AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 17, 1999
REGISTRATION NOS. 333-84461, 333-84461-01, 333-84461-02 AND 333-84461-03
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
AMENDMENT NO. 1
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
U.S. INDUSTRIES, INC.
USI GLOBAL CORP.
USI AMERICAN HOLDINGS, INC.
(Exact Name of Co-Registrant Issuers as Specified in their Charters)
USI ATLANTIC CORP.
(Exact Name of Co-Registrant Guarantor as Specified in its Charter)
----------------------
<TABLE>
<CAPTION>
<S> <C> <C>
DELAWARE 3998 22-3568449
DELAWARE 3998 22-3637049
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
(732) 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
101 Wood Avenue South
Iselin, New Jersey 08830
(732) 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: From time to
time after the effective date of this Registration Statement.
793457 v. 1
<PAGE>
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, as amended (the "Securities Act"), other than securities
offered only in connection with dividend or interest reinvestment plans, please
check the following box: [ X ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(c) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
- ------------------------------------------------------------- ----------------------- ----------------------
Proposed
Maximum Amount of
Title of Each Class of Securities to be Registered Aggregate Registration
Offering Price (1) Fee (2)
- ------------------------------------------------------------- ----------------------- ----------------------
<S> <C> <C>
Notes (3) $600,000,000 (4) $166,800 (4)
============================================================= ======================= ----------------------
(1) The proposed maximum aggregate offering price per security will be
determined by us from time to time in connection with the issuance of the
securities.
(2) Calculated pursuant to Rule 457(o) under the Securities Act.
(3) Subject to note (4) below, we are registering an indeterminate principal
amount of notes as may be sold, from time to time. If any notes are
issued at an original issue discount, then the aggregate offering price
will be in an aggregate principal amount at maturity as would result in
aggregate gross proceeds received by us not to exceed $600 million, less
the gross proceeds attributable to any securities previously issued
pursuant to this registration statement.
(4) In no event will the aggregate offering price of all securities issued
from time to time pursuant to this registration statement exceed $600
million.
</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>
Subject to completion, dated August 17, 1999
PRELIMINARY PROSPECTUS
$600,000,000
U.S. INDUSTRIES, INC.
USI GLOBAL CORP.
USI AMERICAN HOLDINGS, INC.
Issuers
USI ATLANTIC CORP.
Guarantor
NOTES
We intend to offer and sell from time to time, in one or more series,
notes in amounts, at prices and on terms to be determined by market conditions
at the time of the offering. We will not use this prospectus to sell notes with
an aggregate offering price of more than $600 million.
We will provide specific terms for the notes we offer in supplements to
this prospectus, including:
o designation;
o aggregate principal amount or aggregate initial offering price;
o maturity;
o rate and times of payment of interest, if any; and
o other specific terms.
YOU SHOULD READ THIS PROSPECTUS AND THE RELATED SUPPLEMENTS TO THIS
PROSPECTUS CAREFULLY BEFORE YOU INVEST IN THE NOTES.
----------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------------------
This prospectus may not be used to consummate sales of notes unless
accompanied by a prospectus supplement.
This prospectus is dated ______________, 1999.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and we are not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
<PAGE>
TABLE OF CONTENTS
Page
----
WHERE YOU CAN FIND MORE INFORMATION.........................................3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.............................3
PROSPECTUS SUMMARY..........................................................5
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS.............................7
USE OF PROCEEDS.............................................................8
RATIO OF EARNINGS TO FIXED CHARGES..........................................8
DESCRIPTION OF THE NOTES....................................................9
PLAN OF DISTRIBUTION.......................................................31
LEGAL MATTERS 31
EXPERTS 32
2
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934. As a result, we file reports and other information with
the Securities and Exchange Commission. You may read and copy the reports and
other information we file with the Commission at the Commission's public
reference facilities at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549. You may obtain information on the operation of the
public reference facilities by calling the Commission at 1-800-SEC-0330. You may
also obtain information about us from the following regional offices of the
Commission: 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and 7
World Trade Center, 13th Floor, New York, New York 10048. Copies of these
materials can be obtained at prescribed rates. Our filings with the Commission
are also available on the Commission's home page on the Internet at
http://www.sec.gov.
We have filed with the Commission a registration statement on Form S-3.
This prospectus, which is a part of the registration statement, omits certain
information contained in the registration statement. We have summarized the
material terms of certain contracts, agreements or other documents filed as an
exhibit to the registration statement. We recommend that you read the complete
text of any summarized contract, agreement or document for the precise legal
terms and other information that may be important to you.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Commission allows us to "incorporate by reference" in the
registration statement of which this prospectus is a part the information we
file with the Commission. This permits us to disclose important information to
you by referencing these filed documents. Any information referenced this way is
considered part of this prospectus, and any information filed with the
Commission subsequent to this prospectus will automatically update and supersede
this information. Any updated or superseded information shall not be considered
a part of this prospectus except as updated or superseded. We incorporate by
reference the following documents which have been filed with the Commission:
1. Our Current Report on Form 8-K, filed on October 16, 1998;
2. Our Annual Report on Form 10-K for the year ended October 3, 1998,
filed December 15, 1998, as amended on February 3, 1999, May 17, 1999
and June 3, 1999;
3. Our Proxy Statement, dated January 4, 1999;
4. Our Quarterly Report on Form 10-Q for the fiscal quarter ended January
2, 1999, filed February 16, 1999, as amended on May 17, 1999;
5. Our Quarterly Report on Form 10-Q for the fiscal quarter ended April
3, 1999, filed May 18, 1999, as amended on June 9, 1999;
6. Our Current Report on Form 8-K filed on May 13, 1999, which includes
information about our second quarter earnings, our share repurchase
programs, the sale of the Ertl Company and the acquisitions of
Dual-Lite and True Temper;
7. Our Unaudited Pro Forma Condensed Consolidated Financial Statements
contained in our Registration Statement on Form S-4 (Registration No.
333-70537) filed and declared effective on June 10, 1999, which
presents information concerning the proposed spin-off of our USI
diversified group of companies. Please see "Prospectus Summary -
Recent Development," and
3
<PAGE>
8. Our Quarterly Report on Form 10-Q for the fiscal quarter ended June
30, 1999 filed August 17, 1999.
We also incorporate by reference all documents filed pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
prospectus and prior to the termination of this offering.
We will promptly provide without charge to each person to whom this
prospectus is delivered, upon written or oral request, a copy of any or all of
the documents incorporated by reference in this prospectus. We will not provide
copies of the exhibits to those documents unless the exhibits are specifically
incorporated by reference in those documents. Requests for copies and
information should be directed to George H. MacLean, Esq., Senior Vice
President, General Counsel and Secretary, U.S. Industries, Inc., 101 Wood Avenue
South, P.O. Box 169, Iselin, New Jersey 08830-0169, telephone (732) 767-0700.
.........
4
<PAGE>
PROSPECTUS SUMMARY
This prospectus is part of a registration statement that we filed with
the Commission utilizing a "shelf" registration process. Under this shelf
registration process, we may sell the notes described in this prospectus in one
or more offerings up to a total dollar amount of $600 million. This prospectus
provides you with a general description of the notes we intend to offer. Each
time we sell notes we will provide a prospectus supplement that will contain
specific information about the terms of the offering and the notes. The
prospectus supplement may also add, update or change information contained in
this prospectus. Any statement that we make in this prospectus will be modified
or superseded by any inconsistent statement made by us in a prospectus
supplement. You should read both this prospectus and the related prospectus
supplements together with additional information described under the heading
"Where You Can Find More Information" and the information we incorporate by
reference in this prospectus described under the heading "Incorporation of
Certain Documents by Reference."
WHO WE ARE
We manufacture and distribute a broad range of consumer and industrial
products through four operating divisions summarized below. Our businesses have
operations and markets both inside and outside the United States.
o USI BATH AND PLUMBING PRODUCTS manufactures and distributes a full line
of bath and plumbing products under the brand names Jacuzzi, Eljer and
Zurn.
o LIGHTING CORPORATION OF AMERICA manufactures and distributes indoor and
outdoor lighting fixtures. Its brand names include Architectural Area
Lighting, Columbia, Kim, Progress, Siemens (under license from Siemens
AG) and SiTeco.
o USI HARDWARE AND TOOLS manufactures and distributes lawn and garden
tools, hand tools and ladders. Its brand names include Ames, True Temper,
Garant, Spear and Jackson and Woodings-Verona tools; and Keller ladders.
o USI DIVERSIFIED manufactures consumer products, precision engineered
products and automotive interiors products used in a variety of markets.
These include Rainbow vacuum cleaners; Georgia Boot and Lehigh footwear;
Native textiles; Bilt Best windows; leather, metal and plastic automotive
components; overhauled aircraft engine bearings; leadframes for the
semiconductor industry (through a 75% owned Singapore public company);
and metal television picture tube components.
5
<PAGE>
RECENT DEVELOPMENT
On May 18, 1999, our Board of Directors announced that it had approved
a spinoff of our diversified businesses to our shareholders. These diversified
entities had combined revenues for the nine months ended June 30, 1999 and
fiscal year 1998 of $651 million and $888 million, respectively, and operating
income for those periods of $59 million and $32 million (including goodwill
impairment, unusual and other related charges of $14 million and $71 million,
respectively). Excluding USI Diversified and corporate expenses of $17 million,
we had revenues of $1.9 billion and operating income of $164 million (including
nonrecurring and unusual charges of $1 million) for the nine months ended June
30, 1999. Excluding USI Diversified and corporate expenses of $32 million, we
had revenues of $2.2 billion and operating income of $142 million (including
nonrecurring and unusual charges of $75 million) for fiscal year 1998.
Completion of the spinoff is conditioned upon our receipt of
approximately $570 million of proceeds from new third party financings by the
new diversified company, principally through its repayment of existing
intercompany debt owed to us, and the assumption or retirement by the new
diversified company of approximately $30 million of our existing third-party
debt. We will use the proceeds received from the new diversified company to
reduce our outstanding debt, make acquisitions for our core businesses and
continue our share repurchase program. Completion of the spinoff is also subject
to the receipt of a ruling from the Internal Revenue Service that the
distribution will be tax free to our shareholders for U.S. tax purposes. There
is no certainty that the IRS will rule favorably with respect to our request. If
the IRS does not rule favorably, we would reconsider our then available
alternatives. We will account for our diversified businesses as discontinued
operations if and when we receive a favorable IRS ruling. Mr. John Raos, our
President and Chief Operating Officer, will resign his position to become
Chairman and Chief Executive Officer of Strategic Industries Inc., the new
diversified company. A Registration Statement on Form 10 about Strategic
Industries, Inc. has been filed with the Commission, providing additional
details. The Form 10 is subject to completion and amendment, and has not yet
become effective.
6
<PAGE>
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, including the documents incorporated by reference in
this prospectus, contains forward-looking statements about our financial
condition, results of operations and business. All statements other than
statements of historical fact are, or may be considered to be, forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Exchange Act. Various economic and competitive factors could
cause actual results to differ materially from the expectations reflected in
those forward-looking statements, including factors that are outside our
control, such as:
o interest rates,
o foreign currency exchange rates,
o instability in domestic and foreign financial markets,
o consumer spending patterns,
o availability of consumer and commercial credit,
o levels of residential and commercial construction,
o levels of automotive production,
o changes in raw material costs,
o Year 2000 issues, and
o the other factors noted in this prospectus, and in the other
documents incorporated by reference in this prospectus.
