As filed with the Securities and Exchange Commission on August 4, 1999
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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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>
<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>
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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.
<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. [ ]
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
Proposed
Maximum Amount of
Title of Each Class of Aggregate Registration
Securities to be Registered Offering Price(1) Fee (2)
- --------------------------------------------------------------------------------
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.
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>
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
Subject to completion, dated August 4, 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.
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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.
<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
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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/A for the year ended October 3, 1998
filed June 3, 1999 (amendment no.3);
3. Our Proxy Statement, dated January 4, 1999;
4. Our Quarterly Report on Form 10-Q/A for the fiscal quarter ended
January 2, 1999 filed May 17, 1999;
5. Our Quarterly Report on Form 10-Q/A for the fiscal quarter ended April
3, 1999 filed 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; and
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 Developments".
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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.
.........
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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.
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Recent Developments
On May 18, 1999, our Board of Directors announced that it had approved a
spinoff of our diversified businesses to our shareholders. In fiscal 1998, these
entities had combined net sales and operating income of $888 million and $25
million (after goodwill impairment, restructuring and other related charges of
$71 million). Excluding the results of our diversified businesses and corporate
expenses of $32 million, we had net sales of $2.2 billion and operating income
of $142 million (after nonrecurring and unusual charges of $75 million).
Completion of the spinoff is conditioned upon our receipt of approximately $600
million of proceeds from new third party financings by the new diversified
company, principally through its repayment of existing intercompany debt owed to
us. We will use these proceeds 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 US 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 anticipate the IRS ruling will be received within two
to four months but no later than ten months from the date of this prospectus. 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.
On July 19, 1999, we announced that our cash offer to purchase the shares
of The Spring Ram Corporation PLC was declared wholly unconditional. As of the
close of business on July 16, 1999, we owned or had received acceptances
representing 71% of the issued share capital of Spring Ram. Spring Ram is a
leading UK manufacturer of bathroom and kitchen products. The total
consideration for Spring Ram will be approximately (pound)81.7 million, or
$130.7 million.
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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.
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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 six months ended
March 31, 1999 and 1998:
Six Months Ended
Fiscal Year Ended September 30, March 31,
-------------------------------------------- --------------
1998 1997 1996 1995 1994 1999 1998
---- ---- ---- ---- ---- ---- ----
2.0x 4.3x 3.6x 1.0x 1.6x 3.2x 3.9x
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 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.
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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;
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(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.
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Further Issues
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,
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(3) all amounts outstanding under the 7 1/8% 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 7 1/8% 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 in
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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 (1) 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 transactions entered
into after October 27, 1998 other than sale and leaseback
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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
(2) 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 and the guarantee have been passed upon for US
Industries, USI Global Corp., USI Atlantic and USI American Holdings by Weil,
Gotshal & Manges LLP, New York, New York.
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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 Opinion of Weil, Gotshal & Manges LLP.
*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).
*24 Power of Attorney (included on signature page to
Registration Statement).
- ----------
* Filed herewith.
** To be filed by amendment.
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 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
II-3
<PAGE>
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 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 4, 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
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose name appears below
hereby constitutes George H. MacLean such person's true and lawful attorney,
with full power of substitution to sign for such person and in such person's
name and capacity indicated below, any and all amendments to this Registration
Statement, including Post-Effective Amendments, and to file the same with the
Securities and Exchange Commission, hereby ratifying and confirming such
person's signature as it may be signed by said attorney to any and all
amendments.
U.S. INDUSTRIES, INC.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ David H. Clarke Chairman of the Board and Chief Executive August 4, 1999
- ----------------------------------- Officer (Principal Executive Officer)
David H. Clarke
/s/ John G. Raos Director, President and Chief Operating Officer August 4, 1999
- -----------------------------------
John G. Raos
/s/ Brian C. Beazer Director August 4, 1999
- -----------------------------------
Brian C. Beazer
- ----------------------------------- Director ________, 1999
William E. Butler
/s/ John J. McAtee, Jr. Director August 4, 1999
- -----------------------------------
John J. McAtee, Jr.
- ---------------------------------- Director ________, 1999
The Hon. Charles H. Price II
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
- ----------------------------------- Director ________, 1999
Sir Harry Solomon
/s/ Royall Victor III Director August 4, 1999
- -----------------------------------
Royall Victor III
- ----------------------------------- Director ________, 1999
Mark Vorder Bruegge
/s/ Robert R. Womack Director August 4, 1999
- -----------------------------------
Robert R. Womack
/s/ James O'Leary Senior Vice President and Chief Financial August 4, 1999
- ----------------------------------- Officer (Principal Financial Officer)
James O'Leary
/s/ Robert P. Noonan Corporate Controller August 4, 1999
- ----------------------------------- (Principal Accounting Officer)
Robert P. Noonan
</TABLE>
II-6
<PAGE>
USI GLOBAL CORP.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ David H. Clarke Chairman of the Board and Chief Executive August 4, 1999
- ----------------------------------- Officer (Principal Executive Officer)
David H. Clarke
/s/ John G. Raos Director, President and Chief Operating Officer August 4, 1999
- -----------------------------------
John G. Raos
/s/ George H. MacLean Director, Senior Vice President, General August 4, 1999
- ----------------------------------- Counsel and Secretary
George H. MacLean
/s/ James O'Leary Senior Vice President and Chief Financial August 4, 1999
- ----------------------------------- Officer (Principal Financial Officer)
James O'Leary
/s/ Robert P. Noonan Corporate Controller (Principal Accounting August 4, 1999
- ----------------------------------- Officer)
Robert P. Noonan
</TABLE>
II-7
<PAGE>
USI AMERICAN HOLDINGS, INC.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ David H. Clarke Chairman of the Board and Chief August 4, 1999
- -----------------------------------
David H. Clarke Executive Officer (Principal Executive
Officer)
/s/ John G. Raos Director, President and Chief August 4, 1999
- -----------------------------------
John G. Raos Operating Officer
/s/ George H. MacLean Director, Senior Vice President, August 4, 1999
- -----------------------------------
George H. MacLean General Counsel and Secretary
/s/ James O'Leary Senior Vice President and Chief August 4, 1999
- -----------------------------------
James O'Leary Financial Officer (Principal Financial
Officer)
/s/ Robert P. Noonan Corporate Controller August 4, 1999
- ----------------------------------- (Principal Accounting Officer)
Robert P. Noonan
</TABLE>
II-8
<PAGE>
USI ATLANTIC CORP.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ David H. Clarke Chairman of the Board and Chief Executive August 4, 1999
- ------------------------------------ Officer (Principal Executive Officer)
David H. Clarke
/s/ Brian C. Beazer Director August 4, 1999
- ------------------------------------
Brian C. Beazer
- ------------------------------------ Director ________, 1999
Sir Harry Solomon
/s/ Royall Victor III Director August 4, 1999
- ------------------------------------
Royall Victor III
/s/ George H. MacLean Director, Senior Vice President, General August 4, 1999
- ------------------------------------ Counsel and Secretary
George H. MacLean
/s/ James O'Leary Senior Vice President and Chief Financial August 4, 1999
- ------------------------------------- Officer (Principal Financial Officer)
James O'Leary
/s/ Robert P. Noonan Corporate Controller (Principal Accounting August 4, 1999
- ------------------------------------ Officer)
Robert P. Noonan
</TABLE>
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 Opinion of Weil, Gotshal & Manges LLP.
