as to which the
Borrowing Date has not occurred) shall be suspended until such Bank shall
have
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notified the Agent and the Borrowers that the circumstances giving rise to
such determination no longer exist.
(b) If a Bank shall determine that it is unlawful to maintain any
Eurodollar Loan or IBOR Loan, the Borrowers shall, unless otherwise
permitted under paragraph (c) below, prepay in full all Eurodollar Loans
or IBOR Loans of such Bank then outstanding, together with interest
accrued thereon, either on the last day of the Interest Period thereof if
such Bank may lawfully continue to maintain such Eurodollar Loans or IBOR
Loans to such day, or immediately, if the Bank may not lawfully continue
to maintain such Eurodollar Loans, together with any amounts required to
be paid in connection therewith pursuant to Section 4.04.
(c) If the Borrowers are required to prepay any Eurodollar Committed
Loan or IBOR Loan immediately, then concurrently with such prepayment, the
Borrowers shall borrow from the affected Bank, in the aggregate amount of
such repayment, Base Rate Committed Loans.
(d) Before giving any notice to the Agent pursuant to this Section
4.02, the affected Bank shall designate a different Lending Office with
respect to its Eurodollar Loans or IBOR Loans if such designation will
avoid the need for giving such notice or making such demand and will not,
in the judgment of such Bank, be illegal, inconsistent with the policies
of such Bank or otherwise disadvantageous to such Bank.
4.03 Increased Costs and Reduction of Return.
(a) If any Bank or the Issuing Bank shall determine that, due to
either (i) the introduction of or any change in or in the interpretation
or administration of any law or regulation (other than any law or
regulation relating to taxes, including those relating to Taxes or Other
Taxes) after the Effective Date or (ii) the compliance with any guideline
or request from any central bank or other Governmental Authority (whether
or not having the force of law) made after the Effective Date, there shall
be any increase in the cost to such Bank of agreeing to make or making,
funding or maintaining any Eurodollar Loans or IBOR Loans or participating
in any Letter of Credit Obligations, or any increase in the cost to the
Issuing Bank of agreeing to issue, issuing or maintaining any Letter of
Credit or of agreeing to make or making, funding or maintaining any unpaid
drawing under any Letter of Credit, then the Borrowers shall be liable
for, and shall from time to time, upon demand therefor by such Bank or the
Issuing Bank, as the case may be (with a copy of such demand to the
Agent), pay to the Agent for the account of such Bank or the Issuing Bank,
additional amounts as are sufficient to compensate such Bank or the
Issuing Bank for such increased costs.
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(b) If any Bank or the Issuing Bank shall have determined that (i)
the introduction of any Capital Adequacy Regulation after the Effective
Date, (ii) any change in any Capital Adequacy Regulation after the
Effective Date, (iii) any change in the interpretation or administration
of any Capital Adequacy Regulation by any central bank or other
Governmental Authority charged with the interpretation or administration
thereof after the Effective Date, or (iv) compliance by any Bank (or its
Lending Office) or the Issuing Bank, as the case may be, or any
corporation controlling such Bank or the Issuing Bank, as the case may be,
with any Capital Adequacy Regulation adopted after the Effective Date,
affects or would affect the amount of capital required or expected to be
maintained by such Bank or the Issuing Bank or any corporation controlling
such Bank or the Issuing Bank and (taking into consideration such Bank's,
the Issuing Bank's or such corporation's policies with respect to capital
adequacy and such Bank's, the Issuing Bank's or corporation's desired
return on capital) determines that the amount of such capital is (or is
required to be) increased as a consequence of its Commitment, Loans,
participations in Letters of Credit, or obligations under this Agreement,
then, upon demand of such Bank or the Issuing Bank (with a copy to the
Agent), the Borrowers shall be liable for and shall immediately pay to
such Bank or the Issuing Bank, from time to time as specified by such Bank
or the Issuing Bank, additional amounts sufficient to compensate such Bank
or the Issuing Bank for such increase.
4.04 Funding Losses. The Borrowers shall reimburse each Bank and to
hold each Bank harmless from any loss, cost or expense (other than loss of
margin) which such Bank may sustain or incur as a consequence of:
(a) any failure by any Borrower to make any payment of principal of
any Eurodollar Loan or IBOR Loan (including payments made after any
acceleration thereof);
(b) any failure by any Borrower to borrow a Eurodollar Committed
Loan or IBOR Loan or continue a Eurodollar Committed Loan or convert a
Base Rate Committed Loan to a Eurodollar Committed Loan after such
Borrower has given (or is deemed to have given) a Notice of Borrowing, a
request for a Borrowing of Swingline Loans or a Notice of Conversion/
Continuation as the case may be;
(c) any failure by any Borrower to make any prepayment of a
Committed Eurodollar Loan after such Borrower has given a notice in
accordance with Section 2.09;
(d) any payment or prepayment (including pursuant to Sections 2.09
or 2.10 or after acceleration thereof) of any Eurodollar Loan or IBOR Loan
for any
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reason whatsoever on a day which is not the last day of the Interest
Period with respect thereto; or
(e) any prepayment of a Bid Loan before such payment is due and
owing;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain any Eurodollar Loan, IBOR Loan or Bid Loan
hereunder or from fees payable to terminate the deposits from which such funds
were obtained.
4.05 Inability to Determine Rates. Notwithstanding any provisions
herein to the contrary, if, in relation to any proposed Eurodollar Loan or IBOR
Loan, (a) the Agent or the Swingline Bank shall have determined (which
determination shall be conclusive and binding upon all parties hereto) that by
reason of circumstances affecting the inter-bank markets adequate and fair means
do not exist for ascertaining LIBOR or IBOR to be applicable to such Eurodollar
Loan or IBOR Loan or (b) the Agent shall have received notice from the Majority
Banks or the Swingline Bank that LIBOR or IBOR determined or to be determined
for any Interest Period will not adequately and fairly reflect the cost to such
Banks or the Swingline Bank (as conclusively certified by such Banks or the
Swingline Bank) of making or maintaining their affected Loans during such
affected Interest Period, then, the obligation of the Banks to make, continue or
maintain Eurodollar Committed Loans or to convert Base Rate Committed Loans into
Eurodollar Committed Loans or the obligation of the Swingline Bank to make or
maintain IBOR Loans shall be suspended until the Agent upon the instruction of
the Majority Banks or the Swingline Bank, as applicable, revokes such notice in
writing. If, notwithstanding the provisions of this Section 4.05, any Bank has
made available to any Borrower its Commitment Percentage of any such proposed
Eurodollar Committed Loan, then such Borrower shall immediately repay the amount
so made available to it by such Bank, together with accrued interest thereon, if
any.
4.06 Reserves on Eurodollar Committed Loans or IBOR Loans. The
Borrowers shall pay to each Bank, if and as long as such Bank shall be required
under regulations of the Federal Reserve Board to maintain reserves with respect
to liabilities or assets consisting of or including Eurocurrency funds or
deposits (currently known as "Eurocurrency liabilities"), additional costs on
the unpaid principal amount of each Eurodollar Committed Loan or IBOR Loan equal
to actual costs of such reserves allocated to such Committed Loan by such Bank
(as determined by such Bank in good faith, which determination shall be
conclusive absent manifest error), payable on each date on which interest is
payable on such Committed Loan provided the Borrowers shall have received at
least 15 days' prior written notice (with a copy to the Agent) of such
additional interest from the Bank. If a Bank fails to give such notice 15 days
prior to the relevant Interest Payment Date, such additional interest shall be
payable 15 days after receipt by the Borrowers of such notice.
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4.07 Certificates of Banks. Any Bank, the Swingline Bank or the
Issuing Bank claiming reimbursement or compensation pursuant to this Article IV
shall deliver to the Borrowers or the Parent, as applicable (with a copy to the
Agent) a certificate setting forth in reasonable detail the amount payable to
such Person hereunder and such certificate shall be conclusive and binding on
the Borrowers or the Parent in the absence of manifest error.
4.08 Change of Lending Office, Replacement Bank.
(a) Each Bank agrees that upon the occurrence of an event giving
rise to the operation of Section 4.02 or 4.03 with respect to such Bank,
it will if so requested by the Borrowers, use reasonable efforts
(consistent with its internal policy and legal and regulatory
restrictions) to designate a different Lending Office for any Loans
affected by such event with the object of avoiding the consequence of the
event giving rise to the operation of such section; provided, however,
that such designation would not, in the sole judgment of such Bank, be
otherwise disadvantageous to such Bank. Nothing in this Section 4.08(a)
shall affect or postpone any of the obligations of the Borrowers or the
right of any Bank provided in Section 4.02 or 4.03.
(b) Notwithstanding anything to the contrary contained herein or in
any other Loan Document, (x) upon the occurrence of any event that
obligates any Borrower or the Parent to pay any amount under Section 4.01
or giving rise to the operation of Section 4.02 or Section 4.03 with
respect to such Bank or (y) as provided in Section 12.01(b) in the case of
certain refusals by a Bank to consent to certain proposed changes,
waivers, discharges or terminations with respect to this Agreement which
have been approved by the Majority Banks, the Borrowers shall have the
right, if no Default or Event of Default then exists or will exist
immediately after giving effect to the respective replacement, to replace
such Bank (the "Replaced Bank") by designating another Bank or an Eligible
Assignee (such Bank or Eligible Assignee being herein called a
"Replacement Bank") to which such Replaced Bank shall assign, in
accordance with Section 12.07 and without recourse to or warranty by, or
expense to, such Replaced Bank, the rights and obligation of such Replaced
Bank hereunder (except for such rights as survive repayment of the Loans),
and, upon such assignment, such Replaced Bank shall no longer be a party
hereto or have any rights hereunder and such Replacement Bank shall
succeed to the rights and obligations of such Replaced Bank hereunder. The
Borrowers shall pay to such Replaced Bank in same day funds on the date of
replacement all interest, fees and other amounts then due and owing such
Replaced Bank by the Borrowers hereunder to and including the date of
replacement, including, without limitation, costs incurred under Sections
4.01, 4.02 or 4.03.
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4.09 Survival. The agreements and obligations of the Parent and the
Borrowers in this Article IV shall survive the payment of all other Obligations.
ARTICLE V.
CONDITIONS PRECEDENT
5.01 Conditions to the Effective Date. The occurrence of the
Effective Date, the obligation of each Bank to make Committed Loans hereunder,
to receive through the Agent the initial Competitive Bid Request, and the
obligation of the Issuing Bank to issue Letters of Credit on the Effective Date
is subject to the condition that the Agent shall have received on or before the
date for making such Committed Loans and issuing such Letters of Credit all of
the following, in form and substance reasonably satisfactory to the Agent and
each Bank and in sufficient copies for each Bank:
(a) Credit Agreement. This Agreement executed by each Borrower, the
Parent, the Agent, the Issuing Bank, the Swingline Bank and each of the
Banks (or, in the case of any party as to which an executed counterpart
shall not have been received, receipt by the Agent in form satisfactory to
it of facsimile or other written confirmation from such party of execution
of a counterpart hereof by such party);
(b) Resolutions; Incumbency.
(i) Copies of the resolutions of the board of directors of each
Borrower approving and authorizing the execution, delivery and
performance by such Borrower of this Agreement and the other Loan
Documents to be delivered by such Borrower hereunder, and
authorizing the borrowing of the Loans and the issuance of the
Letters of Credit, certified as of the Effective Date by the
secretary or an assistant secretary of such Borrower;
(ii) Copies of the resolutions of the board of directors of the
Parent approving and authorizing the execution, delivery and
performance by the Parent of this Agreement (including the guaranty
of the Obligations of the Borrowers) and the other Loan Documents to
be delivered by the Parent hereunder, certified by the secretary or
an assistant secretary of the Parent;
(iii) Certificates of the secretary or assistant secretary of the
Parent and each Borrower certifying the names and true signatures of
the officers of the Parent and such Borrower authorized to execute,
deliver and perform, as applicable, this Agreement and all other
Loan Documents, notices, requests and other communications to be
delivered hereunder or thereunder;
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(c) Bring-down Certificate. Bring-down certificate of the Parent and
each Borrower from the Secretary of State of the State of Delaware, dated
the Effective Date;
(d) Legal Opinions.
(i) A satisfactory opinion of Davis Polk & Wardwell, counsel to
the Parent and the Borrowers, addressed to the Agent and the Banks,
containing opinions substantially in the form of Exhibit F and as to
such other matters as the Agent may reasonably request;
(ii) A satisfactory opinion of George MacLean, Esq., general
counsel to the Parent and the Borrowers addressed to the Agent and
the Banks, containing opinions substantially in the form of Exhibit
G and as to such other matters as the Agent may reasonably request;
and
(iii) An opinion of White & Case, special counsel to the Agent and
the Banks, containing opinions substantially in the form of Exhibit
H;
(e) Payment of Fees and Expenses. Evidence that all fees and
reasonable costs and expenses (including Attorney Costs) payable by the
Borrowers on or before the Effective Date have been paid;
(f) Certificates. Certificates signed by a Responsible Officer of
the Parent and each Borrower, dated as of the Effective Date stating that:
(A) The representations and warranties of the Parent and each
Borrower contained in Article VI are true and correct on and as of
such date, as though made on and as of such date (except to the
extent such representations and warranties expressly relate to an
earlier date, in which case such representations and warranties
shall be true and correct as of such earlier date);
(B) no Default or Event of Default exists or would result
from any Borrowing on the Effective Date; and
(C) neither the Parent nor any Borrower shall have any
Indebtedness outstanding except as shall be permitted under Section
8.04;
(g) Senior Notes. On or prior to the Effective Date, (i) the Company
shall have issued the Senior Notes and received gross cash proceeds
therefrom (before the payment of fees and expenses in connection
therewith) in an aggregate
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amount of at least $100,000,000, (ii) the Agent shall have received copies
of the Senior Note Documents certified as true and correct by an
appropriate officer of the Company, and (iii) the Senior Note Documents
shall be in full force and effect and the terms and conditions thereof
shall be in form and substance reasonably satisfactory to the Agent and
Majority Banks;
(h) Existing Credit Agreement; etc. On the Effective Date,
concurrently with the incurrence of Loans hereunder, the total commitments
under the Existing Credit Agreement shall have been terminated, and all
loans thereunder shall have been repaid in cash in full, together with all
accrued interest and fees thereon, all letters of credit issued thereunder
shall have been terminated or assumed as Letters of Credit hereunder, and
all other amounts owing pursuant to the Existing Credit Agreement shall
have been repaid in full. The Agent shall have received evidence in form,
scope and substance satisfactory to it that the matters set forth in this
Section 5.01(h) have been satisfied on such date; and
(i) Other Documents. Such other approvals, opinions or documents,
including financing statements, as the Agent or any Bank may reasonably
request.
5.02 Conditions to all Borrowings and the Issuance of any Letters of
Credit. The obligation of each Bank to make any Loan agreed to be made by it
hereunder, or any Bid Loan as to which any Borrower has accepted the relevant
Competitive Bid, and the obligation of the Issuing Bank to issue, renew or amend
any Letter of Credit is subject to the satisfaction of the following conditions
precedent on the relevant Borrowing Date or date of issuance:
(a) Notice. The Agent shall have received a Notice of Borrowing in
the case of Committed Loans, or in the case of a Swingline Loan, the
notice required under Section 2.03(f); or in the case of any issuance of
any Letter of Credit, the Issuing Bank and the Agent shall have received a
Letter of Credit Application, as required under Section 3.02;
(b) Continuation of Representations and Warranties. The
representations and warranties made by the Parent and each Borrower
contained in Article VI and in any other Loan Document shall be true and
correct in all material respects on and as of such Borrowing Date or date
of issuance (except to the extent such representations and warranties
expressly refer to an earlier date, in which case they shall be true and
correct as of such earlier date);
(c) No Existing Default. No Default or Event of Default shall exist
or shall result from such Borrowing or issuance of Letter of Credit; and
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(d) No Material Adverse Effect. Since the Effective Date, no events
have occurred which, individually or in the aggregate, have had a Material
Adverse Effect.
Each Notice of Borrowing, Competitive Bid Request, request for a Swingline Loan
or Letter of Credit Application submitted by any Borrower hereunder shall be
deemed to constitute a representation and warranty by such Borrower hereunder,
as of the date of each such notice or application and as of the date of each
Borrowing that the applicable conditions in this Section 5.02 are satisfied.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants with respect to itself and its
Subsidiaries and the Parent represents and warrants with respect to itself, in
each case to the Agent and each Bank that:
6.01 Corporate Existence and Power. It and each of its Material
Subsidiaries:
(a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation;
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals to own or hold under lease its
property or assets, conduct its business and execute, deliver, and perform
its obligations under, the Loan Documents;
(c) is duly qualified to do business as a foreign corporation, and
licensed and in good standing, under the laws of each jurisdiction where
its ownership, lease or operation of property or the nature or conduct of
its business requires such qualification or license except where the
failure so to qualify could not reasonably be expected to have a Material
Adverse Effect; and
(d) is in compliance with all Requirements of Law, except to the
extent that the failure to do so could not reasonably be expected to have
a Material Adverse Effect.
6.02 Corporate Authorization; No Contravention. The execution,
delivery and performance by each Borrower and its Subsidiaries and the Parent of
this Agreement,
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and any other Loan Document to which such Person is party, have been duly
authorized by all necessary corporate action, and do not and will not:
(a) contravene the terms of any of such Person's charter or by-laws;
(b) conflict with or result in any breach or contravention of, or
the creation of any Lien under, any document evidencing any material
Contractual Obligation to which such Person is a party or any order,
injunction, writ or decree of any Governmental Authority to which such
Person or its property is subject; or
(c) violate any Requirement of Law.
6.03 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with (except for any
registrations or approvals required under state blue sky securities laws in
connection with the sale of the Senior Notes), any Governmental Authority is
necessary or required in connection with the execution, delivery or performance
by, or enforcement against, the Company or any of its Subsidiaries or the Parent
of this Agreement or any other Loan Document.
6.04 Binding Effect. This Agreement and each other Loan Document to
which the Company or any of its Subsidiaries or the Parent is a party constitute
the legal, valid and binding obligations of the Company and each of its
Subsidiaries and the Parent to the extent such Person is a party thereto,
enforceable against such Person in accordance with their 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 of general applicability.
6.05 Litigation. There are no actions, suits, proceedings, claims or
disputes pending, or to the best knowledge of any Borrower or the Parent,
threatened at law, in equity, in arbitration or before any Governmental
Authority, against the Company or any of its Subsidiaries or the Parent or any
of their respective properties or assets which:
(a) purport to affect or pertain to this Agreement or any other
Loan Document, or any of the transactions contemplated hereby or thereby;
or
(b) would reasonably be expected to have a Material Adverse Effect.
No injunction, writ, temporary restraining order or any order of any
nature has been issued by any court or other Governmental Authority purporting
to enjoin or restrain the execution, delivery or performance of this Agreement
or any other Loan Document, or directing that any other transaction provided for
herein not be consummated as herein provided.
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6.06 No Default. No Default or Event of Default exists or would
result from the incurring of any Obligations by any Borrower or the Parent.
Neither the Company nor any of its Subsidiaries nor the Parent is in default
under or with respect to any Contractual Obligation in any respect which,
individually or together with all such defaults, could reasonably be expected to
have a Material Adverse Effect.
6.07 ERISA Compliance.
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state law.
Each Plan which is intended to qualify under Section 401(a) of the Code
(i) has received a favorable determination letter from the Internal
Revenue Service or (ii) has been recently established and has not received
such a determination letter and such Plan complies with the requirements
of Section 401(a) of the Code; and to the best knowledge of any Borrower
or the Parent nothing has occurred which would cause the loss of such
qualification or the revocation of such determination letter.
(b) There are no pending or, to the best knowledge of any Borrower
or the Parent, threatened claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan which has resulted or
could reasonably be expected to result in a Material Adverse Effect. There
has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan which has resulted or could
reasonably be expected to result in a Material Adverse Effect.
(c) No ERISA Event has occurred or is reasonably expected to occur
with respect to any Pension Plan or Multiemployer Plan.
(d) As of the date hereof, the aggregate Unfunded Pension Liability
for all Pension Plans that have an Unfunded Pension Liability does not
exceed $18,000,000.
(e) Neither the Parent, the Company nor any ERISA Affiliate has
incurred, nor reasonably expects to incur, any liability under Title IV of
ERISA with respect to any Pension Plan (other than premiums due and not
delinquent under Section 4007 of ERISA).
(f) Neither the Parent, the Company nor any ERISA Affiliate has
incurred nor reasonably expects to incur any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA,
would result in such liability) under Section 4201 or 4243 of ERISA with
respect to a Multiemployer Plan.
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(g) Neither the Parent, the Company nor any ERISA Affiliate has
transferred any Unfunded Pension Liability to any Person or otherwise
engaged in a transaction that could be subject to Section 4069 or 4212(c)
of ERISA.
6.08 Use of Proceeds; Margin Regulations. The proceeds of the Loans
are intended to be and shall be used solely for the purposes set forth in and
permitted by Section 7.10, and are intended to be and shall be used in
compliance with Section 8.06. Neither the Company nor any of its Subsidiaries
shall purchase Margin Stock other than purchases made in compliance with
Regulations G, T, U and X of the Federal Reserve Board.
6.09 Title to Properties. The Parent, the Company and each of its
Subsidiaries have good record and marketable title in fee simple to, or valid
leasehold interests in, all real property necessary or used in the ordinary
conduct of their respective businesses, except for such defects in title as
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. As of the Effective Date, the property of the Parent,
the Company and its Subsidiaries is subject to no Liens, other than Permitted
Liens.
6.10 Taxes. The Parent, the Company and its Subsidiaries have filed
all federal and other material tax returns and reports required to be filed and
paid the tax thereon shown to be due, and have paid all federal and other
material taxes, assessments, fees and other governmental charges levied or
imposed upon them or their properties, income or assets otherwise due and
payable, except those which are being contested in good faith by appropriate
proceedings and for which adequate reserves have been provided in accordance
with GAAP. There is no proposed tax assessment against the Parent, the Company
or any of its Subsidiaries which could reasonably be expected to have a Material
Adverse Effect.
6.11 Financial Statements. All balance sheets, statements of
operations and other financial data which have been or shall hereafter be
furnished to the Agent and the Banks for the purposes of or in connection with
this Agreement or any transaction contemplated hereby do and will present
fairly, in all material respects, the financial condition of the Persons
involved as of the dates thereof and the results of their operations for the
period(s) covered thereby.
6.12 Securities Law, etc.; Compliance. All transactions contemplated
by this Agreement and the other Loan Documents comply in all material respects
with (x) Regulations G, T, U and X of the Federal Reserve Board and (y) all
other applicable laws and any rules and regulations thereunder, except where the
failure to comply, in the case of this clause (y), could not reasonably be
expected to have a Material Adverse Effect.
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6.13 Governmental Regulation. Neither the Parent nor any Borrower is
an "investment company" within the meaning of the Investment Company Act of 1940
or a "holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a holding
company," within the meaning of the Public Utility Holding Company Act of 1935.
6.14 Accuracy of Information. All factual information (excluding, in
any event, financial projections) heretofore or contemporaneously herewith
furnished by or on behalf of it in writing to the Agent or any Bank for purposes
of or in connection with this Agreement or any transaction contemplated hereby,
and all other such factual information hereafter furnished by or on behalf of it
to the Agent or any Bank will be, true and accurate in every material respect on
the date as of which such information is dated or certified and not incomplete
by omitting to state any material fact necessary to make such information, in
the light of the circumstances existing at the time such information was
delivered, not misleading.
6.15 Hazardous Materials. Except as disclosed on Schedule 6.15,
neither it nor its Subsidiaries have caused or permitted any Hazardous Material
to be disposed of or otherwise released, to its best knowledge, either from, on
or under any property currently or formerly legally or beneficially owned or
operated by, or otherwise used by, it or any of its Subsidiaries which has or is
reasonably likely to have a Material Adverse Effect. To its best knowledge, no
such property has ever been used as a dump site or storage site for any
Hazardous Materials or otherwise contains or contained Hazardous Materials which
has or is reasonably likely to have a Material Adverse Effect. The failure, if
any, of it or its Subsidiaries, in connection with their current and former
properties or their businesses, to be in compliance with any Environmental Law
or to obtain any permit, certificate, license, approval and other authorization
under such Environmental Laws has not had, nor is reasonably likely to have, a
Material Adverse Effect. Neither it nor its Subsidiaries have entered into, have
agreed to or are subject to any judgment, decree or order or other similar
requirement of any Governmental Authority under any Environmental Law, including
without limitation, relating to compliance or to investigation, cleanup,
remediation or removal of Hazardous Materials, which has or is reasonably likely
to have a Material Adverse Effect. Neither it nor its Subsidiaries have
contractually assumed any liabilities or obligations under any Environmental Law
which have or are reasonably likely to have a Material Adverse Effect. There are
no facts or circumstances which exist that could give rise to liabilities with
respect to Hazardous Materials or any Environmental Law, which have or are
reasonably likely to have a Material Adverse Effect.
6.16 Senior Notes. As of the Effective Date, the Senior Notes have
been duly authorized (except with respect to filings, registrations or approvals
that may be required under state blue sky securities laws in connection with the
sale of the Senior Notes), issued and delivered in accordance with applicable
law and the offering memorandum
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relating thereto, and such offering memorandum, as of the date of its issue,
does not contain any untrue statement of a material fact nor omit to state a
material fact necessary in order to make the statements contained therein, in
the light of the circumstances under which they were made, not misleading.
ARTICLE VII.
AFFIRMATIVE COVENANTS
The Borrowers and the Parent agree with the Agent and each Bank
that, until all Commitments and Letters of Credit have terminated and all
Obligations (other than indemnities for which no request for payment has been
made) have been paid and performed in full:
7.01 Financial Statements. The Parent and each Borrower shall
deliver to the Agent in form and detail satisfactory to the Agent and the
Majority Banks, with sufficient copies for each Bank:
(a) as soon as available, but not later than 95 days after the end
of each fiscal year, a copy of the audited consolidated balance sheet of
the Parent and its consolidated Subsidiaries as at the end of such year
and the related consolidated statements of income or operations,
shareholders' equity and cash flows for such fiscal year, setting forth in
each case in comparative form the figures for the previous fiscal year,
and accompanied by the opinion of Ernst & Young LLP or another
nationally-recognized independent public accounting firm which report
shall state that such consolidated financial statements present fairly, in
all material respects, the financial position for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years
(except for changes agreed upon by the Borrowers and such auditors which
are disclosed and described in such statements). Such opinion shall not be
qualified or limited because of a restricted or limited examination by
such accountant of any material portion of the records of the Parent or
any of its Subsidiaries; and
(b) as soon as available, but not later than 50 days after the end
of each of the first three fiscal quarters of each fiscal year, a copy of
the unaudited consolidated balance sheet of the Parent and its
consolidated Subsidiaries as of the end of such quarter and the related
consolidated statements of income, shareholders' equity and cash flows for
the period commencing on the first day and ending on the last day of such
quarter, and certified by any Responsible Officer as being complete and
correct and fairly presenting in all material respects, in accordance with
GAAP, the financial position and the results of operations of the Parent
and its Subsidiaries.
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7.02 Certificates; Other Information. The Parent and each Borrower
shall furnish to the Agent, with sufficient copies for each Bank:
(a) concurrently with the delivery of the financial statements
referred to in Sections 7.01(a) and (b) above, a Compliance Certificate;
(b) concurrently with the delivery of the financial statements
referred to in Sections 7.01(a) and (b), a Leverage Ratio Certificate duly
executed by a Responsible Officer of the Company;
(c) promptly after the same are sent, copies of all financial
statements and reports which the Parent sends to its shareholders; and
promptly after the same are filed, copies of all financial statements and
regular, periodical or special reports which the Parent may make to, or
file with, the Securities and Exchange Commission, other than filings on
Form 11-K and S-8;
(d) promptly after the same are sent, copies of all financial
statements and reports which the Parent or any of its Subsidiaries sends
to the holders of the Senior Notes (to the extent not theretofore
delivered to the Banks pursuant to this Agreement); and
(e) promptly, such additional business, financial and other
information with respect to the Parent or the Company or any of its
Subsidiaries as the Agent, at the request of any Bank, may from time to
time reasonably request.
7.03 Notices. The Parent and each Borrower shall, upon any
Responsible Officer of the Parent or such Borrower obtaining knowledge thereof,
give notice (accompanied by a reasonably detailed explanation with respect
thereto) promptly to the Agent, the Issuing Bank and each Bank of:
(a) the occurrence of any Default or Event of Default;
(b) any litigation, arbitration, or governmental investigation or
proceeding not previously disclosed by the Parent or the Borrowers to the
Banks which has been instituted or, to the knowledge of the Parent or the
Borrowers, is threatened against the Parent or the Company or any of its
respective Subsidiaries or to which any of their respective properties is
subject (i) which has a reasonable likelihood of resulting in a Material
Adverse Effect or (ii) relates to this Agreement, any other Loan Document
or any of the transactions contemplated hereby;
(c) any development which shall occur in any litigation,
arbitration, or governmental investigation or proceeding previously
disclosed by the Parent or the
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Borrowers to the Banks which has a reasonable likelihood of
resulting in a Material Adverse Effect; or
(d) any of the following events affecting the Parent or the Company
or any ERISA Affiliate (but in no event more than ten days after such
event), together with a copy of any notice with respect to such event that
may be required to be filed with a Governmental Authority and any notice
delivered by a Governmental Authority to the Parent, the Company or any
ERISA Affiliate with respect to such event:
(i) an ERISA Event; or
(ii) if any of the representations and warranties in
Section 6.07 ceases to be true and correct.
7.04 Maintenance of Corporate Existence, etc. The Parent and each
Borrower will cause to be done at all times all things necessary to maintain and
preserve the corporate existences of the Parent and each Borrower. The Parent
will continue to own and hold directly all of the outstanding shares of capital
stock of the Company.
7.05 Foreign Qualification, etc. The Parent and the Company will,
and the Company will cause each of its Subsidiaries to, cause to be done at all
times all things necessary to maintain and preserve the rights and franchises of
the Parent, each Borrower and each Material Subsidiary to be duly qualified to
do business and be in good standing as a foreign corporation in each
jurisdiction where the nature of its business makes such qualification necessary
and where the failure to maintain and preserve or so qualify could reasonably be
expected to have a Material Adverse Effect.
7.06 Payment of Taxes, etc. The Parent and the Company will, and the
Company will cause each of its Subsidiaries to, pay and discharge, as the same
may become due and payable, all federal and material state and local taxes,
assessments, and other governmental charges or levies against or on any of its
income, profits or property, as well as material claims of any kind which, if
unpaid, might become a lien upon any one of its properties, and will pay (before
they become delinquent) all other material obligations and liabilities;
provided, however, that the foregoing shall not require the Parent or the
Company or any of its Subsidiaries to pay or discharge any such tax, assessment,
charge, levy, lien, obligation or liability so long as it shall contest the
validity thereof in good faith by appropriate proceedings and shall set aside on
its books adequate reserves in accordance with accounting principles generally
accepted in the country in which it has its principal place of business.
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7.07 Maintenance of Property; Insurance. The Company will, and will
cause each of its Subsidiaries to, keep all of its material property that is
useful and necessary in its business in good working order and condition (except
for ordinary wear and tear and any failures that could not reasonably be
expected to have a Material Adverse Effect) and will maintain, and cause each of
its Subsidiaries to maintain, such insurance as may be required by law and such
other insurance, to such extent and against such hazards and liabilities, as is
customarily maintained by companies similarly situated to the Company.
7.08 Compliance with Laws, etc. The Parent and the Company will, and
the Company will cause each of its Subsidiaries to, comply with the Requirements
of Law of any Governmental Authority, noncompliance with which could reasonably
be expected to have a Material Adverse Effect.
7.09 Books and Records. The Parent and each Borrower will keep
proper books and records reflecting all of their business affairs and
transactions in accordance with GAAP and the Company will cause each of its
other Subsidiaries to keep proper books and records reflecting all of their
business affairs and transactions. The Parent and each Borrower shall permit the
Agent or, after the occurrence and during the continuance of any Default under
Section 7.01 or Event of Default, any Bank, or any of their respective
representatives or agents, upon reasonable notice and at reasonable times and
intervals during ordinary business hours (or at any time if an Event of Default
has occurred and is continuing), to visit all of their offices, discuss their
financial matters with their officers and, subject to the right of each
Borrower's representatives to be present, independent accountants (and hereby
authorizes such independent accountants to discuss their financial matters with
the Agent, any Bank or its representatives pursuant to the foregoing) and
examine and make abstracts or photocopies from any of their books or other
corporate records, all at the Parent's or the Borrowers' expense for any charges
imposed by such accountants or for making such abstracts or photocopies, but
otherwise at the Agent's or such Bank's expense.
7.10 Use of Proceeds. The Borrowers shall use the proceeds of the
Loans to repay obligations to the Banks under the Existing Credit Agreement and
for working capital and general corporate requirements of the Company and its
respective Subsidiaries.
7.11 End of Fiscal Years; Fiscal Quarters. The Company will, for
financial reporting purposes, cause (i) its fiscal years to end on the Saturday
closest to the last day in September of each year and (ii) its fiscal quarters
to end in a manner consistent therewith (on a 52/53 week basis).
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ARTICLE VIII.