In addition, our future results are subject to uncertainties relating
to our ability to consummate our business strategy, including realizing
efficiencies and cost savings by eliminating redundant marketing operations from
the integration of our acquired businesses. All subsequent written and oral
forward-looking statements attributable to us are expressly qualified in their
entirety by these factors.
7
<PAGE>
USE OF PROCEEDS
Unless otherwise provided in a prospectus supplement, we will use the
net proceeds from the sale of the securities offered by this prospectus and the
related prospectus supplements for our general corporate purposes, which may
include repayment of indebtedness, acquisitions, repurchases of shares, working
capital and capital expenditures.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges
for our company for fiscal 1998, 1997, 1996, 1995 and 1994 and the nine months
ended June 30, 1999 and 1998:
NINE MONTHS ENDED
FISCAL YEAR ENDED SEPTEMBER 30, JUNE 30,
- ---------------------------------------------- -----------------
1998 1997 1996 1995 1994 1999 1998
---- ---- ---- ---- ---- ---- ----
2.0x 4.3x 3.6x 1.0x 1.6x 3.5x 1.7x
For purposes of computing the ratio of earnings to fixed charges,
"fixed charges" are defined as interest expense plus a portion of rental expense
representing the interest factor, and "earnings" are defined as income from
continuing operations before income taxes and fixed charges. The ratio of
earnings to fixed charges for the nine months ended June 30, 1999 and 1998 was
affected by unusual pre-tax charges of $15 million and $130 million,
respectively. Before taking into account those charges, the ratio of earnings to
fixed charges for the nine months ended June 30, 1999 and 1998 was 3.7x and
3.9x, respectively. The ratio of earnings to fixed charges for fiscal 1998 was
affected by non-recurring and unusual pre-tax charges of $142 million. Before
taking into account those charges, the ratio of earnings to fixed charges for
fiscal 1998 would have been 3.8x. The ratio of earnings to fixed charges for
fiscal 1995 was affected by goodwill impairment and other non-recurring and
unusual pre-tax charges of $100 million. Before taking into account those
charges, the ratio of earnings to fixed charges for fiscal 1995 would have been
1.9x.
8
<PAGE>
DESCRIPTION OF THE NOTES
We may offer the notes from time to time as senior or subordinated debt
in one or more series. Each series of notes will be issued under the indenture
that we entered into with First National Bank of Chicago, as Trustee, on October
27, 1998, as amended. The terms of the indenture are governed by certain
provisions of the Trust Indenture Act of 1939. The particular terms of each
series offered by us will be described in the related prospectus supplement.
We have summarized the material terms of the indenture below. A copy of
the indenture, and a supplemental indenture amending the terms of the indenture,
have been filed as exhibits to the registration statement. See "Where You Can
Find More Information." You should read the indenture and the supplemental
indenture for provisions that may be important to you. Whenever we refer in this
prospectus or in the related prospectus supplement to particular sections or
defined terms contained in the indenture, as amended, those sections or defined
terms are incorporated by reference in this prospectus or the related prospectus
supplement, as applicable.
As used in this section of the prospectus, the terms "we," "us" and
"our" mean US Industries, Inc., USI Global Corp. and USI American Holdings, Inc.
and are used interchangeably with the term the "issuers."
General
The indenture provides that notes in separate series may be issued by
us from time to time without limitation as to aggregate principal amount. We may
specify a maximum aggregate principal amount for the notes of any series. The
notes will be our unsecured obligations.
A prospectus supplement will set forth the following terms of, and
information relating to, the notes:
(1) the title of the relevant series of notes;
(2) whether the notes are senior notes or subordinated notes and,
if subordinated notes, the subordination terms relating to
those securities;
(3) which of us is to act as issuer;
(4) whether any of our subsidiaries will provide guarantees of the
notes;
(5) the aggregate principal amount of the notes (or principal
amount at maturity);
(6) the dates on which the principal amount of the notes will be
payable;
(7) the interest rate, if any, which the notes will bear and the
interest payment dates for the notes (or the date on which the
notes accrete interest);
(8) the places where payments on the notes will be payable;
(9) any terms upon which the notes may be redeemed, in whole or in
part, at our option;
(10) any provision that would obligate us to deposit money in an
account for the benefit of the holders of the notes for
payments of principal and interest on the notes or other
provisions that would obligate us to repurchase or otherwise
redeem the notes;
9
<PAGE>
(11) the portion of the principal amount, if less than all, of the
notes which will be payable upon declaration of acceleration
of the maturity of the notes;
(12) whether the notes are defeasible;
(13) any addition to or change in the events of default;
(14) whether the notes are convertible or exchangeable into other
securities;
(15) the dates on which the notes may be converted or exchanged at
the option of the holder into other securities;
(16) any addition to or change in the covenants in the indenture
applicable to any of the notes; and
(17) any other terms of the notes not consistent with the
provisions of the indenture.
If a series of notes is denominated in a currency or currency unit
other than United States dollars, the prospectus supplement will specify the
denomination in which the notes will be issued and the coin or currency in which
the principal and any premium or interest on those notes will be payable. In
addition, special United States federal income tax or other considerations
applicable to any notes which are denominated in a currency or currency unit
other than United States dollars may be described in the applicable prospectus
supplement.
The notes may be sold at a substantial discount below their principal
amount. Special United States federal income tax considerations applicable to
notes sold at an original issue discount may be described in the applicable
prospectus supplement.
Interest on the notes will accrue (or, for notes issued at a discount,
will accrete) from the most recent date on which interest has been paid or, if
no interest has been paid, from the original date of issuance. Interest will be
computed on the basis of a 360-day year comprising twelve 30-day months.
Principal, premium and interest on the notes will be payable and all of
the notes will be exchangeable and transferable, at our office or agency in the
City of New York or, at our option, interest may be paid by check mailed to the
address of the person entitled to the payment as its address appears in the
security register.
The notes will be issued only in registered form without coupons and
only in denominations of $1,000 and integral multiples of $1,000. No service
charge will be made for any registration, transfer, exchange or redemption of
notes, but we may require payment in certain circumstances of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with that registration, transfer, exchange or redemption.
We are not obligated to set aside funds or to establish a separate
account for your benefit to make the required interest and principal payments on
the notes.
We do not presently intend to apply for listing of the notes on any
national securities exchange or for inclusion of the notes in any automated
quotation system.
FURTHER ISSUES
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We may issue additional series of notes under the indenture. Notes
offered under the indenture will rank equally or lesser in right of payment to
our 7 1/8% Senior Notes due 2003 and our 7 1/4% Senior Notes due 2006. We may
from time to time, without the consent of holders, create and issue additional
notes having substantially the same terms and conditions as any series of notes.
Any of these additional notes may be combined with existing notes to form a
single series of notes under the indenture.
ISSUERS
Unless otherwise specified in the prospectus supplement, the notes will
be issued jointly by US Industries, USI American Holdings and USI Global Corp.
Each issuer will be fully obligated under the indenture for the entire principal
amount, interest and other obligations under the notes.
GUARANTEE
Unless otherwise specified in the prospectus supplement, the notes will
be fully and unconditionally guaranteed by USI Atlantic. The obligations of USI
Atlantic under the guarantee will be limited as necessary to prevent the
guarantee from constituting a fraudulent conveyance or fraudulent transfer under
applicable federal bankruptcy law and comparable provisions of state fraudulent
transfer laws. If the guarantee were voided by a court, claims in respect of the
guarantee could rank behind all other indebtedness of USI Atlantic, including
guarantees and other contingent liabilities. Any payment by USI Atlantic under
its guarantee could be void and required to be returned to USI Atlantic, or to a
fund for the benefit of its creditors.
RELEASE OF USI ATLANTIC AS GUARANTOR AND USI AMERICAN HOLDINGS AND USI GLOBAL
CORP. AS CO-ISSUERS
Unless otherwise specified in the prospectus supplement, USI Atlantic,
USI American Holdings and USI Global Corp. can be released from their respective
obligations under the indenture under certain circumstances. Following that
release, only U.S. Industries will remain obligated under the notes. This
provision is intended to permit U.S. Industries to simplify its borrowing
structure in the future, and we do not believe that it will adversely affect the
holders of the notes. The purpose of USI Atlantic, USI American Holdings and USI
Global Corp. serving as obligors under the indenture is to give the holders of
the notes an equivalent ranking with holders of indebtedness of those
corporations which existed prior to the issuance of the notes. If that
pre-existing indebtedness is repaid or USI Atlantic, USI American Holdings and
USI Global Corp. are released from all obligations under that indebtedness,
there is no longer a reason for USI Atlantic, USI American Holdings and USI
Global Corp., each of which is a holding company, to remain obligated under the
indenture.
USI Atlantic will be released from its obligations under the guarantee
or USI American Holdings and USI Global Corp. will be released from their
obligations as co-issuers of the notes, as the case may be, if:
(1) the obligations of the issuers under the indenture are assumed
by a person or entity other than one of our subsidiaries,
(2) USI Atlantic, USI American Holdings or USI Global Corp., as
the case may be, is disposed of in a transaction that results
in USI Atlantic, USI American Holdings, or USI Global Corp.,
as the case may be, no longer being a subsidiary of U.S.
Industries, or all or substantially all the assets of USI
Atlantic, USI American Holdings or USI Global Corp., as the
case may be, are disposed of other than to U.S. Industries or
one of its subsidiaries,
11
<PAGE>
(3) all amounts outstanding under the 71/8% Senior Notes due 2003,
the 7 1/4% Senior Notes due 2006 and the Credit Facility and
any indebtedness incurred to extend, renew, refinance or
refund that indebtedness, is repaid, or
(4) USI Atlantic is released from all obligations under the 71/8%
Senior Notes due 2003, the 7 1/4% Senior Notes due 2006, the
Credit Facility and any indebtedness incurred to extend,
renew, refinance or refund that indebtedness.
Immediately following any release, we must be in compliance with the
Limitation on Restricted Subsidiary Funded Debt covenant and the other covenants
contained in the indenture. Furthermore, as a condition to any release under
clause (3) or (4), we must certify to the trustee that immediately following the
release:
(1) in the case of USI Atlantic, USI Atlantic will not be a
guarantor of any Restricted Subsidiary Funded Debt in excess
of the amount of the Debt Basket or
(2) in the case of USI American Holdings and/or USI Global Corp.,
USI American Holdings and/or USI Global Corp. will not be an
obligor under any Restricted Subsidiary Funded Debt in excess
of the amount of the Debt Basket.
RANKING
Unless otherwise specified in the prospectus supplement, the notes will
be senior unsecured obligations of the issuers and rank equally to all other
existing and future unsecured indebtedness of the issuers that is not junior in
ranking to that indebtedness and will be entitled to be paid before all junior
indebtedness of the applicable issuer.
Unless otherwise specified in the prospectus supplement, the guarantee
will be a senior unsecured obligation of the guarantor and will rank equally to
all other existing and future unsecured indebtedness of the guarantor that is
not junior in ranking to that indebtedness and will be entitled to be paid
before all junior indebtedness of the guarantor.
The notes and the guarantee will be effectively junior to all existing
and future
(1) secured indebtedness of the issuers and the guarantor, to the
extent of the value of the assets securing the indebtedness
and
(2) indebtedness of any subsidiaries of the issuers and of the
guarantor other than USI American Holdings and USI Global
Corp.