*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)
*24 Power of Attorney (included on signature page to
Registration Statement).
- ----------
* Filed herewith.
** To be filed by amendment.
Exhibit 1.1
FORM OF UNDERWRITING AGREEMENT
$___________ ____% Senior Notes Due ____
__________
Name(s) of Managing Underwriter
Address(es) of Managing Underwriter
As Representative of the several Underwriters
named in Schedule A
Dear Sirs:
1. Introductory. U.S. Industries, Inc., a Delaware corporation ("USI") USI
Global Corp., a Delaware corporation and an indirect wholly-owned subsidiary of
USI ("USIGC"), and USI American Holdings, Inc., a Delaware corporation and an
indirect wholly-owned subsidiary of USI ("USIAH", and together with USI and
USIGC, the "Companies"), propose, subject to the terms and conditions stated
herein, to issue and sell, on a joint and several basis, to the Underwriters
named in Schedule A hereto (the "Underwriters") U.S.$___________ principal
amount of its ___% [Senior] [Subordinated] Notes Due ____ (the "Notes"). The
Notes will be fully and unconditionally guaranteed by USI Atlantic Corp., a
Delaware corporation and a direct wholly-owned subsidiary of USI (the
"Guarantor"). The Notes are to be issued under the indenture, dated as of
October 27, 1998 (the "Indenture"), among the Companies, the Guarantor and The
First National Bank of Chicago, as trustee (the "Trustee").
The Companies hereby agree with the several Underwriters as follows:
2. Representations and Warranties of the Companies. The Companies represent
and warrant to, and agree with, the several Underwriters that:
(a) The Companies and the Guarantor meet the requirements for the use
of Form S-3 under the Securities Act of 1933, as amended (the "Act"), and
have prepared and filed with the Securities and Exchange Commission (the
"Commission"), pursuant to the Act and the rules and regulations
promulgated by the Commission thereunder (the "Regulations"), and the Trust
Indenture Act of 1939, as amended (the "TIA"), a registration statement on
Form S-3 (Registration No. 333-_____), including the related Base
Prospectus (as defined below) or prospectuses, covering the registration
of, among other securities, the Notes under the Act, and the offering
thereof from time to time in accordance with Rule 415 of
<PAGE>
the Act. Such registration statement has been declared effective by the
Commission. The Companies and the Guarantor will prepare and file with the
Commission, pursuant to Rules 415 and 424(b)(2), (3) or (5), a prospectus
supplement to the form of prospectus included in such registration
statement reflecting the terms of the Notes and the terms of the offering
thereof. As filed, such prospectus supplement shall include all required
information with respect to the Notes and the offering thereof and, except
to the extent the Underwriters shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to you prior to
the Execution Time (as defined below) or, to the extent not completed at
the Execution Time, shall contain only such specific additional information
and other changes (beyond that contained in the Base Prospectus and any
Preliminary Prospectus (as defined below)) as the Companies and the
Guarantor have advised you, prior to the Execution Time, will be included
or made therein.
(i) The terms which follow, when used in this Agreement, shall
have the meanings indicated:
(ii) "Effective Date" means the date that the Registration
Statement and any post-effective amendment or amendments thereto are
declared effective by the Commission.
(iii) "Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
(iv) "Base Prospectus" shall mean the prospectus referred to
above contained in the Registration Statement relating to all
offerings of securities under the Registration Statement.
(v) "Preliminary Prospectus" shall mean any preliminary
prospectus supplement to the Base Prospectus which describes the Notes
and the offering thereof and is used prior to filing of the Final
Prospectus.
(vi) "Final Prospectus" shall mean the prospectus supplement
relating to the Notes that is first filed pursuant to Rule 424(b)
after the Execution Time, together with the Base Prospectus.
(vii) "Registration Statement" shall mean the registration
statement referred to above, as last amended prior to the time the
same was declared effective by the Commission, including all exhibits
and schedules thereto and all documents (including financial
statements, financial schedules and exhibits) incorporated therein by
reference.
(viii) "Rule 415," "Rule 424" and "Regulation S-K" refer to such
rules or regulations under the Act.