NEGATIVE COVENANTS
The Parent and the Company agree with the Agent and each Bank that,
until all Commitments and Letters of Credit have terminated and all Obligations
(other than indemnities for which no request for payment has been made) have
been paid and performed in full:
8.01 Limitation on Liens. The Parent will not and the Company will
not, and will not permit any of its Subsidiaries to, create, incur, assume, or
suffer to exist any Lien upon any of its revenues, property (including fixed
assets, inventory, real property, intangible rights and stock) or other assets,
whether now owned or hereafter acquired, other than the following ("Permitted
Liens"):
(a) Liens which were granted prior to the date hereof securing
Indebtedness or other obligations having an aggregate principal or face
amount not exceeding $5,000,000, and refinancings, renewals and extensions
thereof to the extent not encumbering additional property;
(b) Liens for taxes, assessments, or other governmental charges or
levies to the extent that payment thereof shall not at the time be
required to be made in accordance with the provisions of Section 7.06;
(c) Liens encumbering property of the Company or its Subsidiaries of
carriers, warehousemen, mechanics, materialmen and landlords incurred in
the ordinary course of business for sums not overdue or being contested in
good faith by appropriate proceedings and for which appropriate reserves
with respect thereto have been established and maintained on the
consolidated books of the Company in accordance with GAAP;
(d) Liens encumbering property of the Company or its Subsidiaries
incurred in the ordinary course of business (x) in connection with
workers' compensation, unemployment insurance, or other forms of
governmental insurance or benefits, or to secure performance of tenders,
statutory obligations, leases, and contracts (other than for borrowed
money) entered into in the ordinary course of business or (y) to secure
obligations on surety or appeal bonds so long as the obligations secured
by Liens under this clause (y) do not exceed $20,000,000;
(e) easements, rights-of-way, zoning and similar restrictions and
other similar encumbrances or title defects which, in the aggregate, are
not substantial in amount, and which do not in any case materially detract
from the value of the
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property subject thereto or interfere with the ordinary conduct of the
business of the Company or its Subsidiaries;
(f) judgment Liens securing amounts not in excess of (A) $20,000,000
(i) in existence less than 30 days after the entry thereof, (ii) with
respect to which execution has been stayed or (iii) with respect to which
the appropriate insurance carrier has agreed in writing that there is
coverage by insurance or (B) $5,000,000;
(g) Liens securing documentary letters of credit; provided such
Liens attach only to the property or goods to which such letter of credit
relates;
(h) in addition to Liens referred to in clause (i) below, purchase
money security interests encumbering, or Liens otherwise encumbering at
the time of the acquisition thereof by the Company and/or its Subsidiaries
(x) real property and improvements thereto provided such security
interests and other Liens do not secure at any time amounts in excess of
$25,000,000 in the aggregate for the Company and its Subsidiaries combined
and (y) equipment, furniture, machinery or other assets hereafter acquired
by the Company or its Subsidiaries for normal business purposes, and
refinancings, renewals and extensions of such security interests and
Liens;
(i) Liens on the assets of any Person hereafter acquired by the
Company or any of its Subsidiaries, provided that (i) such acquisition is
permitted by Section 8.03 and (ii) such Liens were not created in
contemplation of or do not arise as result of or otherwise in connection
with such acquisition;
(j) Liens securing the obligations of the Company and/or its
Subsidiaries in connection with letters of credit permitted by Section
8.04(f)(y);
(k) interests in leases under which the Company and/or any of its
Subsidiaries are lessors and such leases are otherwise not prohibited by
the terms of this Agreement; and
(l) Liens granted by the Company or its Subsidiaries after the date
hereof and not covered by clauses (a) through (j) above (including Liens
arising from Sale and Leaseback Transactions and Receivables Sales)
securing obligations ("Secured Obligations") which, when added to the
aggregate principal amount of Indebtedness incurred by Subsidiaries of the
Company (not constituting Secured Obligations) and permitted pursuant to
Section 8.04(j), shall not exceed in the aggregate, 10% of Consolidated
Net Tangible Assets.
8.02 Disposition of Assets. The Parent will not and the Company will
not, and will not suffer or permit any of its Subsidiaries to, directly or
indirectly, sell, assign,
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lease, convey, transfer or otherwise dispose of (whether in one or a series of
transactions) any property (including accounts and notes receivable, with or
without recourse) or enter into any agreement to do any of the foregoing,
except:
(a) dispositions of assets not constituting Asset Sales;
(b) Asset Sales (other than Receivables Sales); and
(c) Receivables Sales provided that the aggregate Receivables Sale
Amount of all such Receivables Sales shall not exceed $100,000,000.
8.03 Consolidations, Merger, etc. The Parent will not and the
Company will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve itself (or suffer any thereof), consolidate or amalgamate
with or merge into or with any other corporation or any other Person, or
purchase or otherwise acquire all or substantially all of the assets of any
Person (or of any division thereof) or convey, sell, transfer, lease or
otherwise dispose of all or substantially all of the assets of any such Person
or, in the case of the Company's Subsidiaries only, stock in one transaction or
a series of transactions, to any other Person or Persons except:
(a) so long as no Event of Default or Default has occurred and is
continuing or would occur after giving effect thereto, any Subsidiary of
the Company (other than USI Funding) may liquidate or dissolve voluntarily
into, and may merge with and into, the Company or any other Wholly-Owned
Subsidiary of the Company;
(b) so long as no Event of Default or Default has occurred and is
continuing or would occur after giving effect thereto, the purchase or
acquisition by the Company or any Subsidiary of the Company after the
Effective Date, of all or substantially all of the assets or stock of any
Person or any division thereof if the Company is in pro forma compliance
with all covenants hereunder both before and after giving effect to such
transaction;
(c) so long as no Event of Default or Default has occurred and is
continuing or would occur after giving effect thereto, any Subsidiary of
the Company may purchase and merge with any other Person permitted to be
acquired pursuant to paragraph (b) above and may be created and
capitalized for such purposes;
(d) so long as no Event of Default or Default has occurred and is
continuing or would occur after giving effect thereto, the Company may
make asset dispositions, as would otherwise be permitted under Section
8.02; and
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(e) so long as no Event of Default or Default has occurred and is
continuing or would occur after giving effect thereto, any Subsidiary of
the Company (other than USI Funding), may be liquidated or dissolved.
8.04 Limitation on Indebtedness. The Parent will not and the Company
will not, and will not suffer or permit any of its Subsidiaries to, create,
incur, assume, suffer to exist, or otherwise become or remain directly or
indirectly liable with respect to, any Indebtedness, except:
(a) Indebtedness existing on the Effective Date and described on
Schedule 8.04(a), and in each case, refinancings or renewals thereof;
(b) Indebtedness incurred pursuant to any Loan Document;
(c) Indebtedness and among the Company and its Subsidiaries;
(d) Indebtedness of the Company and its Subsidiaries secured by
Liens permitted by Section 8.01(h) and 8.01(i);
(e) unsecured Indebtedness of the Borrower not to exceed
$200,000,000 at any time outstanding;
(f) letters of credit and reimbursement obligations of the Company
and/or its Subsidiaries under (x) documentary letters of credit, (y)
letters of credit, so long as the sum of undrawn face amounts and
reimbursement obligations under this clause (y) shall not exceed
$5,000,000 and (z) other letters of credit, so long as the sum of undrawn
face amounts and reimbursement obligations under this clause z shall not
exceed $50,000,000;
(g) Indebtedness (i) of the Company under the Senior Notes and (ii)
constituting a guaranty by the Parent of the Senior Notes on a basis that
is pari passu with the obligations owed by the Parent to the Banks and, in
each case, any refinancings or renewals thereof;
(h) Indebtedness arising under Interest Rate Protection Agreements
entered into by the Company or any of its Subsidiaries relating to
Indebtedness permitted hereunder so long as the notional amount thereof
does not exceed the principal amount of such Indebtedness;
(i) unsecured guaranties by the Parent of any Indebtedness of its
Subsidiaries permitted to be outstanding hereunder; and
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(j) Indebtedness of the Subsidiaries of the Company not otherwise
permitted by this Section 8.04, in an aggregate amount not to exceed, when
added to the principal amount of obligations secured by Liens securing
Secured Obligations and permitted pursuant to Section 8.01(l), 10% of
Consolidated Net Tangible Assets at such time.
No provision of the foregoing shall permit any Subsidiary of the Company to
guaranty any amounts under or in connection with the Senior Notes.
8.05 Transactions with Affiliates. The Parent will not and the
Company will not, and will not permit any of its Subsidiaries to, enter into, or
cause, suffer, or permit to exist:
(a) any arrangement or contract with any of its Affiliates (other
than the Company or a Subsidiary of the Company, as the case may be), of a
nature customarily entered into by Persons which are Affiliates of each
other (including management or similar contracts or arrangements relating
to the allocation of revenues, taxes, and expenses or otherwise) requiring
any payments to be made by the Parent, the Company or any Subsidiary of
the Company to any such Affiliate unless such arrangement or contract is
fair and equitable to the Parent, the Company or such Subsidiary; or
(b) any other transaction, arrangement, or contract with any of its
Affiliates (other than the Parent, the Company or a Subsidiary of the
Company) which would not be entered into by a prudent Person in the
position of the Parent, the Company or such Subsidiary with, or which is
on terms which are less favorable than are obtainable from, any Person
which is not one of its Affiliates.
8.06 Use of Credits; Compliance With Margin Regulations. The Company
will not, and will not suffer or permit any of its Subsidiaries to, use any
portion of the Loan proceeds or any Letter of Credit, directly or indirectly, to
purchase or carry Margin Stock other than in compliance with Regulations G, T, U
and X of the Federal Reserve Board. At no time shall the value of the Margin
Stock owned by the Parent and its Subsidiaries or the Company and its
Subsidiaries (as determined in accordance with Regulation U of the Federal
Reserve Board), as the case may be, exceed 25% of the value (as determined in
accordance with Section 221.2(g)(2) of Regulation U of the Federal Reserve
Board) of the assets of the Parent and its Subsidiaries or the Company and its
Subsidiaries, as the case may be.
8.07 Preferred Stock. The Parent will not, and will not permit any
of its Subsidiaries to, issue any preferred stock (other than Qualified
Preferred Stock).
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8.08 Demerger Transaction Documents. (a) The Parent will not and the
Company will not, and will not permit any of their Subsidiaries to (a) amend,
modify, supplement, waive or otherwise modify any provision of, the Demerger
Transaction Documents, or (b) take or fail to take any action (except as
required by the terms thereof) under the Demerger Transaction Documents, that in
the case of either (a) or (b) could reasonably be expected to have a Material
Adverse Effect.
(b) The Parent will not and the Company will not, and will not
permit any of their Subsidiaries to, make any payment contemplated by Section
VIII of the Indemnification Agreement relating to the Subscription Agreement at
any time that such payment would be prohibited by the terms of such Section
VIII.
8.09 Environmental Liabilities. The Company will not and will not
permit any of its Subsidiaries to violate any Environmental Law to an extent
sufficient to give rise to a Material Adverse Effect; and, without limiting the
foregoing, the Company will not, and will not permit any Person to, dispose of
any Hazardous Material into or onto, or (except in accordance with applicable
law) from, any real property owned, operated or otherwise used by the Company or
any of its Subsidiaries nor allow any Lien imposed pursuant to any Environmental
Law to be imposed or to remain on such real property, any of which events are
reasonably likely to have a Material Adverse Effect, except as contested in
reasonable good faith by appropriate proceedings and the pendency of such
proceedings will not have a Material Adverse Effect and except and unless
adequate reserves have been established and are being maintained on its books in
accordance with GAAP.
8.10 Financial Covenants.
(a) Consolidated Leverage Ratio. The Company shall not permit its
Consolidated Leverage Ratio as determined for any Measurement Period to be
greater than 3.5:1.0.
(b) Maximum Total Funded Debt. The Company will not permit its ratio
of Total Funded Debt to Capital to exceed (A) at any time prior to or on
December 31, 1997, 0.65:1.00 or (B) at any time on or after January 1,
1998, 0.60:1.00.
8.11 Special Covenants of the Parent.
(a) The Parent shall not take, or fail to take, any action that
would result in a breach of, or constitute non-compliance with, any of the
representations and undertakings made by Hanson in that certain letter of
February 23, 1995 from Hanson to the United Kingdom Inland Revenue.
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(b) The Parent shall not, directly or indirectly, take any action
(or fail to take any action) which would cause a loss of its dual tax
residency status under the laws of the United Kingdom and of the United
States that would reasonably be expected to have a Material Adverse
Effect.
(c) The Parent shall engage in no business activities and shall have
no material assets or liabilities (other than debt permitted to be
incurred by the Parent pursuant to Section 8.04), other than (a) the
management of its affairs and, in its capacity as a stockholder thereof,
the affairs of the Company, including those activities (i) relating to the
Parent's status as a reporting company under the Securities Exchange Act
of 1934 and (ii) relating to the requirements of clauses (a) and (b)
above, (b) its ownership of the capital stock of the Company, (c) its
liabilities pursuant to the Loan Documents and (d) its rights and
obligations pursuant to the Demerger Transaction Documents.
ARTICLE IX.
EVENTS OF DEFAULT
9.01 Event of Default. Any of the following shall constitute an
"Event of Default":
(a) Non-Payment. Any Borrower fails to pay, (i) when and as required
to be paid herein, any amount of principal of any Loan or any amount of
any Letter of Credit Obligation, or (ii) within five days after the same
shall become due, any interest, fee or any other amount payable hereunder;
or
(b) Representation or Warranty. Any representation or warranty by
the Company or any of its Subsidiaries or the Parent made or deemed made
herein or in any other Loan Document, or which is contained in any
certificate, document or financial or other statement by the Company, any
of its Subsidiaries, the Parent or their respective Responsible Officers,
furnished at any time under this Agreement or in or under any other Loan
Document, shall prove to have been incorrect in any material respect on or
as of the date made or deemed made; or
(c) Specific Defaults. Any Borrower or the Parent fails to perform
or observe any term, covenant or agreement contained in Sections 7.03(a),
7.10, 7.11 or Article VIII; or
(d) Other Defaults. The Parent, the Company or any of its
Subsidiaries fails to perform or observe any other term or covenant
contained in this Agreement
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or any other Loan Document, and such default shall continue unremedied for
a period of 30 days after the date upon which written notice thereof is
given to the Borrowers by the Agent or any Bank; or
(e) Cross-Default. The Parent, the Company or any of its
Subsidiaries (i) fails to make any payment in respect of any Indebtedness
having an aggregate principal amount of $20,000,000 or more when due
(whether by scheduled maturity, required prepayment, acceleration, demand,
or otherwise) and such failure continues after the applicable grace or
notice period, if any, specified in the document relating thereto on the
date of such failure; or (ii) fails to perform or observe any other
condition or covenant, or any other event shall occur or condition exist,
under any agreement or instrument relating to any such Indebtedness, and
such failure continues after the applicable grace or notice period, if
any, specified in the document relating thereto on the date of such
failure if the effect of such failure, event or condition is to cause, or
to permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Indebtedness (or a trustee or agent on behalf of
such holder or holders or beneficiary or beneficiaries) to cause such
Indebtedness to be declared to be due and payable prior to its stated
maturity; or
(f) Insolvency; Voluntary Proceedings. The Parent, the Company or
any of its Material Subsidiaries (i) generally fails to pay its debts as
they become due; (ii) commences any Insolvency Proceeding with respect to
itself; or (iii) takes any action to effectuate or authorize any of the
foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency
Proceeding is commenced or filed against the Parent, the Company or any of
its Material Subsidiaries, or any writ, judgment, warrant of attachment,
execution or similar process, is issued or levied against a substantial
part of the Parent's, the Company's or any of its Material Subsidiaries'
properties, and any such proceeding or petition shall not be dismissed, or
such writ, judgment, warrant of attachment, execution or similar process
shall not be released, vacated or fully bonded within 60 days after
commencement, filing or levy; (ii) the Parent, the Company or any of its
Material Subsidiaries admits the material allegations of a petition
against it in any Insolvency Proceeding, or an order for relief (or
similar order under non-U.S. law) is ordered in any Insolvency Proceeding;
or (iii) the Parent, the Company or any of its Material Subsidiaries
acquiesces in the appointment of a receiver, trustee, custodian,
conservator, liquidator, mortgagee in possession (or agent therefor), or
other similar Person for itself or a substantial portion of its property
or business; or
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(h) ERISA. (i) An ERISA Event shall occur with respect to a Pension
Plan or Multiemployer Plan which has resulted or could reasonably be
expected to result in liability of the Parent, the Company or an ERISA
Affiliate under Title IV of ERISA to the Pension Plan, Multiemployer Plan
or the PBGC in an aggregate amount in excess of $10,000,000; (ii) the
commencement or increase of contributions to, or the adoption of or the
amendment of a Pension Plan by the Parent, the Company or an ERISA
Affiliate which has resulted or could reasonably be expected to result in
an increase in Unfunded Pension Liability among all Pension Plans with
Unfunded Pension Liabilities in an aggregate amount in excess of
$30,000,000; (iii) any of the representations and warranties contained in
Section 6.07 shall cease to be true and correct in any material respect
and which cessation has resulted or could reasonably be expected to result
in a Material Adverse Effect; or (iv) the Parent, the Company or an ERISA
Affiliate shall fail to pay when due, after the expiration of any
applicable grace period, any installment payment with respect to its
withdrawal liability under Section 4201 of ERISA under a Multiemployer
Plan, which has resulted or could reasonably be expected to result in a
Material Adverse Effect; or
(i) Judgments. One or more non-interlocutory judgments, orders or
decrees shall be entered against the Company or any of its Subsidiaries or
the Parent involving in the aggregate a liability (not covered by
independent third-party insurance) as to any single or related series of
transactions, incidents or conditions, of $20,000,000 or more, and the
same shall remain unsatisfied, unvacated and unstayed pending appeal for a
period of 30 days after the entry thereof; or
(j) Change of Control. Any Change of Control shall occur; or
(k) Guaranty. Any provision of Article X of this Agreement shall for
any reason cease to be valid and binding on or enforceable against the
Parent, any Borrower or any other Guarantor Party or the Parent, any
Borrower or any Guarantor Party shall so state in writing or bring an
action to limit its obligations or liabilities thereunder; or
(l) Tax Status.
(i) the Parent or any of its Subsidiaries shall incur a
liability to Hanson of the type referred to in Section VIII of the
Indemnification Agreement relating to the Subscription Agreement; or
(ii) there shall be a final, nonappealable determination
by the applicable Governmental Authority that the Parent has failed
to maintain its
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dual tax residency in the United States and the United Kingdom that
would reasonably be expected to have a Material Adverse Effect.
9.02 Remedies. If any Event of Default occurs and is continuing, the
Agent shall, at the request of, or may, with the consent of, the Majority Banks,
(a) declare the Commitment of each Bank to make Committed Loans and
any obligation of the Issuing Bank to issue Letters of Credit to be
terminated, whereupon such Commitments and obligation shall forthwith be
terminated;
(b) declare the unpaid principal amount of all outstanding Loans,
all interest accrued and unpaid thereon, and all other amounts owing or
payable hereunder or under any other Loan Document to be immediately due
and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by each Borrower and the
Parent;
(c) demand that the Borrowers Cash Collateralize Letter of Credit
Obligations to the extent of outstanding and wholly or partially undrawn
Letters of Credit, whereupon the Borrowers shall so Cash Collateralize;
(d) exercise on behalf of itself, the Issuing Bank and the Banks all
rights and remedies available to it and the Banks under the Loan Documents
or applicable law; and
(e) apply any cash collateral as provided in Section 3.07 to the
payment of outstanding Obligations;
provided, however, that upon the occurrence of any event specified above in
paragraph (f) or (g) of Section 9.01 with respect to any Borrower (in the case
of clause (i) of paragraph (g) upon the expiration of the 60-day period
mentioned therein), the obligation of each Bank to make Loans and any obligation
of the Issuing Bank to issue Letters of Credit shall automatically terminate,
and all reimbursement obligations under Letters of Credit and the unpaid
principal amount of all outstanding Loans and all interest and other amounts as
aforesaid shall automatically become due and payable without further act or
notice by the Agent, the Issuing Bank or any Bank, which are hereby expressly
waived by each Borrower and the Parent.
9.03 Rights Not Exclusive. The rights provided for in this Agreement
and the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
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ARTICLE X.
THE GUARANTY
10.01 Guaranty from the Guarantor Parties.
(a) In order to induce the Banks to make Loans to the Borrowers
under this Agreement and to induce the Issuing Bank to issue Letters of
Credit, each Guarantor Party hereby unconditionally and irrevocably
guarantees the prompt payment and performance in full by its respective
Guaranteed Party when due (whether at stated maturity, by acceleration or
otherwise) of all Guaranteed Obligations of such Guaranteed Party. The
obligations of each Guarantor Party hereunder are those of a primary
obligor, and not merely a surety, and are independent of the Obligations
of the Guaranteed Party. A separate action or actions may be brought
against a Guarantor Party whether or not an action is brought against its
respective Guaranteed Party, any other guarantor or other obligor in
respect of the Guaranteed Obligations or whether its respective Guaranteed
Party, any other guarantor or any other obligor in respect of the
Guaranteed Obligations is joined in any such action or actions. Each
Guaranteed Party waives, to the extent permitted by applicable law, the
benefit of any statute of limitation affecting its liability hereunder and
agrees that its liability hereunder shall not be subject to any right of
set-off, counterclaim or recoupment (each of which rights is hereby waived
to the extent permitted by applicable law).
(b) Each Guarantor Party guarantees that the obligations guaranteed
by it hereby will be paid and performed strictly in accordance with the
terms of this Agreement and the other Loan Documents regardless of any
law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Agent, the Issuing Bank
or the Banks with respect thereto. To the extent permitted by law, the
liability of each Guarantor Party under this guaranty shall be absolute
and unconditional irrespective of, and each Guarantor Party hereby
irrevocably waives (to the extent permitted by applicable law) any
defenses it may now or hereafter have in any way relating to, any and all
of the following:
(i) any lack of genuineness, validity, legality or
enforceability against any respective Guaranteed Party or any other
guarantor of this Agreement, any other Loan Document or any
document, agreement or instrument relating hereto or any assignment
or transfer of this Agreement or any other Loan Document or any
defense that any respective Guaranteed Party may have with respect
to its liability hereunder or thereunder;
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(ii) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Guaranteed Obligations, or
any waiver, indulgence, compromise, renewal, extension, amendment,
modification of, or addition, consent, supplement to, or consent to
departure from, or any other action or inaction under or in respect
of, this Agreement, any other Loan Document or any document,
instrument or agreement relating to the Guaranteed Obligations or
any other instrument or agreement referred to herein or any
assignment or transfer of this Agreement;
(iii) any release or partial release of any other
guarantor or other obligor in respect of the Guaranteed Obligations;
(iv) any exchange, release or non-perfection of any collateral
for all or any of the Guaranteed Obligations, or any release, or
amendment or waiver of, or consent to departure from, any guaranty
or security, for any or all of the Guaranteed Obligations;
(v) any furnishing of any additional security for any of the
Guaranteed Obligations;
(vi) the liquidation, bankruptcy, insolvency or reorganization
of any Guaranteed Party, any other guarantor or other obligor in
respect of the Guaranteed Obligations or any action taken with
respect to this guaranty or otherwise by any trustee or receiver, or
by any court, in any such proceeding;
(vii) any modification or termination of any intercreditor or
subordination agreement pursuant to which the claims of other
creditors of any Guaranteed Party or any guarantor are subordinated
to those of the Banks, the Issuing Bank or the Agent; or
(viii) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, any
Guaranteed Party or any Guarantor Party.
(c) This guaranty shall continue to be effective or be reinstated,
as the case may be, if at any time payment or performance of the
Guaranteed Obligations, or any part thereof, is, upon the insolvency,
bankruptcy or reorganization of any Guaranteed Party or otherwise pursuant
to applicable law, rescinded or reduced in amount or must otherwise be
restored or returned by any of the Agent, the Issuing Bank or any Bank,
all as though such payment or performance had not been made.
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(d) If an event permitting the acceleration of any of the Guaranteed
Obligations shall at any time have occurred and be continuing and such
acceleration shall at such time be prevented by reason of the pendency
against any Borrower of a case or proceeding under any bankruptcy or
insolvency law, the relevant Guarantor Party agrees that, for purposes of
this guaranty and its obligations hereunder, the Guaranteed Obligations
shall be deemed to have been accelerated and such Guarantor Party shall
forthwith pay such Guaranteed Obligations (including interest which but
for the filing of a petition in bankruptcy with respect to such Borrower
would accrue on such Obligations), and the other obligations hereunder,
forthwith upon demand.
(e) Each Guarantor Party hereby waives (i) promptness, diligence,
presentment, notice of nonperformance, protest or dishonor, notice of
acceptance and any and all other notices with respect to any of the
Guaranteed Obligations or this Agreement or any other Loan Document, and
(ii) to the extent permitted by applicable law, any right to require that
any Agent, the Issuing Bank or any Bank protect, secure, perfect or insure
any Lien in or any Lien on any property subject thereto or exhaust any
right or pursue any remedy or take any action against any Guaranteed
Party, any other guarantor or any other Person or any collateral or
security or to any balance of any deposit accounts or credit on the books
of the Agent, the Issuing Bank or any Bank in favor of such Guaranteed
Party.
(f) Each Guarantor Party expressly waives until the Guaranteed
Obligations under this Agreement are paid in full any and all rights of
subrogation, reimbursement, contribution and indemnity (contractual,
statutory or otherwise), including any claim or right of subrogation under
the Bankruptcy Code or any successor statute, arising from the existence
or performance of this guaranty and each Guarantor Party irrevocably
waives until the Guaranteed Obligations under this Agreement are paid in
full any right to enforce any remedy which the Agent, the Issuing Bank or
the Banks now have or may hereafter have against any Guaranteed Party and
waives, to the extent permitted by law, until the Guaranteed Obligations
under this Agreement are paid in full any benefit of, and any right to
participate in, any security now or hereafter held by the Agent, the
Issuing Bank or any Bank.
(g) If, in the exercise of any of its rights and remedies, the Agent
or any Bank shall forfeit any of its rights or remedies, including its
right to enter a deficiency judgment against any Guaranteed Party or any
other Person, whether because of any applicable laws pertaining to
"election of remedies" or the like, each Guarantor Party hereby consents
to such action and waives any claim based upon such action (to the extent
permitted by applicable law). Any election of remedies which results in
the denial or impairment of the right of the Agent, the Issuing Bank or
any Bank to seek a deficiency judgment against any Guaranteed Party shall
not
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impair the relevant Guarantor Party's obligation to pay the full amount
of the Guaranteed Obligations.
(h) This guaranty is a continuing guaranty and shall (i) remain in
full force and effect until payment in full of the Guaranteed Obligations
and all other amounts payable under this guaranty and the termination of
the Commitments; (ii) be binding upon each Guarantor, its successors and
assigns; and (iii) inure, together with the rights and remedies hereunder,
to the benefit of the Agent, the Issuing Bank, the Banks and their
respective successors, transferees and assigns. Without limiting the
generality of the foregoing clause (iii), any Bank may, subject to the
terms of this Agreement, assign or otherwise transfer its rights and
obligations under this Agreement to any other Person, and such other
Person shall thereupon become vested with all the benefits in respect
hereof granted to such Bank pursuant to this guaranty or otherwise, all as
provided in, and to the extent set forth in, this Agreement.
(i) Any obligations of any Guaranteed Party to its respective
Guarantor Party, now or hereafter existing, are hereby subordinated to the
Guaranteed Obligations. Such obligations of such Guaranteed Party to its
respective Guarantor Party, if the Majority Banks so request, shall be
enforced and amounts recovered shall be received by such Guarantor Party
as trustee for the Banks and the proceeds thereof shall be paid over to
the Banks on account of the Guaranteed Obligations, but without reducing
or affecting in any manner the liability of such Guarantor Party under the
provisions of this guaranty.
(j) Upon failure of the Guaranteed Party to pay any Guaranteed
Obligation when and as the same shall become due, whether at maturity, by
acceleration or otherwise, the respective Guarantor Party hereby agrees
immediately on demand by any of the Banks or the Agent to pay or cause to
be paid in accordance with the terms hereof an amount equal to the full
unpaid amount of the Guaranteed Obligations then due in Dollars.
(k) All payments by a Guarantor Party hereunder shall be made free
and clear of, and without deduction or withholding for or on account of,
any Taxes, unless such deduction or withholding is required by law. If a
Guarantor Party shall be required by law to make any such deduction or
withholding, then such Guarantor Party shall pay such additional amounts
as may be necessary in order that the net amount received by the
applicable Bank, the Issuing Bank or the Agent, as the case may be, after
all deductions and withholdings, shall be equal to the full amount that
such Person would have received, after all deductions and withholdings,
had the respective Guaranteed Party discharged its obligations (including
its tax gross-up obligations) pursuant to Section 4.01.
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Any amounts deducted or withheld by a Guarantor Party for or
on account of Taxes shall be paid over to the government or taxing
authority imposing such Taxes on a timely basis, and such Guarantor Party
shall provide the applicable Bank, the Issuing Bank or the Agent, as the
case may be, as soon as practicable with such tax receipts or other
official documentation (and such other certificates, receipts and other
documents as may reasonably be requested by such Person) with respect to
the payment of such Taxes as may be available.
ARTICLE XI.
THE AGENT, THE ISSUING BANK AND THE ARRANGER
11.01 Appointment and Authorization.
(a) Each of the Banks, the Issuing Bank and the Swingline Bank
hereby irrevocably appoints, designates and authorizes the Agent to take
such action on its behalf under the provisions of this Agreement and each
other Loan Document and to exercise such powers and perform such duties as
are expressly delegated to it by the terms of this Agreement or any other
Loan Document, together with such powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary contained elsewhere
in this Agreement or in any other Loan Document, the Agent shall not have
any duties or responsibilities, except those expressly set forth herein,
nor shall the Agent have or be deemed to have any fiduciary relationship
with any Bank, the Issuing Bank or the Swingline Bank, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or otherwise
exist against the Agent.
(b) The Issuing Bank shall have all of the benefits and immunities
(i) provided to the Agent in this Article XI with respect to any acts
taken or omissions suffered by the Issuing Bank in connection with Letters
of Credit issued by it or proposed to be issued by it and the Letter of
Credit Applications pertaining to the Letters of Credit as fully as if the
term "Agent", as used in this Article XI, included the Issuing Bank with
respect to such acts or omissions, and (ii) as additionally provided in
this Agreement with respect to the Issuing Bank.
11.02 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
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11.03 Liability of Agent. None of the Agent, its Affiliates or any
of their officers, directors, employees, agents or attorneys-in-fact
(collectively, the "Agent-Related Persons") shall (a) be liable for any action
taken or omitted to be taken by any of them under or in connection with this
Agreement or any other Loan Document (except for their own gross negligence or
willful misconduct), or (b) be responsible in any manner to any of the Banks for
any recital, statement, representation or warranty made by the Parent, the
Company or any Subsidiary or Affiliate thereof, or any officer thereof,
contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or any
other Loan Document, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document, or for any failure
of any Borrower, the Parent or any other party to any Loan Document to perform
its obligations hereunder or thereunder. No Agent-Related Person shall be under
any obligation to any Bank to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Borrower, the Parent or any of their respective Subsidiaries or
Affiliates.
11.04 Reliance by Agent.
(a) The Banks agree that the Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, statement or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons, and upon advice and statements of legal counsel
(including counsel to the Borrowers or the Parent), independent
accountants and other experts selected by the Agent. The Banks agree that
the Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall
first receive such advice or concurrence of the Majority Banks or, as
required by Section 12.01, all the Banks as it deems appropriate and, if
it so requests, it shall first be indemnified to its satisfaction by the
Banks against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. The Agent
shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with
a request or consent of the Majority Banks or, as required by Section
12.01 all the Banks, and such request and any action taken or failure to
act pursuant thereto shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions
specified in Section 5.01 as it relates to the initial Borrowing and
issuances of Letters of Credit on the Effective Date, each Bank that has
executed this Agreement shall be
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deemed to have consented to, approved or accepted or to be satisfied with
each document or other matter either sent by the Agent to such Bank for
consent, approval, acceptance or satisfaction, or required thereunder to
be consented to or approved by or acceptable or satisfactory to such Bank,
unless an officer of the Agent responsible for the transactions
contemplated by the Loan Documents shall have received notice from such
Bank prior to the initial Borrowing and issuances of Letters of Credit on
the Effective Date specifying in reasonable detail its objection thereto
and either such objection shall not have been withdrawn by notice to the
Agent to that effect or such Bank shall not have made available to the
Agent such Bank's ratable portion of such Borrowing.
11.05 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest and fees required
to be paid to the Agent for the account of the Banks or the Issuing Bank, unless
the Agent shall have received written notice from a Bank or the Borrowers
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the Agent
receives such a notice, the Agent shall give notice thereof to the Banks and the
Issuing Bank. The Agent shall take such action with respect to such Default or
Event of Default as shall be requested by the Majority Banks in accordance with
Article IX; provided, however, that unless and until the Agent shall have
received any such request, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable or in the best interest of the
Banks.
11.06 Credit Decision. Each Bank expressly acknowledges that none of
the Agent-Related Persons has made any representation or warranty to it and that
no act by the Agent hereinafter taken, including any review of the affairs of
the Borrowers, the Parent and their Subsidiaries shall be deemed to constitute
any representation or warranty by the Agent to any Bank. Each Bank represents to
the Agent that it has, independently and without reliance upon the Agent and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrowers,
the Parent and their Subsidiaries, and all applicable bank regulatory laws
relating to the transactions contemplated thereby, and made its own decision to
enter into this Agreement and extend credit to the Borrowers hereunder. Each
Bank also represents that it will, independently and without reliance upon the
Agent and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Agreement and the other Loan
Documents, and to make such investigations as it deems necessary to inform
itself as to the business, prospects, operations, property, financial and other
condition and creditworthiness of the Borrowers, the Parent and their
Subsidiaries. Except for
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notices, reports and other documents expressly herein required to be furnished
to the Banks by the Agent, the Agent shall not have any duty or responsibility
to provide any Bank with any credit or other information concerning the
business, prospects, operations, property, financial and other condition or
creditworthiness of the Borrowers, the Parent and their Subsidiaries which may
come into the possession of any of the Agent-Related Persons.
11.07 Indemnification. Whether or not the transactions contemplated
hereby shall be consummated, the Banks shall indemnify, upon demand, each of the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Borrowers and without limiting the obligation of the Borrowers to do so),
ratably from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements of any
kind whatsoever which may at any time (including at any time following the
expiration of the Letters of Credit and the repayment of the Loans and the
termination or resignation of the Agent) be imposed on, incurred by or asserted
against any such Person in any way relating to or arising out of this Agreement,
any other Loan Document or any document contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by any such Person under or in connection with any of the foregoing;
provided, however, that no Bank shall be liable for the payment to any of the
Agent-Related Persons of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from such Person's gross negligence or willful misconduct.
Without limitation of the foregoing, each Bank shall reimburse the Agent upon
demand for its ratable share of any costs or out-of-pocket expenses (including
Attorney Costs) incurred by the Agent in connection with the administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein to the extent that the Agent is not
reimbursed for such expenses by or on behalf of the Borrowers. Without limiting
the generality of the foregoing, if the Internal Revenue Service or any other
Governmental Authority of the United States or other jurisdiction asserts a
claim that the Agent did not properly withhold tax from amounts paid to or for
the account of any Bank (because the appropriate form was not delivered, was not
properly executed, or because such Bank failed to notify the Agent of a change
in circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason) such Bank shall indemnify the Agent
fully for all amounts paid as a result thereof, directly or indirectly, by the
Agent as tax or otherwise, including penalties and interest, and including any
taxes imposed by any jurisdiction on the amounts payable to the Agent under this
Section 11.07, together with all costs and expenses (including Attorney Costs).