Each of the issuers and the guarantor is a holding company that
operates through subsidiaries. Accordingly, the ability of each of the issuers
and the guarantor to pay their debts, including the notes, is dependent upon the
cash flow and ability to pay dividends of their respective subsidiaries. The
issuers' and the guarantor's rights and the rights of their respective
creditors, including holders of the notes offered by this prospectus, to receive
proceeds from the assets of any subsidiary upon the subsidiary's liquidation or
recapitalization will be subject to the prior claims of that subsidiary's
creditors.
OPTIONAL REDEMPTION
Unless otherwise specified in the prospectus supplement, the indenture
will provide that we may redeem the notes, in whole or in part, at any time or
from time to time, on at least 30 days' prior notice by mail, at a redemption
price equal to the greater of
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(1) 100% of the principal amount (or accreted value) of the notes
to be redeemed, or
(2) the sum of the present values of the remaining scheduled
payments of principal and interest on the notes discounted to
the date of redemption on a semiannual basis at the Treasury
Rate plus 50 basis points,
plus, in each case, accrued but unpaid (or accreted) interest to the redemption
date. The indenture will provide that on and after the redemption date, interest
will cease to accrue (or accrete) on the notes or portions of the notes called
for redemption on that date.
In the case of any partial redemption, the trustee will select the
notes for redemption on a pro rata basis, by lot or other method as the trustee
in its sole discretion shall deem to be fair and appropriate. No note of $1,000
or less in original principal amount shall be redeemed in part. If any note is
to be redeemed in part only, the notice of redemption relating to that note
shall state the portion of the principal amount of that note to be redeemed. The
holder of the redeemed note will receive a new note in principal amount equal to
the unredeemed portion of that note upon cancellation of the original note.
For this purpose, the following terms shall have the following
meanings:
"COMPARABLE TREASURY ISSUE" means the United States Treasury security
selected by an Independent Investment Bank 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.
"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 that
redemption date, as stated in the daily statistical 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 that release or a successor is not published or does not
contain those prices on that business day
(A) the average of the Reference Treasury Dealer
Quotations for that redemption date, after excluding
the highest and lowest Reference Treasury Dealer
Quotations, or
(B) if the trustee obtains fewer than three Reference
Treasury Dealer Quotations, the average of all
quotations.
"INDEPENDENT INVESTMENT BANK" means one of the Reference Treasury
Dealers appointed by the trustee after consultation with the issuers.
"REFERENCE TREASURY DEALER" means any primary U.S. Government
securities dealers in New York City (a "Primary Treasury Dealer") as shall be
designated by the issuers from time to time, in each case, so long as the 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
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in writing to the trustee by the Reference Treasury Dealer at 5:00 p.m. EST on
the third business day preceding the redemption date.
"TREASURY RATE" means, with respect to any redemption date, the yearly
rate equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue expressed as
a percentage of its principal amount equal to the Comparable Treasury Price for
the redemption date.
The notice of redemption will describe the method of calculation of the
redemption price as described in the first paragraph of this section entitled
"Optional Redemption." We will deliver to the trustee, no later than two
business days prior to the redemption date, an officers' certificate stating the
redemption price, calculated as stated in the notice of redemption.
REDEMPTION IN CIRCUMSTANCES INVOLVING TAXATION
Unless otherwise specified in the prospectus supplement, we may redeem
any series of notes, in whole at any time, at a redemption price equal to 100%
of the principal amount of the notes plus accrued and unpaid (or accreted)
interest to the redemption date, if, as the result of:
(1) any change in or any amendment to the laws, including any
applicable tax treaty or convention, of the United Kingdom or
any Other Jurisdiction, as defined under "--Payment of
Additional Amounts", or of any political subdivision or taxing
authority of the United Kingdom, affecting taxation, or
(2) any change in the application or interpretation of those laws
tax treaty or convention,
which change or amendment becomes effective on or after the original issuance
date of the notes or, in certain circumstances, the later date on which any
assignee of the issuers, the guarantor or a successor corporation of either of
them as permitted under the indenture, we determine, that
(a) the issuers, the guarantor or their respective assignees would
be required to make additional payments in respect of
principal, any premium, or interest, or
(b) based upon an opinion of independent counsel to the issuers,
the guarantor or their respective assignees, 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 of the United Kingdom whether
or not the action was taken or brought with respect to the
issuers, the guarantor or their respective assignees, which
action is taken or brought on or after the original issuance
date of the notes or, in certain circumstances, the later date
on which a corporation becomes a successor or an assignee, the
circumstances described in clause (a) would exist.
MATERIAL COVENANTS
Unless otherwise specified in a prospectus supplement, the indenture
will contain, among others, the following covenants:
LIMITATION ON LIENS. We will not, and will not permit any Restricted
Subsidiary to, create, incur, assume or allow to exist any lien upon any of our
respective properties, assets or revenues, to secure any debt without making
effective provision for securing the notes and, if we shall so determine, any
other debt
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of either or both of the issuers which is not lesser in right of payment to the
notes. We shall secure any of those notes:
(1) equally and ratably with or prior in right of payment to the
debt secured by our property or assets for so long as the debt
shall be secured, or
(2) if payment on the debt is made only after payments on the
notes, prior in right of payment to the debt secured by our
property or assets for so long as that debt shall be secured.
These restrictions will not apply to Permitted Liens (as defined in the
indenture), which shall include:
(1) liens securing only the notes or the guarantee;
(2) liens in favor of only the issuers, the guarantor or a
Restricted Subsidiary;
(3) liens existing on the date of the indenture;
(4) liens on property of a Person existing at the time that Person
is merged into or combined with either issuer or a Restricted
Subsidiary, or becomes a Restricted Subsidiary of either
issuer, and not in anticipation of or in connection with the
merger or combination, provided that the debt secured by the
lien is otherwise permitted to be incurred under the
indenture;
(5) liens on property existing immediately prior to the time of
the acquisition of that property from a person that is not a
director, officer, significant shareholder or other person
closely related to the issuers and not incurred in
anticipation of or in connection with the financing of the
acquisition of the property, provided that the debt secured by
the lien is otherwise permitted to be incurred under the
indenture;
(6) liens to secure debt incurred to finance all or any part of
the purchase price or the cost of construction or improvement
of the property subject to the liens and, in the case of a
Restricted Subsidiary all or substantially all of whose assets
consist of the property, any lien on ownership interests or
investments in the Restricted Subsidiary incurred in
connection with the acquisition or construction of the
property, and the incidence of the debt is otherwise permitted
under the indenture and the debt is incurred prior to, at the
time of, or within 180 days after, the acquisition of the
property, the completion of the construction or the making of
the improvements;
(7) liens on property of the issuers or any of their Restricted
Subsidiaries in favor of the United States of America or any
state of the United States, or any instrumentality of either,
to secure certain payments in accordance with 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,
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performance or return-of-money bonds or other similar
obligations incurred in the ordinary course of business;
(11) judgement 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 the
liens attach only to the property or goods to which the 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
issuers or any Restricted Subsidiary is a lessee; or
(15) liens to secure debt incurred to extend, renew, refinance or
refund, in whole or in part, debt secured by any lien referred
to in clauses (1) through (14) inclusive, so long as
(a) the lien does not extend to any additional property
other than property attributable to improvements,
alterations and repairs and
(b) the principal amount of the debt secured under this
clause (15) shall not exceed the principal amount of
debt 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 the extension, renewal, refinancing
or refunding at the time of the extension, renewal,
refinancing or refunding.
In addition, we and our Restricted Subsidiaries may incur a lien to
secure any debt, without securing the notes, if, after giving effect to the
lien, the sum, without duplication, of
(1) the aggregate principal amount of all outstanding debt secured
by liens incurred by us and our Restricted Subsidiaries with
the exception of secured debt which is excluded under clauses
(1) through (15) inclusive, described above and
(2) the aggregate amount of all Attributable Debt of all sale and
leaseback transactions involving Principal Properties with the
exception of Attributable Debt excluded under clauses (1), (2)
and (3) described below under "--Limitation on Sale and
Leaseback Transactions" does not exceed 15% of Consolidated
Net Tangible Assets. That amount is referred to in this
prospectus as the "Lien Basket." The Lien Basket, however,
shall be reduced, without duplication, by the amount of
outstanding Funded Debt incurred from time to time under the
Debt Basket (as defined below).
LIMITATION ON SALE AND LEASEBACK TRANSACTIONS. We will not, and will
not permit any Restricted Subsidiary to, enter into any sale and leaseback
transaction unless either of the following conditions are met:
(1) (A) the Attributable Debt of the issuers and their
Restricted Subsidiaries in respect of the particular
sale and leaseback transaction and all other sale and
leaseback
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transactions entered into after October 27, 1998
other than sale and leaseback transactions permitted
by paragraph (2) or (3) below,
plus
(B) the aggregate principal amount of Funded Debt secured
by liens on Principal Properties and Restricted
Securities then outstanding excluding any Funded Debt
secured by Permitted Liens without equally and
ratably securing the notes,
would not exceed 15% of Consolidated Net Tangible Assets. This amount
is referred to in this prospectus as the "Leaseback Basket;" or
(2) the issuers, within 180 days after the sale or transfer, apply
or cause a Restricted Subsidiary to apply an amount equal to
the greater of
(A) the net proceeds of the sale or transfer or
(B) the fair market value of the Principal Property that
was sold and leased back at the time of entering into
the sale and leaseback transaction,
in either case, as determined by any two of the following: the
Chairman, the President, any Vice President, the Treasurer or the
Controller of each of the issuers, to the retirement of our debt which
has the following characteristics:
(a) senior or equal in right of payment to the notes or
debt of a Restricted Subsidiary and
(b) having a stated maturity more than 12 months from the
date of the application or which is extendible at the
option of the obligor on the debt to a date more than
12 months from the date of the application.
Unless otherwise expressly provided with respect to any one or more
series of notes, any redemption of notes under this provision shall not be
regarded as a refunding operation or anticipated refunding operation for the
purposes of any provision limiting our right to redeem notes of any one or more
series when the redemption involves a refunding operation or anticipated
refunding operation. The amount to be applied shall be reduced by:
(a) the principal amount of notes delivered within 120
days after the sale or transfer to the trustee for
retirement and cancellation, and
(b) the principal amount of any of the debt of the
issuers or a Restricted Subsidiary, other than notes,
voluntarily retired by us or a Restricted Subsidiary
within 120 days after the sale or transfer.
Notwithstanding the preceding discussion, no retirement referred to in
this paragraph (2) may be effected by payment at maturity or any mandatory
prepayment provision; or
(3) the issuers, within 180 days prior or subsequent to the sale
or transfer, apply or cause a Restricted Subsidiary to apply
an amount equal to the net proceeds of the sale or transfer to
an investment in another Principal Property; provided,
however, that this exception shall apply only if the proceeds
invested in the other Principal Property shall not exceed the
total acquisition, alteration, repair and construction cost of
the issuers or any
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Restricted Subsidiary in the other Principal Property less
amounts secured by any purchase money or construction mortgage
on the other Principal Property.
For purposes of this covenant, a "sale and leaseback transaction" shall mean any
arrangement with any bank, insurance company or other third-party lender or
investor providing for the leasing of any Principal Property, which was or is
owned or leased by either of us or a Restricted Subsidiary and which has been or
is to be sold or transferred, more than 180 days after the completion of
construction and commencement of full operation of that Principal Property by us
to that third-party or to any Person to whom funds have been or are to be
advanced by that third-party on the security of that Principal Property.