2
<PAGE>
Any reference herein to the Registration Statement, the Base
Prospectus, any Preliminary Prospectus or the Final Prospectus shall be
deemed to refer to and include the documents incorporated by reference
therein of Form S-3 that were filed under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), on or before the effective date of
the Registration Statement, or the issue date of the Base Prospectus, any
Preliminary Prospectus or the Final Prospectus, as the case may be, except
that any such documents shall be deemed to be modified or superseded to the
extent that a statement contained in such Base Prospectus, Preliminary
Prospectus or Final Prospectus or in any other subsequently filed document
that also is or is deemed to be incorporated by reference therein modifies
or supersedes such statement (all such documents being hereinafter referred
to as the "Incorporated Documents").
The Companies and the Guarantor understand that the Underwriters
propose to make a public offering of their respective portion of the Notes
on the terms and in the manner set forth in the Final Prospectus, as soon
as the Underwriters deem advisable after this Agreement has been executed
and delivered.
(b) The Registration Statement has become effective under the Act; no
stop order suspending the effectiveness of the Registration Statement is in
effect; and no proceedings for such purpose are pending before or, to its
knowledge, threatened by the Commission.
(c) On the Effective Date, and at all times subsequent thereto and
including the Closing Date, (as defined below), and during such longer
period as the Final Prospectus may be required to be delivered in
connection with sales by the Underwriters or a dealer, and during such
longer period until any post-effective amendment to the Registration
Statement becomes effective, the Registration Statement (including any
registration statement filed with the Commission pursuant to Rule 462(b))
and the Final Prospectus (as amended or supplemented if the Company shall
have filed with the Commission an amendment or supplement thereto)
complied, and will comply, in all material respects with the applicable
provisions of the Act and the Regulations, and did not, and will not,
contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements made therein (in the case of the Base Prospectus,
Preliminary Prospectus or Final Prospectus, in light of the circumstances
under which they were made) not misleading. No representation and warranty,
however, is made in this paragraph (a)(1)(ii) with respect to written
information contained in or omitted from the Registration Statement, the
Base Prospectus, any Preliminary Prospectus or the Final Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with
information furnished to the Company by or on behalf of you with respect to
the Underwriters and the plan of distribution of the Notes expressly for
use in connection with the preparation thereof.
3
<PAGE>
(d) Each of the Incorporated Documents, when the same was first filed
with the Commission, complied in all material respects with the applicable
provisions of the Act, the Regulations, the Exchange Act and the
regulations promulgated thereunder or the TIA, as applicable, and any
further documents so filed and incorporated by reference will, when they
are filed with the Commission, comply in all material respects with the
applicable provisions of the Act, the Exchange Act or the TIA and such
regulations. None of such filed documents when they were filed (or, if an
amendment with respect thereto was filed, when such amendment was filed),
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of circumstances under which they were made,
not misleading, and no such further document, when it is filed with the
Commission, will contain an untrue statement of a material fact required to
be stated therein or necessary to make the statements made therein, in
light of the circumstances under which they were made, not misleading.
(e) The Companies and the Guarantor have been duly incorporated and
are existing corporations in good standing under the laws of the State of
Delaware, with power and authority (corporate and otherwise) to own their
properties and conduct their business as described in the Registration
Statement and as shall be described in the Final Prospectus; and the
Companies and the Guarantor are duly qualified to do business as foreign
corporations in good standing in all other jurisdictions (foreign or
domestic) in which their ownership or lease of property or the conduct of
their business requires such qualification, except where the failure to so
qualify or to be in good standing would not reasonably be expected to have
a material adverse effect on the condition (financial or otherwise),
earnings or business affairs of the Companies, the Guarantor and their
subsidiaries, considered as one enterprise ("Material Adverse Effect").
(f) Each direct or indirect significant subsidiary (as such term is
defined in Rule 405 of the Regulations) (the "Significant Subsidiaries") of
the Companies has been duly incorporated and is an existing corporation in
good standing under the laws of the jurisdiction of its incorporation, with
power and authority (corporate and otherwise) to own its properties and
conduct its business as described in the Registration Statement and as
shall be described in the Final Prospectus with such exceptions as would
not reasonably be expected to have a Material Adverse Effect; each such
Significant Subsidiary is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions (foreign or
domestic) in which its ownership or lease of property or the conduct of its
business requires such qualification with such exceptions as would not
reasonably be expected to have a Material Adverse Effect; all of the issued
and outstanding capital stock of each such Significant Subsidiary of the
Company, except the Significant Subsidiaries listed on Schedule B hereto,
has been duly authorized and validly issued and is fully paid and
nonassessable and is owned by
4
<PAGE>
USI, directly or indirectly free and clear of any lien, encumbrance or
defect of any kind whatsoever.
(g) The Companies have full power and authority to authorize, issue
and sell the Notes as contemplated by this Agreement and to perform their
obligations under the Indenture, the Notes; the execution, delivery and
performance by the Companies and the Guarantor of this Agreement, the
Indenture, and the transactions contemplated hereunder and thereunder,
including the offer and sale of the Notes, have been duly authorized by all
corporate or other action by each of the Companies and the Guarantor, as
the case may be and when the Notes are authenticated by the Trustee in the
manner provided for in the Indenture, such Notes will constitute valid and
legally binding obligations of USI, USIGC, USIAH and the Guarantor, as the
case may be, enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles and except as rights to
indemnification and contribution under this Agreement and the Indenture may
be limited by applicable law.