The obligation of the Banks in this Section 11.07 shall survive the payment of
all Obligations hereunder.
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11.08 Agent in Individual Capacity. Bank of America and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory or other business with the Borrowers, the
Parent and their Subsidiaries and Affiliates as though Bank of America were not
the Agent or the Issuing Bank hereunder and without notice to or consent of the
Banks. With respect to its Loans and participation in Letters of Credit, Bank of
America shall have the same rights and powers under this Agreement and the other
Loan Documents as any other Bank and may exercise the same as though it were not
the Agent or the Issuing Bank, and the terms "Bank" and "Banks" shall include
Bank of America in its individual capacity.
11.09 Successor Agent. The Agent may resign as Agent upon 30 days'
notice to the Banks and the Borrowers. If the Agent shall resign as Agent under
this Agreement, the Majority Banks shall appoint from among the Banks a
successor agent for the Banks which successor agent shall be subject to the
approval of the Borrowers if no Event of Default has occurred and is continuing,
such approval not to be unreasonably withheld or delayed. If no successor agent
is appointed prior to the effective date of the resignation of the Agent, the
Agent may appoint, after consulting with the Banks and subject to the approval
of the Borrowers if no Event of Default has occurred and is continuing, such
approval not to be unreasonably withheld or delayed, a successor agent from
among the Banks or any Bank Affiliate. Any successor Agent appointed under this
Section 11.09 shall be a commercial bank organized under the laws of the United
States or any State thereof, and having a combined capital and surplus of at
least $500,000,000. Upon the acceptance of its appointment as successor agent
hereunder, such successor agent shall succeed to all the rights, powers and
duties of the retiring Agent and the term "Agent" shall mean such successor
agent and the retiring Agent's appointment, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article XI and Sections 12.04 and 12.05 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement. If no successor agent has accepted appointment as Agent by
the date which is 30 days following a retiring Agent's notice of resignation,
the retiring Agent's resignation shall nevertheless thereupon become effective
and the Banks shall perform all of the duties of the Agent hereunder until such
time, if any, as the Majority Banks appoint a successor agent as provided for
above.
11.10 The Arranger. The Arranger, in such capacity, shall have no
duties or responsibilities, and shall incur no obligations or liabilities, under
this Agreement. Each Bank acknowledges that it has not relied, and will not
rely, on the Arranger in deciding to enter into this Agreement.
11.11 Co-Agents; Managing Agents. None of the Banks identified on
the facing page or signature pages of this Agreement as a "co-agent" or
"managing agent" shall
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have any right, power, obligation, liability, responsibility or duty under this
Agreement other than those applicable to all Banks as such. Each Bank
acknowledges that it has not relied, and will not rely, on any of the Banks so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.
ARTICLE XII.
MISCELLANEOUS
12.01 Amendments and Waivers. (a) No amendment or waiver of, any
provision of this Agreement or any other Loan Document and no consent with
respect to any departure by any Borrower or the Parent therefrom, shall be
effective unless the same shall be in writing and signed by the Parent, each
Borrower and the Majority Banks and acknowledged by the Agent, and then such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that no such
waiver, amendment or consent shall, unless in writing and signed by all the
Banks affected thereby and acknowledged by the Agent, do any of the following:
(i) increase or extend the Commitment of such Bank (or reinstate
any Commitment terminated pursuant to Section 9.02(a)) (except as provided
in Section 12.07);
(ii) postpone or delay any Scheduled Commitment Reduction Date or
any date for any payment of interest or fees due to the Banks (or any of
them) hereunder or under any other Loan Document or extend the Termination
Date (other than in compliance with Section 2.19);
(iii) reduce the principal of, or the rate of interest specified
herein on any Loan or Letter of Credit Borrowing (other than with respect
to post-default rates), or of any fees or other amounts payable hereunder
or under any other Loan Document or reduce the Applicable Margin provided
for herein;
(iv) reduce the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which shall be required for the Banks
or any of them to take any action hereunder;
(v) amend this Section 12.01, the definition of the term "Majority
Banks" or any provision of this Agreement expressly requiring the consent
of all the Banks in order to take or refrain from taking any action; or
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(vi) release the guaranty of any Guarantor Party under its guaranty
pursuant to Article X, except in accordance with the express provisions
thereof;
and, provided further, that (A) no amendment, waiver or consent shall, unless in
writing and signed by the Issuing Bank in addition to the Majority Banks or all
the Banks, as the case may be, affect the rights or duties of the Issuing Bank
under this Agreement or any Letter of Credit Related Document, (B) no amendment,
waiver or consent shall, unless in writing and signed by the Swingline Bank in
addition to the Majority Banks or all the Banks, as the case may be, affect the
rights and duties of the Swingline Bank under this Agreement and (C) no
amendment, waiver or consent shall, unless in writing and signed by the Agent in
addition to the Majority Banks or all the Banks, as the case may be, affect the
rights or duties of the Agent under this Agreement or any other Loan Document.
(b) If, in connection with any proposed change, waiver, discharge or
any termination to any of the provisions of this Agreement as contemplated by
clauses (ii) through (vi), inclusive, of the first proviso to Section 12.01(a),
the consent of the Majority Banks is obtained but the consent of one or more
other Banks whose consent is required is not obtained, then the Borrowers shall
have the right, so long as all non-consenting Banks whose individual consent is
required are treated the same, to replace each such nonconsenting Bank or Banks
with one or more Replacement Banks pursuant to Section 4.08(b) so long as at
such time of such replacement, each such Replacement Bank consents to the
proposed change, waiver, discharge or termination.
12.02 Notices.
(a) All notices, requests and other communications provided for
hereunder shall be in writing (including, unless the context expressly
otherwise provides, facsimile transmission) and mailed, transmitted by
facsimile or delivered, (A) if to the Borrowers, the Parent, the Agent,
the Issuing Bank or the Swingline Bank, to the address or facsimile number
specified for notices on the applicable signature page hereof; (B) if to
any Bank, to the notice address of such Bank set forth on Schedule
1.01(a); or (C) as directed to the Borrowers or the Agent, to such other
address as shall be designated by such party in a written notice to the
other parties, and as directed to each other party, at such other address
as shall be designated by such party in a written notice to the Borrowers
and the Agent.
(b) All such notices, requests and communications shall be effective
when delivered or transmitted by facsimile machine, respectively, provided
that any matter transmitted by the Borrowers by facsimile (i) shall be
immediately confirmed by a telephone call to the recipient at the number
specified on the applicable signature page hereof or on Schedule 1.01(a),
and (ii) shall be followed promptly by a hard copy original thereof;
except that notices to the Agent shall not be effec-
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<PAGE>
tive until actually received by the Agent, notices to the Swingline Bank
pursuant to Section 2.03 shall not be effective until received by the
Swingline Bank, and notices pursuant to Article III to the Issuing Bank
shall not be effective until actually received by the Issuing Bank.
(c) The Borrowers acknowledge and agree that any agreement of the
Agent, the Issuing Bank, the Swingline Bank and the Banks at Articles II
and III herein to receive certain notices by telephone and facsimile is
solely for the convenience and at the request of the Borrowers. The Agent,
the Issuing Bank, the Swingline Bank and the Banks shall be entitled to
rely on the authority of any Person purporting to be a Person authorized
by the relevant Borrower to give such notice and the Agent, the Issuing
Bank, the Swingline Bank and the Banks shall not have any liability to
such Borrower or any other Person on account of any action taken or not
taken by the Agent, the Issuing Bank, the Swingline Bank or the Banks in
reliance upon such telephonic or facsimile notice. The obligation of the
Borrowers to repay the Loans and drawings under Letters of Credit shall
not be affected in any way or to any extent by any failure by the Agent,
the Issuing Bank, the Swingline Bank and the Banks to receive written
confirmation of any telephonic or facsimile notice or the receipt by the
Agent, the Issuing Bank, the Swingline Bank and the Banks of a
confirmation which is at variance with the terms understood by the Agent,
the Issuing Bank, the Swingline Bank or the Banks to be contained in the
telephonic or facsimile notice.
12.03 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Agent, the Issuing Bank, the Swingline
Bank or any Bank, any right, remedy, power or privilege hereunder, shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege.
12.04 Costs and Expenses. The Borrowers shall, whether or not the
transactions contemplated hereby shall be consummated:
(a) pay or reimburse on demand for all reasonable costs and expenses
incurred by the Agent, in connection with the development, preparation,
delivery, administration, syndication of the Commitments under and
execution of, and any amendment, supplement, waiver or modification to (in
each case, whether or not consummated), this Agreement, any other Loan
Document and any other documents prepared in connection herewith or
therewith, and the consummation of the transactions contemplated hereby
and thereby, including the reasonable Attorney Costs incurred by the Agent
with respect thereto;
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<PAGE>
(b) pay or reimburse each Bank, the Issuing Bank and the Agent on
demand for all reasonable costs and expenses incurred by them in
connection with the enforcement, attempted enforcement, or preservation of
any rights or remedies (including in connection with any "workout" or
restructuring regarding the Loans, and including in any Insolvency
Proceeding) under this Agreement (including the guaranty contained in
Article X), any other Loan Document, and any such other documents,
including Attorney Costs or the cost of any consultants incurred by the
Agent and any Bank; and
(c) pay or reimburse the Agent and the Issuing Bank on demand for
all appraisal (including, without duplication, the allocated cost of
internal appraisal services), audit, environmental inspection and review
(including, without duplication, the allocated cost of such internal
services), search and filing costs, fees and expenses, incurred or
sustained by the Agent in connection with the matters referred to under
paragraphs (a) and (b) of this Section 12.04.
12.05 Indemnity. Whether or not the transactions contemplated hereby
shall be consummated, the Borrowers shall pay, indemnify, and hold each Bank,
the Issuing Bank, the Swingline Bank, the Agent and each of their respective
officers, directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses or disbursements (including Attorney Costs) of any kind or
nature whatsoever with respect to (a) any investigation, litigation or
proceeding (including any Insolvency Proceeding) related to this Agreement or
the Loan Documents or the Loans or the Letters of Credit, or the use of the
proceeds thereof, whether or not any Indemnified Person is a party thereto and
(b) the actual or alleged presence of Hazardous Materials in the air, surface
water or groundwater or on the surface or subsurface of any property owned or at
any time operated by the Company or any of its Subsidiaries, the generation,
storage, transportation, handling or disposal of Hazardous Materials at any
location by the Company or any of its Subsidiaries, whether or not owned or
operated by the Company or any of its Subsidiaries, the noncompliance of any
property with Environmental Laws (including applicable permits thereunder)
applicable to any property, or any Environmental Claim asserted against the
Parent, the Company, any of its Subsidiaries or any property owned or at any
time operated by the Company or any of its Subsidiaries, (all the foregoing
described in (a) and (b) above, collectively, the "Indemnified Liabilities");
provided, however, that the Borrowers shall have no obligation hereunder to any
Indemnified Person with respect to Indemnified Liabilities arising from the
gross negligence or willful misconduct of such Indemnified Person as the same is
determined by a final judgment of a court of competent jurisdiction. The
obligations in this Section 12.05 shall survive payment of all other
Obligations.
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<PAGE>
12.06 Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that neither the Company nor the
Parent nor USI Funding may assign or transfer any of its rights or obligations
under this Agreement without the prior written consent of the Agent and each
Bank, provided that USI Funding may assign or transfer any of its rights or
obligations under this Agreement to another direct or indirect Wholly-Owned
Subsidiary of the Company with the prior written consent of the Majority Banks
and the Agent so long as (i) such Subsidiary assumes all of the obligations of
USI Funding as a Borrower hereunder and (ii) any obligations of such Subsidiary
that are assigned or transferred under this proviso are guaranteed on a similar
basis as the obligations of USI Funding are guaranteed.
12.07 Assignments, Participations, etc.
(a) Any Bank may, with the written consent of the Borrowers and the
Agent, which consents shall not be unreasonably withheld, at any time
assign and delegate to one or more Eligible Assignees (provided that no
written consent of the Borrowers shall be required in connection with any
assignment and delegation by a Bank to an Eligible Assignee that is a Bank
Affiliate of such Bank) (each an "Assignee") all, or any ratable part of
all, of the Loans, the Commitment and the other rights and obligations of
such Bank hereunder; provided, however, that any such assignment to an
Eligible Assignee shall be in a minimum amount equal to $5,000,000 and
provided, further, that the Borrowers, the Issuing Bank, the Swingline
Bank and the Agent may continue to deal solely and directly with such Bank
in connection with the interest so assigned to an Assignee until (i)
written notice of such assignment, together with payment instructions,
addresses and related information with respect to the Assignee, shall have
been given to the Borrowers and the Agent by such Bank and the Assignee;
(ii) such Bank and its Assignee shall have delivered to the Borrowers and
the Agent an Assignment and Acceptance in the form of Exhibit J
("Assignment and Acceptance"); and (iii) in the case of any assignment to
an Assignee which is not already a Bank, the assignor bank or Assignee has
paid to the Agent a processing fee in the amount of $3,000; and provided,
still further, that any assignment hereunder must include an equal
percentage of the assignor Bank's Commitment and Committed Loans.
(b) From and after the date that the Agent notifies the assignor
Bank that the requirements of paragraph (a) above are satisfied, (i) the
Assignee thereunder shall be a party hereto and, to the extent that rights
and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a Bank
under the Loan Documents, and (ii) the assignor Bank shall, to the extent
that rights and obligations hereunder and under the other Loan Documents
have been assigned by it pursuant to such Assignment and
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<PAGE>
Acceptance, relinquish its rights and be released from its obligations
under the Loan Documents. Anything herein to the contrary notwithstanding,
any Bank assigning all of its Loans, Commitments and other rights and
obligations hereunder to an Assignee shall continue to have the benefit of
all indemnities hereunder following such assignment.
(c) Immediately upon each Assignee's making its payment under the
Assignment and Acceptance, this Agreement, shall be deemed to be amended
to the extent, but only to the extent, necessary to reflect the addition
of the Assignee and the resulting adjustment of the Aggregate Commitment
arising therefrom. The Commitment allocated to an Assignee shall reduce
the Commitment of the assigning Bank pro tanto.
(d) Any Bank may at any time sell to one or more banks or other
Persons not Affiliates of any Borrower (a "Participant") participating
interests in any Loans, the Commitment of such Bank and the other
interests of such Bank (the "Originating Bank") hereunder and under the
other Loan Documents; provided, however, that (i) the Originating Bank's
obligations under this Agreement shall remain unchanged, (ii) the
Originating Bank shall remain solely responsible for the performance of
such obligations, (iii) the Borrowers, the Parent, the Issuing Bank, the
Swingline Bank and the Agent shall continue to deal solely and directly
with the Originating Bank in connection with the Originating Bank's rights
and obligations under this Agreement and the other Loan Documents, and
(iv) no Bank shall transfer or grant any participating interest under
which the Participant shall have rights to approve any amendment to, or
any consent or waiver with respect to, this Agreement or any other Loan
Document, provided that such Participant shall have the right to approve
any amendment, consent or waiver described in clauses (i), (ii) and (iii)
of the first proviso to Section 12.01. In the case of any such
participation, the Participant shall be entitled to the benefit of
Sections 4.01, 4.03 and 12.05, subject to the same limitations, as though
it were also a Bank hereunder, subject to clause (f) below, and if amounts
outstanding under this Agreement are due and unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an
Event of Default, each Participant shall, to the extent permitted under
applicable law, be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to the same
extent as if the amount of its participating interest were owing directly
to it as a Bank under this Agreement.
(e) Notwithstanding any other provision contained in this Agreement
or any other Loan Document to the contrary, any Bank may assign all or any
portion of the Loans held by it to any Federal Reserve Bank or the United
States Treasury as collateral security pursuant to Regulation A of the
Federal Reserve Board and
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<PAGE>
any Operating Circular issued by such Federal Reserve Bank, provided that
any payment in respect of such assigned Loans made by the Borrowers or the
Parent to or for the account of the assigning or pledging Bank in
accordance with the terms of this Agreement shall satisfy the Borrowers'
or the Parent's obligations hereunder in respect to such assigned Loans to
the extent of such payment. No such assignment shall release the assigning
Bank from its obligations hereunder.
(f) No Participant shall be entitled to receive any greater payment
under Sections 4.01 or 4.03 than such Originating Bank would have been
entitled to receive with respect to the rights transferred unless such
transfer is made with the Borrowers' prior written consent.
12.08 Confidentiality. Each Bank agrees to take normal and
reasonable precautions and exercise due care to maintain the confidentiality of
all information identified as "confidential" by any Borrower and provided to it
by the Parent, the Company or any Subsidiary of the Company, or by the Agent on
the Parent's, the Company's or such Subsidiary's behalf, in connection with this
Agreement or any other Loan Document, and neither it nor any of its Affiliates
shall use any such information for any purpose or in any manner other than
pursuant to the terms contemplated by this Agreement; except to the extent such
information (a) was or becomes generally available to the public other than as a
result of a disclosure by the Bank, or (b) was or becomes available on a
non-confidential basis from a source other than any Borrower or the Parent,
provided that such source is not bound by a confidentiality agreement with any
Borrower or the Parent, known to the Bank; provided, further, however, that any
Bank may disclose such information (i) at the request or pursuant to any
requirement of any Governmental Authority to which the Bank is subject or in
connection with an examination of such Bank by any such authority; (ii) pursuant
to subpoena or other court process; (iii) when required to do so in accordance
with the provisions of any applicable Requirement of Law; (iv) to the extent
reasonably required in connection with any litigation or proceeding to which the
Agent, any Bank or their respective Affiliates may be party; (v) to the extent
reasonably required in connection with the exercise of any remedy hereunder or
under any other Loan Document; and (vi) to such Bank's independent auditors,
other professional advisors and employees of such Bank's Bank Affiliates (or any
Affiliate of such Bank engaged in capital market transactions generally)
retained by such Bank in connection with this Agreement. Notwithstanding the
foregoing, the Borrowers authorize each Bank to disclose to any Participant or
Assignee (each, a "Transferee") and to any prospective Transferee, such
financial and other information in such Bank's possession concerning the Company
or its Subsidiaries or the Parent which has been delivered to Agent or the Banks
pursuant to this Agreement or which has been delivered to the Agent or the Banks
by the Borrowers or the Parent in connection with the Banks' credit evaluation
of the Borrowers prior to entering into this Agreement; provided that, unless
otherwise agreed by the Borrowers or the Parent, such Transferee agrees in
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<PAGE>
writing to such Bank to keep such information confidential to the same extent
required of the Banks hereunder.
12.09 Set-off. In addition to any rights and remedies of the Banks
provided by law, if an Event of Default occurs and is continuing, each Bank is
authorized at any time and from time to time, without prior notice to the
Borrowers or the Parent, any such notice being waived by the Borrowers and the
Parent to the fullest extent permitted by law, to set off and apply, to the
extent permitted by applicable law, any and all deposits (general or special,
time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing to, such Bank to or for the credit or the account
of the Borrowers or the Parent against any and all Obligations owing to such
Bank, now or hereafter existing, irrespective of whether or not the Agent or
such Bank shall have made demand under this Agreement or any other Loan Document
and although such Obligations may be contingent or unmatured. Each Bank agrees
promptly to notify the Borrowers or the Parent and the Agent after any such
set-off and application made by such Bank; provided, however, that the failure
to give such notice shall not affect the validity of such set-off and
application. The rights of each Bank under this Section 12.09 are in addition to
the other rights and remedies (including other rights of set-off) which the Bank
may have.
12.10 Notification of Addresses, Lending Offices, etc. Each Bank
shall notify the Agent in writing of any changes in the address to which notices
to the Bank should be directed, of addresses of its Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably request.
12.11 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement in any number of separate counterparts, each of
which, when so executed, shall be deemed an original, and all of said
counterparts taken together shall be deemed to constitute but one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Borrowers and the Agent.
12.12 Severability. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
12.13 No Third Parties Benefited. This Agreement is made and entered
into for the sole protection and legal benefit of the parties hereto and their
permitted successors and assigns, and no other Person shall be a direct or
indirect legal beneficiary of, or have any direct or indirect cause of action or
claim in connection with, this Agreement or any of the other Loan Documents.
None of the Agent, the Issuing Bank, the
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<PAGE>
Swingline Bank or any Bank shall have any obligation to any Person not a party
to this Agreement or any other Loan Document.
12.14 Governing Law and Jurisdiction.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
AND ANY OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF
NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK,
AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES
HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF
THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE PARTIES HERETO EACH
WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH
MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
12.15 Waiver of Jury Trial. THE PARTIES HERETO EACH WAIVE THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR
PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE
PARTIES HERETO EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED
BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES
FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY
OPERATION OF THIS SECTION 12.15 AS TO ANY ACTION, COUNTERCLAIM OR OTHER
PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION
HEREOF
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<PAGE>
OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMEND- MENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
USI AMERICAN HOLDINGS, INC.
By /s/ Robert M. Brier
Title: Vice President - Finance
and Treasurer
Address for notices:
101 Wood Avenue South
Iselin, NJ 08830
Attn: Peter F. Reilly,
Assistant Treasurer
Facsimile: (908) 767-2390
Tel: (908) 767-2252
USI FUNDING, INC.
By /s/ Robert M. Brier
Title: Vice President - Finance
and Treasurer
Address for notices:
101 Wood Avenue South
Iselin, NJ 08830
Attn: Peter F. Reilly
Assistant Treasurer
Facsimile: (908) 767-2390
Tel: (908) 767-2252
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<PAGE>
U.S. INDUSTRIES, INC.
By /s/ Robert M. Brier
Title: Vice President - Finance
and Treasurer
Address for notices:
101 Wood Avenue South
Iselin, NJ 08830
Attn: Peter F. Reilly
Assistant Treasurer
Facsimile: (908) 767-2390
Tel: (908) 767-2252
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By /s/ Steve A. Aronowitz
Title: Managing Director
Address for notices:
1455 Market Street, 12th Floor
San Francisco, CA 94103
Attn: Steven Low
Agency Administrative
Services (#5596)
Facsimile: (415) 436-2700
Tel: (415) 436-3338
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<PAGE>
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
as Issuing Bank
By /s/ Steve A. Aronowitz
Title: Managing Director
Address for notices:
Bank of America National Trust
and Savings Association
Letter of Credit (#1580)
231 LaSalle Street
Chicago, IL 60697
Attn: Philip J. Kelly, VP
Facsimile: (312) 987-6828
Tel: (312) 923-0685
With a copy to:
1455 Market Street, 12th Floor
San Francisco, CA 94103
Attn: Steven Low
Agency Administrative
Services (#5596)
Facsimile: (415) 436-2700
Tel: (415) 436-3338
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<PAGE>
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
as Swingline Bank
By /s/ Steve A. Aronowitz
Title: Managing Director
Address for notices:
1455 Market Street, 12th Floor
San Francisco, CA 94103
Attn: Steven Low
Agency Administrative
Services (#5596)
Facsimile: (415) 436-2700
Tel: (415) 436-3338
With a copy to:
335 Madison Avenue
New York, NY 10017
Attn: Steve Aronowitz
Credit Management
Facsimile: (212) 503-7771
Tel: (212) 503-7950
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<PAGE>
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
as Bank
By /s/ Steve A. Aronowitz
Title: Managing Director
Address for notices:
335 Madison Avenue
New York, NY 10017
Attn: Steve Aronowitz
Credit Management
Facsimile: (212) 503-7771
Tel: (212) 503-7950
BA SECURITIES, INC.,
as Arranger
By /s/ Frank Brittan
Title: Managing Director
Address for notices:
335 Madison Avenue
New York, New York 10017
Attn: Frank Brittan
Syndications (#2698)
Facsimile: (212) 503-7355/7031
Tel.: (212) 503-8339
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<PAGE>
SCHEDULE 1.01(a)
LENDING OFFICES
Eurodollar Lending Office
Domestic Lending Office (If Different)
Bank of America National Trust and
Savings Association
335 Madison Avenue
New York, NY 10017
Attention: Steve Aronowitz
Credit Management
Facsimile: (212) 503-7771
Telephone: (212) 503-7950
<PAGE>
SCHEDULE 1.01(b)
COMMITMENTS
Bank Commitment
Bank of America $750,000,000
<PAGE>
SCHEDULE 3.01(b)
EXISTING LETTERS OF CREDIT
<PAGE>
SCHEDULE 6.15
ENVIRONMENTAL MATTERS
<PAGE>
SCHEDULE 8.04(a)
EXISTING INDEBTEDNESS
<PAGE>
EXHIBIT A
Page 1
EXHIBIT A
FORM OF
NOTICE OF BORROWING
Date: __________, ___
Bank of America National Trust
and Savings Association, as Agent
Attention: Agency Administrative
Services 5596
Re: Credit Agreement dated as of December 12, 1996 (as amended,
restated, supplemented or otherwise modified from time to time, the
"Credit Agreement") among USI AMERICAN HOLDINGS, INC., USI FUNDING,
INC., U.S. INDUSTRIES, INC., the Banks party thereto, BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Issuing Bank,
Swingline Bank and Agent, and BA SECURITIES, INC., as Arranger
Ladies and Gentlemen:
The undersigned, [USI American Holdings, Inc.] [USI Funding, Inc.],
refers to the Credit Agreement, the terms defined therein being used herein as
therein defined, and hereby gives you notice irrevocably, pursuant to Section
[2.03(a)] [2.03(f)] of the Credit Agreement, of the Borrowing specified herein:
(1) The Business Day of the proposed Borrowing is _________, ___.
(2) The aggregate amount of the proposed Borrowing is $____________.
(3) The proposed Borrowing is to be comprised of [Eurodollar Committed]
[Base Rate [Committed]] [IBOR] [Negotiated Rate] Loans.
[(4) The duration of the Interest Period for the [Eurodollar Committed]
[IBOR] [Negotiated Rate] Loans included in the proposed Borrowing shall be
[[one] [two] [three] [six] months] [[one] [two] [three] weeks] [[___]
days].]
0000DUKZ.W51
<PAGE>
EXHIBIT A
Page 2
The undersigned hereby certifies that the following statements will
be true on the date of the proposed Borrowing, before and after giving effect
thereto and to the application of the proceeds therefrom:
(a) the applicable representations and warranties of the undersigned
contained in Article VI of the Credit Agreement and the other Loan Documents are
true and correct in all material respects as though made on and as of such date
(except to the extent such representations and warranties expressly refer to an
earlier date, in which case they shall be true and correct as of such earlier
date); and
(b) no Default or Event of Default exists or shall result from such
proposed Borrowing.
[USI AMERICAN HOLDINGS, INC.]
[USI FUNDING, INC.]
By
Title:
0000DUKZ.W51
<PAGE>
EXHIBIT B
FORM OF NOTICE OF
CONVERSION/CONTINUATION
Date: ________, ____
Bank of America National Trust
and Savings Association, as Agent
Attention: Agency Administrative
Services 5596
Re: Credit Agreement dated as of December 12, 1996 (as amended,
restated, supplemented or otherwise modified from time to time, the
"Credit Agreement") among USI AMERICAN HOLDINGS, INC., USI FUNDING,
INC., U.S. INDUSTRIES, INC., the Banks party thereto, BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Issuing Bank,
Swingline Bank and Agent, and BA SECURITIES, INC., as Arranger
Ladies and Gentlemen:
The undersigned, [USI American Holdings, Inc.] [USI Funding, Inc.], refers
to the Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives you notice irrevocably, pursuant to Section 2.04 of
the Credit Agreement, of the [conversion] [continuation] of the Loans specified
herein:
(1) The date of the [conversion] [continuation] is __________, ____.
(2) The aggregate amount of the Loans to be [converted] [continued] is
$
------------.
(3) The Loans are to be [converted into] [continued as] [Base Rate]
[Eurodollar] Committed Loans.
0000DUL3.W51
<PAGE>
EXHIBIT B
Page 2
(4) [If applicable:] The duration of the Interest Period for the Loans
included in the [conversion] [continuation] shall be [[one] [two] [three]
[six] months] [_____ days].
[USI AMERICAN HOLDINGS, INC.]
[USI FUNDING, INC.]
By
Title:
0000DUL3.W51
<PAGE>
EXHIBIT C
FORM OF COMPETITIVE BID REQUEST
Date: ________, ____
Bank of America National Trust
and Savings Association, as Agent
Attention: Agency Administrative
Services 5596
Re: Credit Agreement dated as of December 12, 1996 (as amended,
restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among USI AMERICAN HOLDINGS, INC., USI FUNDING,
INC., U.S. INDUSTRIES, INC., the Banks party thereto, BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Issuing Bank,
Swingline Bank and Agent, and B.A. SECURITIES, INC., as Arranger.
Ladies and Gentlemen:
The undersigned, [USI American Holdings, Inc.] [USI Funding, Inc.], refers
to the Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives you notice pursuant to Section 2.06 of the Credit
Agreement of a Competitive Bid Request for Bid Loans as follows:
(1) The Business Day of the proposed Bid Borrowing is
--------------, -----.
(2) The aggregate amount of the proposed Bid Borrowing is
$
-----------------.
(3) The proposed Bid Borrowing to be made pursuant to Section 2.06
shall be comprised of [Eurodollar] [Absolute Rate] Bid Loans.
[(4) The Interest Period[s] for the Bid Loans included in the
proposed Bid Borrowing shall be [[one] [two] [three] [four] [five] [six]
months] [[______] days].
[USI AMERICAN HOLDINGS, INC.]
[USI FUNDING, INC.]
By
Title:
0000DV78.W51
<PAGE>
EXHIBIT D
FORM OF COMPETITIVE BID
___________, 199_
Bank of America National Trust
and Savings Association, as Agent
Attention: Agency Administrative Services 5596
Re: Credit Agreement dated as of December 12, 1996 (as amended,
restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among USI AMERICAN HOLDINGS, INC., USI FUNDING,
INC., U.S. INDUSTRIES, INC., the Banks party thereto, BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Issuing Bank,
Swingline Bank and Agent, and B.A. SECURITIES, INC., as Arranger.
Ladies and Gentlemen:
The undersigned, [Name of Bank], refers to the Credit Agreement, the terms
defined herein as therein defined. In response to the Competitive Bid Request of
[the Company] [USI FUNDING, INC.] dated ______________, ____ and in accordance
with subsection 2.06(c)(ii) of the Credit Agreement, the undersigned Bank offers
to make [a] Bid Loan[s] thereunder in the following principal amount[s] at the
following interest rates for the following Interest Period[s]:
Date of Borrowing: ________________, ____
Aggregate Maximum Bid Amount: $______________
================================================================================
Principal Principal Principal
Amount $_________ Amount $_________ Amount $_________
- --------------------------------------------------------------------------------
Interest: Interest: Interest:
[Absolute [Absolute [Absolute
Rate __%, __%, __%] Rate __%, __%, __%] Rate __%, __%, __%]
- --------------------------------------------------------------------------------
or
[LIBOR [LIBOR [LIBOR
Margin +/- __%, Margin +/- __%, Margin +/- __%,
+/- __%, +/- __%] +/- __%, +/- __%] +/- __%, +/- __%]
- --------------------------------------------------------------------------------
Interest Interest Interest
Period ____________ Period ____________ Period ____________
================================================================================
[NAME OF BANK]
By:
Title:
0000DV7C.W51
<PAGE>
EXHIBIT E
FORM OF LEVERAGE RATIO CERTIFICATE
Date: _________, ____
Re: Credit Agreement dated as of December 12, 1996 (as amended,
restated, supplemented or otherwise modified from time to time, the
"Credit Agreement") among USI AMERICAN HOLDINGS, INC., USI FUNDING,
INC., U.S. INDUSTRIES, INC., the Banks party thereto, BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Issuing Bank,
Swingline Bank and Agent, and BA SECURITIES, INC., as Arranger
Bank of America National Trust
and Savings Association
as Agent for the Banks party to the
Credit Agreement referred to above
1455 Market Street
13th Floor
San Francisco, California 94103
Attention: Agency Administrative Services 5596
Ladies and Gentlemen:
This Leverage Ratio Certificate is delivered pursuant to Section
7.02(b) of the Credit Agreement. Any terms defined in the Credit Agreement and
not defined in this Leverage Ratio Certificate are used herein as defined in the
Credit Agreement.
The Company hereby certifies and warrants that, as of the dates set
forth below:
(a) for the Measurement Period ending on or closest to
____________, ____, (the "Computation Date") the ratio of (i) Total Funded
0000DUL9.W51
<PAGE>
EXHIBIT E
Page 2
Debt as of the Computation Date to (ii) Adjusted EBITDA for such
Measurement Period was approximately (and in any event not less than)
_____ to _____, as computed on ANNEX 1 hereto;
(b) as of each of the Computation Date and the date hereof, no
Default or Event of Default has occurred and is continuing or will have
occurred and be continuing.
The undersigned is a duly elected, qualified and acting Responsible
Officer of the Company.
IN WITNESS WHEREOF, the Company has caused this Certificate to be
executed and delivered, and the certification and warranties contained herein to
be made, this ____ day of _____, ____.
USI AMERICAN HOLDINGS, INC.
By_______________________
Name:
Title:
0000DUL9.W51
<PAGE>
ANNEX 1
TO EXHIBIT E
page 3
The information described herein is as of _______________, _____ and
pertains to the accounting period from ________________, _____ to
______________, _____ (the "Measurement Period").
I. Consolidated Leverage Ratio
1. Total Funded Debt on the last day of
the Measurement Period $_____
2. Adjusted EBITDA for such
Measurement Period $_____
3. Ratio of line 1 to line 2 =
Consolidated Leverage Ratio _____ to _____.