This provision will not prohibit a lease for a temporary period not to
exceed three years, if by the end of the three-year period it is intended that
the use of the Principal Property by the lessee will be discontinued.
LIMITATION ON RESTRICTED SUBSIDIARY FUNDED DEBT. We will not permit any
Restricted Subsidiary of ours or of the guarantor to incur any Funded Debt. Any
Restricted Subsidiary may, however, 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 the Restricted Subsidiary remains at all times a
Special Purpose Funding Subsidiary;
(3) Funded Debt owed by a Restricted Subsidiary to the guarantor,
any issuer or a Wholly-Owned Subsidiary of either of the
guarantor or any issuer; provided that the Funded Debt is at
all times held by the guarantor, any issuer or a Person which
is a Wholly-Owned Subsidiary of either of us; provided,
further, that upon either
(A) the transfer or other disposition by the guarantor,
any issuer or Wholly-Owned Subsidiary of any of this
Funded Debt to a Person other than the guarantor, any
issuer or another Wholly-Owned Subsidiary of any of
us, or
(B) the issuance, sale, lease, transfer or other
disposition of shares, other than directors'
qualifying shares, of Capital Stock, including by
merger or other business combination of the
Wholly-Owned Subsidiary, to a Person other than the
guarantor, any issuer or another Wholly-Owned
Subsidiary, the provisions of this clause (3) shall
no longer be applicable to that Funded Debt and that
Funded Debt shall be considered incurred at the time
of the transfer or other disposition;
(4) Funded Debt incurred by a Person before that Person became a
Restricted Subsidiary in an acquisition from a person that is
not an officer, director, significant shareholder or other
person closely related to the issuers whether through a stock
acquisition, merger, business combination or otherwise, after
October 27, 1998; provided that the Funded Debt was not
incurred in anticipation of or in connection with and was
outstanding prior to the 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 any issuer prior to, or
within 180 days after, the time of that acquisition, purchase,
improvement or development;
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(6) Funded Debt incurred to extend, renew, refinance or refund, in
whole or in part, any Funded Debt referred to in clauses (1),
(4) and (5), provided that the principal amount of the Funded
Debt incurred under this clause (6) shall not exceed the
principal amount of Funded Debt 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 the extension, renewal, refinancing or
refunding at the time of the extension, renewal, refinancing
or refunding; and
(7) Funded Debt not otherwise permitted under the exceptions
described above in an aggregate principal amount which, when
aggregated with all other Funded Debt not otherwise permitted
under the exceptions described above of all of our Restricted
Subsidiaries then outstanding does not exceed 15% of
Consolidated Net Tangible Assets. This amount is referred to
in this prospectus as the "Debt Basket." The Debt Basket shall
be reduced, without duplication, by the amount of debt secured
by the Lien Basket and by the amount of Attributable Debt
incurred under the Leaseback Basket, in each case to the
extent that secured debt and that Attributable Debt may from
time to time be outstanding.
EVENTS OF DEFAULT
Unless otherwise specified in the prospectus supplement, each series of
notes offered under the indenture will contain the following Events of Default:
(1) default in the payment of any interest on the notes of that
series, or any related coupon, when the interest or coupon
becomes due and payable, which default continues for a period
of 30 days;
(2) default in the payment of the principal of or premium, if any,
on the notes of that series at their maturity which default
continues for a period of five business days;
(3) default in the performance, or breach, of any covenant or
agreement of the issuers or the guarantor in the indenture
which affects or is applicable to the notes of that series
other than a default in the performance, or breach of a
covenant or agreement which is specifically dealt with
elsewhere, which default or breach continues for a period of
60 days after there has been given, by registered or certified
mail, to the issuers or the guarantor, by the trustee or to
the issuers or the guarantor and the trustee for that series
of notes by the holders of at least 25% in principal amount of
all Outstanding notes of that series a written notice
specifying the default or breach and requiring it to be
remedied and stating that the notice is a "Notice of Default"
under the indenture;
(4) an event of default shall have occurred under any mortgage,
bond, indenture, loan agreement or other document evidencing
any Debt of any issuer or any Restricted Subsidiary of any
issuer, which Debt is outstanding in a principal amount in
excess of $25,000,000 in the aggregate, and the default
results in the Debt becoming, whether by declaration or
otherwise, due and payable prior to the date on which it would
otherwise become due and payable or a default in any payment
when due at final maturity of that Debt;
(5) any Person entitled to take the actions described in this
section, after the occurrence of any event of default under
any agreement or instrument evidencing any Debt in excess of
$25,000,000 in the aggregate of any issuer or any Restricted
Subsidiary of any issuer, shall commence judicial proceedings
to foreclose upon our assets or assets of any of our
subsidiaries having an aggregate value in excess of
$25,000,000, or shall have exercised
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any right under applicable law or applicable security
documents to take ownership of those assets in lieu of
foreclosure;
(6) final judgments or orders rendered against any of us or any
Restricted Subsidiary which require the payment in money,
either individually or in an aggregate amount, that is more
than $25,000,000 and either
(a) an enforcement proceeding shall have been commenced
by any creditor upon that judgment or order or
(b) there shall have been a period of 60 days during
which a stay of enforcement of the judgment or order,
by reason of pending appeal or otherwise, was not in
effect;
(7) the entry of a decree or order by a court with jurisdiction
(a) adjudging any of the issuers or the guarantor as
bankrupt or insolvent,
(b) adjustment or composition of or in respect of any of
the issuers or the guarantor approving as properly
filed a petition seeking reorganization, arrangement
under the Federal Bankruptcy Code or any other
applicable federal or state law,
(c) appointing a receiver, liquidator, assignee, trustee,
sequestrator or other similar official of any of the
issuers or the guarantor or of any substantial part
of our respective properties, or
(d) ordering the winding up or liquidation of our
affairs,
which decree or order remains unstayed and in effect for a
period of 90 consecutive days;
(8) any of the issuers or the guarantor
(a) institute proceedings to be adjudicated a bankrupt or
insolvent,
(b) consent to the institution of bankruptcy or
insolvency proceedings against either of them,
(c) file a petition or answer or consent seeking
reorganization or relief under the Federal Bankruptcy
Code or any other applicable federal or state law,
(d) consent to the filing of the petition described in
clause (c) or to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator or other
similar official of any of them or of any substantial
part of their respective properties,
(e) make an assignment for the benefit of creditors, or
(f) admit in writing our inability to pay our debts
generally as they become due; and
(9) the guarantee ceases to be in full force and effect or is
declared null and void or the guarantor denies that it has any
further liability under the guarantee, or gives notice to that
effect other than by reason of the termination of the
indenture or the release of the guarantee in accordance with
the indenture.
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If an Event of Default other than an Event of Default of the type
described in clauses (7) and (8) above shall occur and be continuing, either the
trustee or the holders of at least 25% in principal amount of the Outstanding
notes of that series may declare the principal of all notes of that series to be
due and payable immediately.
If an Event of Default specified in clause (7) or (8) above shall occur
and be continuing, then the principal of all of the notes shall be due and
payable immediately without any declaration or other act on the part of the
trustee or any holder.
In certain cases, the holders of a majority in principal amount of the
Outstanding notes of any series may on behalf of the holders of all notes of
that series withdraw a declaration of acceleration.
The trustee will 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 or
rights or powers conferred upon it by the indenture. No holder of notes of any
series may institute any proceedings, judicial or otherwise, to enforce the
indenture except in the case of failure of the trustee, for 60 days, to act
after it has received a request to enforce the indenture. In the case of an
Event of Default other than the type described in clauses (7) and (8), holders
of at least 25% in aggregate principal amount of the then outstanding notes of
that series must request the trustee to act and offer the trustee reasonable
indemnity. In the case of an Event of Default of the type described in clauses
(7) and (8) above, holders of at least 25% in aggregate principal amount of all
of the notes then outstanding must request the trustee to act and offer the
trustee reasonable indemnity.
This provision will not prevent any holder of notes from enforcing
payment of the principal on the notes and any premium and interest on the notes
at the respective due dates. The holders of a majority in aggregate principal
amount of the notes of any series then outstanding may direct the time, method
and place of conducting any proceeding for any remedy available to the trustee
or exercising any trust or power conferred on it with respect to the notes of
that series.
The trustee may, however, refuse to take any action that it determines
may not lawfully be taken or would be illegal or conflict with the terms of the
indenture or involve it in personal liability or which would be unjustly
prejudicial to holders not joining in the action.
The trustee will, within 90 days after the occurrence of a default with
respect to the notes of any series, give to the holders of notes of that series
notice of default, if the default has not been cured or waived. Except in the
case of a default in the payment of principal of or any premium or interest on
any note, or in the payment of any installment in respect of any fund required
to be set aside for the payment of any note, the trustee shall be protected in
withholding that notice if it determines in good faith that the withholding of
the notice is in the interest of the holders of the notes.
We will be required to file with the trustee annually an officers'
certificate as to compliance with all conditions and covenants under the terms
of the indenture.
MODIFICATION AND WAIVER
Subject to certain exceptions, we, along with the guarantor and the
trustee, may modify or amend the indenture, including the guarantee, only with
the consent of the holders of a majority in principal amount of the outstanding
notes of each series affected by the modification or amendment. However, no
modification or amendment may, without the consent of the holder of each
outstanding note affected thereby:
(1) change the stated maturity of the principal of or any premium
or any installment of interest on any note, or reduce the
principal amount of any note or any premium or the rate of any
interest on any note, or change any obligation of the issuers
to pay additional
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amounts contemplated by the indenture, with limited
exceptions, or reduce the amount of the principal of an
Original Issue Discount Security that would be due and payable
upon a declaration of acceleration of the maturity of the note
or the amount of the note provable in bankruptcy; or
(2) adversely affect any right of repayment at the option of any
holder of notes, or change any place of payment where or the
currency in which the notes or any premium or interest on the
notes is payable;
(3) impair the right to institute suit for the enforcement of any
payment on or after the stated maturity of the notes or, in
the case of redemption or repayment at the option of the
holder, on or after the redemption date or repayment date;
(4) adversely affect any right to exchange any note provided in
the indenture;
(5) reduce the percentage in principal amount of the outstanding
notes of any series, the consent of whose holders is required
for any supplemental indenture, for any waiver of compliance
with certain provisions of the indenture which affect the
notes or certain defaults applicable to the notes and their
consequences provided for in the indenture;
(6) reduce the requirements under the indenture for quorum or
voting with respect to any series of notes;
(7) modify any of the provisions of Sections 902, 513 or 1011 of
the indenture, except to increase that percentage or to
provide that certain other provisions of the indenture which
affect the notes cannot be modified or waived without the
consent of the holder of each outstanding note affected
thereby;
(8) modify the ranking or priority of any series of notes or the
guarantee; or
(9) release the guarantor from any of its obligations under the
guarantee or the indenture other than in accordance with the
terms of the indenture.