(h) No consent, approval, authorization, or order of, or filing with,
any U.S. or non-U.S. governmental agency, body or court or of any third
party, including, without limitation, the holders of the 7 1/4% Notes
originally issued by USIAH in 1996, is required for the issuance and sale
of the Notes by the Companies or for the performance by the Companies and
the Guarantor, as the case may be, of their obligations under this
Agreement, the Indenture, the Notes except as may be required under federal
and state securities laws
(i) The execution, delivery and performance by the Companies and the
Guarantor, as applicable, of the Indenture, and this Agreement, and the
issuance and sale of the Notes and compliance with the terms and provisions
thereof will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, (i) any statute, any rule,
regulation or order of any U.S. or non-U.S. governmental agency, body or
court, having jurisdiction over the Companies or any of their subsidiaries
or any of their properties, or (ii) any agreement of instrument to which
the Companies or any such subsidiary is a party or by which the Companies
or any such subsidiary is bound or to which any of the properties of the
Companies or any such subsidiary is subject, or (iii) the charter or
by-laws of the Companies or any such subsidiary, in the case of (i) an (ii)
with such exceptions as would not reasonably be expected to have a Material
Adverse Effect.
(j) This Agreement has been duly authorized, executed and delivered by
each of the Companies and the Guarantor.
(k) The Companies and their respective subsidiaries have good and
marketable title to all real property and all other property and assets
owned by
5
<PAGE>
them, in each case free from any lien, encumbrance or defect that would
affect the value thereof or interfere with the use made or to be made
thereof by them; and the Companies and their subsidiaries hold any leased
real or personal property under valid and enforceable leases with no
exceptions that would interfere with the use made or to be made thereof by
them, in each case with such exceptions as would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
(l) The Companies and their subsidiaries possess adequate
certificates, authorities or permits issued by appropriate U.S. or non-U.S.
governmental agencies or bodies necessary to conduct the business now
operated by them and have not received any notice of proceedings, relating
to the revocation or modification of any such certificate, authority or
permit that, if determined adversely to the Companies or any of their
subsidiaries, would individually or in the aggregate be reasonably expected
to have a Material Adverse Effect.
(m) No labor dispute with the employees of the Companies or any
subsidiary exists or, to the knowledge of the Companies, is imminent that
might reasonably be expected to have a Material Adverse Effect.
(n) The Companies and their subsidiaries own, possess or can acquire
on reasonable terms, adequate trademarks, trade names and other rights to
inventions, know-how, patents, copyrights, confidential information and
other intellectual property necessary to conduct the business now operated
by them, or presently employed by them and have not received any notice of
infringement of or conflict with asserted rights of others with respect to
any such intellectual property rights, in each case with such exceptions as
would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect.
(o) Except as disclosed in the Registration Statement and as shall be
disclosed in the Final Prospectus, neither the Companies nor any of their
Significant Subsidiaries are in violation of any statute, rule, regulation,
decision or order of any governmental agency or body or any court, domestic
or foreign, relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the environment
or human exposure to hazardous or toxic substances, owns or operates any
real property contaminated with any substance that is subject to any such
environmental laws, is liable for any off-site disposal or contamination
pursuant to any such environmental laws, or is subject to any claim
relating to any environmental laws, which violation, contamination,
liability or claim would individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect; and neither of the Companies is
aware of any pending investigation which reasonably can be expected to lead
to such a claim.
(p) Except as disclosed in the Registration Statement and as shall be
disclosed in the Final Prospectus, there are no pending or, to the
Companies'
6
<PAGE>
knowledge, threatened or contemplated, actions, suits or proceedings
against or affecting either of the Companies, any of their subsidiaries or
any of their respective properties that, if determined adversely to the
Companies or any of their respective subsidiaries, would individually or in
the aggregate reasonably be expected to have a Material Adverse Effect or
would materially and adversely affect the ability of the Companies to
perform their obligations under this Agreement or under the Indenture, the
Notes.
(q) The financial statements included or incorporated by reference in
the Registration Statement and as shall be included or incorporated by
reference into the Final Prospectus present fairly the financial position
of USI and its consolidated subsidiaries as of the dates shown and their
results of operations and cash flows for the periods shown, such financial
statements have been prepared in conformity with the generally accepted
accounting principles in the United States ("GAAP") applied on a consistent
basis; the assumptions used in preparing the pro forma financial statements
included in certain of the documents incorporated into the Registration
Statement and as shall be included or incorporated by reference into the
Final Prospectus provide a reasonable basis for presenting the significant
effects directly attributable to the transactions or events described
therein, the related pro forma adjustments give appropriate effect to those
assumptions, and the pro forma columns therein reflect the proper
application of those adjustments to the corresponding historical financial
statement amounts.
(r) None of the Companies or the Guarantor is subject to any material
liability, including material contingent liabilities arising out of or in
connection with the Companies tax returns and filings, any purchase or sale
of any business, including any acquired companies, any employee benefit
plans or arrangements, any insurance maintained by the Companies, any
litigation or proceedings or any environmental laws of any kind to which
the Companies or their subsidiaries are or may be subject, that are not, to
the extent required by GAAP, fully reserved for and reflected as such on
the financial statements included in the Registration Statement and as
shall be included or incorporated by reference into the Final Prospectus.
(s) Since ______ ____, being the date of the latest financial
statements included in or incorporated by reference in the Registration
Statement and as shall be in included in or incorporated by reference into
the Final Prospectus, there has been no Material Adverse Effect, nor any
development or event involving a prospective Material Adverse Effect, and,
except for regular quarterly cash dividends of $.___ per share of USI
Common Stock paid on _______, and ________ __, ____, there has been no
dividend or distribution of any kind declared, paid or made by either of
the Companies on any class of its capital stock or default or renegotiation
by any of the Companies or any of their subsidiaries or affiliates in the
payment of any indebtedness.
7
<PAGE>
(t) Each of the Companies and their subsidiaries maintains a risk
management program, including appropriate insurance, with respect to their
properties and business against loss or damage of the kinds customarily
insured against by corporations of established reputation engaged in the
same or similar businesses and similarly situated, of such types and in
such amounts as are customarily carried under similar circumstances by such
other corporations; and neither of the Companies nor their subsidiaries has
any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business
at a cost that would not have a Material Adverse Effect.