0000DUL9.W51
<PAGE>
EXHIBIT F
FORM OF OPINION OF
DAVIS POLK & WARDWELL
December 12, 1996
To the Banks, the Issuing Bank and
Swingline Bank and the Agent
referred to below
c/o Bank of America National Trust
and Savings Association, as Agent
1455 Market Street
San Francisco, CA 94103
Ladies and Gentlemen:
We have acted as special counsel for USI American Holdings, Inc., a
Delaware corporation (the "Company"), USI Funding, Inc. ("USI Funding" and
together with the Company, each a "Borrower" and, collectively, the
"Borrowers"), a Delaware Corporation and U.S. Industries, Inc., a Delaware
corporation (the "Parent"), in connection with the Credit Agreement dated as of
December 12, 1996 (the "Credit Agreement") among the Company, USI Funding, the
Parent, the banks listed on the signature pages thereof (the "Banks"), Bank of
America National Trust and Savings Association, as Issuing Bank and Swingline
Bank (the "Issuing Bank and Swingline Bank"), and as Agent (the "Agent"), and BA
Securities, Inc., as Arranger. Terms defined in the Credit Agreement and not
otherwise defined herein are used herein as therein defined.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.
0000DULA.W51
<PAGE>
EXHIBIT F
Page 2
For purposes of this opinion, we have assumed that (i) each of the
Company, USI Funding and the Parent (each a "Loan Party") is a corporation
validly existing and in good standing under the laws of its jurisdiction of
organization and has the requisite power and authority to execute, deliver and
perform its obligations under the Credit Agreement and (ii) the Credit Agreement
has been duly authorized, executed and delivered by all parties thereto.
Based upon the foregoing, and subject to the qualifications set
forth below, we are of the opinion that:
1. The Credit Agreement constitutes a valid and binding obligation
of each Loan Party, in each case enforceable against such Loan Party, party
thereto, in accordance with its terms, subject to the effect of applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
equitable principles of general applicability.
The foregoing opinion is subject to the following qualifications:
(a) We express no opinion as to the effect (if any) of any law of
any jurisdiction (except the State of New York) in which any Bank is
located which may limit the rate of interest that such Bank may charge or
collect.
(b) We express no opinion as to the possible applicability to the
transactions contemplated by the Credit Agreement of Section 548 of the
Bankruptcy Code or comparable provisions of other applicable law.
(c) We wish to point out that the provisions of the Credit
Agreement which permit a Bank or the Issuing Bank and Swingline Bank or
the Agent to take actions or make determinations or benefit from
indemnities and similar undertakings may be subject to requirements that
such actions or determinations be made, or that any action or inaction by
any Bank, the Issuing Bank and Swingline Bank or the Agent which may give
rise to a request for payment under such indemnity or other undertaking,
be taken or not taken, reasonably and in good faith.
(d) We express no opinion as to last clause of the second sentence
of Section 10.01(a) of the Credit Agreement.
0000DULA.W51
<PAGE>
EXHIBIT F
Page 3
(e) We express no opinion as to Section 10.01(i) of the Credit
Agreement.
We are members of the bar of the State of New York and the
foregoing opinion is limited to the laws of the State of New York and the
federal laws of the United States of America.
This opinion is rendered solely to you in connection with the above
matter. This opinion may not be relied upon by you for any other purpose or
relied upon by any other person without our prior written consent, except that
each lender that becomes a party to the Credit Agreement from time to time in
accordance with the provisions of the Credit Agreement may rely upon this
opinion to the same extent as if it were specifically addressed and delivered to
such lender on the date hereof; provided that we express no opinion as to the
effect of events occurring, circumstances arising or changes of law after the
date hereof on the opinions set forth herein.
Very truly yours,
0000DULA.W51
<PAGE>
EXHIBIT G
FORM OF OPINION OF
GEORGE MACLEAN, ESQ.
December 12, 1996
To the Banks, the Issuing Bank and
Swingline Bank and the Agent
referred to below
c/o Bank of America National Trust
and Savings Association, as Agent
1455 Market Street
San Francisco, CA 94103
Ladies and Gentlemen:
I am the General Counsel of USI American Holdings, Inc., a Delaware corporation
(the "Company"), USI Funding, Inc., a Delaware corporation ("USI Funding" and
together with the Company, each a "Borrower" and, collectively, the "Borrowers")
and U.S. Industries, Inc., a Delaware corporation (the "Parent"). I am
delivering this opinion in connection with the Credit Agreement dated as of
December 12, 1996 (the "Credit Agreement") among the Company, USI Funding, the
Parent, the banks listed on the signature pages thereof (the "Banks"), Bank of
America National Trust and Savings Association, as Issuing Bank and Swingline
Bank (the "Issuing Bank and Swingline Bank"), and as Agent (the "Agent"), and BA
Securities, Inc., as Arranger.
In so acting, I have examined, or caused to be examined by
appropriate members of my staff, originals or copies, certified or otherwise
identified to my satisfaction, of such documents as we have deemed necessary or
appropriate as a basis for the opinions set forth herein, including, without
limitation, the following (collectively, the "Documents"): (a) the Credit
Agreement, (b) the Senior Notes Documents and (c) such other corporate records,
agreements, documents and other instruments and of such certificates or
comparable documents of public officials and of officers and representatives of
each of the Company, USI Funding and the Parent (each a "Loan Party"), and I
have made inquiries of such officers and representatives, as I have deemed
relevant and necessary as the basis for the opinions hereinafter set forth.
0000DULA.W51
<PAGE>
EXHIBIT G
Page 2
In such examination, I have assumed the genuineness of all
signatures, the authenticity of all documents submitted to me as originals, the
conformity to original documents of documents submitted to me as certified or
photostatic copies and the authenticity of the originals of such latter
documents.
I have assumed for purposes of the opinion in paragraph 4 below, the
due authorization, execution and delivery of the Documents by each party thereto
other than the Loan Parties.
Based on the foregoing, and subject to the qualifications set forth
below, I am of the opinion that:
1. Each of the Company, USI Funding and the Parent (a) is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization, (b) is duly qualified and in good
standing as a foreign corporation and is authorized to do business in every
jurisdiction where such qualification or authorization is required, except where
the failure to so qualify could not reasonably be expected to have a Material
Adverse Effect and (c) has all requisite power and authority to execute, deliver
and perform the Documents and each agreement or instrument contemplated thereby,
in each case, to which it is or will be party.
2. The execution, delivery and performance by each Loan Party of
the Documents to which such Loan Party is party have been duly authorized by all
necessary corporate action, and do not and will not:
(a) contravene the terms of any of such Loan Party's charter or by-
laws;
(b) conflict with or result in any breach or contravention of, or
the creation of any Lien under, any document evidencing any material
Contractual Obligation to which such Loan Party is a party or any order,
injunction, writ or decree of any Governmental Authority to which such
Loan Party or its property is subject; or
(c) violate any Requirement of Law.
3. No approval, consent, exemption, authorization or other action
by, or notice to, or filing with, any Governmental Authority is necessary or
required
0000DULA.W51
<PAGE>
EXHIBIT G
Page 3
in connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of any Document.
4. Each of the Documents has been duly executed by the Loan Parties
party thereto and constitutes a valid and binding obligation of each Loan Party
party thereto, in each case enforceable against such Loan Party in accordance
with their respective terms, subject to the effect of applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally and equitable
principles of general applicability.
5. To the best of my knowledge, there are no actions, suits,
proceedings, claims or disputes pending or overtly threatened at law, in equity,
in arbitration or before any Governmental Authority against any Loan Party or
any of the properties or assets of any Loan Party which:
(a) purport to affect or pertain to any Document, or any of the
transactions contemplated thereby; or
(b) would reasonably be expected to have a Material Adverse
Effect.
6. To the best of my knowledge, no injunction, writ, temporary
restraining order or any order of any nature has been issued by any court or
other Governmental Authority purporting to enjoin or restrain the execution,
delivery or performance of any Document.
7. Neither the Parent nor any Borrower is an "investment company"
within the meaning of the Investment Company Act of 1940 or a "holding company,"
or a "subsidiary company" of a "holding company," or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding company," within
the meaning of the Public Utility Holding Company Act of 1935.
The foregoing opinion is subject to the following qualifications:
(a) I express no opinion as to the effect (if any) of any law of
any jurisdiction (except the State of New York) in which any Bank is
located which may limit the rate of interest that such Bank may charge or
collect.
0000DULA.W51
<PAGE>
EXHIBIT G
Page 4
(b) I express no opinion as to the possible applicability to the
transactions contemplated by the Documents of Section 548 of the
Bankruptcy Code or comparable provisions of other applicable law.
(c) I wish to point out that the provisions of the Credit Agreement
which permit a Bank or the Issuing Bank and Swingline Bank or the Agent
to take actions or make determinations or benefit from indemnities and
similar undertakings may be subject to requirements that such actions or
determinations be made, or that any action or inaction by any Bank, the
Issuing Bank and Swingline Bank or the Agent which may give rise to a
request for payment under such indemnity or other undertaking, be taken
or not taken, reasonably and in good faith.
(d) I express no opinion as to the last clause of the second
sentence of Section 10.01(a) of the Credit Agreement.
(e) I express no opinion as to Section 10.01(i)of the Credit
Agreement.
I am a member of the bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York, the General Corporation
Law of the State of Delaware and the federal laws of the United States of
America.
This opinion is rendered solely to you in connection with the above
matter. This opinion may not be relied upon by you for any other purpose or
relied upon by any other person without my prior written consent, except that
each lender that becomes a party to the Credit Agreement from time to time in
accordance with the provisions of the Credit Agreement may rely upon this
opinion to the same extent as if it were specifically addressed and delivered to
such lender on the date hereof; provided that I express no opinion as to the
effect of events occurring, circumstances arising or changes of law after the
date hereof on the opinions set forth herein.
Very truly yours,
0000DULA.W51
<PAGE>
EXHIBIT H
FORM OF OPINION OF WHITE & CASE
December 12, 1996
To: The Agent and the several financial
institutions (collectively, the "Banks")
party to the Credit Agreement referred
to below.
Re: Credit Agreement, dated as of December 12, 1996 (the "Credit
Agreement"), among USI AMERICAN HOLDINGS, INC., USI
FUNDING, INC., U.S. INDUSTRIES, INC., various Banks, BANK
OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Issuing Bank, Swingline Bank and Agent, and BA
SECURITIES INC., as Arranger
Ladies and Gentlemen:
We have acted as special counsel to the Agent and the Banks party to
the Credit Agreement in connection with the execution and delivery of the Credit
Agreement. This opinion is delivered to you pursuant to Section 5.01(d)(iii) of
the Credit Agreement. Terms used herein which are defined in the Credit
Agreement shall have the respective meanings set forth in the Credit Agreement
unless otherwise defined herein.
In connection with this opinion, we have examined the originals, or
certified, conformed or reproduction copies, of all records, agreements,
instruments and documents as we have deemed relevant or necessary as the basis
for the opinions hereinafter expressed. In stating our opinion, we have assumed
the genuineness of all signatures on original or certified copies, the
authenticity of documents submitted to us as originals and the conformity to
original or certified copies of all copies submitted to us as certified or
reproduction copies.
0000DV51.W51
<PAGE>
EXHIBIT H
Page 2
We have also assumed, for purposes of the opinions expressed herein,
that the parties to the Credit Agreement have the corporate power and authority
to enter into and perform the Credit Agreement and that the Credit Agreement has
been duly authorized, executed and delivered by each such party.
Based upon the foregoing, and subject to the limitations set forth
herein, we are of the opinion that the Credit Agreement constitutes the legal,
valid and binding obligation of each Borrower enforceable in accordance with its
terms except to the extent that enforcement may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws affecting
creditors' rights generally and by equity principles (regardless of whether
enforcement is sought in equity or at law).
We have not been requested to render and, with your permission, we
express no opinion as to the applicability to the obligations of any Borrower
under the Credit Agreement of Section 548 of the Bankruptcy Code and Article 10
of the New York Debtor & Creditor Law relating to fraudulent transfers and
obligations. We understand, without independent verification, that the Banks
have satisfied themselves on the basis of, among other things, the financial
information furnished to the Banks and their knowledge of the credit facilities
available to the Borrowers, that no Borrower is either insolvent or will be
rendered insolvent by the transactions contemplated by the Credit Agreement and
that, after giving effect to such transactions, each Borrower will not be left
with unreasonably small capital with which to engage in its anticipated business
and that no Borrower will have intended to incur, nor will have believed it has
incurred, debts beyond its ability to pay as such debts mature.
This opinion is limited to the federal law of the United States of
America and the law of the State of New York.
Very truly yours,
0000DV51.W51
<PAGE>
EXHIBIT I
FORM OF COMPLIANCE CERTIFICATE
This Compliance Certificate is delivered to you pursuant to Section
7.02(a) of the Credit Agreement, dated as of December 12, 1996 (as amended,
supplemented or modified from time to time, the "Credit Agreement"), among USI
American Holdings, Inc. (the "Company"), USI Funding, Inc., U.S. Industries,
Inc. (the "Parent"), the Banks party thereto, Bank of America National Trust and
Savings Association, as Issuing Bank, Swingline Bank and Agent, and BA
Securities, Inc., as Arranger. Terms defined in the Credit Agreement and not
otherwise defined herein are used herein with the meanings so defined.
1. I am a duly elected, qualified and acting Responsible Officer of
the Company.
2. I have reviewed and am familiar with the contents of this
Certificate. I am providing this Certificate solely in my capacity as officer of
the Company. The matters set forth herein are true to the best of my knowledge
after diligent inquiry, but I express no personal opinion as to any conclusions
of law or other legal matters.
3. I have reviewed the terms of the Credit Agreement and have made
or caused to be made under my supervision, a review in reasonable detail of the
transactions and condition of the Company during the accounting period covered
by the financial statements attached hereto as ANNEX 1 (the "Financial
Statements"). Such review did not disclose the existence during or at the end of
the accounting period covered by the Financial Statements, and I have no
knowledge of the existence, as of the date of this Certificate, of any condition
or event which constitutes a Default or Event of Default [, except as set forth
below].
4. Attached hereto as ANNEX 2 are the computations showing
compliance with the covenants specified therein.
0000DULE.W51
<PAGE>
EXHIBIT I
Page 2
IN WITNESS WHEREOF, I execute this Certificate this ____ day of
- ------, ----.
USI AMERICAN HOLDINGS, INC.
By_____________________
Title:
0000DULE.W51
<PAGE>
ANNEX 1 TO
EXHIBIT I
Financial Statements
See attached.
0000DULE.W51
<PAGE>
ANNEX 2 to
Exhibit I
The information described herein is as of _________, ____, (the
"Computation Date") and pertains to the period from __________ __, ____ to
_______ __, ____ (the "Measurement Period").
I. Negative and Financial Covenants
A. Indebtedness (Section 8.05)
Section Amount
8.05(e) $_____
8.05(f)(y) $_____
8.05(f)(z) $_____
8.05(j) $_____
B. Maximum Total Funded Debt
1. Consolidated Leverage Ratio
(Section 8.11(b))
a. Total Funded Debt on the last
day of the Measurement Period $_____
b. Net Worth on the last day of
the Measurement period $_____
c. Sum of lines a. and b. (Capital) $_____
d. Ratio of line a. to line c. ____:1
0000DULE.W51
<PAGE>
EXHIBIT J
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
between
Assignor
and
Assignee
Entered into as of __________, ____
with respect to
USI AMERICAN HOLDINGS, INC.
and
USI FUNDING, INC.
<PAGE>
TABLE OF CONTENTS
Section Description Page
1. Assignment and Assumption............................... 2
2. Payments................................................ 2
3. Reallocation of Payments................................ 3
4. Independent Credit Decision............................. 3
5. Assignment Effective Date; Notices...................... 3
[6. Agent.................................................. 4]
7. Withholding Tax......................................... 4
8. Representations and Warranties.......................... 4
9. Further Assurances...................................... 6
10. Indemnity............................................... 6
11. Miscellaneous........................................... 6
Schedule I
Schedule II
(i)
<PAGE>
EXHIBIT J
Form of Assignment and Assumption Agreement
This ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement") dated as
of ____________, _____ is made between
(the "Assignor") and (the "Assignee").
RECITALS
WHEREAS, the Assignor is party to that certain Credit Agreement
dated as of December 12, 1996 among USI AMERICAN HOLDINGS, INC., (the
"Company"), USI FUNDING, INC. (together with the Company, each a "Borrower" and,
collectively, the "Borrowers"), U.S. INDUSTRIES, INC. (the "Parent"), the banks
party thereto (including the Assignor, the "Banks"), BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION, as Issuing Bank, Swingline Bank and Agent, BA
SECURITIES, INC., as Arranger (as from time to time amended, restated,
supplemented or otherwise modified, the "Credit Agreement"). Terms defined in
the Credit Agreement are used herein with the same meanings;
WHEREAS, as provided under the Credit Agreement, the Assignor has
committed to make loans (the "Loans") to the Borrowers [and to issue Letters of
Credit for the account of the Borrowers]in an aggregate amount not to exceed
________________________ ($ ) (the "Aggregate Commitment");
WHEREAS, the Assignor has made Loans in the aggregate principal
amount of (i) $____________ to the Company and (ii) $_____________ to USI
Funding; and
WHEREAS, the Assignor wishes to assign to the Assignee part of the
rights and obligations of the Assignor under the Credit Agreement, together with
a corresponding portion of each of its outstanding Loans, in an amount equal to
$ _______________ (the "Assigned Amount") on the terms listed on Schedule I
hereto and subject to the conditions set forth herein, and the Assignee wishes
to accept assignment of such rights and to assume such obligations from the
Assignor on such terms and subject to such conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
<PAGE>
EXHIBIT J
Page 2
1. Assignment and Assumption.
(a) With effect on and after the Assignment Effective Date (as
defined in Section 5 hereof), the Assignor hereby sells and assigns
to the Assignee, and the Assignee hereby purchases and assumes from
the Assignor, the Assigned Amount, which shall be equal to
____________ percent (___%) (the "Assignee's Percentage Share") of
all of the Assignor's rights and obligations under the Credit
Agreement, any outstanding Loans [and any outstanding amounts under
any Letters of Credit]. The assignment set forth in this Section
1(a) shall be without recourse to, or representation or warranty
(except as expressly provided in this Agreement) by, the Assignor.
(b) With effect on and after the Assignment Effective Date, the
Assignee shall be a party to the Credit Agreement and succeed to all
of the rights and be obligated to perform all of the obligations of
a Bank under the Credit Agreement, including the requirements
concerning confidentiality, with Loans equal to the Assigned Amount.
The Assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Bank.
2. Payments.
(a) As consideration for the sale, assignment and transfer
contemplated in Section 1 hereof, the Assignee shall pay to the
Assignor on the Assignment Effective Date in immediately available
funds an amount equal to $ __________________________, representing
the Assignee's Percentage Share of the principal amount of all Loans
previously made, and currently owned, by the Assignor to the
Borrowers under the Credit Agreement and outstanding on the
Assignment Effective Date.
(b) In the case of any assignment to an Assignee which is not
already a Bank, the [Assignor] [Assignee] further agrees to pay to
the Agent a processing fee in the amount of $3,000.
(c) To the extent payment to be made by the Assignee pursuant to
Section 2(a) hereof is not made when due, the Assignor shall be
entitled to recover such amount together with interest thereon at
the Federal Funds Rate per annum accruing from the date such amounts
were due.
<PAGE>
EXHIBIT J
Page 3
3. Reallocation of Payments.
Any interest, commissions, fees and other payments accrued to but
excluding the Assignment Effective Date with respect to the Loans, shall be for
the account of the Assignor. Any interest, fees and other payments accrued on
and after the Assignment Effective Date with respect to the Assigned Amount
shall be for the account of the Assignee. Each of the Assignor and the Assignee
agree that it will hold in trust for the other party any interest, commissions,
fees and other amounts which it may receive to which the other party is entitled
pursuant to the preceding sentence and pay to the other party any such amounts
which it may receive promptly upon receipt. The Assignor and the Assignee's
obligations to make the payments referred to in this Section 3 are
non-assignable.
4. Independent Credit Decision.
The Assignee (a) acknowledges that it has received a copy of the
Credit Agreement and the Schedules and Exhibits thereto, together with copies of
the financial statements referred to in Section 7.01 thereof, and such other
documents and information as it has deemed appropriate to make its own credit
and legal analysis and decision to enter into this Agreement; and (b) agrees
that it will, independently and without reliance upon the Assignor, the Agent,
the Issuing Bank, the Swingline Bank or any other Bank and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit and legal decisions in taking or not taking action under the
Credit Agreement.
5. Assignment Effective Date; Notices.
(a) The effective date for this Agreement shall be _________ (the
"Assignment Effective Date"); provided that the following conditions
precedent have been satisfied on or before the Assignment Effective
Date:
(i) this Agreement shall be executed and delivered by the Assignor
and the Assignee;
(ii) the consent of each Borrower, the Agent, the Issuing Bank
and/or the Swingline Bank required for an effective assignment of
the Assigned Amount by the Assignor to the Assignee shall have been
duly obtained and shall be in full force and effect as of the
Assignment Effective Date;
(iii) the Assignee shall pay to the Assignor all amounts due to the
Assignor under this Agreement; and
<PAGE>
EXHIBIT J
Page 4
(iv) the processing fee referred to in Section 2(b) of this
Agreement and in Section 12.07(a) of the Credit Agreement shall have
been paid to the Agent.
(b) Promptly following the execution of this Agreement, the Assignor
shall deliver to the Agent for acceptance and recording by the
Agent, the notices, agreements or other documents as may be required
under the Credit Agreement.
[6. Agent [INCLUDE ONLY IF ASSIGNOR IS AGENT].
(a) The Assignee hereby appoints and authorizes the Assignor to take
such action as agent on its behalf and to exercise such powers under
the Credit Agreement as are delegated to the Agent by the Banks
pursuant to the terms of the Credit Agreement.
(b) The Assignee shall assume no duties or obligations held by the
Assignor in its capacity as Agent under the Credit Agreement.]
7. Withholding Tax.
The Assignee agrees to comply with Section 4.01(f) of the Credit
Agreement to the extent applicable to it as if the date of this Agreement were
the "Effective Date" under, and as defined in, the Credit Agreement.
8. Representations and Warranties.
(a) The Assignor represents and warrants that (i) it is the legal
and beneficial owner of the interest being assigned by it hereunder
and that such interest is free and clear of any lien, security
interest or other adverse claim; (ii) it is duly organized and
existing and it has the full power and authority to take, and has
taken, all action necessary to execute and deliver this Agreement
and any other documents required or permitted to be executed or
delivered by it in connection with this Agreement and to fulfill its
obligations hereunder; (iii) no notices to, or consents,
authorizations or approvals of, any Person are required (other than
any already given or obtained) for its due execution, delivery and
performance of this Agreement, and apart from any agreements or
undertaking or filings required by the Credit Agreement, no further
action by, or notice to, or filing with, any Person is required of
it for such execution, delivery or performance; and (iv) this
Agreement has been duly executed and delivered by it and constitutes
the legal, valid
<PAGE>
EXHIBIT J
Page 5
and binding obligation of the Assignor, enforceable against the
Assignor in accordance with the terms hereof, subject, as to
enforcement, to bankruptcy, insolvency, moratorium, reorganization
and other laws of general application relating to or affecting
creditors' rights and to general equitable principles.
(b) The Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement
or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit
Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto. The Assignor makes no
representation or warranty in connection with, and assumes no
responsibility with respect to, the solvency, financial condition or
statements of the Parent or any Borrower or the performance or
observance by the Parent or any Borrower of any of its respective
obligations under the Credit Agreement, any other Loan Document or
any other instrument or document furnished in connection therewith.
(c) The Assignee represents and warrants that (i) it is duly
organized and existing and it has full power and authority to take,
and has taken, all action necessary to execute and deliver this
Agreement and any other documents required or permitted to be
executed or delivered by it in connection with this Agreement, and
to fulfill its obligations hereunder; (ii) no notices to, or
consents, authorizations or approvals of, any Person are required
(other than any already given or obtained) for its due execution,
delivery and performance of this Agreement; and apart from any
agreements or undertaking or filings required by the Credit
Agreement, no further action by, or notice to, or filing with, any
Person is required of it for such execution, delivery or
performance; (iii) this Agreement has been duly executed and
delivered by it and constitutes the legal, valid and binding
obligation of the Assignee, enforceable against the Assignee in
accordance with the terms hereof, except subject, as to enforcement,
to bankruptcy, insolvency, moratorium, reorganization and other laws
of general application relating to or affecting creditors' rights
and to general equitable principles; and (iv) it is eligible under
the Credit Agreement to be an assignee of the Loans.
<PAGE>
EXHIBIT J
Page 6
9. Further Assurances.
The Assignor and the Assignee each hereby agrees to execute and
deliver such other instruments, and take such other action, as either party may
reasonably request in connection with the transactions contemplated by this
Agreement, including, without limitation, the delivery of any notices or other
documents or instruments to any Borrower, the Agent, the Issuing Bank, the
Swingline Bank or the Parent which may be required in connection with the
assignment and assumption contemplated hereby.
10. Indemnity.
The Assignee agrees to indemnify and hold harmless the Assignor
against any and all losses, costs, expenses (including, without limitation,
reasonable attorneys' fees and the allocated costs and expenses for in-house
counsel) and liabilities incurred by the Assignor in connection with or arising
in any manner from the non-performance by the Assignee of any obligation assumed
by the Assignee under this Agreement.
11. Miscellaneous.
(a) Any amendment or waiver of any provision of this Agreement shall
be in writing signed by the parties hereto. No failure or delay by
either party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof and any waiver of any
breach of the provisions of this Agreement shall be without
prejudice to any rights with respect to any other or further breach
hereof.
(b) All payments made hereunder shall be made without any set-off
or counterclaim.
(c) All communications among the parties or notices in connection
herewith shall be in writing (including facsimile transmission or
telex) and delivered, telexed or telecopied, addressed as follows:
(i) if to the Assignor or the Assignee, at their respective
addresses set forth on the signature pages hereof and (ii) if to any
Borrower, the Issuing Bank, the Swingline Bank or the Agent, at
their respective addresses set forth in the Credit Agreement or any
other documents or instruments delivered pursuant thereto. All such
communications and notices shall be effective upon receipt. The
Assignee specifies as its Domestic and Eurodollar Lending Office(s)
the offices set forth beneath its name on the signature pages
hereof.
<PAGE>
EXHIBIT J
Page 7
(d) The Assignor and the Assignee shall each pay its own costs and
expenses incurred in connection with the negotiation, preparation,
execution and performance of this Agreement.
(e) The representations and warranties made herein shall survive the
consummation of the transactions contemplated hereby.
(f) This Agreement shall be binding upon and inure to the benefit of
the Assignor and the Assignee and their respective successors and
assigns; provided, however, that no party shall assign its rights
and obligations hereunder without the prior written consent of the
other party and any purported assignment, absent such consent, shall
be void. The preceding sentence shall not limit the right of the
Assignee to assign or participate all or part of the Assignee's
Percentage Share and the Assigned Amount and any outstanding Loans
attributable thereto in the manner contemplated by the Credit
Agreement.
(g) The Assignor may at any time or from time to time grant to
others assignments or participations in the Loans but not in the
portions thereof assigned to the Assignee pursuant to this
Agreement.
(h) This Agreement may be executed in any number of counterparts and
all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
(i) This Agreement shall be governed by and construed in accordance
with the law of the State of New York. The Assignor and the Assignee
each irrevocably submits to the non-exclusive jurisdiction of any
New York State or Federal court sitting in The City of New York over
any suit, action or proceeding arising out of or relating to this
Agreement and irrevocably agrees that all claims in respect of such
action or proceeding may be heard and determined in such New York
State or Federal court. Each party to this Agreement hereby
irrevocably waives, to the fullest extent it may effectively do so,
the defense of an inconvenient forum to the maintenance of such
action or proceeding.
(j) This Agreement and any agreement, document or instrument
attached hereto or referred to herein integrate all the terms and
conditions mentioned herein or incidental hereto, constitute the
entire agreement and understanding between the parties hereto and
supersede any and all prior agreements and understandings related to
the subject matter hereof. In the event of any conflict between the
terms, conditions
<PAGE>
EXHIBIT J
Page 8
and provisions of this Agreement and any such agreement, document or
instrument, the terms, conditions and provisions of this Agreement
shall prevail.
(k) In the event of any inconsistency between the provisions of this
Agreement and Schedule I hereto, this Agreement shall control.
Headings are for reference only and are to be ignored in
interpreting this Agreement.
(l) The illegality or unenforceability of any provision of this
Agreement or any instrument or agreement required hereunder shall
not in any way affect or impair the legality or enforceability of
the remaining provisions of this Agreement or any instrument or
agreement required hereunder.
(m) The Assignor and the Assignee each hereby knowingly, voluntarily
and intentionally waive any rights they may have to a trial by jury
in respect of any litigation based hereon, or arising out of, under,
or in connection with this Agreement, the Credit Agreement, any
related documents and agreements or any course of conduct, course of
dealing or statements (whether oral or written).
<PAGE>
EXHIBIT J
Page 9
IN WITNESS WHEREOF the Assignor and the Assignee have caused this
Agreement to be executed and delivered by their duly authorized officers as of
the date first above written.
-----------------------------
Assignor
By: ________________________
Title:
-----------------------------
Assignee
By: ________________________
Title:
<PAGE>
SCHEDULE I
to
Assignment and Assumption Agreement
1. Company:
2. Date of Credit Agreement:
3. Assignor:
4. Assignee:
5. Date of Assignment Agreement:
6. Assignment Effective Date:
[Outstanding
7. Assignee's Share Commitment Letters of Credit]
(a) Assignee's Percentage
Share
(b) Assigned Amount
8. Fees: Payment by Borrower
to Assignee
Facility Fee
9. Interest: Payment by Borrower
to Assignee
(i) Base Rate Loan
(ii) Eurodollar Loan
10. Payment Instructions:
Assignor:
Assignee:
<PAGE>
11. Assignee's Notice:
Instructions
12. Other Information:
<PAGE>
SCHEDULE II
Form of Notice of Assignment and Acceptance
----------, ----
Bank of America National Trust
and Savings Association,
as Agent
1455 Market Street, 13th Floor
San Francisco, California 94103
Attention: Agency Administrative Services #5596
USI American Holdings, Inc.
101 Wood Avenue South
Iselin, New Jersey 08830
USI Funding, Inc.
101 Wood Avenue South
Iselin, New Jersey 08830
Attention: ___________________
Ladies and Gentlemen:
We refer to the Credit Agreement dated as of December 12, 1996 (the
"Credit Agreement") among USI AMERICAN HOLDINGS, INC. (the "Company"), USI
FUNDING, INC. (together with the Company, each a "Borrower" and, collectively,
the "Borrowers"), U.S. INDUSTRIES, INC. (the "Parent"), the Banks party thereto,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Issuing Bank,
Swingline Bank and Agent, and BA SECURITIES, INC., as Arranger. Terms defined in
the Credit Agreement are used herein as therein defined.
1. We hereby give you notice of, and request the consent of each
Borrower and the Agent to the assignment by _______________ (the "Assignor") to
_______________ (the "Assignee") of _____% of the right, title and interest of
the Assignor in and to the Credit Agreement and all outstanding Loans [and
outstanding amounts under any Letters of Credit] made by the Assignor.
<PAGE>
SCHEDULE II
Page 2
2. The Assignee agrees that, upon receiving the consent of the
Company and the Agent to such assignment and from and after the Assignment
Effective Date (under, and as defined in, the relevant Assignment Agreement),
the Assignee will be bound by the terms of the Credit Agreement, with respect to
the interest in the Credit Agreement assigned to it as specified above, as fully
and to the same extent as if the Assignee were the Bank originally holding such
interest in the Credit Agreement.
3. The following administrative details apply to the Assignee:
(A) Lending Office:
Assignee name: ___________________
Address: _________________________
Attention: _______________________
Telephone: ( )__________________
Telecopier: ( )__________________
Telex (Answerback): ______________
(B) Notice Address:
Assignee name: ____________________
Address: __________________________
Attention: ________________________
Telephone: ( )___________________
Telecopier: ( )___________________
Telex (Answerback): _______________
(C) Payment Instructions:
Account No.: _______________________
At: ________________________________
Reference: _________________________
Attention: _________________________
<PAGE>
SCHEDULE II
Page 3
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Notice of Assignment and Acceptance to be executed by their respective duly
authorized officials, officers or agents as of the date first above mentioned.
Very truly yours,
[Name of Assignor]
By:________________________
Title:
[Name of Assignee]
By:________________________
Title:
USI AMERICAN HOLDINGS, INC. hereby consents to the foregoing assignment:
USI AMERICAN HOLDINGS, INC.
By:______________________________
Title:
USI FUNDING, INC. hereby consents to the foregoing assignment:
<PAGE>
SCHEDULE II
Page 4
USI FUNDING, INC.
By:______________________________
Title:
CONSENT:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By:________________________________
Title:
Title:
EXHIBIT 12.1
U.S. INDUSTRIES, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In millions, except ratios)
<TABLE>
<CAPTION>
Three Months Ended
Year Ended September 30, December 31,
--------------------------------------------------------- --------------------------
1996 1995 1994 1993 1992 1996 1995
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS:
Income (loss) from
continuing operations
before income taxes
and fixed charges................. $155 $ (37) $ 66 $ 47 $ 44 36 22
==== ===== ==== ==== ==== == ==
Fixed charges:
Interest expense.................. 60 101 94 95 89 12 20
Interest component
of rent.......................... 8 7 6 7 6 2 2
- - - - - - -
Fixed charges..................... 68 108 100 102 95 14 22
== === === === == == ==
Earnings, as defined 223 71 166 149 139 50 44
=== == === === === == ==
FIXED CHARGES........................ 68 108 100 102 95 14 22
== === === === == == ==
Ratio of earnings to
fixed charges...................... 3.3x -(1) 1.7x 1.5x 1.5x 3.6x 2.0x
==== === ==== ==== ==== ==== ====
<FN>
- --------
(1) Earnings for fiscal 1995 were insufficient to cover fixed charges by $37
million. This deficiency resulted from goodwill impairment and other
non-recurring charges of $113 million. Before taking into account such
items, the ratio of earnings to fixed charges for fiscal 1995 would have
been 1.7x.
</FN>
</TABLE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in U.S.
Industries, Inc. Registration Statement on Form S-4 and related Prospectus for
the registration of its 7 1/4% Senior Notes and to the incorporation by
reference therein of our report dated November 11, 1996, except for Note 18, as
to which the date is December 12, 1996, with respect to the consolidated
financial statements and schedule of U.S. Industries, Inc. included in its
Annual Report on Amended Form 10-K for the year ended September 30, 1996, filed
with the Securities and Exchange Commission.