We, along with the guarantor and trustee, may amend the indenture
without the consent of any holder of notes, to:
(1) cure any ambiguity, omission, defect or inconsistency;
(2) provide for the assumption by a successor corporation of the
obligations of the issuers or the guarantor under the
indenture;
(3) add guarantees or collateral security with respect to the
notes;
(4) provide for the release of a co-issuer or a guarantor from its
obligations under the notes or guarantor from its obligations
under the notes or guarantees, respectively in accordance with
the terms of the indenture;
(5) add to the covenants of the issuers for the benefit of the
holders or to surrender any right or power conferred upon the
issuers or the guarantor;
(6) make any change that does not adversely affect the rights of
any holder; or
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(7) comply with any requirement of the SEC in connection with the
qualification of the indenture under the Trust Indenture Act
of 1939.
We may choose in some instances not to comply with a term, provision or
condition contained in notes of one series, if the holders of at least a
majority in principal amount of the notes of each series affected by our
noncompliance, waive our compliance with that term, provision or condition. The
waiver shall only extend to or affect that term, provision or condition to the
extent it is expressly waived. Until the waiver becomes effective, our
obligations and the duties of the trustee to those holders with respect to that
term, provision or condition shall remain in full force and effect. The holders
of:
o a majority in principal amount of the outstanding notes of any
series in the case of an Event of Default specified in (1),
(2), (3) or (6) in "--Events of Default," above
o or of all then outstanding notes in the case of an Event of
Default specified in (4) or (5) in "--Events of Default,"
above
may, on behalf of those holders, waive any past default under the indenture with
respect to those notes except a default in the payment of the principal of or
any premium or any interest on the notes and except a default in respect of a
covenant or provision the modification or amendment of which would require the
consent of the holder of each outstanding note of each series affected by that
modification or amendment..
MERGER, CONVEYANCE, TRANSFER OR LEASE
Unless otherwise specified in the prospectus supplement, we may not
enter into any merger or other business combination, or liquidate, wind up or
dissolve, or convey, sell, lease, assign, transfer or otherwise dispose of, all
or substantially all of our respective property, business or assets, except:
(1) any subsidiary of any of the issuers may be merged or combined
with or into
(a) any of the issuers, if the issuer involved in the
transaction is the continuing or surviving
corporation, or
(b) any one or more wholly-owned subsidiaries of any
issuer, if the wholly-owned subsidiary or
subsidiaries involved in the transaction is the
continuing or surviving corporation;
(2) the issuers or any wholly-owned subsidiary of the issuers may
sell, lease, transfer or otherwise dispose of any or all of
their assets upon voluntary liquidation, or otherwise, to any
of the issuers or any other wholly-owned subsidiary of the
issuers or may sell, lease, transfer or otherwise dispose of
any or all of their assets upon voluntary liquidation, or
otherwise, to any non-wholly-owned subsidiary of the issuers
for fair market value;
(3) any non-wholly-owned subsidiary of the issuers may sell,
lease, transfer or otherwise dispose of any or all of its
assets upon voluntary liquidation, or otherwise, to the
issuers or any wholly-owned subsidiary of the issuers for fair
market value or may sell, lease, transfer or otherwise dispose
of any or all of its assets upon voluntary liquidation, or
otherwise, to any other non-wholly-owned subsidiary of the
issuers; and
(4) the issuers or any subsidiary of any of the issuers may be
merged or combined with or into another entity.
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Any of the transactions discussed above may occur only if no Default or Event of
Default shall have occurred and be continuing or would occur as a result of the
transaction. If the issuer involved in the transaction is not the continuing or
surviving corporation, the continuing or surviving corporation shall succeed to
the indenture.
The guarantor may not merge with or into any other entity or convey,
sell, assign, transfer, lease or otherwise dispose of its properties and assets
substantially as an entirety to any other entity other than any of the issuers
unless:
(1) the entity formed by or surviving the merger, if other than
the guarantor, or to which the properties and assets are
transferred assumes all of the obligations of the guarantor
under the indenture and the guarantee, in a supplemental
indenture in form and substance satisfactory to the trustee;
(2) immediately after giving effect to the transaction, no Default
or Event of Default has occurred and is continuing; and
(3) the guarantor delivers, or causes to be delivered, to the
trustee, in form and substance reasonably satisfactory to the
trustee, an officers' certificate and an opinion of counsel,
each stating that the transaction complies with the
requirements of the indenture.
PAYMENT OF ADDITIONAL AMOUNTS
Unless otherwise specified in the prospectus supplement, any amounts
paid by the issuers, or their assignee or successor, will be paid without
deduction for taxes collected for the account of the United Kingdom or the
foreign jurisdiction of incorporation or residence of any assignee of the
issuers or any successor to either issuer or the guarantor. We refer to these
foreign jurisdictions of incorporation or residents in this prospectus as an
"Other Jurisdiction." If, at any time, the United Kingdom or an Other
Jurisdiction requires those deductions, the issuers, their assignee or any
relevant successor will pay additional amounts in respect of principal, premium
or interest as may be necessary so that the net amounts paid to the holders of
the notes or the trustee under the indenture, after the deduction, shall equal
the respective amounts of principal, premium or interest to which those holders
or the trustee are entitled. We refer to these additional amounts in this
prospectus as "Additional Amounts." The preceding discussion shall not apply to
(1) any taxes which would not have been so imposed but for the
fact that the holder or beneficial owner of the relevant note
is or has been a domiciliary, national or resident of, has
been engaged in business, 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 and interest on, or
the enforcement of, a note or the guarantee,
(2) any taxes which would not have been so imposed but for the
fact that the relevant note was presented more than thirty
days after the date the payment became due or was provided
for, whichever is later,
(3) any taxes or charges which are payable otherwise than by
deduction or withholding on or in respect of the relevant note
or guarantee,
(4) any taxes which would not have been so imposed but for the
holder's failure to comply with any reporting requirements
concerning the nationality, residence, identity or
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connection with the United Kingdom or the Other Jurisdiction
or any other relevant jurisdiction of the holder or beneficial
owner of the relevant note,
(5) any taxes
(A) which would not have been imposed if the beneficial
owner of the relevant note had been the holder of
that note, or
(B) which, if the beneficial owner of that note had held
the note as the holder of that note, would have been
excluded under clauses (1) through (4) above, or
(6) any estate, inheritance, gift, sale, transfer, personal
property or similar tax.
We are not required to pay Additional Amounts with respect to the notes
or the guarantee due to any deduction requirement imposed by any governmental
unit other than the United Kingdom or an Other Jurisdiction.
DEFEASANCE
Unless otherwise specified in the prospectus supplement, with respect
to any series of notes, we, at our option, may be discharged from any and all
obligations in respect of that series of notes except for our obligations to
replace stolen, lost or mutilated notes, maintain paying agencies, and hold
money for payment in the defeasance trust. This is referred to as "legal
defeasance." We may also terminate our obligations with respect to certain
covenants in the indenture and any other specified covenants with respect to
that series of notes. This is referred to as "covenant defeasance."
In order to exercise either of these defeasance options, we must
deposit with the trustee, in trust, money or government obligations, an adequate
amount for the payment of principal, including any mandatory installment
payments in respect of any fund to be set aside for the payment of principal,
and interest on, the outstanding notes of the relevant series on the dates those
payments are due.
We must also deliver to the trustee the following:
(1) an opinion of counsel to the effect that the deposit and
related defeasance would not cause the holders of the notes of
that series to recognize income, gain or loss for federal
income tax purposes;
(2) in the case of a legal defeasance only, the opinion of counsel
must be based on either a ruling received from or published by
the United States Internal Revenue Service or other change in
applicable federal income tax law to that effect; and
(3) an officer's certificate stating that no Event of Default with
respect to that series of notes has occurred and is
continuing.
BOOK-ENTRY; DELIVERY AND FORM
GENERAL. Unless otherwise specified in a prospectus supplement, except
as described below, the notes will not be represented by physical certificates.
Instead, the notes will be in the form of one or more fully registered global
notes. Each global note will be deposited with the trustee, as custodian for,
and registered in the name of DTC or a nominee of DTC. The old notes, to the
extent validly tendered and accepted and directed by their holders in their
letters of transmittal, will be exchanged through electronic transfer through
DTC's Automated Tender Offer Program.
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Notes that are issued as described below under "--Physical Notes" will
be issued as physical certificates. Upon the transfer of a note of any series
issued as physical certificates, that note will be exchanged for an interest in
the global note representing the principal amount of notes being transferred,
unless the global notes for that series have previously been exchanged for
physical certificates.
THE GLOBAL NOTES. We expect that in accordance with DTC's procedures:
(1) upon deposit of the global notes, DTC or its custodian will
credit, on its internal system, the principal amount of the
individual beneficial interests represented by the global
notes to the respective accounts of persons who have accounts
with DTC and
(2) ownership of beneficial interests in the global notes will be
shown on, and the transfer of that ownership will be effected
only through:
o records maintained by DTC or its nominee with respect
to interests of persons who have accounts with DTC
("participants") and
o the records of participants with respect to interests
of persons other than participants.
So long as DTC, or its nominee, is the registered owner or holder of
the global notes, DTC or the nominee will be considered the sole record owner or
holder of the notes represented by the global notes for all purposes under the
indenture. No beneficial owner of an interest in the global notes will be able
to transfer that interest except in accordance with DTC's procedures and the
requirements of the indenture.
We will make payments of the principal of, or premium and interest on,
the global notes to DTC or its nominee, as the registered owner of the global
notes. None of the issuers, the trustee or any paying agent under the indenture
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests in the global
notes or for maintaining, supervising or reviewing any records relating to those
beneficial ownership interests.
We expect that DTC or its nominee, upon receipt of any payment of the
principal of, or premium and interest on, the global notes, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the global notes as
shown on the records of DTC or its nominee. We also expect that payments by
participants to owners of beneficial interests in the global notes held through
those participants will be governed by standing instructions and customary
practice as is now the case with securities held for the accounts of customers
registered in the names of nominees for those customers.
Those payments will be the responsibility of those participants.
Transfers between participants in DTC will be effected in accordance
with DTC's procedures. If a holder requires physical delivery of the notes for
any reason, including to sell notes to persons in states which require physical
delivery of the notes, or to pledge the notes, the holder must transfer its
interest in the global notes in accordance with DTC's normal procedures and the
procedures described in the indenture.
DTC has advised the issuers and the guarantor that it will take any
action permitted to be taken by a holder of notes only at the direction of one
or more participants to whose account interests in the global notes are credited
and only in respect of the aggregate principal amount of notes as to which that
participant has given direction. However, if there is an Event of Default under
the indenture, DTC will exchange the global notes for physical notes, which it
will distribute to its participants.
DTC has advised the issuers and the guarantor as follows:
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(1) DTC is a limited purpose trust company organized under the
laws of the State of New York,
(2) a member of the Federal Reserve System,
(3) a "clearing corporation" within the meaning of the Uniform
Commercial Code and
(4) a "clearing agency" registered under the provisions of Section
17A of the Exchange Act.
DTC was created to hold securities for its participants and facilitate the
clearance and settlement of securities transactions between participants through
electronic entries in its participants' accounts. This system eliminated the
need for physical movement of certificates. Participants include securities
brokers and dealers, banks, trust companies and clearing corporations and
certain other organizations. Indirect access to the DTC system is available to
others such as banks, brokers, dealers and trust companies and clear through or
maintain a custodial relationship with a participant ("indirect participants").
Although DTC and its participants are expected to follow these
procedures in order to facilitate transfers of interests in the global notes
among participants, they are under no obligation to perform these procedures,
and the procedures may be discontinued at any time. Neither the issuers nor the
trustee will have any responsibility for the performance by DTC or its
participants or indirect participants of their respective obligations under the
rules and procedures governing their operations.