(u) The Companies and their Subsidiaries have filed all federal,
state, local and foreign tax returns that are required to be filed or have
duly requested extensions thereof and have paid all taxes required to be
paid by any of them and any related assessments, fines or penalties, except
for any such tax, assessment, fine or penalty that is being contested in
good faith and by appropriate proceedings and with such exceptions as would
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect; and adequate charges, accruals and reserves have
been provided for in the financial statements referred to herein in respect
of all material federal, state, local and foreign taxes for all periods as
to which the tax liability of either Company or any of their subsidiaries
has not been finally determined or remains open to examination by
applicable taxing authorities.
(v) Neither of the Companies or the Guarantor is an open-end
investment company, unit investment trust or face-amount certificate
company that is or is required to be registered under the United States
Investment Company Act of 1940; and neither of the Companies or the
Guarantor is nor, after giving effect to the offering and sale of the Notes
and the application of the proceeds thereof as described in the
Registration Statement and as shall be described in the Prospectus, will be
an "investment company" as defined in such Act.
(w) The Guarantor on the date hereof is, and immediately after the
Closing Date will be, solvent. As used herein, the term "Solvent" means,
with respect to the Guarantor on a particular date, that on such date (A)
the fair market value of the assets of the Guarantor is greater than the
total amount of liabilities (including, without limitation, contingent
liabilities) of the Guarantor, (B) the present fair saleable value of the
assets of the Guarantor is greater than the amount that will be required to
pay the probable liabilities of the Guarantor on its debts as they become
absolute and matured, (C) the Guarantor is able to realize upon its assets
and pay its debts and other liabilities, including contingent obligations,
as they mature and (D) the Guarantor is in possession of sufficient capital
to meet its obligations as such obligations mature or become due and to
operate its businesses.
8
<PAGE>
(x) All disclosures regarding Year 2000 compliance required to be
described under the Act or the Regulations (including disclosures required
by Staff Legal Bulletin No. 6, SEC Release No. 33-7558, July 29, 1998) have
been included or incorporated by reference in the Final Prospectus. Neither
the Company nor any of its subsidiaries will incur significant operating
expenses or costs to ensure that its information systems will be year 2000
compliant.
(y) Any certificate signed by any officer of the Company and delivered
to the Underwriters or to counsel for the Underwriters pursuant to the
terms of this Agreement shall be deemed a representation and warranty by
such party to each Underwriter as to the matters covered thereby.
3. Purchase and Sale of the Notes; Deliver and Payment.
(a) Subject to the terms and conditions and in reliance upon the
representations and warranties of the Company herein set forth:
(i) the Company agrees to sell to the Underwriters, and the
Underwriters agree, severally and not jointly, to purchase from the
Company, at an aggregate purchase price of _____% of the principal
amount [at maturity] thereof (the "Purchase Price"), the aggregate
principal amount [at maturity] of the Notes set forth opposite such
Underwriter's name on Schedule A hereto.
(b) Delivery and payment for the Notes shall be made at the offices of
___________________ at 10:00 a.m., New York City time, on _______________,
or such later date and time, if any, as the Underwriters and the Company
shall agree (such date and time of delivery and payment for the Notes being
herein called the "Closing Date"). Delivery of the Notes shall be made to
the Underwriters against payment by the Underwriters of the Purchase Price
by wire transfer of immediately available funds to an account specified by
the Company.
Certificates for the Notes shall be in global form and registered in such
names and in such denominations as you, on behalf of the Underwriters, shall
request in writing not less than two full business days prior to the Closing
Date or the Option Closing Date. The Notes and any Option Notes shall be
delivered to you on the Closing Date Date, as the case may be, with any transfer
taxes payable in connection with the transfer of the Notes to you duly paid,
against payment of the Purchase Price therefor.
4. Certain Agreements of the Companies. Each of the Companies and the
Guarantor agrees with the several Underwriters that:
(a) The Company will promptly advise you (on behalf of the
Underwriters), and confirm such advice in writing, (i) when any
post-effective amendment to the Registration Statement has become
effective, (ii) of any request by the Commission for any amendment of or
supplement to the Registration
9
<PAGE>
Statement or Final Prospectus or for any additional information, (iii) of
the initiation or threatening of any proceedings for, or receipt by the
Company of any notice with respect to, the suspension of the qualification
of the Notes for sale in any jurisdiction or the issuance by the Commission
of any order suspending the effectiveness of the Registration Statement and
(iv) of receipt by the Company or any representative of or attorney for the
Company of any other communications from the Commission relating to the
Company, the Registration Statement, any Preliminary Prospectus, the Final
Prospectus or the transactions contemplated by this Agreement.
(b) During the period of time when a prospectus relating to the Notes
is required to be delivered hereunder or under the Act or the Regulations,
the Company shall comply with all requirements imposed upon it by the Act
and the TIA, as now existing or hereafter amended, and by the Regulations,
as from time to time in force, so far as may be necessary to permit the
continuance of sales of and dealings in the Notes as contemplated by the
provisions thereof and the Final Prospectus. If, at any time when a
prospectus relating to the Notes is required to be delivered under the Act,
any event shall have occurred as a result of which, in the judgment of the
Company, you or your counsel, the Final Prospectus as then amended or
supplemented shall contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to
make the statements made therein, in the light of the circumstances under
which they were made, not misleading, or if it shall be necessary at any
time to amend the Registration Statement or supplement the Final Prospectus
to comply with the Act, the TIA and the Regulations, the Company shall
notify the Representative promptly and prepare and file with the Commission
an appropriate post-effective amendment to the Registration Statement or
supplement to the Final Prospectus that will correct such untrue statement
or such omission and will use its best efforts to have any such
post-effective amendment to the Registration Statement declared effective
as soon as possible.