/s/ Ernst and Young LLP
New York, New York
April 22, 1997
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-4 of U.S. Industries,
Inc. of our report dated November 11, 1996, appearing on page 26 of the U.S.
Industries, Inc. Annual Report on Form 10-K/A for the year ended September 30,
1996. We also consent to the reference to us under the heading "Experts" in such
Prospectus.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Morristown, New Jersey
April 18, 1997
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement on
Form S-4 of our report dated February 21, 1995 with respect to the combined
financial statements and schedule of the U.S. Industries, Inc. Automotive Group
companies (not presented separately) appearing in U.S. Industries, Inc.'s Annual
Report on Form 10-K/A Amendment No. 1 for the fiscal year ended September 28,
1996, and to the reference to us under the heading "Experts" in the Prospectus,
which is part of this Registration Statement.
/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
New York, New York
April 18, 1997
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes each of George H. MacLean and Frank R. Reilly his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign one or more registration statements on Form S-4 of U.S.
Industries, Inc. with respect to (a) an exchange offer of notes substantially
similar to the 7 1/4% Senior Notes Due December 1, 2006 and/or (b) a shelf
registration of the 7 1/4% Senior Notes Due December 1, 2006, and to sign and
file any other documents in connection therewith, including amendments thereto,
with the Securities and Exchange Commission, granting unto said attorney-in-fact
and agent, full power and authority to do and perform each act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney
as of the 31st day of December 1996.
/S/ David H. Clarke /S/ John G. Raos
- ----------------------- --------------------------------
David H. Clarke John G. Raos
/S/ Frank R. Reilly /S/ Brian C. Beazer
- ----------------------- --------------------------------
Frank R. Reilly Brian C. Beazer
/S/ John J. McAtee, Jr. /S/ The Hon. Charles H. Price II
- ----------------------- --------------------------------
John J. McAtee, Jr. The Hon. Charles H. Price II
/S/ Sir Harry Solomon /S/ Royall Victor III
- ----------------------- --------------------------------
Sir Harry Solomon Royall Victor III
/S/ Mark Vorder Bruegge /S/ James O'Leary
- ----------------------- --------------------------------
Mark Vorder Bruegge James O'Leary
NYFS11...:\95\78595\0012\1860\RID1167V.240
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT
OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)___
PNC BANK, NATIONAL ASSOCIATION
(Exact Name of Trustee as Specified in its Charter)
NOT APPLICABLE
(Jurisdiction of incorporation or
organization if not a U.S. national bank)
25-1197336
(I.R.S. Employer Identification No.)
One PNC Plaza
FifthAvenue and Wood Street, Pittsburgh, Pennsylvania 15222
(Address of principal executive offices - Zip code)
F. J. Deramo, Vice President, PNC Bank, National Association
27th Floor, One Oliver Plaza, Pittsburgh, Pennsylvania 15222-2602
(412) 762-3666
(Name, address and telephone number of agent for service)
USI AMERICAN HOLDINGS, INC.
(Exact name of obligor as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
22-3363062
(I.R.S. Employer Identification No.)
101 Wood Avenue South
Iselin, New Jersey 08830
(Address of principal executive offices - Zip code)
7 1/4% Senior Notes due December 1, 2006
(Title of the indenture securities)
================================================================================
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Comptroller of the Currency Washington, D.C.
Federal Reserve Bank of Cleveland Cleveland, Ohio
Federal Deposit Insurance Corporation Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes. (See Exhibit T-1-3)
ITEM 2. AFFILIATIONS WITH OBLIGOR AND UNDERWRITERS.
If the obligor or any underwriter for the obligor is an affiliate of the
trustee, describe each such affiliation.
Neither the obligor nor any underwriter for the obligor is an
affiliate of the trustee.
ITEM 3 THROUGH ITEM 14.
The issuer currently is not in default under any of its outstanding
securities for which PNC Bank is trustee. Accordingly, responses to Items
3 through 14 of Form T-1 are not required pursuant to Form T-1 General
Instructions B.
ITEM 15. FOREIGN TRUSTEE.
Identify the order or rule pursuant to which the foreign trustee is
authorized to act as sole trustee under the indentures qualified or to be
qualified under the Act.
Not applicable (trustee is not a foreign trustee).
ITEM 16. LIST OF EXHIBITS.
List below all exhibits filed as part of this statement of eligibility.
Exhibit T-1-1 - Articles of Association of the trustee,
with all amendments thereto, as presently in
effect, filed as Exhibit 1 to Trustee's Statement
of Eligibility and Qualification, Registration No.
33-58107 and incorporated herein by reference.
Exhibit T-1-2 - Copy of Certificate of the Authority of
the Trustee to Commence Business, filed as Exhibit
2 to Trustee's Statement of Eligibility and
Qualification, Registration No. 2-58789 and
incorporated herein by reference.
Exhibit T-1-3 - Copy of Certificate as to Authority of the Trustee
to Exercise Trust Powers, filed as Exhibit 3 to
Trustee's
-2-
<PAGE>
Statement of Eligibility and Qualification,
Registration No. 2-58789, and incorporated
herein by reference.
Exhibit T-1-4 - The By-Laws of the trustee.
Exhibit T-1-5 - The consent of the trustee required by Section
321(b) of the Act.
Exhibit T-1-6 - The copy of the Balance Sheet taken from
the latest Report of Condition of the trustee
published in response to call made by Comptroller
of the Currency under Section 5211 U.S. Revised
Statutes.
NOTE
The answers to this statement, insofar as such answers relate to (a) what
persons have been underwriters for any securities of the obligor within three
years prior to the date of filing this statement, or are owners of 10% or more
of the voting securities of the obligor, or are affiliates or directors or
executive officers of the obligor, and (b) the voting securities of the trustee
owned beneficially by the obligor and each director and executive officer of the
obligor, are based upon information furnished to the trustee by the obligor and
also, in the case of (b) above, upon an examination of the trustee's records.
While the trustee has no reason to doubt the accuracy of any such information
furnished by the obligor, it cannot accept any responsibility therefor.
Signature appears on next page
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, PNC Bank, National Association, a corporation organized and existing
under the laws of the United States of America, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Pittsburgh and Commonwealth of Pennsylvania on
April 23, 1997.
PNC BANK, NATIONAL ASSOCIATION
(Trustee)
By /s/ Fred J. Deramo
--------------------------------
Fred J. Deramo
Vice President
-4-
<PAGE>
Exhibit T-1-4
PNC BANK, NATIONAL ASSOCIATION
BY-LAWS
(as amended and restated on April 9, 1996)
Article I. Meetings of Shareholders
Section 1. Annual Meeting. The annual meeting of the shareholders of the Bank
for the election of Directors and the transaction of all other business that may
properly come before the meeting shall be held at the Pittsburgh National
Building or other convenient place selected by the Directors, on the Tuesday
that next follows the annual meeting of the shareholders of PNC Bank Corp. If
for any reason no such election of Directors is made on that day, the Board of
Directors shall order the election to be held on some subsequent day, as soon
thereafter as practicable.
Section 2. Special Meetings. Special meetings of the shareholders shall be held
when called by the Board of Directors or when called in writing by one or more
shareholders owning in the aggregate not less than ten per centum of the
outstanding shares of stock of the Bank.
Section 3. Notice and Record Date. Notice of shareholders' meetings shall be
given in the manner set forth in Article VIII, Section 5, not less than ten days
nor more than sixty prior to the meeting. The Board of Directors may fix a date
not less than ten nor more than forty days prior to the annual meeting or any
special meeting of the shareholders as the record date for the determination of
shareholders entitled to notice of and to vote at any such meeting, or any
adjournment thereof, and only shareholders of record on the date so fixed shall
be entitled to notice of and to vote at any meeting, or any adjournment thereof.
In no event shall the record date as fixed by the Board of Directors be prior to
the date on which the action is taken fixing such record date.
Section 4. Quorum, Shareholder Action. A majority of the shares outstanding
represented in person or by proxy shall constitute a quorum. Less than a quorum
may adjourn any meeting from time to time and the meeting may be held as
adjourned without further notice. A majority of the votes cast shall decide
every question or matter submitted to the shareholders at any duly convened
meeting unless otherwise provided by law. Shareholders may vote in person or by
proxy duly authorized in writing, but no officer or employee of the Bank may act
as proxy.
Section 5. Written Action of Shareholders. Any action which may be taken at a
meeting of the shareholders of the Bank may be taken without a meeting if a
consent in writing setting forth the action so taken, signed by all the
shareholders who would be entitled to vote at a meeting for such purpose, and
such written consent shall be filed with the Secretary of the Bank.
Article II. Directors
Section 1. Board of Directors. The Board of Directors shall have the power to
manage and administer the business and affairs of the Bank. Except as expressly
limited by law, all corporate powers of the Bank shall be vested in and may be
exercised by the Board of Directors.
Section 2. Number. The Board of Directors shall consist of not less than five
nor more than twenty-five individuals, the exact number within such minimum and
maximum limits to be fixed and determined from time to time by resolution of a
majority of the Board or by resolution of a majority of the shareholders.
Between annual meetings of shareholders, the Board of Directors, by vote of
-5-
<PAGE>
By-Laws PNC Bank, National Association
a majority of the Board, may increase the membership of the Board, within the
maximum above prescribed, by not more than four members and, by like vote,
appoint individuals to fill the vacancies created thereby.
Section 3. Election; Term of Office. The Board of Directors shall be elected at
each annual meeting of the shareholders. Each Director shall hold office from
the time of his election and his qualification to serve as such and until the
election and qualification of his successor or until such Director's earlier
death, resignation, disqualification or removal.
Section 4. Organization Meeting. A meeting of the Board of Directors for the
purpose of organizing the new Board, appointing the officers of the Bank for the
ensuing year and transacting other business shall be held without notice
immediately following the annual election of the Directors or as soon thereafter
as is practicable at such time and place as the Secretary may designate.
Section 5. Regular Meetings. The regular meetings of the Board of Directors
shall be held, without notice, at such times and places as the Board of
Directors shall by resolution determine.
Section 6. Special Meetings. Special meetings of the Board of Directors may be
called by the Chairman of the Board or the President and shall be called at the
request of any three Directors. Notice of special meetings shall be given in the
manner set forth in Article VIII, Section 5.
Section 7. Quorum; Board Action. A majority of the Directors then in office
shall constitute a quorum for the transaction of business at any meeting. Unless
otherwise provided by law, any action of the Board of Directors may be taken
upon the affirmative vote of a majority of the Directors present at a duly
convened meeting.
Section 8. Vacancies. Any vacancy in the Board of Directors may be filled by
appointment by a majority of the remaining Directors at any regular meeting or
at a special meeting called for that purpose.
Section 9. Participation Other Than By Attendance. To the extent permitted by
law, any Director may participate in any regular or special meeting of the Board
of Directors or of any committee of the Board of Directors by means of a
conference telephone or similar communications equipment by means of which all
persons participating in the meeting are able to hear each other.
Section 10. Written Action of Directors. Any action which may be taken by the
Directors at a duly convened meeting may be taken upon the unanimous written
consent of the Directors.
Section 11. Compensation. Each director, advisory director, and member of an
Advisory Board of a branch office, who is not a salaried officer, shall receive
compensation in such amount and in such manner as the Board of Directors may
from time to time determine.
Section 12. Resignation; Removal. Any Director may resign by submitting his
resignation to the Chief Executive Officer, the Chairman, the President or the
Secretary. Such resignation shall become effective upon its submission or at any
later time specified. Any Director may be removed from office by action of the
shareholders or the Board taken in accordance with applicable law.
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By-Laws PNC Bank, National Association
Section 13. Personal Liability for Monetary Damages.
(a) To the fullest extent permitted by applicable law, each Director shall
be indemnified and held harmless by the Bank for all actions taken by him or her
and for all failures to take action to the fullest extent permitted by
Pennsylvania law against all expense, liability and loss (including without
limitation attorneys' fees, judgments, fines, taxes, penalties, and amounts paid
or to be paid in settlement) reasonably incurred or suffered by him or her. No
indemnification pursuant to this Section 13 shall be made, however, in any case
where the act or failure to act giving rise to the claim for indemnification is
determined by a court of competent jurisdiction to have constituted willful
misconduct or recklessness.
(b) This Section 13 shall not apply to any administrative proceeding or
action instituted by a federal bank regulatory agency which proceeding or action
results in a final order assessing civil money penalties or requiring
affirmative action by the Director in the form of making payments to the Bank.
(c) The provisions of this Section 13 shall be deemed to be a contract
with each Director of the Bank who serves as such at any time while this Section
13 is in effect and each such Director shall be deemed to be doing so in
reliance on the provisions of this Section 13. Any amendment or repeal of this
Section 13 or adoption of any other provision of the By-Laws or the Articles of
the Association which has the effect of increasing Director liability shall
operate prospectively only and shall not affect any action taken, or any failure
to act, prior to the adoption of such amendment, repeal or other provision.
Section 14. Corporate Governance Procedures. The Board of Directors and each
committee thereof shall have the authority to adopt or otherwise avail itself of
such corporate governance procedures as may be included from time to time in the
Pennsylvania Business Corporation Law of 1988, provided that any such procedure
complies with, or is not inconsistent with, applicable federal banking statutes
and regulations, and safe and sound banking practices.
Article III. Committees
Section 1. Appointment; Powers. In addition to the Committees described in this
Article III, the Board may appoint one or more standing or temporary committees
consisting of two or more Directors. The Board may invest such committees with
such power and authority, subject to such conditions, as it may see fit.
Section 2. Executive Committee. The Board may appoint from among its members an
Executive Committee which, to the maximum extent permitted by law or as
otherwise provided herein shall have and exercise in the intervals between the
meetings of the Board of Directors all the powers of the Board of Directors. All
acts done and powers conferred by the Executive Committee from time to time
shall be deemed to be, and may be certified as being, done and conferred under
authority of the Board of Directors. Four directors shall constitute a quorum
regardless of whether the directors present shall have been formally appointed
to the Executive Committee, and the action of a majority of the directors
present at a meeting, unless a majority of such Directors are officers of the
Bank, shall decide any matter or question submitted to the Executive Committee.
Section 3. Examining Committee. The Board shall appoint from among its members
an Examining Committee which shall be composed of not less than three directors,
none of whom shall be officers
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By-Laws PNC Bank, National Association
of the Bank. The Board of Directors shall select a Chairman from the Committee's
membership and the Committee may appoint a Secretary who need not be a director.
The Committee shall meet on call of its Chairman. The duties and
responsibilities of the Committee shall be as required by law and as assigned
from time to time by the Board of Directors.
Section 4. CRA Policy Committee. The Board of Directors shall appoint from among
its members a Community Reinvestment Act Policy Committee which shall consist of
not less than three directors, and such other officers who shall from time to
time be appointed by the Board of Directors. The duties and responsibilities of
the Committee shall be as assigned from time to time by the Board of Directors.
Section 5. Personnel and Compensation Committee. The Board may appoint from
among its members a Personnel and Compensation Committee. The duties and
responsibilities of the Committee shall be as assigned by the Board of
Directors.
Section 6. Nominating Committee. The Board may appoint from among its members a
Nominating Committee. The duties and responsibilities of the Committee shall be
as assigned by the Board of Directors.
Section 7. Fiduciary Committee. The Board may appoint from among its members a
Fiduciary Committee. The duties and responsibilities of the Committee shall be
as assigned by the Board of Directors.
Section 8. Credit Committee. The Board may appoint from among its members a
Credit Committee. The duties and responsibilities of the Committee shall be as
assigned by the Board of Directors.
Section 9. Asset and Liability Management Committee. The Board may appoint from
among its members an Asset and Liability Management Committee. The duties and
responsibilities of the Committee shall be as assigned by the Board of
Directors.
Section 10. Organization. All committees shall determine their own organization,
procedures and times and places of meeting, unless otherwise directed by the
Board and except as otherwise provided in these By-Laws. A majority of the
Directors appointed to a committee shall constitute a quorum for the transaction
of business at any meeting unless as otherwise provided in these By-Laws. In the
case of committees with an even number of Directors appointed to the committees,
one-half of the Directors shall constitute a quorum. Unless otherwise prevented
by law or by the procedures established by the committee, any action of a
committee may be taken upon the affirmative vote of a majority or one-half, as
the case may be, of the Directors present at a duly convened meeting or upon the
unanimous written consent of all Director members.
Section 11. Advisory Boards. Any branch office, with the approval of the Board
of Directors or the Chief Executive Officer, may have an Advisory Board
consisting of Directors, officers or members of the public, who may from time to
time be appointed by the Board of Directors or the Chief Executive Officer or
his designee. The Chairman of each Advisory Board shall be designated by the
Board of Directors or the Chief Executive Officer. Each Advisory Board shall
meet at such time or times as shall be determined by the Chairman of such
Advisory Board. Advisory Boards shall be established for informational and
marketing purposes only and shall not have any duties, powers or
responsibilities.
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By-Laws PNC Bank, National Association
Article IV. Officers
Section 1. Officers Generally. The officers of the Bank, in order of precedence
or rank, shall be a Chairman of the Board; one or more Vice Chairmen, if any; a
President; one or more Vice Presidents, of whom one or more may be designated,
in order of precedence or rank, Senior Executive, Executive or Senior Vice
Presidents, and one of whom may be designated as responsible to direct, manage
and supervise all fiduciary activities; a Cashier; a Secretary; a Controller; an
Audit Director; and such other officers and functional officer titles, as the
Board of Directors, the Chairman, the Vice Chairman or the President may from
time to time designate. The Board of Directors shall from time to time designate
from among the Chairman of the Board, the Vice Chairmen and the President, one
of these officers to be the Chief Executive Officer.
Section 2. Elections; Appointment. All officers having the rank of Senior Vice
President or higher, shall be elected by the Board of Directors and shall hold
office during the pleasure of the Board of Directors. All other Vice Presidents
and other officers shall be appointed by the Chairman of the Board, a Vice
Chairman or President or other officer authorized by the Board of Directors to
appoint officers, and such action shall be reported to the Board of Directors.
Section 3. Chief Executive Officer. The Chief Executive Officer shall have the
general supervision of the policies, business and operations of the Bank; shall
have general executive powers as well as those duties and powers as may be
assigned by the Board of Directors; and shall have all other powers and duties
as are usually incident to the chief executive officer of a national bank. In
the absence of the Chief Executive Officer his powers and duties shall be
performed by such other officer or officers as shall be designated by the Board
of Directors.
Section 4. Chairman. The Chairman of the Board shall have general executive
powers, shall preside at all meetings of the shareholders and shall have such
other powers and duties as may be assigned to him from time to time by the Board
of Directors.
Section 5. Vice Chairman. A Vice Chairman shall have general executive powers
and shall have such duties and powers as shall be assigned from time to time by
the Board of Directors or the Chief Executive Officer.
Section 6. President. The President shall have general executive powers and
shall have such duties and powers as may be assigned to him from time to time by
the Board of Directors.
Section 7. Senior Officers; Vice Presidents. The Senior Executive, Executive,
and Senior Vice Presidents as well as all other Vice Presidents shall have such
duties and powers as may from time to time be assigned to them by the Board of
Directors or by the Chief Executive Officer. Any reference in these By-Laws to a
Vice President shall apply equally to a Senior Executive, Executive, or a Senior
Vice President unless the context otherwise requires.
Section 8. Vice President in Charge of Trusts. The Vice President in Charge of
Trusts, if any, under the direction of the Chief Executive Officer, shall
direct, manage and supervise all fiduciary activities of the Bank and shall be
responsible to the Board of Directors, the Chief Executive Officer and the
Fiduciary Committee for the administration of the Bank's fiduciary powers. He
shall have such other duties and powers as may be assigned to him by the Board
of Directors or the Chief Executive Officer.
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By-Laws PNC Bank, National Association
Section 9. Cashier. Unless otherwise delegated to another officer or officers by
the Board of Directors, the Cashier shall be responsible for all moneys, funds,
securities, fidelity and indemnity bonds and other valuables belonging to the
Bank, exclusive of the assets held by the Bank in a fiduciary capacity; shall
cause to be kept proper records of the transactions of the Bank; and shall
perform such other duties as may be assigned to him by the Board of Directors or
the Chief Executive Officer.
Section 10. Secretary. The Secretary shall attend the meetings of the
shareholders, of the Board of Directors, and of the Executive Committee, if any,
and shall keep minutes thereof in suitable minute books. He shall have charge of
the corporate records, papers, and the corporate seal of the Bank. He shall have
charge of the stock and transfer records of the Bank and shall keep a record of
all shareholders and give notices of all meetings of shareholders and special
meetings of the Board of Directors. He shall perform such other duties as may be
assigned to him by the Board of Directors or the Chief Executive Officer.
Section 11. Trust Officers. The Officers performing fiduciary functions, being
all officers assigned to the Trust, Trust and Investment Management or other
Fiduciary Department, Division, or other unit of the Bank, shall execute and
perform all actions desirable to carry out the fiduciary functions of the Bank,
and shall perform such other duties as may be assigned by the Board of
Directors, the Chief Executive Officer, or the Vice President in Charge of
Trusts, if any.
Section 12. Controller. The Controller shall be the chief accounting officer and
shall supervise systems and accounting records and shall be responsible for the
preparation of financial reports.
Section 13. Audit Director. The Audit Director shall have charge of auditing the
books, records and accounts of the Bank. He shall report directly to the Board
of Directors or a committee thereof.
Section 14. Assistant Officers. Each Assistant Officer shall assist in the
performance of the duties of the officer to whom he is assistant and shall
perform such duties in the absence of the officer. He shall perform such
additional duties as the Board of Directors, the Chief Executive Officer, or the
officer to whom he is assistant, may from time to time assign to him.
Section 15. Tenure of Office. The Chief Executive Officer, the Chairman, and the
President shall each hold office for the year for which the Board was elected
and until the appointment and qualification of his successor or until his
earlier death, resignation, disqualification or removal by the Board of
Directors. All other officers and employees shall hold office at the pleasure of
the appropriate appointing authority.
Section 16. Resignation. An officer may resign at any time by delivering written
notice to the Bank. A resignation is effective when the notice is given unless
the notice specifies a later effective date.
Article V. Fidelity Bonds
Section 1. Fidelity Bonds, for the faithful performance of their duties, shall
be carried on all officers and employees in such form and amounts as the Board
of Directors or Chief Executive Officer may require.
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By-Laws PNC Bank, National Association
Article VI. General Powers of Officers
Section 1. The corporate seal of the Bank may be imprinted or affixed by any
process. The Secretary and any other officers authorized by resolution of the
Board of Directors shall have authority to affix and attest the corporate seal
of the Bank.
Section 2. The authority of officers and employees of this Bank to execute
documents and instruments on its behalf in cases not specifically provided for
in these By-Laws shall be as determined from time to time by the Board of
Directors, or, in the case of employees, by officers in accordance with
authority given them by the Board of Directors.
Section 3. Each of the Chairman of the Board, any Vice Chairman, the President,
any one of the Vice Presidents, the Cashier or the Secretary of this Bank is
hereby authorized to pledge assets of the Bank as security for the safekeeping
and prompt payment of deposits of public funds, or other funds, as required or
permitted by law. Such officers may also pledge assets of the Bank as may be
authorized from time to time by the Board of Directors;
Article VII. Stock Certificates
Section 1. Certificates of stock of the Bank shall be signed by the Chairman of
the Board, or a Vice Chairman, or the President, or a Vice President, and
countersigned by the Cashier or an Assistant Cashier, or by the Secretary or an
Assistant Secretary, and shall be sealed with the seal of the Bank. The seal may
be a facsimile. Where any such certificate is manually countersigned by two
authorized officers, or is manually countersigned by one authorized officer and
manually signed by a Registrar, the signature of the Chairman of the Board, or a
Vice Chairman, or the President, or Vice President upon such certificate may be
a facsimile. In case any such officer who has signed or countersigned, or whose
facsimile signature has been placed upon such certificate shall have ceased to
be an officer before such certificate is issued, it may be issued by the Bank
with the same effect as if such officer were still an officer at the time of
this issue.
Section 2. The shares of stock of the Bank shall be transferable only on its
books upon surrender of the stock certificate for such shares properly endorsed.
Section 3. Transfers of stock shall not be suspended preparatory to the
declaration of dividends, but dividends shall be paid to the shareholders in
whose name the stock is standing on the records of the Bank at the close of
business on such day subsequent to the date of declaration of the dividend as
the Board of Directors may designate.
Section 4. If a stock certificate shall be lost, stolen, or destroyed, the
shareholder may file with the Bank an affidavit stating the circumstances of the
loss, theft or destruction and may request the issuance of a new certificate. He
shall give to the Bank a bond which shall be in such sum, contain such terms and
provisions and have such surety or sureties as the Board of Directors may
direct. The Bank may thereupon issue a new certificate replacing the certificate
lost, stolen or destroyed.
Article VIII. General
Section 1. Exercise of Authority During Emergencies. The Board of Directors or
the Executive Committee may from time to time adopt resolutions authorizing
certain persons and entities to
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By-Laws PNC Bank, National Association
exercise authority on behalf of this Bank in time of emergency, and in the time
of emergency any such resolutions will be applicable, notwithstanding any
provisions to the contrary contained in these By-Laws.
Section 2. Charitable Contributions. The Board of Directors may authorize
contributions to community funds, or to charitable, philanthropic, or benevolent
instrumentalities conducive to public welfare in such sums as the Board of
Directors may deem expedient and in the interest of the Bank.
Section 3. Fiscal Year. The fiscal year of the Bank shall be the calendar year.
Section 4. Amendments. These By-Laws may be altered, amended, added to or
repealed by a vote of a majority of the Board of Directors at any regular
meeting of the Board of Directors, or at any special meeting of the Board of
Directors called for that purpose.
Section 5. Notice; Waiver of Notice. Any notice required to be given to any
shareholder or Director may be given either personally or by sending a copy
thereof through the mail, or by telegram, charges prepaid, or by facsimile to
his or her address or telephone number, as the case may be, appearing on the
books of the Bank, or supplied by him or her to the Bank for the purpose of
notice. If the notice is sent by mail or by telegraph, it shall be deemed to
have been given to the person entitled thereto when deposited in the United
States mail or with a telegraph office for transmission to such person. Each
notice shall specify the place, day, and hour of the meeting, and, in the case
of a special meeting, the general nature of the business to be transacted.
Unless otherwise provided by law, whenever any notice is required to be given to
any shareholder or Director under the provisions of these By-Laws or under the
provisions of the Articles of Association, a waiver thereof in writing, signed
by the person or persons entitled to such notice, whether before or after the
time stated therein, will be deemed equivalent to the given of such notice.
Except in the case of a special meeting of shareholders or Directors, neither
the business to be transacted nor the purpose of the meeting need by specified
in the waiver of notice of such meeting. Attendance of a person either in person
or by proxy, when permitted, will constitute a waiver of notice of such meeting,
except where such person attends a meeting for the express purpose of objecting
to the transaction of any business because the meeting was not lawfully called
or convened.
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<PAGE>
EXHIBIT T-1-5
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act
of 1939, as amended by the Trust Indenture Reform Act of 1990, in connection
with the proposed issuance by USI American Holdings, Inc. (a Delaware
Corporation) of 7 1/4% Senior Notes due December 1, 2006, we hereby consent that
reports of examination by Federal, State, Territorial, or District authorities
may be furnished by such authorities to the Securities and Exchange Commission
upon request therefor.
PNC BANK, NATIONAL ASSOCIATION
(Trustee)
By /s/ Fred J. Deramo
---------------------------------
Fred J. Deramo
Vice President
Dated: April 23, 1997
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<PAGE>
EXHIBIT T-1-6
SCHEDULE RC - BALANCE SHEET
FROM
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of
PNC BANK, NATIONAL ASSOCIATION
of PITTSBURGH in the state of PENNSYLVANIA
at the close of business on
December 31, 1996
filed in response to call made by
Comptroller of the Currency,
under title 12, United States Code, Section 161
Charter Number 540
Comptroller of the Currency Northeastern District
BALANCE SHEET
Thousands
of Dollars
ASSETS
Cash and balances due from depository institutions
Noninterest-bearing balances and currency and coin.........$ 3,245,966
Interest-Bearing Balances.................................. 150,803
Securities
Held-to-maturity securities................................ 0
Available-for-sale securities.............................. 8,786,227
Federal funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBFs:
Federal funds sold......................................... 1,856,681
Securities purchased under agreements to resell............ 0
Loans and lease financing receivables:
Loans and leases, net of unearned income $40,025,746
LESS: Allowance for loan and lease losses 745,426
Loans and leases, net of unearned income,
allowance and reserve................................... 39,280,320
Trading assets ............................................. 15,481
Premises and fixed assets (including capitalized leases).... 698,730
Other real estate owned .................................... 76,903
Investments in unconsolidated subsidiaries and
associated companies ..................................... 560,668
Customers' liability to this bank on acceptances
outstanding............................................... 53,564
Intangible assets .......................................... 1,158,419
Other assets................................................ 1,401,199
-----------
Total Assets.............................................. $57,284,961
===========
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<PAGE>
LIABILITIES
Deposits:
In domestic offices....................................... $35,005,553
Noninterest-bearing $ 9,209,796
Interest-bearing 25,795,757
In foreign offices, Edge and Agreement subsidiaries,
and IBFs................................................ 1,388,326
Noninterest-bearing $ 2,560
Interest-bearing 1,385,746
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and in IBFs:
Federal funds purchased................................. 2,912,006
Securities sold under agreements to repurchase.......... 196,756
Demand notes issued to U.S. Treasury........................ 2,133,251
Trading Liabilities......................................... 2,059
Other borrowed money
With original maturity of one year or less................ 7,620,267
With original maturity of more than one year.............. 1,768,448
Mortgage indebtedness and obligations under
capitalized leases........................................ 3,699
Bank's liability on acceptances executed and outstanding.... 53,564
Subordinated notes and debentures .......................... 500,552
Other liabilities........................................... 1,071,888
------------
Total liabilities........................................... 52,655,369
EQUITY CAPITAL
Common Stock................................................ 218,919
Surplus. . . ............................................... 1,971,534
Undivided profits and capital reserves...................... 2,492,982
Net unrealized holding gains (losses) on
available-for-sale securities............................. (54,243)
Total equity capital........................................ 4,629,592
-----------
Total liabilities and equity capital........................$ 57,284,961
============
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==============================================================================
Registration Rights Agreement
Dated as of December 12, 1996
among
USI American Holdings, Inc.,
U.S. Industries, Inc.
and
BA Securities, Inc.
==============================================================================
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of
December 12, 1996, among USI American Holdings, Inc., a Delaware corporation
(the "Issuer"), U.S. Industries, Inc., a Delaware corporation (the "Company")
and BA Securities, Inc. (the "Initial Purchaser").
This Agreement is made pursuant to the Purchase Agreement, dated
December 6, 1996, among the Issuer, the Company and the Initial Purchaser (the
"Purchase Agreement"), which provides for the sale by the Issuer to the Initial
Purchaser of an aggregate of $125 million principal amount of the Issuer's 7
1/4% Senior Notes Due December 1, 2006, Series A (such Notes, including the
guarantees of the Company endorsed thereon, herein called the "Securities"). In
order to induce the Initial Purchaser to enter into the Purchase Agreement, the
Issuer and the Company have agreed to provide to the Initial Purchaser and its
direct and indirect transferees the registration rights set forth in this
Agreement. The execution of this Agreement is a condition to the closing under
the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions.
As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from
time to time, and the rules and regulations of the SEC thereunder.
"1934 Act" shall mean the Securities Exchange Act of l934, as
amended from time to time, and the rules and regulations of the SEC thereunder.
"Closing Date" shall mean the Closing Time as defined in the
Purchase Agreement.
"Company" shall have the meaning set forth in the preamble and shall
also include the Company's successors.
"Depositary" shall mean The Depository Trust Company, or any other
depositary appointed by the Issuer; provided, however, that such depositary must
have an address in the Borough of Manhattan, in The City of New York.
"Effective Time" shall mean the time that and date of which the SEC
declares any Registration Statement effective under the 1933 Act or as of which
such Registration Statement otherwise becomes effective.
<PAGE>
"Exchange Offer" shall mean the exchange offer by the Issuer of
Exchange Securities for Registrable Securities pursuant to Section 2.1.
"Exchange Offer Registration" shall mean a registration under the
1933 Act effected pursuant to Section 2.1.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form) under the 1933 Act, and all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all filings
and other material incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in Section 2.1.
"Exchange Securities" shall mean the 7 1/4% Senior Notes Due
December 1, 2006, Series B issued by the Issuer under the Indenture (including
the guarantees of the Company endorsed thereon) containing terms identical to
the Securities in all material respects (except for references to certain
interest rate provisions, restrictions on transfers and restrictive legends), to
be offered to Holders of Registrable Securities in exchange for Registrable
Securities pursuant to the Exchange Offer.
"Holder" shall mean the Initial Purchaser, for so long as it owns
any Registrable Securities, and each of its successors, assigns and direct and
indirect transferees who become registered owners of Registrable Securities
under the Indenture.
"Indenture" shall mean the Indenture dated as of December 12, 1996,
among the Issuer, the Company and PNC Bank, National Association, as trustee,
relating to the Securities and the Exchange Securities, as the same may be
amended, supplemented, waived or otherwise modified from time to time in
accordance with the terms thereof.
"Initial Purchaser" shall have the meaning set forth in the
preamble.
"Issuer" shall have the meaning set forth in the preamble and shall
also include the Issuer's successors.
"Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of Outstanding (as defined in the Indenture)
Registrable Securities; provided, however, that whenever the consent or approval
of Holders of a specified percentage of Registrable Securities is required
hereunder, Registrable Securities held by the Issuer and other obligors on the
Securities, the Company, or any Affiliate (as defined in the Indenture) of the
Issuer shall be disregarded in determining whether such consent or approval was
given by the Holders of such required percentage amount.
2
<PAGE>
"NASD" shall mean National Association of Securities Dealers, Inc.
"Participating Broker-Dealer" shall mean BA Securities, Inc. and
any other broker-dealer which makes a market in the Securities and exchanges
Registrable Securities in the Exchange Offer for Exchange Securities.
"Person" or "person" shall mean an individual, partnership,
corporation, limited liability company, trust, unincorporated organization or
other entity, or a government or agency or political subdivision thereof.