PHYSICAL NOTES. Notes issued as physical certificates are referred to
in this prospectus as "physical notes." These physical notes will be
exchangeable or transferable for global notes if:
(1) DTC notifies us that it is unwilling or unable to continue as
depositary for the global notes, or DTC ceases to be a
"clearing agency" registered under the Exchange Act, and a
successor depositary is not appointed by us within 90 days, or
(1) we, in our discretion, at any time determine not to have all
of the notes represented by a global note or
(3) an Event of Default has occurred and holders of more than 25%
in aggregate principal amount of the notes at the time
outstanding represented by global notes advise the trustee
through DTC or a successor depositary in writing that the
continuation of an electronic system through DTC or the
successor depositary with respect to the global notes is no
longer required.
Upon the occurrence of any of the above events, we will cause the appropriate
physical notes to be delivered.
THE TRUSTEE
Unless an Event of Default has occurred and is continuing, the trustee
will only perform those duties specifically described in the indenture. If an
Event of Default has occurred and is continuing, the trustee will exercise the
rights and powers given to 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 that person's own affairs.
If the trustee becomes a creditor of any issuer or the guarantor, the
indenture and provisions of the Trust Indenture Act of 1939 incorporated by
reference in the indenture limit the trustee's rights to obtain payment of
claims in certain cases or, to realize on certain property received by it in
respect of those
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claims, as security or otherwise. The trustee is permitted to engage in other
transactions; however, if it acquires any conflicting interest it must eliminate
the conflict or resign.
PAYMENT
All payments of principal, any premium, and interest on the notes will
be made by the issuers in immediately available funds.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of the
issuers or the guarantor shall have any liability for any obligations of the
issuers or the guarantor under the guarantee, any series of notes or the
indenture or for any claim based on, in respect of, or by reason of, the
obligations or their creation. Each holder of notes by accepting a note waives
and releases those persons from that liability. The waiver and release are part
of the consideration for issuance of the notes and the guarantee. This waiver
may not be effective to waive liabilities under the federal securities laws and
it is the view of the SEC that this waiver is against public policy.
TRANSFER
The notes will be issued in registered form and will be transferable
only upon the surrender of the notes being transferred for registration of
transfer. The issuer may require payment of a sum sufficient to cover any tax,
assessment or other governmental charge payable in connection with certain
transfers and exchanges.
GOVERNING LAW
The indenture provides that it and the notes will be governed by, and
construed in accordance with, the laws of the State of New York to the extent
that the application of the law of another jurisdiction would not otherwise be
required.
CERTAIN DEFINITIONS
The following are certain defined terms used in the indenture.
Reference is made to the indenture for a full disclosure of all defined terms,
as well as any other terms used in this prospectus for which no definition is
provided. Any modifications or additions to these definitions will be set forth
in the prospectus supplement.
"ATTRIBUTABLE DEBT" means, as to any particular lease under which any
of the issuers or any Restricted Subsidiary is at the time liable for a term of
more than 12 months, at any date as of which the amount of the debt under the
lease is to be determined, the total net amount of rent required to be paid by
either the issuers or any Restricted Subsidiary under that lease during the
remaining term of the lease (excluding any subsequent renewal or other extension
options held by the lessee), discounted from the respective due dates of that
rent to that date at the yearly rate equivalent to the interest rate inherent in
the lease. The net amount of rent required to be paid under any lease for any
period shall be:
o the aggregate amount of the rent payable by the lessee with
respect to that period EXCLUDING
o amounts required to be paid on account of maintenance and
repairs, services, insurance, taxes, assessments, water rates
and similar charges and contingent rents.
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In the case of any lease which is terminable by the lessee upon the payment of a
penalty, the net amount of rent shall include the lesser of
(1) the total discounted net amount of rent required to be paid
from the later of the first date upon which the lease may be
so terminated or the date of the determination of the net
amount of rent, as the case may be, and
(2) the amount of the penalty in which event no rent shall be
considered as required to be paid under the lease subsequent
to the first date upon which it may be so terminated.
"CONSOLIDATED NET TANGIBLE ASSETS" means the total amount of assets
appearing on our most recent Consolidated balance sheet of, prepared in
accordance with GAAP after deducting from those assets
(1) all current liabilities excluding any current liabilities
which are by their terms extendible or renewable at the option
of the obligor on those liabilities to a time more than 12
months after the time as of which the amount of those
liabilities is being computed and
(2) all goodwill, trade names, trademarks, patents, unamortized
debt discount less unamortized premium and expense and other
like intangibles.
"CONSOLIDATION" means, with respect to any Person, the consolidation of
the accounts of that Person and each of its subsidiaries if and to the extent
the accounts of that Person and each of its subsidiaries would normally be
consolidated with those of that Person, all in accordance with GAAP. The term
"Consolidated" shall have a similar meaning.
"CREDIT FACILITY" means the Credit Agreement, dated as of December 12,
1996, among USI American Holdings, Inc., USI Funding, Inc., as borrowers, US
Industries, as guarantor, Bank of America Illinois, as Issuing Bank and
Swingline Bank, the additional financial institutions named in that agreement,
as lenders, Bank of America National Trust and Savings Association, as Agent,
and BA Securities, Inc., as Arranger, as that agreement may be amended from time
to time or any one or more renewals, extension, refinancings, or refundings of
that facility.
"DEBT" means (without duplication) indebtedness for borrowed money
evidenced by notes, bonds, debentures or other similar instruments, and any
contingent or other obligations arising under any guarantee or similar
instrument with respect to the debt.
"DEPOSITORY TRUST COMPANY" or "DTC" means The Depository Trust Company,
its nominees, and their respective successors.
"EXISTING FUNDED DEBT" means all Funded Debt other than Funded Debt
outstanding under the Credit Facility existing on the date of the indenture.
"FUNDED DEBT" means Debt that by its terms
(1) matures more than one year from the date of original issuance
or creation or
(2) matures within one year from that date but is renewable or
extendible at the option of any obligor to a date more than
one year from that date.
"GAAP" means generally accepted accounting principles described 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 other
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statements by any other entity as approved by a significant segment of the
accounting profession in the United States, from time to time.
"GOVERNMENT OBLIGATIONS" means securities which are:
(1) direct obligations of the government which issued the Currency
in which the notes are payable; or
(2) obligations of a Person controlled or supervised by and acting
as an agency or instrumentality of the government which issued
the Currency in which the notes are payable, the payment of
which is unconditionally guaranteed by such government,
which, in either case, are full faith and credit obligations of such government
payable in such Currency and are not callable or redeemable at the option of the
issuer of such obligations and shall also include a depository receipt issued by
a bank or trust company as custodian with respect to any such Government
Obligation or a specific payment of interest on or principal of any such
Government Obligation held by such custodian for the account of the holder of a
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 Government Obligation or the specific payment of interest or principal of
the Government Obligation evidenced by such depository receipt.
"GUARANTEE" means the unconditional guarantee by the guarantor, in
accordance with Article 12 of the indenture, which is subject to release under
certain circumstances as described in this prospectus.
"LIEN" means any pledge, mortgage, lien, charge, encumbrance or
security interest.
"MATURITY", when used with respect to any note, means the date on which
the principal of that note or an installment of principal becomes due and
payable as provided in that note or the indenture, whether at the stated
maturity or by declaration of acceleration, notice of redemption, notice of
option to elect repayment or otherwise.
"ORIGINAL ISSUE DATE" means October 27, 1998, the date on which the
notes were originally issued.
"ORIGINAL ISSUE DISCOUNT SECURITY" means any note that provides for an
amount less than the principal amount of the note to be due and payable upon a
declaration of acceleration of the Maturity of the note under Section 502 of the
indenture.
"PAYING AGENT" means any Person authorized by the issuers to pay the
principal of or any premium or any interest, on any notes on behalf of the
issuers.
"PLACE OF PAYMENT" means New York City, New York.
"PRINCIPAL PROPERTY" means any manufacturing plant or warehouse,
together with the land upon which it is erected and fixtures comprising a part
of that plant or warehouse, owned by either of the issuers or any Restricted
Subsidiary and located in the United States, the gross book value without
deduction of any reserve for depreciation of which on the date as of which the
determination is being made is an amount which exceeds 1% of Consolidated Net
Tangible Assets, other than that manufacturing plant or warehouse or any portion
of that plant or warehouse together with the land upon which it is erected and
fixtures comprising a part of that plant or warehouse which, in the opinion of
the Board of Directors, is not of material importance to the total business
conducted by the issuers and their subsidiaries, taken as a whole.
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"RESTRICTED SUBSIDIARY" means each subsidiary other than Unrestricted
Subsidiaries.
"SPECIAL PURPOSE FUNDING SUBSIDIARY" means a direct Wholly-Owned
Subsidiary of any of the issuers:
(1) that serves as a cash management company for any of the
issuers and its respective subsidiaries and has no other
material operations or business,
(2) that for every transfer of funds to it, records a
corresponding liability on its books and records to the
transferor of those funds, and
(3) whose assets do not materially exceed its liabilities.
"STATED MATURITY", when used with respect to any note or any
installment of principal of such note or interest on such note, means the date
specified in such note as the fixed date on which the principal of such note or
such installment of principal or interest is due and payable, as such date may
be extended under the provisions of Section 308 of the indenture.
"TRUSTEE" means The First National Bank of Chicago until a successor
trustee shall have become trustee in accordance with the applicable provisions
of the indenture, and thereafter "trustee" shall mean or include each Person who
is then a trustee under the indenture.
"UNRESTRICTED SUBSIDIARY" means any subsidiary of any of the issuers
that:
(1) is organized under the laws of a jurisdiction other than a
jurisdiction in the United States of America,
(2) does not constitute a "significant subsidiary" of US
Industries within the meaning of Rule 1-02(w) of Regulation
S-X under the Exchange Act or any successor provision or
(3) in the case of USI Atlantic, USI American Holdings and USI
Global Corp., is or is acting as a co-issuer or guarantor of
any indebtedness of U.S. Industries that is pari passu in
right of payment with the indebtedness under the notes.
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PLAN OF DISTRIBUTION
We may sell the notes being offered by this prospectus directly or
through agents, underwriters, dealers or remarketing firms.
Offers to purchase notes may be solicited by agents designated by us
from time to time. Any agent who may be deemed to be an underwriter, as that
term is defined in the Securities Act, involved in the offer or sale of the
notes in respect of which this prospectus is delivered will be named, and any
commissions payable by us to that agent will be set forth, in a prospectus
supplement. The agent will be acting on a reasonable efforts basis for the
period of its appointment or, if indicated in the applicable prospectus
supplement, on a firm commitment basis. Agents may be entitled under agreements
which may be entered into with us to indemnification by us against certain civil
liabilities, including liabilities under the Securities Act, and may be
customers of, engage in transactions with or perform services for us in the
ordinary course of business.
If any underwriters are utilized in any sale of the notes in respect of
which this prospectus is delivered, we will enter into an underwriting agreement
with those underwriters at the time of sale to them and the names of the
underwriters and the terms of the transaction will be set forth in the
prospectus supplement, which will be used by the underwriters to make resales of
the notes. The underwriters may be entitled, under the relevant underwriting
agreement, to indemnification by us against certain civil liabilities, including
liabilities under the Securities Act, and may be customers of, engage in
transactions with or perform services for us in the ordinary course of business.