(c) The Company shall promptly deliver to you and counsel for the
Underwriters a copy of the Registration Statement, including exhibits and
all documents incorporated by reference therein and all amendments thereto,
and, so long as delivery if a prospectus may be required by the Act, as
many copies of each Preliminary Prospectus, the Final Prospectus, all
amendments of and supplements to such documents, if any, as you reasonably
may request.
(d) The Company shall make generally available (within the meaning of
Section 11(a) of the Act and Rule 158 of the Regulations) to its security
holders and to you, in such numbers as you may reasonably request for
distribution to the Underwriters, as soon as practicable but in no event
later than 45 days after the end of the Company's fiscal quarter in which
the first anniversary of the Effective Date occurs, an earnings statement
(which need not be audited), covering a period of at least twelve
consecutive full calendar months
10
<PAGE>
commencing after the Effective Date, that satisfies the provisions of
Section 11(a) of the Act and Rule 158 of the Regulations.
(e) For five years following the Closing Date, each of the Companies
and the Guarantor will furnish to you and, upon request, to each of the
other Underwriters, as soon as practicable after the end of each fiscal
year, a copy of its annual report to shareholders for such year; and each
of the Companies and the Guarantor will furnish to you (on behalf of the
Underwriters) (i) as soon as available, a copy of each report and any
definitive proxy statement of each of the Companies and the Guarantor filed
with the Commission under the Exchange Act or mailed to shareholders, if
any, and (ii) from time to time, such other information as shall be
furnished by the Companies and the Guarantor generally to the holders of
the Offering Securities.
(f) The Company will use its best efforts in cooperation with the
Underwriters to permit the Notes to be eligible for clearance and
settlement through The Depository Trust Company.
(g) The Company shall apply the net proceeds from the sale of the
Notes as shall be set forth under the caption "Use of Proceeds" in the
Final Prospectus.
(h) The Companies and the Guarantor will arrange for the qualification
of the Notes for sale and the determination of their eligibility for
investment under the laws of such jurisdictions in the United States and
Canada as you (on behalf of the Underwriters) designate and will continue
such qualification in effect so long as required for the resale of the
Notes by the Underwriters, provided that neither of the Companies or the
Guarantor will be required to qualify as a foreign corporation or a dealer
in securities or to file a general consent to service of process in any
such state or to subject itself to taxation in respect of doing business in
any jurisdiction in which it is not otherwise subject.
(i) For two years following the Closing Date, neither of the Companies
will be or become an open-end investment company, unit investment trust or
face-amount certificate company that is or is required to be registered
under Section 8 of the Investment Company Act of 1940.
(j) The Companies and the Guarantor will pay all expenses incident to
the performance of their obligations under this Agreement and the
Indenture, including (i) the fees and expenses of the Trustee and its
professional advisers; (ii) all expenses in connection with the execution,
issue, authentication, packaging and initial delivery of the Notes, the
preparation and printing of this Agreement, the Notes, the Indenture, the
Registration Statement, the Base Prospectus, the Preliminary Prospectus,
the Final Prospectus and amendments and supplements thereto, and any other
document relating to the issuance offer, sale and delivery of the Notes;
(iii) the cost of any advertising approved by the Companies in
11
<PAGE>
connection with the issue of the Notes; (iv) for reasonable documented
expenses (including fees and disbursements of counsel) incurred in
connection with qualification of the Notes for sale under the laws of such
jurisdictions in the United States and Canada as you designate and the
printing of memoranda relating thereto; (v) for any fees charged by
investment rating agencies for the rating of the Notes; and (vi) for
expenses incurred in distributing the Registration Statement, the Base
Prospectus, the Preliminary Prospectus, the Final Prospectus and the Notes
(including any amendments and supplements thereto) to the Underwriters. The
Companies and the Guarantor will also pay or reimburse the Underwriters (to
the extent incurred by them) for all reasonable travel expenses of the
Underwriters and the Companies' respective officers and employees and any
other reasonable expenses of the Underwriters and the Companies in
connection with attending or hosting meetings with prospective purchasers
of the Notes from the Underwriters. Except as provided in this Section 4(j)
and in Section 6, the Underwriters shall pay all of their own costs and
expenses, including the fees of their counsel and transfer taxes on resales
by them of the Notes.
(k) In connection with the offering, until you shall have notified the
Companies and the Guarantor and the other Underwriters of the completion of
the resale of the Notes, neither of the Companies nor any of their
affiliates has or will, either alone or with one or more other persons, bid
for or purchase for any account in which it or any of its affiliates has a
beneficial interest any Notes or attempt to induce any person to purchase
any Notes; and neither it nor any of its affiliates will make bids or
purchases for the purposes of creating actual, or apparent, active trading
in, or of raising the price of, the Offered Securities.
5. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriter to purchase and pay for the Notes on the Closing Date
will be subject to the accuracy of the representations and warranties on the
part of the Companies and the Guarantor herein, to the accuracy of the
statements of officers of each of the Companies and the Guarantor made pursuant
to the provisions hereof as of the Closing Date, to the performance by the
Companies and the Guarantor of their obligations hereunder and to the following
additional conditions precedent:
(a) Any post-effective amendments to the Registration Statement
required to be filed by the Company prior to the Closing Date shall have
become effective and no stop order suspending the effectiveness of the
Registration Statement or any such post-effective amendment shall have been
issued and no proceedings therefor shall have been initiated or, to the
knowledge of the Company, threatened by the Commission.