"Prospectus" shall mean the prospectus contained in a Registration
Statement or furnished pursuant to this Agreement, including any preliminary or
summary prospectus, and any such prospectus as amended or supplemented by any
prospectus supplement, including any such prospectus supplement with respect to
the terms of the offering of any portion of the Registrable Securities covered
by a Shelf Registration Statement, and by all other amendments and supplements
to a prospectus, including post-effective amendments, and in each case including
all filings and other material incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the
preamble.
"Registrable Securities" shall mean the Securities; provided,
however, that any particular Securities shall cease to be Registrable Securities
when (i) a Registration Statement with respect to such Securities shall have
been declared effective under the 1933 Act and such Securities shall have been
disposed of pursuant to such Registration Statement, (ii) such Securities have
been sold to the public pursuant to Rule l44 (or any similar provision then in
force, but not Rule 144A) under the 1933 Act, (iii) such Securities shall have
ceased to be outstanding, or (iv) the Exchange Offer is consummated (except in
the case of Securities purchased from the Issuer and continued to be held by the
Initial Purchaser).
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Issuer and the Company with this Agreement,
including without limitation (i) all SEC, stock exchange or NASD registration
and filing fees, including, if applicable, the fees and expenses of any
"qualified independent underwriter" (and its counsel) that is required to be
retained by any holder of Registrable Securities in accordance with the rules
and regulations of the NASD, (ii) all fees and expenses incurred in connection
with compliance with state securities or blue sky laws and compliance with the
rules of the NASD (including reasonable fees and disbursements of
3
<PAGE>
counsel for any underwriters or Holders in connection with blue sky
qualification of any of the Exchange Securities or Registrable Securities and
any filings with the NASD), (iii) all expenses of any Person in preparing or
assisting in preparing, word processing, printing and distributing any
Registration Statement, any Prospectus, any amendments or supplements thereto,
any underwriting agreements, securities sales agreements and other documents
relating to the performance of and compliance with this Agreement, (iv) all fees
and expenses incurred in connection with the listing, if any, of any of the
Registrable Securities on any securities exchange or exchanges (which listing
shall be at the sole discretion of the Issuer), (v) all rating agency fees, (vi)
the fees and disbursements of counsel for the Issuer and the Company and of the
independent public accountants for the Issuer and the Company, including the
expenses of any special audits or reviews or "cold comfort" letters required by
or incident to such performance and compliance, (vii) the fees and expenses of
the Trustee, any authenticating agent, any paying agent, any escrow agent or any
custodian, (viii) the reasonable fees and disbursements of Fried, Frank, Harris,
Shriver & Jacobson, special counsel representing the Holders of Registrable
Securities, and (ix) any fees and disbursements of the underwriters customarily
required to be paid by issuers or sellers of securities and the fees and
expenses of any special experts retained by the Issuer and the Company in
connection with any Registration Statement, but excluding underwriting discounts
and commissions and transfer taxes, if any, relating to the sale or disposition
of Registrable Securities by a Holder.
"Registration Statement" shall mean an Exchange Offer
Registration Statement or a Shelf Registration Statement.
"SEC" shall mean the Securities and Exchange Commission.
"Shelf Registration" shall mean a registration effected pursuant
to Section 2.2.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Issuer pursuant to Section 2.2, which covers all the
Registrable Securities on an appropriate form under Rule 415 under the 1933 Act,
or any similar rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference therein.
"Special Circumstance Holder" shall have the meaning set forth in
Section 2.2(a).
"TIA" shall mean the Trust Indenture Act of 1939, as amended, and
the rules and regulations of the SEC thereunder.
"Trustee" shall mean the trustee with respect to the Securities
under the Indenture.
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2. Registration Under the 1933 Act.
2.1 Exchange Offer. (a) The Issuer and the Company shall (i) prepare
and, as soon as practicable but not later than 45 days following the Closing
Date, file with the SEC an Exchange Offer Registration Statement with respect to
a proposed Exchange Offer and the issuance and delivery to the Holders, in
exchange for the Registrable Securities, a like principal amount of Exchange
Securities, which will have terms identical in all material respects to the
Notes (except that the Exchange Notes will not contain terms with respect to
transfer restrictions or interest rate increases as described herein), (ii) use
their best efforts to cause the Exchange Offer Registration Statement to be
declared effective under the 1933 Act within 135 days following the Closing
Date, (iii) use their best efforts to keep the Exchange Offer Registration
Statement effective until the closing of the Exchange Offer, and (iv) use their
best efforts to cause the Exchange Offer to be consummated not later than 165
days following the Closing Date. The Exchange Securities will be issued under
the Indenture. Promptly upon the effectiveness of the Exchange Offer
Registration Statement, the Issuer shall commence the Exchange Offer, it being
the objective of such Exchange Offer to enable each Holder eligible and electing
to exchange Registrable Securities for Exchange Securities (assuming that such
Holder (A) is not an affiliate of the Issuer within the meaning of Rule 405
under the 1933 Act, (B) is not a broker-dealer tendering Registrable Securities
acquired directly from the Issuer for its own account, (C) acquired the Exchange
Securities in the ordinary course of such Holder's business, and (D) has no
arrangements or understandings with any person to participate in the Exchange
Offer for the purpose of distributing the Exchange Securities) to transfer such
Exchange Securities from and after their receipt without any limitations or
restrictions under the 1933 Act and without material restrictions under the
securities laws of a substantial proportion of the several states of the United
States.
(b) In connection with the Exchange Offer, the Issuer and the
Company shall:
(i) mail to each Holder a copy of the Prospectus forming part
of the Exchange Offer Registration Statement, together with an appropriate
letter of transmittal and related documents;
(ii) keep the Exchange Offer open for acceptance for a period
of not less than 20 Business Days (as defined in Section 14(d) under the
Exchange Act) after the date notice thereof is mailed to the Holders (or
longer if required by applicable law) (such period referred to herein as
the "Exchange Period");
(iii) utilize the services of the Depository for the
Exchange Offer;
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(iv) permit Holders to withdraw tendered Registrable
Securities at any time prior to 5:00 p.m. (Eastern Time), on the last
business day of the Exchange Period, by sending to the institution
specified in the notice, a telegram, telex, facsimile transmission or
letter setting forth the name of such Holder, the principal amount of
Registrable Securities delivered for exchange, and a statement that such
Holder is withdrawing his election to have such Securities exchanged;
(v) notify each Holder that any Registrable Security not
tendered will remain outstanding and continue to accrue interest, but will
not retain any rights under this Agreement (except in the case of the
Initial Purchaser and Participating Broker-Dealers as provided herein);
and
(vi) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
(c) As soon as practicable after the close of the Exchange Offer,
the Issuer and the Company shall:
(i) accept for exchange all Registrable Securities duly
tendered and not validly withdrawn pursuant to the Exchange Offer in
accordance with the terms of the Exchange Offer Registration Statement and
the letter of transmittal which shall be an exhibit thereto;
(ii) deliver to the Trustee for cancellation all
Registrable Securities so accepted for exchange; and
(iii) cause the Trustee promptly to authenticate and deliver
Exchange Securities to each Holder of Registrable Securities so accepted
for exchange in a principal amount equal to the principal amount of the
Registrable Securities of such Holder so accepted for exchange.
(d) Interest on each Exchange Security will accrue from the last
date on which interest was paid on the Registrable Securities surrendered in
exchange therefor or, if no interest has been paid on the Registrable
Securities, from the date of original issuance thereof. The Exchange Offer shall
not be subject to any conditions, other than (i) that the Exchange Offer, or the
making of any exchange by a Holder, does not violate applicable law or any
applicable interpretation of the staff of the SEC, (ii) the due tendering of
Registrable Securities in accordance with the Exchange Offer, (iii) that each
Holder of Registrable Securities exchanged in the Exchange Offer shall have
represented that all Exchange Securities to be received by it shall be acquired
in the ordinary course of its business and that at the time of the consummation
of the Exchange Offer it shall have no arrangement or understanding with any
person to participate in the distribution (within the meaning of the 1933 Act)
of the Exchange Securities and shall have made
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such other representations as may be reasonably necessary under applicable SEC
rules, regulations or interpretations to render the use of Form S-4 or other
appropriate form under the 1933 Act available, and (iv) that no action or
proceeding shall have been instituted or threatened in any court or by or before
any governmental agency with respect to the Exchange Offer which, in the
Issuer's judgment, would reasonably be expected to impair the ability of the
Issuer to proceed with the Exchange Offer. The Issuer shall inform the Initial
Purchaser of the names and addresses of the Holders to whom the Exchange Offer
is made, and the Initial Purchaser shall have the right to contact such Holders
and otherwise facilitate the tender of Registrable Securities in the Exchange
Offer.
2.2 Shelf Registration. (a) If (i) because of any changes in law,
SEC rules or regulations or applicable interpretations thereof by the staff of
the SEC, the Issuer and the Company are not permitted to effect the Exchange
Offer as contemplated by Section 2.1, (ii) for any other reason the Exchange
Offer is not consummated within 165 days following the original issue of the
Registrable Securities (it being understood that the Exchange Offer will be
deemed to have been consummated if conducted and closed in compliance with
Section 2.1 hereof regardless of the principal amount, if any, of Registrable
Securities tendered pursuant thereto), (iii) the Initial Purchaser so requests
with respect to Registrable Securities held by it which are not eligible to be
exchanged for Exchange Securities in the Exchange Offer, or (iv) a Holder (A) is
not permitted by applicable law to participate in the Exchange Offer based upon
written advice of counsel furnished to the Issuer to the effect that such Holder
may not be legally able to participate in the Exchange Offer, or (B) elects to
participate in the Exchange Offer but (based upon written advice of counsel
furnished to the Issuer) does not receive fully tradeable Exchange Securities
pursuant to the Exchange Offer (any such Holder herein called a "Special
Circumstance Holder"), then the Issuer and the Company shall, at their cost and
expense:
(1) As promptly as practicable, file with the SEC, and
thereafter shall use their best efforts to cause to be declared effective
as promptly as practicable, a Shelf Registration Statement relating to the
offer and sale of the Registrable Securities by the Holders from time to
time in accordance with the methods of distribution elected by the
Majority Holders participating in the Shelf Registration and set forth in
such Shelf Registration Statement.
(2) Use their best efforts to keep the Shelf Registration
Statement continuously effective in order to permit the Prospectus forming
part thereof to be usable by Holders for a period of three years (or one
year in the case of a request by the Initial Purchaser) from the date of
the original issue of the Securities, or for such shorter period that will
terminate when all Registrable Securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement or cease to be outstanding or otherwise to be Registrable
Securities.
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(3) Notwithstanding any other provisions hereof, use their
best efforts to ensure that (x) any Shelf Registration Statement and any
amendment thereto and any Prospectus forming part thereof and any
supplement thereto complies in all material respects with the 1933 Act and
the rules and regulations thereunder, (y) any Shelf Registration Statement
and any amendment thereto does not, when it becomes effective, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, and (z) any Prospectus forming part of any Shelf
Registration Statement, and any supplement to such Prospectus (as amended
or supplemented from time to time), does not include an untrue statement
of a material fact or omit to state a material fact necessary in order to
make the statements, in light of the circumstances under which they were
made, not misleading.
(b) The Issuer and the Company shall, if necessary, supplement or
amend the Shelf Registration Statement, as required by Section 3(b), and shall
furnish to the Holders of Registrable Securities copies of any such supplement
or amendment promptly after its being used or filed with the SEC.
(c) The Issuer and the Company shall not be required to include any
Registrable Securities of a Holder in any Shelf Registration Statement pursuant
to this Agreement unless such Holder furnishes to the Issuer, within 20 business
days after receipt by such Holder of a request therefor, such information
regarding the Holder and the proposed distribution by such Holder of such
Registrable Securities as the Issuer and the Company may reasonably request for
use in connection with such Shelf Registration Statement.
2.3 Expenses. The Issuer and the Company shall pay all Registration
Expenses in connection with any registration pursuant to Section 2.1 or 2.2.
Each Holder shall pay all underwriting discounts and commissions and transfer
taxes, if any, relating to the sale or disposition of such Holder's Registrable
Securities pursuant to the Shelf Registration Statement.
2.4 Effectiveness. (a) The Issuer and the Company will be deemed not
to have used their best efforts to cause the Exchange Offer Registration
Statement or the Shelf Registration Statement, as the case may be, to become, or
to remain, effective during the requisite period if the Issuer or the Company
voluntarily takes any affirmative action that would, or omits to take any action
which omission would, result in any such Registration Statement not being
declared effective or in the Holders of Registrable Securities covered thereby
not being able to exchange or offer and sell such Registrable Securities during
that period as and to the extent contemplated hereby, unless such action is
required by applicable law.
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(b) An Exchange Offer Registration Statement pursuant to Section 2.1
or a Shelf Registration Statement pursuant to Section 2.2 will not be deemed to
have become effective unless it has been declared effective by the SEC;
provided, however, that if, after it has been declared effective, the Exchange
Offer or the offering of Registrable Securities pursuant to a Shelf Registration
Statement, as the case may be, is interfered with by any stop order, injunction
or other order or requirement of the SEC or any other governmental agency or
court, such Registration Statement will be deemed not to have become effective
during the period of such interference, until the Exchange Offer or the offering
of Registrable Securities pursuant to such Shelf Registration Statement, as the
case may be, may legally resume.
2.5 Interest. The Indenture and/or the Securities will provide that
if (a) the Exchange Offer Registration Statement is not filed with the
Commission on or prior to the 45th day following the date of the original issue
of the Securities, (b) the Exchange Offer Registration Statement is not declared
effective on or prior to the 135th day following the date of original issue of
the Securities, (c) neither the Exchange Offer is consummated nor the Shelf
Registration Statement is declared effective on or prior to the 165th day
following the date of the original issue of the Securities, or (d) a Shelf
Registration Statement is required to be filed because of the request of the
Initial Purchaser or a Special Circumstance Holder, 45 days following the
request by any such Initial Purchaser or Special Circumstance Holder that the
Issuer and the Company file the Shelf Registration Statement (or 90 days if the
Shelf Registration Statement is reviewed by the SEC), then the parties hereto
agree that the interest rate borne by the Securities (except in the case of
clause (d) above, in which case only the Securities which have not been
exchanged in the Exchange Offer) shall be increased by 0.50% per annum. The
Indenture and/or the Securities further will provide that upon (i) the filing of
the Exchange Offer Registration Statement or the Shelf Registration Statement in
the case of clause (a) above, (ii) the effectiveness of the Exchange Offer
Registration Statement in the case of clause (b) above, (iii) the date of
consummation of the Exchange Offer or effectiveness of the Shelf Registration
Statement in the case of clause (c) above, or (iv) the effectiveness of the
Shelf Registration Statement in the case of clause (d) above, the interest rate
borne by the Securities from the date of such filing, effectiveness or the date
of such consummation or effectiveness, as the case may be, will be reduced to
the original interest rate borne by the Securities; provided, however, that, if
after any such reduction in interest rate, a different event specified in clause
(a), (b), (c) or (d) above occurs, the interest rate borne by the relevant
Securities shall again be increased pursuant to the foregoing provisions.
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3. Registration Procedures.
In connection with the obligations of the Issuer and the Company
with respect to Registration Statements pursuant to Sections 2.1 and 2.2, the
Issuer and the Company shall:
(a) prepare and file with the SEC a Registration Statement, within
the relevant time period specified in Section 2, on the appropriate form under
the 1933 Act, which form (i) shall be selected by the Issuer, (ii) shall, in the
case of a Shelf Registration, be available for the sale of the Registrable
Securities by the selling Holders thereof, and (iii) shall comply as to form in
all material respects with the requirements of the applicable form and include
or incorporate by reference all financial statements required by the SEC to be
filed therewith or incorporated by reference therein, and use their best efforts
to cause such Registration Statement to become effective and remain effective in
accordance with Section 2;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary under applicable
law to keep such Registration Statement effective for the applicable period; and
cause each Prospectus to be supplemented by any required prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 under the 1933 Act, and
comply with the provisions of the 1933 Act applicable to them with respect to
the disposition of all securities covered by each Registration Statement during
the applicable period in accordance with the intended method or methods of
distribution by the selling Holders thereof described in this Agreement;
(c) in the case of a Shelf Registration: (i) notify each Holder of
Registrable Securities, at least five business days prior to filing, that a
Shelf Registration Statement with respect to the Registrable Securities is being
filed and advising such Holders that the distribution of Registrable Securities
will be made in accordance with the method selected by the Majority Holders
participating in the Shelf Registration; (ii) furnish to each Holder of
Registrable Securities and to each underwriter of an underwritten offering of
Registrable Securities, if any, without charge, as many copies of each
Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder or underwriter may
reasonably request, including financial statements and schedules and, if the
Holder so requests, all exhibits, in order to facilitate the public sale or
other disposition of the Registrable Securities; and (iii) hereby consent to the
use of the Prospectus or any amendment or supplement thereto by each of the
selling Holders of Registrable Securities in connection with the offering and
sale of the Registrable Securities covered by the Prospectus or any amendment or
supplement thereto;
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(d) use their best efforts to register or qualify the Registrable
Securities under all applicable state securities or "blue sky" laws of such
jurisdictions as any Holder of Registrable Securities covered by a Registration
Statement and each underwriter of an underwritten offering of Registrable
Securities shall reasonably request by the time the applicable Registration
Statement is declared effective by the SEC, and do any and all other acts and
things which may be reasonably necessary or advisable to enable each such Holder
and underwriter to consummate the disposition in each such jurisdiction of such
Registrable Securities owned by such Holder; provided, however, that the Issuer
and the Company shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation or as a dealer in securities in
any jurisdiction in which they are not so qualified or to subject themselves to
taxation in respect of doing business in any jurisdiction in which they are not
otherwise so subject;
(e) notify promptly each Holder of Registrable Securities under a
Shelf Registration or any Participating Broker-Dealer who has notified the
Issuer that it is utilizing the Exchange Offer Registration Statement as
provided in paragraph (f) below and, if requested by such Holder or
Participating Broker-Dealer, confirm such advice in writing promptly (i) when a
Registration Statement has become effective and when any post-effective
amendments and supplements thereto become effective, (ii) of any request by the
SEC or any state securities authority for post-effective amendments and
supplements to a Registration Statement and Prospectus or for additional
information after the Registration Statement has become effective, (iii) of the
issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose, (iv) in the case of a Shelf Registration, if,
between the effective date of a Registration Statement and the closing of any
sale of Registrable Securities covered thereby, the representations and
warranties of the Issuer contained in any underwriting agreement, securities
sales agreement or other similar agreement, if any (which shall not include the
Purchase Agreement), relating to the offering cease to be true and correct in
all material respects, (v) of the happening of any event or the discovery of any
facts during the period a Registration Statement is effective which makes any
statement made in such Registration Statement or the related Prospectus untrue
in any material respect or which requires the making of any changes in such
Registration Statement or Prospectus in order to make the statements therein not
misleading, and (vi) of the receipt by the Issuer of any notification with
respect to the suspension of the qualification of the Registrable Securities or
the Exchange Securities, as the case may be, for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose;
(f) in the case of the Exchange Offer Registration Statement: (i)
include in the Exchange Offer Registration Statement a section entitled "Plan of
Distribution" which section shall be reasonably acceptable to the Initial
Purchaser, and which shall contain a summary statement of the positions taken or
policies made by the staff of the
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SEC with respect to the potential "underwriter" status of any broker-dealer that
holds Registrable Securities acquired for its own account as a result of
market-making activities or other trading activities and that will be the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of Exchange
Securities to be received by such broker-dealer in the Exchange Offer, whether
such positions or policies have been publicly disseminated by the staff of the
SEC or such positions or policies, in the reasonable judgment of the Initial
Purchaser and its counsel, represent the prevailing views of the staff of the
SEC, including a statement that any such broker-dealer who receives Exchange
Securities for Registrable Securities pursuant to the Exchange Offer may be
deemed a statutory underwriter and must deliver a prospectus meeting the
requirements of the 1933 Act in connection with any resale of such Exchange
Securities; (ii) furnish to each Participating Broker-Dealer who has delivered
to the Issuer the notice referred to in paragraph (e) above, without charge, as
many copies of each Prospectus included in the Exchange Offer Registration
Statement, including any preliminary Prospectus, and any amendment or supplement
thereto, as such Participating Broker-Dealer may reasonably request; (iii)
hereby consent to the use of the Prospectus forming part of the Exchange Offer
Registration Statement or any amendment or supplement thereto, by any person
subject to the prospectus delivery requirements of the SEC, including all
Participating Broker-Dealers, in connection with the sale or transfer of the
Exchange Securities covered by the Prospectus or any amendment or supplement
thereto; and (iv) include in the transmittal letter or similar documentation to
be executed by an exchange offeree in order to participate in the Exchange Offer
(A) the following provision:
"If the exchange offeree is a broker-dealer holding Registrable
Securities acquired for its own account as a result of market-making
activities or other trading activities, it will deliver a prospectus
meeting the requirements of the 1933 Act in connection with any
resale of Exchange Securities received in respect of such
Registrable Securities pursuant to the Exchange Offer"
; and (B) a statement to the effect that by a broker-dealer making the
acknowledgment described in clause (A) above and by delivering a Prospectus in
connection with the exchange of Registrable Securities, the broker-dealer will
not be deemed to admit that it is an underwriter within the meaning of the 1933
Act; and
(g) in the case of any Exchange Offer Registration Statement, each
of the Issuer and the Company agrees to deliver to the Initial Purchaser on
behalf of the Participating Broker-Dealers upon the effectiveness of the
Exchange Offer Registration Statement (i) an opinion of counsel substantially in
the form attached hereto as Exhibit A hereto, (ii) an officers' certificate
substantially in the form customarily delivered in a public offering of debt
securities, and (iii) a comfort letter in customary form if permitted by
Statement on Auditing Standards No. 72 of the American Institute of Certified
Public Accountants (or if such a comfort letter is not permitted, an agreed upon
procedures letter in customary form);
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(h) (i) in the case of an Exchange Offer, furnish counsel for the
Initial Purchaser, and (ii) in the case of a Shelf Registration, furnish counsel
for the Holders of Registrable Securities, copies of any request by the SEC or
any state securities authority for amendments or supplements to a Registration
Statement and Prospectus or for additional information;
(i) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement at the earliest
possible moment;
(j) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, and each underwriter, if any, without charge, at least
one conformed copy of each Registration Statement and any post-effective
amendment thereto, including financial statements and schedules (without
documents incorporated therein by reference and all exhibits thereto, unless
requested);
(k) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and not
bearing any restrictive legends; and enable such Registrable Securities to be in
such denominations (consistent with the provisions of the Indenture) and
registered in such names as the selling Holders or the underwriters, if any, may
reasonably request at least two business days prior to the closing of any sale
of Registrable Securities;
(l) upon the occurrence of any event or the discovery of any facts,
each of the kind described in paragraph (e)(v) or (e)(vi) above, use their best
efforts to prepare a supplement or post-effective amendment to the Registration
Statement or the related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter delivered
to the Holders or to the purchasers of the Registrable Securities or
Participating Broker-Dealers, as the case may be, such Prospectus will not
contain at the time of such delivery any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading;
(m) in the case of a Shelf Registration, a reasonable time prior to
the filing of any Registration Statement, any Prospectus, any amendment to a
Registration Statement, or amendment or supplement to a Prospectus or any
document which is to be incorporated by reference into a Registration Statement
or a Prospectus after initial filing of a Registration Statement, provide copies
of such document to the Initial Purchaser on behalf of such Holders; and make
representatives of the Company and the Issuer as shall be reasonably requested
by the Holders of Registrable Securities, or the Initial Purchaser on behalf of
such Holders, available for discussion of such document;
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(n) obtain a CUSIP number for all Exchange Securities not later than
the effective date of a Registration Statement, and provide the Trustee with
printed certificates for the Exchange Securities or the Registrable Securities,
as the case may be, in a form eligible for deposit with the Depositary;
(o) (i) cause the Indenture to be qualified under the TIA, in
connection with the registration of the Exchange Securities or Registrable
Securities, as the case may be, (ii) cooperate with the Trustee and the Holders
to effect such changes to the Indenture as may be required for the Indenture to
be so qualified in accordance with the terms of the TIA, and (iii) execute, and
use their best efforts to cause the Trustee to execute, all documents as may be
required to effect such changes, and all other forms and documents required to
be filed with the SEC to enable the Indenture to be so qualified in a timely
manner;
(p) in the case of a Shelf Registration, enter into agreements
(including customary underwriting agreements) and take all other customary and
appropriate actions in order to expedite or facilitate the disposition of such
Registrable Securities and in such connection whether or not an underwriting
agreement is entered into and whether or not the registration is an underwritten
registration:
(i) make such representations and warranties to the Holders of
such Registrable Securities and the underwriters, if any, in form,
substance and scope as are customarily made by issuers to underwriters in
similar underwritten offerings as may be reasonably requested by them;
(ii) obtain opinions of counsel to the Issuer and the Company
and updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the managing underwriters,
if any, and the holders of a majority in principal amount of the
Registrable Securities being sold) addressed to each selling Holder and
the underwriters, if any, covering the matters customarily covered in
opinions requested in sales of securities or underwritten offerings and
such other matters as may be reasonably requested by such Holders and
underwriters;
(iii) obtain "cold comfort" letters and updates thereof from
the Issuer's and the Company's independent certified public accountants
addressed to the underwriters, if any, and use reasonable efforts to have
such letter addressed to the selling Holders of Registrable Securities (to
the extent consistent with Statement on Auditing Standards No. 72 of the
American Institute of Certified Public Accounts), such letters to be in
customary form and covering matters of the type customarily covered in
"cold comfort" letters to underwriters in connection with similar
underwritten offerings;
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(iv) if requested, enter into a securities sales agreement
with the Holders and an agent of the Holders providing for, among other
things, the appointment of such agent for the selling Holders for the
purpose of soliciting purchases of Registrable Securities, which agreement
shall be in form, substance and scope customary for similar offerings;
(v) if an underwriting agreement is entered into, cause the
same to set forth indemnification provisions and procedures substantially
equivalent to the indemnification provisions and procedures set forth in
Section 5 with respect to the underwriters and all other parties to be
indemnified pursuant to said Section or, at the request of any
underwriters, in the form customarily provided to such underwriters in
similar types of transactions; and
(vi) deliver such documents and certificates as may be
reasonably requested and as are customarily delivered in similar offerings
to the Holders of a majority in principal amount of the Registrable
Securities being sold and the managing underwriters, if any.
The above shall be done at (x) the effectiveness of such Registration Statement
(and each post-effective amendment thereto), and (y) each closing under any
underwriting or similar agreement as and to the extent required thereunder;
(q) in the case of a Shelf Registration, make available for
inspection by representatives of the Holders of the Registrable Securities and
any underwriters participating in any disposition pursuant to a Shelf
Registration Statement and any counsel or accountant retained by such Holders or
underwriters, pertinent financial and other records, pertinent corporate
documents and properties of the Issuer and the Company reasonably requested by
any such persons, and cause the respective officers, directors, employees, and
any other agents of the Issuer and the Company to supply all information
reasonably requested by any such representative, underwriter, special counsel or
accountant in connection with a Registration Statement, and make such
representatives of the Issuer and the Company available for discussion of such
documents as shall be reasonably requested by the Initial Purchaser;
(r) (i) in the case of an Exchange Offer Registration Statement, a
reasonable time prior to the filing of any Exchange Offer Registration
Statement, any Prospectus forming a part thereof, any amendment to an Exchange
Offer Registration Statement or amendment or supplement to such Prospectus,
provide copies of such
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document to the Initial Purchaser, make such changes in any such document prior
to the filing thereof as the Initial Purchaser may reasonably request and not
file any such document in a form to which the Initial Purchaser on behalf of the
Holders of Registrable Securities shall reasonably object, and make the
representatives of the Issuer available for discussion of such documents as
shall be reasonably requested by the Initial Purchaser; and
(ii) in the case of a Shelf Registration, a reasonable time
prior to filing any Shelf Registration Statement, any Prospectus forming a part
thereof, any amendment to such Shelf Registration Statement or amendment or
supplement to such Prospectus, provide copies of such document to the Holders of
Registrable Securities, to the Initial Purchaser, to counsel on behalf of the
Holders and to the underwriter or underwriters of an underwritten offering of
Registrable Securities, if any, make such changes in any such document prior to
the filing thereof as the Holders, the Initial Purchaser or the underwriter or
underwriters reasonably request and not file any such document in a form to
which the Majority Holders or the Initial Purchaser on behalf of the Holders of
Registrable Securities or any underwriter may reasonably object, and make the
representatives of the Issuer and the Company available for discussion of such
document as shall be reasonably requested by the Holders, the Initial Purchaser
or any underwriter.
(s) in the case of a Shelf Registration, use their best efforts to
cause all Registrable Securities to be listed on any securities exchange on
which similar debt securities issued by the Issuer are then listed if requested
by the Majority Holders, or if requested by the underwriter or underwriters of
an underwritten offering of Registrable Securities, if any;
(t) in the case of a Shelf Registration, use their best efforts to
cause the rating of the Registrable Securities to be confirmed or the
Registrable Securities to be re-rated by the appropriate rating agencies, if so
requested by the Majority Holders, or if requested by the underwriter or
underwriters of an underwritten offering of Registrable Securities;
(u) otherwise use their best efforts to comply with all applicable
rules and regulations of the SEC and make available to their security holders,
as soon as reasonably practicable, an earnings statement of the Company covering
at least 12 months which shall satisfy the provisions of Section 11(a) of the
1933 Act and Rule 158 thereunder;
(v) cooperate and assist in any filings required to be made with the
NASD and, in the case of a Shelf Registration, in the performance of any due
diligence investigation by any underwriter and their counsel (including any
"qualified independent underwriter" that is required to be retained in
accordance with the rules and regulations of the NASD); and
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(w) upon consummation of an Exchange Offer, obtain a customary
opinion of counsel to the Issuer and the Company addressed to the Initial
Purchaser and to the Trustee for the benefit of all Holders of Registrable
Securities participating in the Exchange Offer, and which includes an opinion
that (i) each of the Issuer and the Company has duly authorized, executed and
delivered the Exchange Securities and the Indenture, and (ii) the Exchange
Securities and the Indenture constitute legal, valid and binding obligations of
the Issuer and the Company, enforceable against them in accordance with their
respective terms (with customary exceptions).
In the case of a Shelf Registration Statement, each Holder agrees
that, upon receipt of any notice from the Issuer of the happening of any event
or the discovery of any facts, each of the kind described in paragraph (e)(v) or
(e)(vi) above, such Holder will forthwith discontinue disposition of Registrable
Securities pursuant to a Registration Statement until such Holder's receipt of
the copies of the supplemented or amended Prospectus contemplated by paragraph
(l) above, and, if so directed by the Issuer, such Holder will deliver to the
Issuer (at its expense) all copies in such Holder's possession, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of such
notice. Notwithstanding anything to the contrary in this Agreement, if the
Issuer shall give any such notice to suspend the disposition of Registrable
Securities pursuant to a Shelf Registration Statement as a result of the
happening of any event or the discovery of any facts, each of the kind described
in paragraph (e)(v) or (e)(vi) above, the Issuer and the Company shall be deemed
to have used their best efforts to keep the Shelf Registration Statement
effective during such period of suspension, provided that the Issuer and the
Company shall use their best efforts to file and have declared effective (if an
amendment) as soon as practicable an amendment or supplement to the Shelf
Registration Statement and shall extend the period during which the Shelf
Registration Statement shall be maintained effective pursuant to this Agreement
by the number of days during the period from and including the date of the
giving of such notice to and including the date when the Holders shall have
received copies of the supplemented or amended Prospectus necessary to resume
such dispositions.
If, at any time, the Issuer and the Company shall fail to be in
compliance with their obligations under this Agreement to effect or consummate
the Exchange Offer or file any Shelf Registration Statement and maintain the
effectiveness of any Shelf Registration Statement as provided herein, the Issuer
and the Company shall not (without the written consent of the Initial Purchaser)
permit to become effective or request acceleration of effectiveness of any
Registration Statement with respect to any securities (within the meaning of
Section 2(1) of the 1933 Act) of the Issuer other than (i) Registrable
Securities, (ii) securities issued or issuable under an employee benefit plan of
the Issuer or the Company and registered pursuant to Form S-8 under the 1933
Act, or (iii) securities issued or issuable in connection with an acquisition or
business combination transaction.
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If any of the Registrable Securities covered by any Shelf
Registration Statement are to be sold in an underwritten offering, the
underwriter or underwriters and manager or managers that will manage such
offering will be selected by the Majority Holders of such Registrable Securities
included in such offering and shall be reasonably acceptable to the Issuer. No
Holder of Registrable Securities may participate in any underwritten
registration hereunder unless such Holder (1) agrees to sell such Holder's
Registrable Securities on the basis provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements, and (2)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
4. Representations and Warranties.
Each of the Issuer and the Company, jointly and severally, hereby
represents and warrants to, and agrees with, the Initial Purchaser and each of
the Holders from time to time of Registrable Securities that:
4.1 Each Registration Statement covering Registrable Securities and
each Prospectus contained therein or furnished pursuant to this Agreement and
any further amendments or supplements to any such Registration Statement or
Prospectus, when it becomes effective or is filed with the SEC, as the case may
be, and, in the case of an underwritten offering of Registrable Securities, at
the time of the closing under the underwriting agreement relating thereto, will
conform in all material respects to the applicable requirements of the 1933 Act
and the TIA and will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading; and at all times subsequent to the Effective
Time when a Prospectus would be required to be delivered under the Securities
Act, each such Registration Statement, and each Prospectus contained therein or
furnished pursuant to this Agreement, as then amended or supplemented, will
conform in all material respects to the applicable requirements of the 1933 Act
and the TIA and will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing; provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Issuer and the Company by a Holder
of Registrable Securities expressly for use therein.
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4.2 Any documents incorporated by reference in any Prospectus
referred to in Section 4.1, when they become or became effective or are or were
filed with the Commission, as the case may be, will conform or conformed in all
material respects to the requirements of the 1933 Act or the 1934 Act, as
applicable, and none of such documents will contain or contained an untrue
statement of a material fact or will omit or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Issuer and the Company by a Holder
of Registrable Securities expressly for use therein.