If a dealer is utilized in any sale of the notes, we will sell the debt
securities to the dealer, as principal. The dealer may then resell those notes
to the public at varying prices to be determined by the dealer at the time of
resale. Dealers may be entitled to indemnification by us against certain civil
liabilities, including liabilities under the Securities Act, and may be
customers of, engage in transactions with or perform services for us in the
ordinary course of business.
Securities may also be offered and sold, if so indicated in the
prospectus supplement, in connection with a remarketing upon their purchase, in
accordance with their terms, by one or more firms ("remarketing firms"), acting
as principals for their own accounts or as our agents. Any remarketing firm will
be identified and the terms of its agreement, if any, with us and its
compensation will be described in the prospectus supplement. Remarketing firms
may be entitled under agreements which may be entered into with us to
indemnification by us against certain civil liabilities, including liabilities
under the Securities Act, and may be customers of, engage in transactions with
or perform services for us in the ordinary course of business.
If so indicated in the applicable prospectus supplement, we will
authorize agents, underwriters or dealers to solicit offers by certain
purchasers to purchase notes from us, at the public offering price set forth in
the prospectus supplement under delayed delivery contracts providing for payment
and delivery on a specified date in the future. These contracts will be subject
to only the conditions described in the applicable prospectus supplement, and
the prospectus supplement will describe the commission payable for solicitation
of such offers.
LEGAL MATTERS
The validity of the notes has been passed upon for US Industries, USI
Global Corp. and USI American Holdings by Weil, Gotshal & Manges LLP, New York,
New York. The validity of the guarantee has been passed upon for USI Atlantic by
George H. MacLean, Esq, Senior Vice President and General Counsel of US
Industries.
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EXPERTS
The consolidated financial statements and schedule of US Industries
included in Amendment No. 3 to its Annual Report on Form 10-K/A for the year
ended October 3, 1998, have been audited by Ernst & Young LLP, independent
auditors, as stated in their report included in the Annual Report and which is
incorporated in this prospectus by reference. Their report as to the years ended
September 30, 1997 and 1996, is based in part on the report of
PricewaterhouseCoopers LLP. Our consolidated financial statements and schedule
are incorporated by reference in reliance on Ernst & Young LLP's report given on
the authority of Ernst & Young LLP and PricewaterhouseCoopers LLP as experts in
accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Expenses in connection with the issuance and distribution of the
securities being registered are estimated (other than with respect to the SEC
registration fee) to be as follows:
SEC registration fee....................................... $166,800
Accounting fees and expenses ............................. 50,000
Legal fees and expenses .................................. 200,000
Miscellaneous.............................................. 100,000
-------
Total................................................ $516,800
-------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The issuers and the guarantor 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 that action, suit
or proceeding provided that the 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 the 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 the person acted in any of the capacities described
above, against expenses (including attorneys' fees) actually and reasonably
incurred in connection with the defense or settlement of the action or suit
provided that the 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 the 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 the 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, the director or officer is fairly and reasonably
entitled to indemnity for those 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 in that action, suit or proceeding, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with that
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defense; provided that indemnification provided for by Section 145 or granted
under that section shall not be exclusive of any other rights to which the
indemnified party may be entitled; 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 that capacity or
arising out of his status as director or officer whether or not the corporation
would have the power to indemnify him against those 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 those 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 issuers' and the guarantor's Certificates of Incorporation
currently provide 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 each of the issuers provide that the issuers shall, and
the By-Laws of the guarantor provide that the guarantor may, provide to any
director or officer advances for expenses incurred in defending an action, suit
or proceeding brought against that person because of his or her status as an
officer or director upon receipt of an undertaking to repay those 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 issuers and the guarantor are
insured against certain civil liabilities, including liabilities under federal
securities laws, which might be incurred by them in their capacity as directors
and officers.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to our directors, officers and controlling persons
pursuant to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission that indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against those liabilities (other
than the payment by us of expenses incurred or paid by one of our directors,
officers or controlling persons in the successful defense of any action, suit or
proceeding) is asserted by any director, officer or controlling person in
connection with the securities being registered, we will, unless in the opinion
of our counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether indemnification by us is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of this issue.
II-2
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
Exhibit Number Exhibit Description
- -------------- -------------------
*1.1 Form of Underwriting Agreement.
*4.1(a) Indenture dated as of October 27, 1998, among US
Industries, USI American Holdings, USI Atlantic and
The First National Bank of Chicago, as Trustee
(incorporated herein by reference to Exhibit 4.4 to
the Form 10K/A for the year ended October 3, 1998,
filed June 3, 1999).
*4.1(b) First Supplemental Indenture, dated as of April 30,
1999, among US Industries, USI American Holdings, USI
Atlantic and The First National Bank of Chicago, as
Trustee (incorporated herein by reference to Exhibit
4.1(b) to the Registrant's Registration Statement on
Form S-4 (File No. 333-70537)).
**5.1 Opinion of Weil, Gotshal & Manges LLP.
**5.2 Opinion of George H. MacLean, Esq.
**12 Statement regarding computation of ratio of earnings
to fixed charges.
**23.1 Consent of Ernst & Young LLP.
**23.2 Consent of PricewaterhouseCoopers LLP
**23.3 Consent of Weil, Gotshal & Manges LLP (included in
the Opinion filed as Exhibit 5.1).
**23.3 Consent of George H. MacLean, Esq. (included in the
Opinion filed as Exhibit 5.2).
*24 Power of Attorney (included on signature page to
Registration Statement).
- ------------------------
* Previously filed.
** Filed herewith.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrants hereby undertake:
(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) To reflect in the prospectus any facts or
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
II-3
<PAGE>
deviation from the low or high end of the
estimated maximum offering range may be
reflected in the form of a prospectus filed
with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume
and price represent no more than a 20
percent change in the maximum aggregate
offering price set forth in the "Calculation
of Registration Fee" table in the effective
registration statement; and
(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;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrants pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference 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; and
(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.
(b) The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of such
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.
II-4
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, as amended,
each of the Registrants named below certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this Amendment No. 1 to the Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Iselin,
State of New Jersey, on August 17, 1999.
U.S. INDUSTRIES, INC.
USI GLOBAL CORP.
USI AMERICAN HOLDINGS, INC.
USI ATLANTIC CORP.
By: /s/ George H. MacLean
---------------------
Name: George H. MacLean
Title: Senior Vice President, General
Counsel and Secretary
U.S. INDUSTRIES, INC.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Chairman of the Board and Chief Executive August 17, 1999
- --------------------------------------------
David H. Clarke Officer (Principal Executive Officer)
* Director, President and Chief Operating Officer August 17, 1999
- ------------------------------------
John G. Raos
* Director August 17, 1999
- ------------------------------------
Brian C. Beazer
- ------------------------------------ Director ________, 1999
William E. Butler
* Director August 17, 1999
- ------------------------------------
John J. McAtee, Jr.
- ------------------------------------ Director ________, 1999
The Hon. Charles H. Price II
- ------------------------------------ Director ________, 1999
Sir Harry Solomon
* Director August 17, 1999
- ------------------------------------
Royall Victor III
- ------------------------------------ Director ________, 1999
Mark Vorder Bruegge
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Director August 17, 1999
- ------------------------------------
Robert R. Womack
* Senior Vice President and Chief Financial August 17, 1999
- ------------------------------------
James O'Leary Officer (Principal Financial Officer)
* Corporate Controller August 17, 1999
- ------------------------------------
Robert P. Noonan (Principal Accounting Officer)
</TABLE>
* By: /s/ George H. MacLean
---------------------
George H. MacLean
Attorney-in-fact
II-6
<PAGE>
USI GLOBAL CORP.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Chairman of the Board and Chief Executive August 17, 1999
- ------------------------------------
David H. Clarke Officer (Principal Executive Officer)
* Director, President and Chief Operating Officer August 17, 1999
- ------------------------------------
John G. Raos
/s/ George H. MacLean Director, Senior Vice President, General August 17, 1999
- ------------------------------------
George H. MacLean Counsel and Secretary
* Senior Vice President and Chief Financial August 17, 1999
- ------------------------------------
James O'Leary Officer (Principal Financial Officer)
* Corporate Controller (Principal Accounting August 17, 1999
- ------------------------------------
Robert P. Noonan Officer)
</TABLE>
* By: /s/ George H. MacLean
---------------------
George H. MacLean
Attorney-in-fact
II-7
<PAGE>
USI AMERICAN HOLDINGS, INC.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Chairman of the Board and Chief Executive August 17, 1999
- ------------------------------------
David H. Clarke Officer (Principal Executive Officer)
* Director, President and Chief Operating Officer August 17, 1999
- ------------------------------------
John G. Raos
/s/ George H. MacLean Director, Senior Vice President, General August 17, 1999
- ------------------------------------
George H. MacLean Counsel and Secretary
* Senior Vice President and Chief Financial August 17, 1999
- ------------------------------------
James O'Leary Officer (Principal Financial Officer)
* Corporate Controller (Principal Accounting August 17, 1999
- ------------------------------------
Robert P. Noonan Officer)
</TABLE>
* By: /s/ George H. MacLean
---------------------
George H. MacLean
Attorney-in-fact
II-8
<PAGE>
USI ATLANTIC CORP.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Chairman of the Board and Chief Executive August 17, 1999
- ------------------------------------
David H. Clarke Officer (Principal Executive Officer)
* Director August 17, 1999
- ------------------------------------
Brian C. Beazer
- ------------------------------------ Director ________, 1999
Sir Harry Solomon
* Director August 17, 1999
- ------------------------------------
Royall Victor III
/s/ George H. MacLean Director, Senior Vice President, General August 17, 1999
- ------------------------------------
George H. MacLean Counsel and Secretary
* Senior Vice President and Chief Financial August 17, 1999
- ------------------------------------
James O'Leary Officer (Principal Financial Officer)
* Corporate Controller (Principal Accounting August 17, 1999
- ------------------------------------
Robert P. Noonan Officer)
</TABLE>
* By: /s/ George H. MacLean
---------------------
George H. MacLean
Attorney-in-fact
II-9
<PAGE>
EXHIBIT INDEX
Exhibit Number Exhibit Description
*1.1 Form of Underwriting Agreement.
*4.1(a) Indenture dated as of October 27, 1998, among US
Industries, USI American Holdings, USI Atlantic and The
First National Bank of Chicago, as Trustee (incorporated
herein by reference to Exhibit 4.4 to the Form 10K/A for
the year ended October 3, 1998, filed June 3, 1999).
*4.1(b) First Supplemental Indenture, dated as of April 30, 1999,
among US Industries, USI American Holdings, USI Atlantic
and The First National Bank of Chicago, as Trustee
(incorporated herein by reference to Exhibit 4.1(b) to the
Registrant's Registration Statement on Form S-4) (File No.
333-70537)).
**5.1 Opinion of Weil, Gotshal & Manges LLP.
**5.2 Opinion of George H. MacLean, Esq.
**12 Statement regarding computation of ratio of earnings to
fixed charges.
**23.1 Consent of Ernst & Young LLP.
**23.2 Consent of PricewaterhouseCoopers LLP
**23.3 Consent of Weil, Gotshal & Manges LLP (included in the
Opinion filed as Exhibit 5.1)
**23.4 Consent of George H. MacLean, Esq. (included in the
Opinion filed as Exhibit 5.2)
*24 Power of Attorney (included on signature page to
Registration Statement).
- -------------------
* Previously filed.