(b) On the Closing Date, the Final Prospectus shall not contain an
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
12
<PAGE>
(c) The Underwriters shall have received a letter, dated the date of
this Agreement, of Ernst & Young LLP, confirming that they are independent
public accountants within the meaning of the Securities Act and the
applicable published rules and regulations thereunder ("Accounting Rules
and Regulations") substantially in the form set forth in Exhibit A hereto:
(d) Subsequent to the execution and delivery of this Agreement there
shall not have occurred (A) any change, or any development or event
involving a prospective change, in the condition (financial or other),
business, properties, results of operations or prospects of the Companies
or their subsidiaries which, in your judgment, is material and adverse and
makes it impractical or inadvisable to proceed with completion of the
offering or the sale of and payment for the Notes; (B) any downgrading in
the rating of any debt securities of the Companies or the Guarantor by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Securities Act), or any public
announcement that any such organization has under surveillance or review
its rating of any debt securities of either of the Companies or the
Guarantor (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of such
rating or any of their subsidiaries); (C) any suspension or limitation of
trading in securities generally on the New York Stock Exchange or any
setting of minimum prices for trading on such exchange, or any suspension
of trading of any securities of either of the Companies or the Guarantor on
any exchange or in the over-the-counter market; (D) any banking moratorium
declared by U.S. Federal or New York authorities; or (E) any outbreak or
escalation of major hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national or
international calamity or emergency if, in your judgment, the effect of any
such outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the offering or
sale of and payment for the Notes.
(e) The Underwriters shall have received opinions, dated the Closing
Date, of (i) Weil, Gotshal & Manges, LLP, counsel for the Companies, and
(ii) George MacLean, General Counsel of the Companies and the Guarantor,
substantially to the effect set forth in Exhibits B-1 and B-2 hereto.
(f) The Underwriters shall have received from _________, counsel for
the Underwriters, an opinion as to such matters as Underwriters shall
request and the Companies and the Guarantor shall have furnished to such
counsel such documents as they request for the purpose of enabling them to
pass upon such matters.
(g) The Underwriters shall have received a certificate, dated the
Closing Date, of the President, Treasurer or any Vice President and a
principal financial or accounting officer of the Companies and the
Guarantor, as the case may be, in which such officers, to the best of their
knowledge, shall state that the
13
<PAGE>
representations and warranties of the Companies in this Agreement are true
and correct, that the Companies and the Guarantor have complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date, and that, subsequent
to the date of the most recent financial statements in the Final
Prospectus, there has been no Material Adverse Effect.
(h) The Underwriters shall have received a letter, dated the Closing
Date, of Ernst & Young LLP which meets the requirements of subsection (c)
of this Section, except that the specified date referred to in such
subsection will be a date not more than three business days prior to the
Closing Date for the purposes of this subsection.
For purposes of the foregoing, the Companies will furnish the Underwriter
with such conformed copies of such opinion, certificates, letters and documents
as the Underwriters reasonably request. You may in your sole discretion waive on
behalf of the Underwriters compliance with any conditions to the obligations of
the Underwriters hereunder.
6. Indemnification and Contribution.
(a) The Companies and the Guarantor, on a joint and several basis,
will indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter
may become subject, under the Securities Act or the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus or Final Prospectus, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that
(A) the Companies and the Guarantor will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or
is based upon an untrue statement or alleged untrue statement in or
omission or alleged omission from any of such documents made in reliance
upon and in conformity with written information furnished to the Companies
by any Underwriter specifically for use therein, and (B) such indemnity
with respect to any untrue statement or omission or alleged untrue
statement or omission in the Preliminary Prospectus shall not inure to the
benefit of the Underwriter from whom the person asserting such claim
purchased the Notes if such person was not sent a copy of the Final
Prospectus at or prior to the confirmation of the initial resale of the
Notes to such
14
<PAGE>
person when such statement or omission contained in the Preliminary
Prospectus was corrected in the Final Prospectus.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless the Companies and the Guarantor against any losses, claims,
damages or liabilities to which the Companies may become subject, under the
Securities Act or the Exchange Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus or Final Prospectus, or any amendment or supplement thereto, or
arise out of or are based upon the omission or the alleged omission to
state therein a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, in each case to the extent, but only to the extent that such
untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written
information furnished to the Companies by such Underwriters specifically
for use therein, and will reimburse any legal or other expenses reasonably
incurred by the Companies in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under subsection (a) or (b) above. In case any such
action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and after notice from the indemnifying party to
such indemnified party of its election so to assume the defense thereof,
the indemnifying party will not be liable to such indemnified party under
this Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of
any pending or threatened action in respect of which any indemnified party
is or could have been a party and indemnity could have been sought
hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action.
15
<PAGE>
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a)
or (b) above, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Companies on the one hand and the Underwriters on the other
from the offering of the Notes or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Companies and the Guarantor on
the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The
relative benefits received by the Companies and the Guarantor on the one
hand and the Underwriter on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Companies and the Guarantor bear to the total
discounts and commissions received by the Underwriters from the Companies
and the Guarantor under this Agreement. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Companies and the Guarantor or the Underwriter and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim
which is the subject of this subsection (d). Notwithstanding the provisions
of this subsection (d), no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Notes
purchased by it were resold exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. The Underwriters'
obligations in this subsection (d) to contribute are several in proportion
to their respective purchase obligations and not joint.
(e) The obligations of the Companies and the Guarantor under this
Section shall be in addition to any liability which the Companies and the
Guarantor may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within the
meaning of the Securities Act or the Exchange Act; and the obligations of
the Underwriter under this Section shall be in addition to any liability
which the respective Underwriter may otherwise have and shall extend, upon
the same terms and conditions, to each person, if any, who controls either
of the Companies within the meaning of the Securities Act or the Exchange
Act.