4.3 The compliance by the Issuer and the Company with all the
provisions of this Agreement and the consummation of the transactions herein
contemplated will not (i) conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Issuer or the Company or any subsidiary of the Issuer or the Company is a party
or by which the Issuer or the Company or any subsidiary of the Issuer or the
Company is bound or to which any of the property or assets of the Issuer or the
Company or any subsidiary of the Issuer or the Company is subject, (ii) result
in any violation of the provisions of the charter or the by-laws of the Issuer
or the Company or (iii) result in a violation of any statute or any order, rule
or regulation of any United States court or governmental agency or body having
jurisdiction over the Issuer or the Company or any subsidiary of the Issuer or
the Company or any of their properties, which conflict, breach, default or
violation, in the case of clauses (i) and (iii), would singly or in the
aggregate, have a material adverse effect on the Company and its subsidiaries
taken as a whole or adversely affect the ability of the Issuer or the Company to
perform its obligations hereunder; and no consent, approval, authorization,
order, registration or qualification of or with any such court or governmental
agency or body is required for the consummation by the Issuer or the Company of
the transactions contemplated by this Agreement, except the registration under
the 1933 Act of the Exchange Securities or the Securities, as the case may be,
qualification of the Indenture under the TIA and such consents, approvals,
authorizations, registrations or qualifications as may be required under State
securities or blue sky laws in connection with the Exchange Offer and the
Exchange Securities or the offering and distribution of the Securities, as the
case may be.
4.4 This Agreement has been duly authorized, executed and delivered
by the Issuer and the Company.
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5. Indemnification; Contribution.
5.1 Indemnification by the Issuer; Guaranty by the Company. The
Issuer shall, and it hereby agrees to, indemnify and hold harmless each Holder,
the Initial Purchaser, each Participating Broker-Dealer, each person who
participates as a placement or sales agent or as an underwriter and each person
who controls any of the foregoing persons (within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act), against any losses, claims, damages
or liabilities, joint or several, to which such persons may become subject,
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement or any Prospectus contained therein or furnished pursuant
to this Agreement; or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Issuer shall,
and it hereby agrees to, reimburse (without duplication) such persons for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Issuer and the Company shall not be liable
to any such person in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such
Registration Statement or Prospectus in reliance upon and in conformity with
information furnished in writing to the Issuer and the Company by Holders of
Registrable Securities expressly for use therein. The Company irrevocably and
unconditionally guarantees the prompt performance and payment of the
indemnification obligations of the Issuer set forth in this Section 5.1, when
and as the same shall become due and payable in accordance with the terms of
this Section 5.1 (and if any payments made by the Company pursuant to such
guarantee are subject to any withholding tax imposed by the United Kingdom
(including any political subdivision or taxing authority thereof) or the
jurisdiction of incorporation or residence (other than the United States or any
political subdivision thereof) of any assignee or successor to the Company
(including any political subdivision or taxing authority thereof), the Company
shall pay such additional amounts as may be necessary so that the net amounts
paid to the Initial Purchaser, after deduction for such withholding tax, shall
equal the amounts to which the Initial Purchaser is entitled under this Section
5.1; subject to such exceptions for payment of additional amounts as are set
forth in the Indenture).
5.2 Indemnification by the Holders. The Issuer and the Company may
require, as a condition to including any Registrable Securities in any Shelf
Registration Statement filed pursuant to Section 2.2 and to entering into any
underwriting agreement with respect thereto, that the Issuer and the Company
shall have received an undertaking reasonably satisfactory to them from the
Holders of such Registrable
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Securities, severally and not jointly, (a) to indemnify and hold harmless the
Issuer, the Company, the Initial Purchaser, all other Holders of Registrable
Securities and each person who controls any of the foregoing persons (within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act), against
any losses, claims, damages or liabilities to which such persons may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in such Shelf Registration Statement or any Prospectus contained
therein or furnished or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with information furnished in writing to the Issuer and the Company
by such Holder expressly for use therein, and (b) to reimburse (without
duplication) such persons for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such action or claim as
such expenses are incurred; provided, however, that no such Holder shall be
required to undertake liability to any person under this Section 5.2 for any
amounts in excess of the dollar amount of the net proceeds to be received by
such Holder from the sale of such Holder's Registrable Securities pursuant to
such Shelf Registration.
5.3 Notices of Claims, Etc. Promptly after receipt by an indemnified
party under Section 5.1 or 5.2 of written notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party pursuant to the indemnification provisions of
or contemplated by this Section 5, notify such indemnifying party in writing of
the commencement of such action; but the omission so to notify the indemnifying
party shall not relieve such indemnifying party from any liability hereunder to
the extent it is not materially prejudiced as a result thereof and shall not, in
any event, relieve it from any liability which it may have to any indemnified
party other than under the indemnification provisions of or contemplated by
Section 5.1 or 5.2. In case any such action shall be brought against any
indemnified party and it shall notify an indemnifying party of the commencement
thereof, such indemnifying party shall be entitled to participate therein and,
to the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and, after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, such indemnifying party shall not be liable to
such
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indemnified party for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (a) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim, and (b) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.
5.4 Contribution. Each party hereto agrees that, if for any reason
the indemnification provisions contemplated by Section 5.1 or 5.2 are
unavailable to or insufficient to hold harmless the indemnified parties in
respect of any losses, claims, damages or liabilities (or actions in respect
thereof) referred to therein, then the indemnifying parties shall contribute to
the amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative fault of the indemnifying
parties and the indemnified parties in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative fault of such indemnifying parties and indemnified
parties shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by such
indemnifying parties or by such indemnified parties, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid by an indemnified party as a result
of the losses, claims, damages or liabilities referred to in the first sentence
of this Section 5.4 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim which is the subject of this Section 5.4.
The parties hereto agree that it would not be just and equitable if
contributions pursuant to this Section 5.4 were determined by pro rata
allocation (even if the Holders or any agents or underwriters or all of them
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in this Section 5.4. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, or liabilities (or actions in respect
thereof) referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 5.4, no Holder shall be required to contribute any
amount in
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excess of the amount by which the dollar amount of the net proceeds
received by such Holder from the sale of any Registrable Securities exceeds the
amount of any damages which such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Holders'
obligations in this Section 5.4 to contribute shall be several in proportion to
the principal amount of Registrable Securities registered by them and not joint.
5.5 Other Matters. The obligations of the Issuer and the Company
under this Section 5 shall be in addition to any liability which the Issuer and
the Company may otherwise have and shall extend, upon the same terms and
conditions, to each officer, director and partner of each Holder, agent and
underwriter and each person, if any, who controls any Holder, agent or
underwriter within the meaning of the Securities Act; and the obligations of the
Holders and any agents or underwriters contemplated by this Section 5 shall be
in addition to any liability which the respective Holder, agent or underwriter
may otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Issuer or the Company (including any person who,
with his consent, is named in any Registration Statement as about to become a
director of the Issuer or the Company) and to each person, if any, who controls
the Issuer or the Company within the meaning of the Securities Act.
6. Miscellaneous.
6.1 Rule 144 and Rule 144A. During any period that the Securities or
Registrable Securities are "restricted securities" within the meaning of Rule
144(a)(3) under the 1933 Act, for so long as each of the Company and the Issuer
is subject to the reporting requirements of Section 13 or 15 of the 1934 Act,
each of the Company and the Issuer covenants that it will file the reports
required to be filed by it under the 1933 Act and Section 13(a) or 15(d) of the
1934 Act and the rules and regulations adopted by the SEC thereunder, and that
if it is not subject to such reporting requirements or ceases to be so required
to file such reports, it will upon the request of any Holder of Registrable
Securities (a) make publicly available such information as is necessary to
permit sales pursuant to Rule 144 under the 1933 Act, (b) deliver such
information to a prospective purchaser as is necessary to permit sales pursuant
to Rule 144A under the 1933 Act and it will take such further action as any
Holder of Registrable Securities may reasonably request, and (c) take such
further action that is reasonable in the circumstances, in each case, to the
extent required from time to time to enable such Holder to sell its Registrable
Securities without registration under the 1933 Act within the limitation of the
exemptions provided by (i) Rule 144 under the 1933 Act, as such Rule may be
amended from time to time, (ii) Rule 144A under the 1933 Act, as such
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Rule may be amended from time to time, or (iii) any similar rules or regulations
hereafter adopted by the SEC. Upon the request of any Holder of Registrable
Securities, the Issuer and the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements.
6.2 No Inconsistent Agreements. The Issuer and the Company have not
entered into and the Issuer and the Company will not after the date of this
Agreement enter into any agreement which is inconsistent with the rights granted
to the Holders of Registrable Securities in this Agreement or otherwise
conflicts with the provisions hereof. The rights granted to the Holders
hereunder do not in any way conflict with the rights granted to the holders of
the Issuer's or the Company's other issued and outstanding securities under any
such agreements.
6.3 Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Issuer and the Company have obtained the written
consent of Holders of at least a majority in aggregate principal amount of the
outstanding Registrable Securities affected by such amendment, modification,
supplement, waiver or departure.
6.4 Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (a) if to a Holder, at the most current address given by such Holder to
the Issuer by means of a notice given in accordance with the provisions of this
Section 6.4, which address initially is the address set forth in the Purchase
Agreement with respect to the Initial Purchaser; and (b) if to the Issuer or the
Company, initially at the Issuer's address set forth in the Purchase Agreement,
and thereafter at such other address of which notice is given in accordance with
the provisions of this Section 6.4.
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next business day if timely delivered to a courier guaranteeing overnight
delivery.
Copies of all such notices, demands, or other communications shall
be concurrently delivered by the person giving the same to the Trustee under the
Indenture, at the address specified in such Indenture.
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6.5 Successor and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided, however, that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms of the Purchase Agreement. If any
transferee of any Holder shall acquire Registrable Securities, in any manner,
whether by operation of law or otherwise, such Registrable Securities shall be
held subject to all the terms of this Agreement, and by taking and holding such
Registrable Securities such person shall be conclusively deemed to have agreed
to be bound by and to perform all the terms and provisions of this Agreement,
including the restrictions on resale set forth in this Agreement and, if
applicable, the Purchase Agreement, and such person shall be entitled to receive
the benefits hereof.
6.6 Third Party Beneficiaries. The Initial Purchaser (even if the
Initial Purchaser is not a Holder of Registrable Securities) shall be a third
party beneficiary to the agreements made hereunder between the Issuer and the
Company, on the one hand, and the Holders, on the other hand, and shall have the
right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect their rights or the rights of
Holders hereunder. Each Holder of Registrable Securities shall be a third party
beneficiary to the agreements made hereunder between the Issuer and the Company,
on the one hand, and the Initial Purchaser, on the other hand, and shall have
the right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights hereunder.
6.7 Counterparts. This Agreement may be executed with counterpart
signature pages or in any number of counterparts and by the parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
6.8 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
6.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF.
6.10 Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
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6.11 Specific Performance. The parties hereto acknowledge that there
would be no adequate remedy at law if any party fails to perform any of its
obligations hereunder and that each party may be irreparably harmed by any such
failure, and accordingly agree that each party, in addition to any other remedy
to which it may be entitled at law or in equity, shall be entitled to compel
specific performance of the obligations of any other party under this Agreement
in accordance with the terms and conditions of this Agreement, in any court of
the United States or any State thereof having jurisdiction.
6.12 Inspection. For so long as this Agreement shall be in effect,
this Agreement and a complete list of the names and addresses of all the Holders
of Registrable Securities shall be made available for inspection and copying on
any business day by any Holder of Registrable Securities for proper purposes
only (which shall include any purpose related to the rights of the Holders of
Registrable Securities under the Securities, the Indenture and this Agreement)
at the offices of the Issuer and the Company at the address thereof set forth in
Section 6.4 or at the office of the Trustee under the Indenture.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
USI AMERICAN HOLDINGS, INC.
By: /s/ Frank Reilly
Name: Frank Reilly
Title: Senior Vice President, Chief
Financial Officer
U.S. INDUSTRIES, INC.
By: /s/ Frank Reilly
Name: Frank Reilly
Title: Senior Vice President, Chief
Financial Officer
Confirmed and accepted as of the date first above written:
BA SECURITIES, INC.
BY:
By: /s/ Elizabeth A. Birdwell
Name: Elizabeth A. Birdwell
Title: Managing Director
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Exhibit A
Form of Opinion of Counsel
BA SECURITIES, INC.
40 East 52nd Street, 5th Floor
New York, N.Y. 10022
Re: USI American Holdings, Inc.
7 1/4% Senior Notes Due December 1, 2006, Series A
Ladies and Gentlemen:
We have acted as counsel for each of USI American Holdings, Inc., a
Delaware corporation (the "Issuer"), and U.S. Industries Inc., a Delaware
corporation (the "Company"), in connection with (i) the purchase from the Issuer
by BA Securities, Inc., the Initial Purchaser named in the Purchase Agreement,
dated as of December 6, 1996 (the "Purchase Agreement"), among the Issuer, the
Company and you of $125,000,000 aggregate principal amount of 7 1/4% Senior
Notes Due December 1, 2006, Series A of the Issuer issued under an Indenture
dated as of December 12, 1996 (the "Indenture"), among the Issuer, the Company
and PNC Bank, National Association, as trustee, and (ii) the Exchange Offer (as
defined in the Registration Rights Agreement dated as of December 12, 1996 (the
"Registration Rights Agreement"), among the Issuer, the Company and you) to be
effected pursuant to the Registration Rights Agreement. This opinion is
furnished to you pursuant to Section 3(g) of the Registration Rights Agreement.
Unless otherwise defined herein, capitalized terms used in this opinion that are
defined in the Registration Rights Agreement are used herein as so defined.
We have examined such documents, records and matters of law as we
have deemed necessary for purposes of this opinion. In rendering this opinion,
as to all matters of fact relevant to this opinion, we have assumed the
completeness and accuracy of, and are relying solely upon, the representations,
warranties and agreements of the Issuer, the Company and the Initial Purchaser
set forth in the Purchase Agreement, the Indenture and the Registration Rights
Agreement, and the statements set forth in certificates of public officials and
officers of the Issuer and the Company, without making any independent
investigation or inquiry with respect to the completeness or accuracy of such
representations, warranties, agreements or statements.
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We are of the opinion as follows:
1. The Exchange Offer Registration Statement and the Prospectus
included therein comply as to form in all material respects with the
requirements of the 1933 Act (except that we express no opinion as to the
financial statements, related notes, financial statement schedules and other
financial, statistical and accounting data included or incorporated by reference
therein, or as to the Form T-1).
2. Any documents incorporated by reference in any Prospectus, when
they became effective or were filed with the Commission, as the case may be,
complied as to form in all material respects with the requirements of the 1933
Act or the 1934 Act, as applicable (except that we express no opinion as to the
financial statements, related notes, financial statement schedules and other
financial, statistical and accounting data included or incorporated by reference
therein, or as to the Form T-1).
3. In addition, we have participated in conferences with directors,
officers and other representatives of the Company and the Issuer,
representatives of the independent public accountants for the Company and the
Issuer, representatives of the Initial Purchaser and representatives of counsel
for the Initial Purchaser and the Holders, at which conferences the contents of
the Exchange Offer Registration Statement and related matters were discussed,
and, although we have not independently verified and are not passing upon and
assume no responsibility for the accuracy, completeness or fairness of the
statements contained in the Exchange Offer Registration Statement and the
Prospectus contained therein, no facts have come to our attention which lead us
to believe that the Exchange Offer Registration Statement including the
documents incorporated by reference therein (except for the financial
statements, related notes, financial statement schedules and other financial,
statistical and accounting data included or incorporated by reference therein,
as to which we express no opinion), at the time it became effective, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading, or that the Prospectus included in the Exchange Offer
Registration Statement (except for financial statements, related notes,
financial statement schedules and other financial, statistical and accounting
data included or incorporated by reference therein, as to which we express no
opinion), as of the date of such Prospectus or at the closing of the Exchange
Offer, included or includes an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
This opinion is being furnished to you solely for your benefit in
connection with the transactions contemplated by the Registration Rights
Agreement and may not be used for any other purpose or relied upon by any person
other than
A-2
<PAGE>
you. Except with our prior written consent, the opinions herein expressed are
not to be used, circulated, quoted or otherwise referred to in connection with
any transactions other than those contemplated by the Registration Rights
Agreement by or to any other person.
Very truly yours,
LETTER OF TRANSMITTAL
TO TENDER IN RESPECT OF THE
OFFER TO EXCHANGE ANY AND ALL OUTSTANDING
7 1/4% SENIOR NOTES DUE DECEMBER 1, 2006, SERIES
A, WHICH HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT,
FOR
7 1/4% SENIOR NOTES DUE DECEMBER 1, 2006, SERIES
B, WHICH HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT,
OF
USI AMERICAN HOLDINGS, INC.
EACH SERIES UNCONDITIONALLY GUARANTEED BY
U.S. INDUSTRIES, INC.
PURSUANT TO THE PROSPECTUS, DATED , 1997
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
, 1997, UNLESS EXTENDED AS PROVIDED IN THE PROSPECTUS (THE "EXPIRATION
DATE"). TENDERS MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK CITY
TIME, ON THE EXPIRATION DATE.
- --------------------------------------------------------------------------------
The Exchange Agent for the Exchange Offer is:
PNC BANK, NATIONAL ASSOCIATION
(For Eligible Institutions and
Withdrawal Notices Only)
Facsimile Transmission Number
(412) 762-8226
Confirm by Telephone:
(412) 762-3666
By Registered or Certified Mail,
By Hand or By Overnight Courier:
One Oliver Plaza, 27th Floor
Pittsburgh, PA 15222-2602
Attention: F.J. Deramo, Vice President
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN
AS LISTED ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
All capitalized terms used herein and not otherwise defined shall have the
respective meanings ascribed to them in the Prospectus, dated ,1997, of USI
American Holdings, Inc. (the "Issuer") and U.S. Industries, Inc. (the "Company")
(as it may be supplemented from time to time, the "Prospectus").
The undersigned acknowledges that he or she has received the Prospectus and
this Letter of Transmittal (which together constitute the "Exchange Offer"), to
exchange $1,000 principal amount of the Issuer's 7 1/4% Senior Notes due
December 1, 2006, Series B (the "New Notes"), which have been registered under
the Securities Act of 1933, as amended (the "Securities Act"), for each $1000
principal amount of the Issuer's outstanding 7 1/4% Senior Notes due December 1,
2006, Series A (the "Existing Notes"), which have not been registered under the
<PAGE>
Securities Act, from the holders thereof. The New Notes and the Existing Notes
are unconditionally guaranteed by the Company.
This Letter of Transmittal is to be used by holders of Existing Notes to
accept the Exchange Offer if: (i) tender of Existing Notes is to be made
according to the Automated Tender Offer Program ("ATOP") of the Depository Trust
Company ("DTC"), for which the transaction is eligible, pursuant to the
procedures set forth in the Prospectus under the caption "Procedures for
Tendering Existing Notes--Tendering Existing Notes--Notes held through DTC";
(ii) certificates representing Existing Notes are to be physically delivered to
the Exchange Agent herewith by such holders, pursuant to the procedures set
forth in the Prospectus under the caption "Procedures for Tendering Existing
Notes--Tendering Existing Notes--Notes held by Holders"; or (iii) tender of
Existing Notes is to be made according to the guaranteed delivery procedures set
forth in the Prospectus under the caption "Procedures for Tendering Existing
Notes--Guaranteed Delivery Procedures." NOTWITHSTANDING THE FOREGOING, VALID
ACCEPTANCE OF THE TERMS OF THE EXCHANGE OFFER MAY BE EFFECTED BY A PARTICIPANT
IN DTC (A "DTC PARTICIPANT") TENDERING EXISTING NOTES THROUGH ATOP WHERE THE
EXCHANGE AGENT RECEIVES AN AGENT'S MESSAGE (AS DEFINED IN THE PROSPECTUS) PRIOR
TO THE EXPIRATION DATE. ACCORDINGLY, SUCH DTC PARTICIPANT MUST ELECTRONICALLY
TRANSMIT ITS ACCEPTANCE TO DTC THROUGH ATOP, AND THEN DTC WILL EDIT AND VERIFY
THE ACCEPTANCE, EXECUTE A BOOK-ENTRY DELIVERY TO THE EXCHANGE AGENT'S ACCOUNT AT
DTC AND SEND AN AGENT'S MESSAGE TO THE EXCHANGE AGENT FOR ITS ACCEPTANCE. BY
TENDERING THROUGH ATOP, DTC PARTICIPANTS WILL EXPRESSLY ACKNOWLEDGE RECEIPT OF
THIS LETTER OF TRANSMITTAL AND AGREE TO BE BOUND BY ITS TERMS AND THE ISSUER
WILL BE ABLE TO ENFORCE SUCH AGREEMENT AGAINST SUCH DTC PARTICIPANTS.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE
AGENT.
DTC Participants who wish to cause their Existing Notes to be tendered, but
who cannot transmit their acceptances through ATOP prior to the Expiration Date,
may effect a tender in accordance with the guaranteed delivery procedures set
forth in the Prospectus under the caption "Procedures for Tendering Existing
Notes--Guaranteed Delivery Procedures--Notes held through DTC." Holders who wish
to tender their Existing Notes but (i) whose Existing Notes are not immediately
available and will not be available for tendering prior to the Expiration Date,
or (ii) who cannot deliver their Existing Notes, the Letter of Transmittal, or
any other required documents to the Exchange Agent prior to the Expiration Date,
may effect a tender in accordance with the guaranteed delivery procedures set
forth in the Prospectus under the caption "Procedures for Tendering Existing
Notes--Guaranteed Delivery Procedures--Notes held by Holders."
For each Existing Note accepted for exchange, the holder will receive a New
Note having a principal amount equal to that of the surrendered Existing Note.
The New Notes will bear interest from and including their respective dates of
issuance (the "Exchange Date"). Holders whose Existing Notes are accepted for
exchange will receive accrued interest thereon to, but not including, the
Exchange Date, such interest to be payable with the first interest payment on
the New Notes, but will not receive any payment in respect of interest on the
Existing Notes accrued after the Exchange Date.
If (i) the Exchange Offer Registration Statement is not filed with the
Commission on or prior to the 45th day following December 12, 1996, the issue
date of the Existing Notes (the "Initial Issue Date"), (ii) the Exchange Offer
Registration Statement is not declared effective on or prior to the 135th day
following the Initial Issue Date, (iii) neither the Exchange Offer is
consummated nor the Shelf Registration Statement is declared effective on or
prior to the 165th day following the Initial Issue Date, or (iv) the Shelf
Registration Statement is required to be filed because of the request of BA
Securities, Inc. or other specified holder, 45 days following the request by BA
Securities, Inc. that the Issuer file the Shelf Registration Statement (or 90
days if the Shelf Registration Statement is reviewed by the Commission), then
the interest rate borne by the Existing Notes (except in the case of clause
(iv), in which case only the Existing Notes which have not been exchanged in the
Exchange Offer) shall be increased by 0.5% per annum. Upon (w) the filing of the
Exchange Offer Registration Statement in the case of clause (i) above, (x) the
effectiveness of the Exchange Offer Registration Statement in the case of clause
(ii) above, (y) the date of the consummation of the Exchange Offer or the
effectiveness of the Shelf Registration Statement in the case of clause (iii)
above, or (z) the effectiveness of the Shelf Registration Statement, in the case
of clause (iv) above, the interest rate stated on the Existing Notes from the
date of such filing, effectiveness or the date of such consummation or
effectiveness, as the case may be, will be reduced to the original interest rate
on the Notes; provided, however, that, if after any such reduction in interest
rate, a different event specified in clause (i),
2
<PAGE>
(ii), (iii) or (iv) above occurs, the interest rate shall again be increased
pursuant to the foregoing provisions. Holders of Existing Notes accepted for
exchange will be deemed to have waived the right to receive any other payments
or accrued interest on the Existing Notes.
The Issuer reserves the right, at any time or from time to time, to extend
the Exchange Offer at its discretion, in which event the term "Expiration Date"
shall mean the latest time and date to which the Exchange Offer is extended. The
Issuer shall notify the holders of the Existing Notes of any extension by means
of a press release or other public announcement prior to 9:00 a.m., New York
City time, on the next business day after the previously scheduled Expiration
Date.
The undersigned has completed the appropriate boxes below and signed this
Letter of Transmittal to indicate the action the undersigned desires to take
with respect to the Exchange Offer.
List below the Existing Notes to which this Letter of Transmittal relates.
If the space provided below is inadequate, the certificate numbers and principal
amount of Existing Notes should be listed on a separate signed schedule affixed
hereto. Tenders of Existing Notes will be accepted only in principal amounts
equal to $1,000 or integral multiples thereof.
3
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF EXISTING NOTES
- -------------------------------------------------------------------------------------------------------------------
Name(s) and Address(es) of Registered Holder(s)
(Please fill in, if blank) 1 2 3
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aggregate
Principal Principal
Certificate* Amount of Amount
Number(s) Old Note(s) Tendered**
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
<FN>
- -------------------------------------------------------------------------------------------------------------------
* Need not be completed if Existing Notes are being tendered by book-entry
transfer or in accordance with DTC's ATOP procedures for transfer.
** Unless otherwise indicated in this column, a holder will be deemed to have tendered ALL of the
Existing Notes represented by the Existing Notes indicated in column 2. See Instruction 2. Existing
Notes tendered hereby must be in denominations of principal amount of $1,000 and any integral
multiple thereof. See Instruction 1.
- -------------------------------------------------------------------------------------------------------------------
</FN>
</TABLE>
The names and addresses of the registered holders of Existing Notes should
be printed, if not already printed above, exactly as they appear on the Existing
Notes tendered hereby. The Existing Notes and the principal amount of such
Existing Notes that the undersigned wishes to tender should be indicated in the
appropriate boxes.
4
<PAGE>
|_| CHECK HERE IF TENDERED EXISTING NOTES ARE ENCLOSED HEREWITH.
|_| CHECK HERE IF TENDERED EXISTING NOTES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT
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 Eligible Institution that Guaranteed Delivery_________
______________________________________________________________
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions set forth in the Prospectus,
receipt of which is hereby acknowledged, the undersigned hereby tenders to the
Issuer the aggregate principal amount of Existing Notes indicated above. Subject
to, and effective upon, the acceptance for exchange of the Existing Notes
tendered hereby, the undersigned hereby sells, assigns and transfers to, or upon
the order of, the Issuer all right, title and interest in and to such Existing
Notes as are being tendered hereby.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Existing Notes
tendered hereby and that, when (and to the extent that) such tendered Existing
Notes are accepted for exchange by the Issuer, the Issuer will acquire good and
unencumbered title thereto, free and clear of all liens, restrictions, charges
and encumbrances and not subject to any adverse claim or right. The undersigned
will, upon request, execute and deliver any additional documents deemed by the
Exchange Agent or by the Issuer to be necessary or desirable to complete the
sale, assignment and transfer of the Existing Notes tendered hereby.
The undersigned hereby further represents that (i) any New Notes acquired
in exchange for Existing Notes tendered hereby will have been acquired in the
ordinary course of business of the person receiving such New Notes, whether or
not such person is the undersigned, (ii) such holder or any such other person is
not engaging in, has no arrangement or understanding with any person to
participate in, and does not intend to engage in, any distribution of such New
Notes, (iii) it is not a broker-dealer tendering Existing Notes acquired
directly from the Issuer for its own account, and (iv) neither such holder nor
any such other person is an "affiliate" (an "Affiliate") as defined in Rule 405
under the Securities Act of the Issuer, or if it is such an Affiliate, that it
will comply with the registration and prospectus delivery requirements of the
Securities Act to the extent applicable to it.
The undersigned also acknowledges that the Exchange Offer is being made
based on no-action letters issued by the Staff of the Securities and Exchange
Commission (the "Commission") to third parties with respect to similar
transactions, including Exxon Capital Holding Corporation (available May 13,
1988), Morgan Stanley & Co. Incorporated (available June 5, 1991) and similar
letters, that the New Notes issued pursuant to the Exchange Offer in exchange
for the Existing Notes may be offered for resale, resold and otherwise
transferred by holders thereof (other than any such holder that is an Affiliate
of the Issuer) without compliance with the registration and prospectus delivery
requirements of the Securities Act, provided that such New Notes are acquired in
the ordinary course of such holders' business and such holders are not engaging
in, have no arrangement or understanding with any person to participate in, and
do not intend to engage in, any distribution of such New Notes. However, the
undersigned acknowledges that the Issuer has not sought a no-action letter with
respect to the Exchange Offer and that there can be no assurance that the Staff
of the Commission would make a similar determination with respect to the
Exchange Offer. Any holder who tenders in the Exchange Offer for the purpose of
participating in a distribution of New Notes (i) cannot rely on such an
interpretation by the Staff of the Commission, (ii) will not be able to validly
tender Existing Notes in the Exchange Offer and (iii) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any secondary resale transactions. If the undersigned is not a
broker-dealer, the undersigned represents that it is not engaged in, has no
arrangement or
5
<PAGE>
understanding with any person to participate in, and does not intend to engage
in, a distribution of New Notes. In addition, if the undersigned is a
broker-dealer that will receive New Notes for its own account in exchange for
Existing Notes that were acquired as a result of market-making activities or
other trading activities, it acknowledges that it will deliver a prospectus
meeting the requirements of the Securities Act in connection with any resales of
such New Notes; provided, however, that by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
The undersigned may, if and only if, it would not receive freely tradeable
New Notes in the Exchange Offer or is not eligible to participate in the
Exchange Offer, elect to have its Existing Notes registered in the shelf
registration described in the Registration Rights Agreement, dated December 12,
1996, among the Issuer, the Company and BA Securities, Inc. in the form filed as
Exhibit 99.1 to the Registration Statement.
All authority conferred or agreed to be conferred by this Letter of
Transmittal and every obligation of the undersigned hereunder shall be binding
upon the successors, assigns, heirs, executors, administrators, trustees in
bankruptcy and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned. This
tender may be withdrawn only in accordance with the procedures set forth in the
Prospectus under the caption "Procedures for Tendering Existing
Notes--Withdrawal Rights." See Instruction 11.
Unless otherwise indicated herein under "Special Issuance Instructions,"
the undersigned hereby requests that any Existing Notes representing principal
amounts not tendered or not accepted for exchange be issued in the name(s) of
the undersigned (and, in the case of Existing Notes tendered through ATOP, by
credit to the account of DTC). Similarly, unless otherwise indicated herein
under "Special Delivery Instructions," the undersigned hereby requests that any
Existing Notes representing principal amounts not tendered or not accepted for
payment and New Notes issued in exchange for tendered Existing Notes be
delivered to the undersigned at the address shown below the undersigned's
signature(s). In the event that the "Special Issuance Instructions" box or the
"Special Delivery Instructions" box is, or both are, completed, the undersigned
hereby requests that any Existing Notes representing principal amounts not
tendered or not accepted for exchange be issued in the name(s) of, certificates
for such Existing Notes be delivered to, and the New Notes be issued in
connection with the Exchange Offer, to the person(s) at the address(es) so
indicated, and credit for Existing Notes representing principal amounts not
tendered be made to the account of DTC, as applicable. The undersigned
recognizes that the Issuer has no obligation pursuant to the "Special Issuance
Instructions" box to transfer any Existing Notes from the name of the registered
holder(s) thereof if the Issuer does not accept for exchange any of the
principal amount of such Existing Notes so tendered.
The undersigned acknowledges that the Exchange Offer is subject to the more
detailed terms set forth in the Prospectus and, in case of any conflict between
the terms of the Prospectus and this Letter of Transmittal, the Prospectus shall
prevail.
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF EXISTING
NOTES" ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE
EXISTING NOTES AS SET FORTH IN SUCH BOX ABOVE.
6
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
- ------------------------------------------------------- ---------------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 3 and 4) (See Instructions 3 and 4)
To be completed ONLY if certificates for Existing Notes To be completed ONLY if certificates for Existing Notes
not exchanged and/or New Notes are to be issued in the not exchanged and/or New Notes are to be sent to someone
name of someone other than the person or persons whose other than the person or persons whose signature(s) ap-
signature(s) appear(s) on this Letter below, or if Existing pear(s) on this Letter below or to such person or persons at
Notes delivered by book-entry transfer which are not an address other than shown in the box entitled "Descrip-
accepted for exchange are to be returned by credit to an tion of Existing Notes" on this Letter above.
account maintained at the Book-Entry Transfer Facility
other than the account indicated above. Mail: New Notes and/or Existing Notes to:
Issue: New Notes and/or Existing Notes to: Name(s)_________________________________________
(Please Type or Print)
Name(s)______________________________________
(Please Type or Print) ________________________________________________
(Please Type or Print)
_____________________________________________
(Please Type or Print) Address_________________________________________
Address______________________________________
________________________________________________
(Zip Code)
_____________________________________________
(Zip Code)
_____________________________________________
(Employer Identification or Social Security Number)
Credit unexchanged Existing Notes delivered by book-entry
transfer to the Book-Entry Transfer Facility account set
forth below.
_____________________________________________
(Book-Entry Transfer Facility
Account Number, if applicable)
- ------------------------------------------------------- ---------------------------------------------------------
</TABLE>
IMPORTANT: EITHER (1) (A) THIS LETTER OF TRANSMITTAL (OR A FACSIMILE
HEREOF) TOGETHER WITH CERTIFICATES REPRESENTING EXISTING NOTES OR (B) A
BOOK-ENTRY CONFIRMATION INCLUDING BY MEANS OF AN AGENT'S MESSAGE, MUST BE
RECEIVED BY THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE
EXPIRATION DATE TOGETHER WITH ALL OTHER REQUIRED DOCUMENTS, OR (2) THE TENDERING
HOLDER MUST COMPLY WITH THE GUARANTEED DELIVERY PROCEDURES SET FORTH HEREIN. BY
TENDERING THROUGH ATOP, DTC PARTICIPANTS WILL EXPRESSLY ACKNOWLEDGE RECEIPT OF
THIS LETTER OF TRANSMITTAL AND AGREE TO BE BOUND BY ITS TERMS AND THE ISSUER
WILL BE ABLE TO ENFORCE SUCH AGREEMENT AGAINST SUCH DTC PARTICIPANTS.
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING ANY BOX ABOVE.
7
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)
<S> <C>
___________________________________________________ _____________________________________ 1997
___________________________________________________ _____________________________________ 1997
___________________________________________________ _____________________________________ 1997
Signature(s) of Owner Date
</TABLE>
Area Code and Telephone Number__________________________________
If a holder is tendering any Existing Notes, this Letter of Transmittal must
be signed by the registered holder(s) as the name(s) appear(s) on the
certificate(s) for the Existing Notes or by any person(s) authorized to become
registered holder(s) by endorsements and documents transmitted herewith. If
signature is by a trustee, executor, administrator, guardian, officer or other
person acting in a fiduciary or representative capacity, please set forth full
title. See Instruction 3.