** Filed herewith.
II-10
<PAGE>
Exhibit 5.1
<PAGE>
Exhibit 5.1
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
August 17, 1999
U.S. Industries, Inc.
USI American Holdings, Inc.
USI Global Corp.
101 Wood Avenue South
Iselin, New Jersey 08830
Ladies and Gentlemen:
We have acted as counsel to U.S. Industries, Inc., a Delaware
corporation ("USI" and, collectively with its consolidated subsidiaries, the
"Company"), USI's wholly-owned indirect subsidiary, USI American Holdings, Inc.,
a Delaware corporation ("USIAH") and USI's wholly-owned subsidiary, USI Global
Corp., a Delaware corporation ("USIGC" and, together with USI and USIAH, the
"Issuers"), in connection with the registration under the Securities Act of
1933, as amended (the "Securities Act"), pursuant to a Registration Statement on
Form S-3 (Registration No. 333-84461)(the "Registration Statement") of notes of
the Issuers (the "Notes") which will be unconditionally guaranteed (the
"Guarantees") by USI's wholly-owned direct subsidiary, USI Atlantic Corp., a
Delaware corporation ("USI Atlantic" or the "Guarantor"), in the aggregate
principal amount of up to $600,000,000, to be offered and sold by the Issuers
from time to time pursuant to Rule 415 of the General Rules and Regulations
promulgated under the Securities Act (the "Securities Act Rules"), in each case
pursuant to terms and conditions to be designated by the Issuers at the time of
offering.
In so acting, we have examined originals or copies, certified or
otherwise identified to our satisfaction, of such corporate records, agreements,
documents and other instruments, including (i) the Registration Statement, (ii)
the Indenture, dated as of October 27, 1998 among the Issuers, the Guarantor and
The First National Bank of Chicago, as Trustee (the "Indenture"), (iii) the
First Supplemental Indenture, dated as of April 30, 1999, among the Issuers, the
Guarantor and The First National Bank of Chicago, as Trustee (the "First
Supplemental Indenture"), (iv) the form of Underwriting Agreement filed as
Exhibit 1.1 to the Registration Statement and (v) such corporate records,
agreements, documents and other instruments, and such certificates or comparable
documents of public officials and of officers and representatives of the
Issuers, and have made such inquiries of such officers and representatives, as
we have deemed relevant and necessary as a basis for the opinion 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 all
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 Issuers.
In rendering this opinion, we have also assumed that prior to any
offering and sale of the Notes, each respective Board of Directors (or, in each
particular case, a special committee thereof authorized to act on its behalf) of
each of the Issuers, will duly authorize the terms of and the prices at which
the Notes are to be issued and sold in accordance with the terms of the
Indenture and the First Supplemental Indenture.
Based on the foregoing, and subject to the qualifications stated
herein, we are of the opinion that:
<PAGE>
1. With respect to any offering of any series of the Notes (the
"Offered Notes"), when (i) the Registration Statement, as finally amended
(including all necessary post-effective amendments), has become effective; (ii)
an appropriate prospectus supplement (the "Prospectus Supplement") with respect
to the Offered Notes has been prepared, delivered and filed in compliance with
the Securities Act and the applicable Securities Act Rules thereunder; (iii) if
the Offered Notes are to be sold pursuant to an underwriting agreement with
respect to the Offered Notes, such underwriting agreement has been duly
authorized, executed and delivered by the Issuers, the Guarantor and the other
parties thereto; (iv) the terms of the Offered Notes and of their issuance and
sale have been duly established in conformity with the Indenture and the First
Supplemental Indenture, so as not to violate any applicable law, the operative
certificate of incorporation or by-laws of any of the Issuers or result in a
default under or a breach of any agreement or instrument binding upon any of the
Issuers, and so as to comply with any requirement or restriction imposed by any
court or governmental body having jurisdiction over any of the Issuers; and (v)
the Offered Notes have been duly executed and authenticated in accordance with
the provisions of the Indenture and the Supplemental Indenture and duly
delivered to the purchasers thereof upon payment of the agreed upon
consideration therefor; then (1) the Offered Notes, when issued and sold in
accordance with the Indenture and the Supplemental Indenture and a duly
authorized, executed and delivered underwriting agreement will be valid and
binding obligations of each of the Issuers, enforceable against each of the
Issuers in accordance with their respective terms, subject to (A) applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally; and (B) as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
The opinion expressed herein is 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 letter of the laws of any other jurisdiction. In addition, the opinion
expressed herein pertains only to the Notes and we express no opinion as to the
Guarantees.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and the reference to this firm under the caption "Legal
Matters" in the prospectus forming a part of the Registration Statement.
Very truly yours,
/s/ Weil, Gotshal & Manges LLP
Exhibit 5.2
<PAGE>
Exhibit 5.2
US Industries, Inc.
August 17, 1999
U.S. Industries, Inc.
USI American Holdings, Inc.
USI Global Corp.
101 Wood Avenue South
Iselin, New Jersey 08830
Ladies and Gentlemen:
I am a Senior Vice President, General Counsel and Secretary and am
responsible for the legal affairs of U.S. Industries, Inc., a Delaware
corporation ("USI" and, collectively with its consolidated subsidiaries, the
"Company"), USI's wholly-owned indirect subsidiary, USI American Holdings, Inc.,
a Delaware corporation ("USIAH") and USI's wholly-owned subsidiary, and USI
Global Corp., a Delaware corporation ("USIGC" and, together with USI and USIAH,
the "Issuers"), in connection with the registration under the Securities Act of
1933, as amended (the "Securities Act"), pursuant to a Registration Statement on
Form S-3 (Registration No. 333-84461) (the "Registration Statement") of notes of
the Issuers (the "Notes") which will be unconditionally guaranteed (the
"Guarantees") by USI's wholly-owned direct subsidiary, USI Atlantic Corp., a
Delaware corporation ("USI Atlantic" or the "Guarantor"), in the aggregate
principal amount of up to $600,000,000, to be offered and sold by the Issuers
from time to time pursuant to Rule 415 of the General Rules and Regulations
promulgated under the Securities Act (the "Securities Act Rules"), in each case
pursuant to terms and conditions to be designated by the Issuers at the time of
offering.
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 corporate records, agreements, documents and other
instruments, including (i) the Registration Statement, (ii) the Indenture, dated
as of October 27, 1998 among the Issuers, the Guarantor and The First National
Bank of Chicago, as Trustee (the "Indenture"), (iii) the First Supplemental
Indenture, dated as of April 30, 1999, among the Issuers, the Guarantor and The
First National Bank of Chicago, as Trustee (the "First Supplemental Indenture"),
(iv) the form of Underwriting Agreement filed as an Exhibit to the Registration
Statement and (v) such corporate records, agreements, documents and other
instruments, and such certificates or comparable documents of public officials
and of officers and representatives of the Guarantor, and have made such
inquiries of such officers and representatives, as I have deemed relevant and
necessary as a basis for the opinion hereinafter set forth.
In such examination, I have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to me as originals, the conformity to original documents of all
documents submitted to me 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, I
have relied upon certificates or comparable documents of officers and
representatives of the Issuers.
In rendering this opinion, I have also assumed that prior to any
offering and sale of the Notes, each respective Board of Directors (or, in each
particular case, a special committee thereof authorized to act on its behalf) of
each of the Issuers and the Guarantor, will duly authorize the terms of and the
prices at which the Notes are to be issued and sold in accordance with the terms
of the Indenture and the First Supplemental Indenture.
<PAGE>
Based on the foregoing, and subject to the qualifications stated
herein, I am of the opinion that the Guarantees have been duly authorized by the
Guarantor and, when the Notes are executed on behalf of the Issuers,
authenticated by the Trustee and delivered in accordance with the terms of the
Indenture and the First Supplemental Indenture and as contemplated in the
Registration Statement, the Guarantees will constitute valid and binding
obligations of the Guarantor entitled to the benefits provided by the Indenture,
the First Supplemental Indenture and as contemplated in the Registration
Statement, enforceable against the Guarantor 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).
The opinion expressed herein is 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 I express no opinion as to the effect on the matters covered
by this letter of the laws of any other jurisdiction. In addition, the opinion
expressed herein pertains only to the Guarantees and I express no opinion as to
the Notes.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and the reference to this firm under the caption "Legal
Matters" in the prospectus forming a part of the Registration Statement.
Very truly yours,
/s/ George H. MacLean, Esq.
---------------------------
George H. MacLean, Esq.
Exhibit 12
<PAGE>
Exhibit 12
<TABLE>
<CAPTION>
RATIO OF EARNINGS TO FIXED CHARGES
--------------------------------------------------------------------------
(in $millions except ratios) FISCAL YEAR ENDED SEPTEMBER 30
--------------------------------------------------------------------------
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Fixed Charges
Interest Expense $ 69 $ 59 $ 64 $ 102 $ 95
Interest Portion of Rent (est.) 10 7 7 7 6
-------------- -------------- -------------- -------------- --------------
Sub-Total $ 79 $ 66 $ 71 $ 109 $ 101
-------------- -------------- -------------- -------------- --------------
Earnings
Income from Continuing Ops $ 78 $ 219 $ 185 $ - $ 57
before taxes
plus: Fixed Charges 79 66 71 109 101
-------------- -------------- -------------- -------------- --------------
Sub-Total $ 157 $ 285 $ 256 $ 109 $ 158
-------------- -------------- -------------- -------------- --------------
============== ============== ============== ============== ==============
Earnings/Fixed Charges (x) = 2.0 4.3 3.6 1.0 1.6
============== ============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
RATIO OF EARNINGS TO FIXED CHARGES
-------------------------------------
(in $millions except ratios) NINE MONTHS ENDED JUNE 30
-------------------------------------
1999 1998
<S> <C> <C>
Fixed Charges
Interest Expense $ 57 $ 51
Interest Portion of Rent (est.) 8 7
------------------ ------------------
Sub-Total $ 65 $ 58
------------------ ------------------
Earnings
Income from Continuing Ops $ 161 $ 40
before taxes
plus: Fixed Charges 65 58
------------------ ------------------
Sub-Total $ 226 $ 98
------------------ ------------------
================== ==================
Earnings/Fixed Charges (x) = 3.5 1.7
================== ==================
</TABLE>
Exhibit 23.1
<PAGE>
Exhibit 23.1
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in
the Amendment No. 1 to the Registration Statement on Form S-3 and related
Prospectus of U.S. Industries, Inc., USI Global Corp. and USI American Holdings,
Inc. and to the incorporation by reference therein of our report dated November
12, 1998, except for Note 16, as to which the date is April 26, 1999, with
respect to the consolidated financial statements and schedule of US Industries,
Inc. included in its Annual Report on Amendment No. 3 to Form 10-K/A for the
year ended October 3, 1998, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
New York, New York
August 16, 1999
Exhibit 23.2
<PAGE>
Exhibit 23.2
Consent of PricewaterhouseCoopers LLP
Consent of Independent Accountants
We hereby consent to the incorporation by reference in this Amendment No. 1 to
the Registration Statement on Form S-3 of U.S. Industries, Inc. of our report
dated November 14, 1997, relating to the financial statements, which appears in
the U.S. Industries, Inc. Annual Report on Form 10-K/A for the year ended
October 3, 1998. We also consent to the reference to us under the heading
"Experts" in such Registration Statement.
PricewaterhouseCoopers LLP
Florham Park, New Jersey
August 16, 1999