16
<PAGE>
7. Default by an Underwriter.
(a) If any Underwriter shall default, in whole or in part, in its
obligation to purchase Notes hereunder, and if the Notes with respect to
which such default relates do not (after giving effect to arrangements, if
any, made pursuant to subsection (b) below) exceed in the aggregate 10% of
the total number of Notes that all Underwriters have agreed to purchase
hereunder, then the Notes to which the default relates shall be purchased
by the non-defaulting Underwriters on a pro rata basis based on the amount
of Notes to be purchased as set forth on Schedule A.
(b) If such default relates to more than 10% of the Notes, the you may
in your discretion arrange for another party or parties (including the
non-defaulting Underwriters, if they should so agree) to purchase those of
the Notes to which such default relates on the terms contained herein. If
within thirty-six (36) hours after such a default you do not arrange for
the purchase of those of the Notes to which such default relates as
provided in this Section 7, this Agreement shall thereupon terminate,
without liability on the part of the Company with respect thereto (except
in each case as provided in Section 6) or the non-defaulting Underwriters
(except as provided in Section 6), but nothing in this Agreement shall
relieve any defaulting Underwriter of its liability, if any, to the other
Underwriters and the Company for damages occasioned by its or their default
hereunder.
(c) If the Notes to which the default relates are to be purchased by
any non-defaulting Underwriters, or are to be purchased by another party or
parties as aforesaid, you or the Company shall have the right to postpone
the Closing Date for a period not exceeding five (5) business days, in
order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Final Prospectus or in any other documents
and arrangements, and the Company agrees to file promptly any amendment or
supplement to the Registration Statement or the Final Prospectus that, in
the opinion of Underwriters' counsel, may thereby be made necessary or
advisable. The term "Underwriter" as used in this Agreement shall include
any party substituted under this Section with like effect as if it had
originally been a party to this Agreement with respect to such Notes.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Companies or their respective officers and of the several Underwriters set forth
in or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made by
or on behalf of any Underwriter , the Companies, the Guarantor and any of their
respective representatives, officers or directors or any controlling person, and
will survive delivery of and payment for the Notes. If this Agreement is
terminated pursuant to Section 8 or if for any reason the purchase of the Notes
by the Underwriter is not consummated, the Companies shall remain responsible
for the expenses to be paid or reimbursed by them pursuant to Section
17
<PAGE>
5 and the respective obligations of the Companies and the Underwriters pursuant
to Section 7 shall remain in effect. If the purchase of the Notes by the
Underwriter is not consummated for any reason other than solely because of the
termination of this Agreement pursuant to Section 7 or the occurrence of any
event specified in clause (C), (D) or (E) of Section 6(d), the Companies will
reimburse the Underwriters for all out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by them in connection with the
offering of the Notes.
9. Notices. All communications hereunder will be in writing and, if sent to
the Underwriters will be mailed, delivered or faxed and confirmed to the
Underwriters, c/o _____________________, Attention: ____________________, or, if
sent to the Companies, will be mailed, delivered or telegraphed and confirmed to
them, c/o U.S. Industries, Inc., 101 Wood Avenue South, P.O. Box 169, Iselin,
New Jersey 08830-0169, Attention: George H. MacLean, Esq.; provided, however,
that any notice to a Underwriter pursuant to Section 6 will be mailed, delivered
or telegraphed and confirmed to such Underwriter .
10. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the controlling
persons referred to in Section 6, and no other person will have any right or
obligation hereunder.
11. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
12. Submission to Jurisdiction. The Companies and the Guarantor hereby
submit to the non-exclusive jurisdiction of the Federal and state courts in the
Borough of Manhattan in The City of New York in any suit or proceeding arising
out of or relating to this Agreement or the transactions contemplated hereby.
13. Application Law; Jurisdiction. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
18
<PAGE>
If the foregoing is in accordance with the your understanding of our
agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement between the Companies and the
several Underwriters in accordance with its terms.
Very truly yours,
U.S. INDUSTRIES, INC., as Co-Issuer
By: _____________________________________
Name:
Title:
USI GLOBAL CORP., as Co-Issuer
By: _____________________________________
Name:
Title:
USI AMERICAN HOLDINGS, INC., as
Co-Issuer
By: _____________________________________
Name:
Title:
USI ATLANTIC CORP., as Guarantor
By: _____________________________________
Name:
Title:
19
<PAGE>
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written.
[MANAGING UNDERWRITER]
By: ______________________
Name:
Title:
[OTHER UNDERWRITERS]
By: ______________________
Name:
Title:
20
<PAGE>
SCHEDULE A
UNDERWRITERS
Name of Underwriter Amount of Notes to be
Purchased
_____________________.................................
-----------
_____________________.................................
-----------
_____________________.................................
-----------
_____________________.................................
-----------
TOTAL: ===========
A-1
<PAGE>
Schedule B
B-1
<PAGE>
Exhibit A
[Accountant's Comfort Letter]
A-1
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
============== ============== ============== ============== ==============
<CAPTION>
Ratio of Earnings to Fixed Charges
-------------------------------------
(in $millions except ratios) Six Months Ended March 31
-------------------------------------
1999 1998
<S> <C> <C>
Fixed Charges
Interest Expense $ 37 $ 33
Interest Portion of Rent (est.) 4 5
------------------ ------------------
Sub-Total $ 41 $ 38
------------------ ------------------
Earnings
Income from Continuing Ops $ 90 $ 110
before taxes
plus: Fixed Charges 41 38
------------------ ------------------
Sub-Total $ 131 $ 148
------------------ ------------------
------------------ ------------------
Earnings/Fixed Charges (x) = 3.2 3.9
================== ==================
</TABLE>
Exhibit 23.1
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in 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 U.S. 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 2, 1999
Exhibit 23.2
Consent of PricewaterhouseCoopers LLP
Consent of Independent Accountants
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of U.S. Industries, Inc. of our report 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.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Florham Park, New Jersey
August 2, 1999