Name(s)_________________________________________________________________________
________________________________________________________________________________
(Please Type or Print)
Capacity________________________________________________________________________
Address_________________________________________________________________________
________________________________________________________________________________
(Including Zip Code)
Employer Identification or Social Security No.__________________________________
(Please complete Substitute Form W-9)
SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTIONS 3)
Signature(s) Guaranteed by an Eligible Institution:
Authorized Signature____________________________________________________________
Title___________________________________________________________________________
Name and Firm___________________________________________________________________
- --------------------------------------------------------------------------------
8
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. SIGNATURE GUARANTIES.
All Signatures on this Letter of Transmittal must be guaranteed by a
financial institution that is a member of the Securities Transfer Agents
Medallion Program, the Stock Exchange Medallion Program or the New York Stock
Exchange, Inc. ("NYSE") Medallion Signature Program (each of the foregoing being
referred to as an "Eligible Institution"), unless the Existing Notes tendered
hereby are tendered (i) by a registered holder of Existing Notes (or by a DTC
Participant whose name appears on a security position listing as the owner of
such Existing Notes) who has not completed either the box entitled "Special
Delivery Instructions" or the box entitled "Special Issuance Instructions" on
this Letter of Transmittal, or (ii) for the account of an Eligible Institution.
If the Existing Notes are registered in the name of a person other than the
signer of this Letter of Transmittal or if Existing Notes not accepted for
exchange or not tendered are to be returned to a person other than the
registered holder, then the signatures on this Letter of Transmittal must be
guaranteed by an Eligible Institution as described above. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND EXISTING NOTES.
This Letter of Transmittal is to be completed by holders of Existing
Notes to accept the Exchange Offer if: (i) tender of Existing Notes is to be
made by DTC Participants through ATOP, for which the transaction is eligible,
pursuant to the procedures set forth in the Prospectus under the caption
"Procedures for Tendering Existing Notes--Tendering Existing Notes--Notes held
through DTC"; (ii) certificates representing Existing Notes are to be physically
delivered to the Exchange Agent herewith by such holders, pursuant to the
procedures set forth in the Prospectus under the caption "Procedures for
Tendering Existing Notes--Tendering Existing Notes--Notes held by Holders"; or
(iii) tender of Existing Notes is to be made according to the guaranteed
delivery procedures set forth in the Prospectus under the caption "Procedures
for Tendering Existing Notes--Guaranteed Delivery Procedures." NOTWITHSTANDING
THE FOREGOING, VALID ACCEPTANCE OF THE TERMS OF THE EXCHANGE OFFER MAY BE
EFFECTED BY A DTC PARTICIPANT TENDERING EXISTING NOTES THROUGH ATOP WHERE THE
EXCHANGE AGENT RECEIVES AN AGENT'S MESSAGE PRIOR TO THE EXPIRATION DATE.
ACCORDINGLY, SUCH DTC PARTICIPANT MUST ELECTRONICALLY TRANSMIT ITS ACCEPTANCE TO
DTC THROUGH ATOP, AND THEN DTC WILL EDIT AND VERIFY THE ACCEPTANCE, EXECUTE A
BOOK-ENTRY DELIVERY TO THE EXCHANGE AGENT'S ACCOUNT AT DTC AND SEND AN AGENT'S
MESSAGE TO THE EXCHANGE AGENT FOR ITS ACCEPTANCE. BY TENDERING THROUGH ATOP, DTC
PARTICIPANTS WILL EXPRESSLY ACKNOWLEDGE RECEIPT OF THIS LETTER OF TRANSMITTAL
AND AGREE TO BE BOUND BY ITS TERMS AND THE ISSUER WILL BE ABLE TO ENFORCE SUCH
AGREEMENT AGAINST SUCH DTC PARTICIPANTS.
In order to validly tender Existing Notes pursuant to the Exchange
Offer, either (i) (A) this Letter of Transmittal, or a facsimile hereof,
together with certificates representing Existing Notes, or (B) a Book-Entry
Confirmation, including by means of an Agent's Message, of the transfer into the
Exchange Agent's account at DTC of all Existing Notes delivered electronically
must be received by the Exchange Agent at its address set forth herein prior to
5:00 p.m., New York City time, on the Expiration Date, together with all other
required documents, or (ii) the tendering holder must comply with the guaranteed
delivery procedures set forth below. DELIVERY OF DOCUMENTS TO DTC DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
If a holder or DTC Participant desires to tender Existing Notes pursuant
to the Exchange Offer and time will not permit this Letter of Transmittal,
certificates representing such Existing Notes and all other required documents
to reach the Exchange Agent, or the procedures for book-entry transfer,
including those with respect to tenders through ATOP, cannot be completed, prior
to the Expiration Date, such holder or DTC Participant, as the case may be, must
tender such Existing Notes pursuant to the guaranteed delivery procedures set
forth in the Prospectus under the caption "Procedures for Tendering Existing
Notes--Guaranteed Delivery Procedures." Pursuant to such procedures (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 provided by the Issuer, must be received by the Exchange Agent either by
hand delivery, mail, facsimile transmission or overnight courier, prior to the
Expiration Date; and (iii) within three NYSE trading days after the date of the
execution of the Notice of Guaranteed Delivery, (A) holders must deliver to the
Exchange Agent a properly completed and
9
<PAGE>
duly executed Letter of Transmittal, as well as the certificate(s) representing
all tendered Existing Notes in proper form for transfer, and all other documents
required by the Letter of Transmittal, or (B) DTC Participants must effect a
Book-Entry Confirmation, including through ATOP by means of an Agent's Message,
of the transfer of such Existing Notes into the Exchange Agent's account at DTC
as set forth in the Prospectus.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE EXISTING NOTES
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC AND ANY
ACCEPTANCE OR AGENT'S MESSAGE TRANSMITTED THROUGH ATOP, IS AT THE OPTION AND
RISK OF THE TENDERING HOLDER. If delivery is by mail, registered mail with
return receipt requested, properly insured, is recommended. In all cases,
sufficient time should be allowed for such documents to reach the Exchange Agent
prior to the Expiration Date. Except as otherwise provided in this Instruction
2, delivery will be deemed made only when actually received by the Exchange
Agent.
No alternative, conditional or contingent tenders will be accepted. All
tendering holders, by execution of this Letter of Transmittal (or a facsimile
hereof), waive any right to receive any notice of the acceptance of their
Existing Notes for exchange.
3. INADEQUATE SPACE.
If the space provided herein is inadequate, the certificate numbers
and/or the principal amount represented by Existing Notes should be listed on a
separate signed schedule attached hereto.
4. PARTIAL TENDERS.
Tenders of Existing Notes will be accepted only in principal amounts
equal to $1,000 or integral multiples thereof. In the case of a partial tender
of Existing Notes, as soon as practicable after the Expiration Date, new
certificates for the remainder of the Existing Notes that were evidenced by such
holder's old certificates will be issued in the name of and sent to such holder,
unless otherwise provided in the appropriate "special instruction" box or boxes
on this Letter of Transmittal. Unless otherwise indicated in the table entitled
"Description of Existing Notes" under the column heading "Principal Amount
Tendered," the entire principal amount that is represented by Existing Notes
delivered to the Exchange Agent will be deemed to have been tendered.
5. SIGNATURES ON LETTER OF TRANSMITTAL; INSTRUMENTS OF TRANSFER AND
ENDORSEMENTS.
If this Letter of Transmittal is signed by the registered holder of the
Existing Notes tendered hereby, the signature must correspond exactly with the
name as written on the face of the certificates without alteration, enlargement
or any change whatsoever. If this Letter of Transmittal is signed by a DTC
Participant whose name is shown as the owner of the Existing Notes tendered
hereby, the signature must correspond with the name shown on the security
position listing as the owner of the Existing Notes.
If any tendered Existing Notes are owned of record by two or more joint
owners, all such owners must sign this Letter of Transmittal. If any tendered
Existing Notes are registered in different names on several certificates, it
will be necessary to complete, sign and submit as many separate copies of the
Letter of Transmittal as there are different registrations or certificates.
When this Letter of Transmittal is signed by the registered holder or
holders of the Existing Notes specified herein and tendered hereby, no
endorsements of Existing Notes or separate instruments of transfer are required.
If, however, the New Notes are to be issued, or any tendered Existing Notes are
to be reissued, to a person other than the registered holder, then signatures on
such Existing Notes or instruments of transfer are required and must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder or holders of any certificate(s) specified herein, such
certificate(s) must be endorsed or accompanied by appropriate bond powers, in
either case signed exactly as the name or names of the registered holder or
holders appear(s) on the certificate(s) and signatures on such certificate(s)
must be guaranteed by an Eligible Institution.
10
<PAGE>
If this Letter of Transmittal or any certificates or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
agents, officers of corporations or others acting in a fiduciary or
representative capacity, such persons should so indicate when signing, and,
unless waived by the Issuer, proper evidence satisfactory to the Issuer of their
authority to so act must be submitted.
IF THIS LETTER OF TRANSMITTAL IS SIGNED OTHER THAN BY THE REGISTERED
HOLDER(S) OF THE EXISTING NOTES LISTED, THE EXISTING NOTES MUST BE ENDORSED OR
ACCOMPANIED BY AN APPROPRIATE WRITTEN INSTRUMENT OR INSTRUMENTS OF TRANSFER, IN
EITHER CASE SIGNED EXACTLY AS THE NAME OR NAMES OF THE REGISTERED HOLDER(S)
APPEAR ON THE EXISTING NOTES AND SIGNATURE(S) ON SUCH EXISTING NOTES OR
INSTRUMENTS OF TRANSFER ARE REQUIRED AND MUST BE GUARANTEED BY AN ELIGIBLE
INSTITUTION, UNLESS THE SIGNATURE IS THAT OF AN ELIGIBLE INSTITUTION.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS.
Tendering holders of Existing Notes should indicate in the applicable
box the name and address to which New Notes issued pursuant to the Exchange
Offer and/or substitute certificates evidencing Existing Notes not exchanged are
to be issued or sent, if different from the name or address of the person
signing this Letter of Transmittal. In the case of issuance in a different name,
the employer identification or social security number of the person named must
also be indicated. Holders tendering Existing Notes by book-entry transfer may
request that Existing Notes not exchanged be credited to such account maintained
at DTC as such holder may designate hereon. If no such instructions are given,
such Existing Notes exchanged will be returned to the name and address of the
person signing this Letter of Transmittal.
7. TRANSFER TAXES.
Holders who tender their Existing Notes for exchange will not be
obligated to pay any transfer taxes in connection therewith, except that holders
who instruct the Issuer to register New Notes in the name of, or request that
Existing Notes not tendered or not accepted in the Exchange Offer be returned
to, a person other than the registered tendering holder will be responsible for
the payment of any applicable transfer tax thereon. If satisfactory evidence of
payment of such taxes or exemption therefrom is not submitted herewith, the
amount of such transfer taxes will be billed directly to such tendering holder.
Except as provided in this Instruction 7, it will not be necessary for
transfer tax stamps to be affixed to the Existing Notes specified in this Letter
of Transmittal.
8. WAIVER OF CONDITIONS.
The Issuer reserves the absolute right to waive satisfaction of any or
all conditions enumerated herein or in the Prospectus.
9. NO CONDITIONAL TENDERS.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering holders of Existing Notes, by execution of this Letter
of Transmittal, shall waive the right to receive notice of the acceptance of
their Existing Notes for exchange.
Neither the Issuer, the Exchange Agent nor any other person is obligated
to give notice of any defect or irregularity with respect to any tender of
Existing Notes nor shall any of them incur any liability for failure to give any
such notice.
10. MUTILATED, LOST, STOLEN OR DESTROYED EXISTING NOTES.
Any holder whose Existing Notes have been mutilated, lost, stolen or
destroyed should contact the Exchange Agent at the address indicated above for
further instructions.
11
<PAGE>
11. WITHDRAWAL OF TENDERS.
Tenders of Existing Notes may be withdrawn at any time prior to 5:00
p.m., New York City time, on the Expiration Date.
For a withdrawal of a tender of Existing Notes to be effective, a
letter, telex, telegram or facsimile transmission notice of withdrawal must be
received by the Exchange Agent at its address set forth above prior to 5:00
p.m., New York City time, on the Expiration Date. Any such notice of withdrawal
by a DTC Participant must contain the name and number of the DTC Participant,
the principal amount due at the stated maturity of Existing Notes to which such
withdrawal related and the signature of the DTC Participant. Any such notice of
withdrawal by a holder of Existing Notes must (i) specify the name of the person
who tendered the Existing Notes to be withdrawn, (ii) contain a description of
the Existing Notes to be withdrawn (including the certificate number or numbers
and principal amount due at the stated maturity of such Existing Notes) and
(iii) be signed by the holder of such Existing Notes in the same manner as the
original signature on this Letter of Transmittal (including any required
signature guaranties), or be accompanied by (x) documents of transfer in a form
acceptable to the Issuer, in its sole discretion and (y) a properly completed
irrevocable proxy that authorized such person to effect such revocation on
behalf of such holder. Any Existing Notes so withdrawn will be deemed not to
have been validly tendered for exchange for purposes of the Exchange Offer. Any
Existing Notes which have been tendered for exchange but which are not exchanged
for any reason will be returned to the holder thereof without cost to such
holder as soon as practicable after withdrawal, rejection of tender, or
termination of the Exchange Offer. Properly withdrawn Existing Notes may be
retendered by following the procedures described above at any time on or prior
to 5:00 p.m., New York City time, on the Expiration Date.
12. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Questions relating to the procedure for tendering, as well as requests
for additional copies of the Prospectus and this Letter of Transmittal, may be
directed to the Exchange Agent, at the address and telephone number indicated
above.
IMPORTANT: IN ORDER TO VALIDLY TENDER EXISTING NOTES PURSUANT TO THE
EXCHANGE OFFER, EITHER (I) (A) THIS LETTER OF TRANSMITTAL (OR A FACSIMILE
HEREOF), TOGETHER WITH CERTIFICATES REPRESENTING EXISTING NOTES, OR (II) A
BOOK-ENTRY CONFIRMATION, INCLUDING BY MEANS OF AN AGENT'S MESSAGE, MUST BE
RECEIVED BY THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE
EXPIRATION DATE, TOGETHER WITH ALL OTHER REQUIRED DOCUMENTS, OR (II) THE
TENDERING HOLDER MUST COMPLY WITH THE GUARANTEED DELIVERY PROCEDURES SET FORTH
HEREIN.
IMPORTANT TAX INFORMATION
Under current federal income tax law, a holder of New Notes is required
to provide the Issuer (as payor) with such holder's correct taxpayer
identification number ("TIN") on Substitute Form W-9 or otherwise establish a
basis for exemption from backup withholding to prevent backup withholding on
each payment in respect of interest thereon or gross proceeds thereof. If a
holder of New Notes is an individual, the TIN is such holder's social security
number. If the Issuer is not provided with the correct TIN, the holder of
Existing Notes and the holder of New Notes may be subject to a $50 penalty
imposed by the Internal Revenue Service ("IRS"). Accordingly, each prospective
holder of New Notes to be issued pursuant to Special Issuance Instructions
should complete the attached Substitute Form W-9.
Certain holders of New Notes (including, among others, all corporations
and certain foreign individuals) are not subject to these backup withholding and
reporting requirements. Exempt prospective holders of New Notes should indicate
their exempt status on Substitute Form W-9. A foreign individual may qualify as
an exempt recipient by submitting to the Issuer, through the Exchange Agent, a
properly completed IRS Form W-8 (which the Exchange Agent will provide upon
request) signed under penalty of perjury, attesting to the holder's exempt
status. See the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional instructions.
12
<PAGE>
If backup withholding applies, the Issuer is required to withhold 31% of
any payment made to the holder of New Notes or other payee. Backup withholding
is not an additional federal income tax. Rather, the federal income 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 IRS.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are to be made with
respect to New Notes, each prospective holder of New Notes to be issued pursuant
to Special Issuance Instructions should provide the Issuer, through the Exchange
Agent, with either: (i) such prospective holder's correct TIN by completing the
form below certifying that the TIN provided on Substitute Form W-9 is correct
(or that such prospective holder is awaiting a TIN) and that (A) such
prospective holder has not been notified by the Internal Revenue Service that he
or she is subject to backup withholding as a result of a failure to report all
interest or dividends or (B) the Internal Revenue Service has notified such
prospective holder that he or she is no longer subject to backup withholding; or
(ii) an adequate basis for exemption.
WHAT NUMBER TO GIVE THE EXCHANGE AGENT
The prospective holder of New Notes is required to give the Exchange
Agent the TIN (e.g., social security number or employer identification number)
of the prospective record owner of the New Notes. If the New Notes will be held
in more than one name or are not held 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 regarding which number to report.
13
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
PAYER'S NAME: USI AMERICAN HOLDINGS, INC.
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Part 1 -- PLEASE PROVIDE YOUR TIN IN THE Social Security Number
BOX AT RIGHT | |
AND CERTIFY BY SIGNING AND | |
DATING BELOW
OR
Employer Identification Number
SUBSTITUTE |
|
--------------------------------------------------------------------------------------
Form W-9
--------------------------------------------------------------------------------------
Part 2 -- Certification -- Under Penalties of Perjury, I certify that (1) The number
shown on this form is my current taxpayer identification number (or I am waiting for a
number to be issued to me) and (2) I am not subject to backup withholding either because
I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to
backup withholding as a result of a failure to report all interest or dividends,
or the IRS has notified me that I am no longer subject to backup withholding.
--------------------------------------------------------------------------------------
----------------------------------------------------
Part 3 --
Awaiting TIN -> |_|
----------------------------------------------------
Department of the Treasury, Certificate Instructions -- You must cross out item (2) in Part 2 above if you have been
Internal Revenue Service notified by the IRS that you are subject to backup withholding because of underreporting
interest or dividends on your tax return. However, if after being notified by the IRS
that you are subject to backup withholding you receive another notification from the IRS
stating that you are no longer subject to backup withholding, do not cross out item (2).
Payer's Request for Taxpayer SIGNATURE -> DATE ->
------------------------------- -------------------------
Identification Number (TIN)
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENT MADE TO YOU PURSUANT TO THE EXCHANGE
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 (A) 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 (B)
I INTEND TO MAIL OR DELIVER SUCH AN APPLICATION IN THE NEAR FUTURE. I UNDERSTAND
THAT, IF I DO NOT PROVIDE A TAXPAYER IDENTIFICATION NUMBER TO THE PAYER WITHIN
SIXTY (60) DAYS, 31% OF ALL REPORTABLE PAYMENTS MADE TO ME THEREAFTER WILL BE
WITHHELD UNTIL I PROVIDE SUCH A NUMBER.
________________________________________ ____________________________, 1997
SIGNATURE DATE
- --------------------------------------------------------------------------------
14
NOTICE OF GUARANTEED DELIVERY
TO TENDER IN RESPECT OF THE
OFFER TO EXCHANGE ANY AND ALL OUTSTANDING
7 1/4% SENIOR NOTES DUE DECEMBER 1, 2006, SERIES A, WHICH HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT,
(INCLUDING THOSE IN BOOK-ENTRY FORM)
FOR
7 1/4% SENIOR NOTES DUE DECEMBER 1, 2006, SERIES B, WHICH HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT,
OF
USI AMERICAN HOLDINGS, INC.
EACH SERIES UNCONDITIONALLY GUARANTEED BY
U.S. INDUSTRIES, INC.
PURSUANT TO THE PROSPECTUS, DATED , 1997
This form or one substantially equivalent hereto must be used to accept
the offer to exchange $1,000 principal amount of the 7 1/4% Senior Notes due
December 1, 2006, Series B (the "New Notes") of USI American Holdings, Inc. (the
"Issuer"), which are registered under the Securities Act of 1933, as amended
(the "Securities Act"), for each $1,000 principal amount of the Issuer's
outstanding 7 1/4% Senior Notes due December 1, 2006, Series A (the "Existing
Notes"), which have not been registered under the Securities Act, made pursuant
to the Prospectus dated , 1997 (the "Prospectus") and the accompanying Letter of
Transmittal (which together constitute the "Exchange Offer"), if (i) a
participant ("DTC Participant") in the Depository Trust Company ("DTC") holding
Existing Notes through DTC cannot transmit its acceptance through DTC's
Automated Tender Offer Program ("ATOP") prior to 5:00 p.m., New York City time,
on , 1997, or such later date and time to which the Exchange Offer may be
extended (the "Expiration Date"), or (ii) a holder of Existing Notes (A) does
not have certificates immediately available and cannot tender prior to the
Expiration Date, or (B) cannot deliver their Existing Notes, the Letter of
Transmittal, or any other required documents to the Exchange Agent prior to the
Expiration Date. Such form may be delivered or transmitted by facsimile
transmission, mail or hand delivery to PNC Bank, National Association (the
"Exchange Agent") as set forth below. Capitalized terms used herein and not
otherwise defined shall have the respective meanings ascribed to them in the
Prospectus.
PNC BANK, NATIONAL ASSOCIATION
Facsimile Transmission Number
(For Eligible Institutions Only)
(412) 762-8226
Confirm by Telephone:
(412) 762-3666
<PAGE>
By Registered or Certified Mail,
By Hand or By Overnight Courier:
One Oliver Plaza, 27th Floor
Pittsburgh, PA 15222-2602
Attention: F.J. Deramo, Vice President
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA A
FACSIMILE NUMBER OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID
DELIVERY.
2
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to USI American Holdings, Inc., a Delaware
corporation (the "Issuer"), in accordance with the Issuer's offer, upon the
terms and subject to the conditions set forth in the Prospectus dated , 1997
(the "Prospectus"), and in the accompanying Letter of Transmittal, receipt of
which is hereby acknowledged, the principal amount of Existing Notes set forth
below, pursuant to the guaranteed delivery procedures described in the
Prospectus.
Name(s) of Record
Holder(s) or DTC Participants
(Please Type or Print)
DTC Participant Number (if applicable)
Address
Area Code & Telephone No.
Principal Amount of Existing Notes Tendered: $
Certificate Number(s) for
Existing Notes (if available)
Total Principal Amount
Represented by Certificate(s):
All authority herein conferred shall survive the death or incapacity of
the undersigned and every obligation of the undersigned hereunder shall be
binding upon the heirs, personal representatives, successors and assigns of the
undersigned.
Signature of Holder
Dated:
Must be signed by the holder(s) of the Existing Notes as their names(s)
appear(s) on certificates for Existing Notes or on a security position listing,
or by person(s) authorized to become registered holder(s) by endorsement and
documents transmitted with this Notice of Guaranteed Delivery. If signature is
by a trustee, executor, administrator, guardian, attorney-in-fact, officer or
other person acting in a fiduciary or representative capacity, such person must
set forth his or her full title below.
3
<PAGE>
PLEASE PRINT NAME(S) AND ADDRESS(ES)
Name(s):
Capacity:
Address(es):
[_] The Depository Trust Company
(Check if Existing Notes will be tendered by
book-entry transfer, including through ATOP)
Account Number
THE GUARANTY ON THE FOLLOWING PAGE MUST BE COMPLETED
4
<PAGE>
GUARANTY
(NOT TO BE USED FOR SIGNATURE GUARANTY)
The undersigned, being a member of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States or an Eligible Guarantor Institution within the meaning of Rule 17Ad-15
under the Securities Exchange Act of 1934, as amended, hereby guarantees that
the undersigned will deliver to the Exchange Agent the certificates representing
the Existing Notes being tendered hereby or confirmation of book-entry transfer
of such Existing Notes into the Exchange Agent's account at DTC, in proper form
for transfer, together with the Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guaranties and
any other required documents, within three New York Stock Exchange trading days
after the Expiration Date:
Name of Firm
Address
Area Code and Telephone No.
Authorized Signature
Name
(Please Type or Print)
Title
Dated
NOTE: DO NOT SEND CERTIFICATES OF EXISTING NOTES WITH THIS FORM.
CERTIFICATES OF EXISTING NOTES SHOULD BE SENT ONLY WITH A LETTER
OF TRANSMITTAL.
5
USI AMERICAN HOLDINGS, INC.
OFFER TO EXCHANGE ANY AND ALL OUTSTANDING
7 1/4% SENIOR NOTES DUE DECEMBER 1, 2006, SERIES A,
WHICH ARE NOT REGISTERED UNDER THE SECURITIES ACT,
FOR
7 1/4% SENIOR NOTES DUE DECEMBER 1, 2006, SERIES B,
WHICH ARE REGISTERED UNDER THE SECURITIES ACT
EACH SERIES UNCONDITIONALLY GUARANTEED BY
U.S. INDUSTRIES, INC.
To: Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees;
USI American Holdings, Inc. (the "Issuer") is offering, upon and
subject to the terms and conditions set forth in the Prospectus, dated ,
1997 (the "Prospectus"), and the enclosed Letter of Transmittal (the "Letter of
Transmittal"), to exchange (the "Exchange Offer") $1,000 principal amount of its
7 1/4% Senior Notes due December 1, 2006, Series B (the "New Notes"), which are
registered under the Securities Act of 1933, as amended (the "Securities Act"),
for each $1,000 principal amount of its outstanding 7 1/4% Senior Notes due
December 1, 2006, Series A (the "Existing Notes"; and together with the New
Notes, the "Notes"), which are not registered under the Securities Act. The
Notes are unconditionally guaranteed by the Issuer's parent, U.S. Industries,
Inc. (the "Company"). The Exchange Offer is being made in order to satisfy
certain obligations of the Issuer and the Company contained in the Registration
Rights Agreement, dated December 12, 1996, among the Issuer, the Company and BA
Securities, Inc.
We are requesting that you contact your clients for whom you hold
Existing Notes regarding the Exchange Offer. For your information and for
forwarding to your clients for whom you hold Existing Notes registered in your
name or in the name of your nominee, or who hold Existing Notes registered in
their own names, we are enclosing the following documents:
1. Prospectus dated , 1997;
2. The Letter of Transmittal for your use and for the information
of your clients;
3. A Notice of Guaranteed Delivery to be used to accept the
Exchange Offer if certificates for Existing Notes are not
immediately available or time will not permit all required
documents to reach the Exchange Agent prior to the Expiration
Date (as defined below) or if the procedure for book-entry
transfer, including through the Automated Tender Offer Program
("ATOP") of the Depository Trust Company ("DTC"), cannot be
completed on a timely basis;
4. A form of letter which may be sent to your clients for whose
account you hold Existing Notes registered in your name or the
name or your nominee, with space provided for obtaining such
clients' instructions with regard to the Exchange Offer; and
5. Guidelines for Certification of Taxpayer Identification Number
of Substitute Form W-9.
<PAGE>
Your prompt action is requested. The Exchange Offer will expire at 5:00
p.m., New York City time, on , 1997, unless extended by the Issuer (the
"Expiration Date"). The Existing Notes tendered pursuant to the Exchange Offer
may be withdrawn at any time before 5:00 pm., New York City time, on the
Expiration Date.
To participate in the Exchange Offer, a duly executed and property
completed Letter of Transmittal (or facsimile thereon), with any required
signature guaranties and any other required documents, should be sent to the
Exchange Agent and certificates representing the Existing Notes should be
delivered to the Exchange Agent, all in accordance with the instructions set
forth in the Letter of Transmittal and the Prospectus. NOTWITHSTANDING THE
FOREGOING, A PARTICIPANT IN DTC (A "DTC PARTICIPANT") MAY VALIDLY ACCEPT THE
TERMS OF THE EXCHANGE OFFER BY TENDERING EXISTING NOTES THROUGH ATOP PRIOR TO
THE EXPIRATION DATE. ACCORDINGLY, SUCH DTC PARTICIPANT MUST ELECTRONICALLY
TRANSMIT ITS ACCEPTANCE TO DTC THROUGH ATOP, AND THEN DTC WILL EDIT AND VERIFY
THE ACCEPTANCE, EXECUTE A BOOK-ENTRY DELIVERY TO THE EXCHANGE AGENT'S ACCOUNT AT
DTC AND SEND AN AGENT'S MESSAGE TO THE EXCHANGE AGENT FOR ITS ACCEPTANCE. BY
TENDERING THROUGH ATOP, SUCH DTC PARTICIPANT WILL EXPRESSLY ACKNOWLEDGE RECEIPT
OF THIS LETTER OF TRANSMITTAL AND AGREE TO BE BOUND BY ITS TERMS AND THE ISSUER
WILL BE ABLE TO ENFORCE SUCH AGREEMENT AGAINST SUCH DTC PARTICIPANT.
If holders of Existing Notes wish to tender, but it is impracticable
for them to forward their certificates for Existing Notes prior to the
expiration of the Exchange Offer or to comply with the book-entry transfer
procedures, including those with respect to tenders through ATOP, on a timely
basis, a tender may be effected by following the guaranteed delivery procedures
described in the Prospectus under the caption "Procedures for Tendering Existing
Notes--Guaranteed Delivery Procedures."
Holders who tender their Existing Notes for exchange will not be
obligated to pay any transfer taxes in connection therewith, expect that holders
who instruct the Issuer to register New Notes in the name of, or request that
Existing Notes not tendered or not accepted in the Exchange Offer be returned
to, a person other than the registered tendering holder will be responsible for
the payment of any applicable transfer tax thereon.
Any inquiries you may have with respect to the Exchange Offer, or
requests for additional copies of the enclosed materials, should be directed to
PNC Bank, National Association, the Exchange Agent for the Existing Notes, at
its address and telephone number set forth on the front of the Letter of
Transmittal.
Very truly yours,
USI AMERICAN HOLDINGS, INC.
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
PERSON AS AN AGENT OF THE ISSUER OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY
OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF EITHER OF
THEM WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN
THE PROSPECTUS OR THE LETTER OF TRANSMITTAL.
Enclosures
2
USI AMERICAN HOLDINGS, INC.
OFFER TO EXCHANGE ANY AND ALL OUTSTANDING
7 1/4% SENIOR NOTES DUE DECEMBER 1, 2006, SERIES A,
WHICH ARE NOT REGISTERED UNDER THE SECURITIES ACT,
FOR
7 1/4% SENIOR NOTES DUE DECEMBER 1, 2006, SERIES B,
WHICH ARE REGISTERED UNDER THE SECURITIES ACT
EACH SERIES UNCONDITIONALLY GUARANTEED BY
U.S. INDUSTRIES, INC.
To Our Clients:
Enclosed for your consideration is a Prospectus, dated , 1997
(the "Prospectus"), and the related Letter of Transmittal (the "Letter of
Transmittal"), relating to the offer (the "Exchange Offer") of USI American
Holdings, Inc. (the "Issuer") to exchange $1,000 principal amount of its 7 1/4%
Senior Notes due December 1, 2006, Series B (the "New Notes"), which are
registered under the Securities Act of 1933, as amended (the "Securities Act"),
for each $1,000 principal amount of its 7 1/4% Senior Notes due December 1,
2006, Series A (the "Existing Notes"; and together with the New Notes, the
"Notes"), which are not registered under the Securities Act, upon the terms and
subject to the conditions described in the Prospectus. The Notes are
unconditionally guaranteed by the Issuer's parent, U.S. Industries, Inc. (the
"Company"). The Exchange Offer is being made in order to satisfy certain
obligations of the Issuer and the Company contained in the Registration Rights
Agreement, dated December 12, 1996, among the Issuer, the Company and BA
Securities Inc.
This material is being forwarded to you as the beneficial owner of the
Existing Notes carried by us in your account but not registered in your name. A
tender of such Existing Notes may only be made by us as the holder of record and
pursuant to your instructions.
Accordingly, we request instructions as to whether you wish us to
tender on your behalf the Existing Notes held by us for your account, pursuant
to the terms and conditions set forth in the enclosed Prospectus and Letter of
Transmittal.
Your instructions should be forwarded to us as promptly as possible in
order to permit us to tender the Existing Notes on your behalf in accordance
with the provisions of the Exchange Offer. The Exchange Offer will expire at
5:00 p.m., New York City time, on , 1997, unless extended by the Issuer
(the "Expiration Date"). Any Existing Notes tendered pursuant to the Exchange
Offer may be withdrawn at any time before 5:00 p.m., New York City time, on the
Expiration Date.
Your attention is directed to the following:
1. The Exchange Offer is for any and all Existing Notes.
2. The Exchange Offer is subject to certain conditions set forth
in the Prospectus in the section captioned "The Exchange
Offer--Conditions."
3. Holders who tender their Existing Notes for exchange will not
be obligated to pay any transfer taxes in connection
therewith, except that holders who instruct the Issuer to
register New Notes in the name of, or request that Existing
Notes not be tendered or not accepted in the Exchange Offer be
returned to, a person other than the registered tendering
holder will be responsible for the payment of any applicable
transfer tax thereon.
1
<PAGE>
4. The Exchange Offer expires at 5:00 p.m., New York City time,
on , 1997, unless extended by the Issuer.
If you wish to have us tender your Existing Notes, please so instruct
us by completing, executing and returning to us the instruction form on the back
of this letter. The Letter of Transmittal is furnished to you for information
only and may not be used directly by you to tender Existing Notes.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO
THE EXCHANGE OFFER
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein relating to the Exchange Offer made by USI American
Holdings, Inc., with respect to its Existing Notes.
This will instruct you to tender the Existing Notes held by you for the
account of the undersigned, upon and subject to the terms and conditions set
forth in the Prospectus and the related Letter of Transmittal.
Please tender the Existing Notes held by you for my account as
indicated below:
<TABLE>
<S> <C>
AGGREGATE PRINCIPAL AMOUNT OF EXISTING NOTES
--------------------------------------------
7 1/4% Senior Notes due December 1, 2006,
Series A (the "Existing Notes") . . . ______________________________________________
|_| Please do not tender any Existing
Notes held by you for my account
Dated:____________________, 1997
______________________________________________
______________________________________________
SIGNATURE(S)
______________________________________________
______________________________________________
______________________________________________
PLEASE PRINT NAME(S) HERE
______________________________________________
ADDRESS(ES)
______________________________________________
AREA CODE AND TELEPHONE NUMBER
______________________________________________
TAX IDENTIFICATION OR SOCIAL SECURITY NO(S).
</TABLE>
None of the Existing Notes held by us for your account will be tendered
unless we receive written instructions from you to do so. Unless a specific
contrary instruction is given in the space provided, your signature(s) hereon
shall constitute an instruction to us to tender all the Existing Notes held by
us for your account.
3
