AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 13, 1999
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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U.S. INDUSTRIES, INC.
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)
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DELAWARE 3998 22-3568449
DELAWARE 3998 22-3363062
DELAWARE 3998 22-3369326
(State or other (Primary Standard Industrial (I.R.S. Employer
Jurisdiction Classification Code Number) Identification No.)
of Incorporation
or Organization)
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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)
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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
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practicable after this registration statement becomes effective.
If the securities being registered on this form are being offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, check the following box. [ ]
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------
PROPOSED
PROPOSED MAXIMUM
MAXIMUM AGGREGATE
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER UNIT PRICE REGISTRATION FEE
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
7-1/8% Senior Notes due 2003 $250,000,000 100% $250,000,000 $69,500
- --------------------------------------------------------------------------------------------------
Guarantee of 7-1/8% Senior
Notes due 2003 $250,000,000 * * $0(1)
- --------------------------------------------------------------------------------------------------
</TABLE>
(1) USI Atlantic Corp. a direct subsidiary of U.S. Industries, Inc. will
guarantee the payment of the 7-1/8% Senior Notes due 2003. Pursuant to Rule
457 (n) under the Securities Act of 1933, no filing fee is required.
* Not Applicable
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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.
================================================================================
NYFS11...:\95\78595\0012\2041\OFFN058B.14E
<PAGE>
SUBJECT TO COMPLETION, DATED JANUARY 13,1999
U.S. INDUSTRIES, INC.
USI AMERICAN HOLDINGS, INC.
Issuers
USI ATLANTIC CORP.
Guarantor
Offer to Exchange
All Outstanding 7-1/8% Senior Notes due 2003 (the "Old Notes") for
7-1/8% Senior Notes due 2003 which have been
registered under the Securities Act of 1933, as amended (the "New Notes")
THE NEW NOTES
- - Will be identical in all material respects to the Old Notes, except for the
elimination of certain transfer restrictions, registration rights and
liquidated damages provisions relating to the Old Notes.
- - Interest will accrue at the rate of 7 1/8% per annum, payable on each April
15 and October 15, commencing April 15, 1999.
- - Will rank equally with all existing and future unsubordinated indebtedness.
- - Will be fully and unconditionally guaranteed on a senior unsecured basis by
USI Atlantic Corp.
MATERIAL TERMS OF THE EXCHANGE OFFER
- - Expires at 5:00 p.m., New York City time, on [ ], 1999, unless extended.
- - Subject to all customary conditions.
- - All outstanding Old Notes that are validly tendered and not validly withdrawn
will be exchanged for an equal principal amount of New Notes.
- - Tenders of Old Notes may be withdrawn at any time prior to the expiration of
the Exchange Offer.
-----------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE NEW NOTES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS MAY NOT BE 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 IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
The date of this Prospectus is _________, 1999.
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TABLE OF CONTENTS
PAGE
Available Information........................................... 3
Incorporation of Certain Documents by
Reference.................................................... 3
Disclosure Regarding Forward-Looking
Statements................................................... 4
Prospectus Summary.............................................. 5
The Company.................................................. 5
The Exchange Offer .......................................... 6
Terms of the New Notes ...................................... 10
Use of Proceeds................................................. 12
Capitalization.................................................. 12
Ratio of Earnings to Fixed Charges.............................. 13
The Exchange Offer.............................................. 14
Procedures for Tendering Old Notes.............................. 18
Description of the New Notes.................................... 23
Certain Federal Income Tax Considerations....................... 42
Notice to Canadian Residents.................................... 44
Legal Matters................................................... 45
Experts......................................................... 45
2
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AVAILABLE INFORMATION
We are subject to the informational and reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and,
accordingly, we file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission (the "SEC"). Prior
to a business combination transaction (the "Zurn Merger") consummated in June
1998, which led to the creation of the Company as the parent of each of USI
Atlantic Corp. ("USI Atlantic"), then named "U.S. Industries, Inc.", and Zurn
Industries, Inc. ("Zurn"), each of USI Atlantic and Zurn was a separate public
company subject to the periodic reporting requirements of the Exchange Act. As a
result of the Zurn Merger, USI Atlantic and Zurn are wholly-owned subsidiaries
of ours and are no longer independently subject to periodic reporting
requirements.
You may read and copy the reports and other information that we file with
the SEC at the SEC's public reference facilities at Room 1024, 450 Fifth Street,
N.W., Washington D.C. 20549. You may also obtain information about us from the
following regional offices of the SEC: Seven World Trade Center, 13th Floor, New
York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60601-2511. Copies of these materials can be obtained at
prescribed rates. Our filings with the SEC are also available on the SEC's home
page on the Internet at http://www.sec.gov.
Our common stock is listed on the New York Stock Exchange, Inc. ("NYSE") and
related materials may be inspected at the offices of the NYSE at 20 Broad
Street, New York, New York 10005.
We have filed with the SEC a Registration Statement on Form S-4 (the
"Registration Statement") with respect to the New Notes. This Prospectus, which
is a part of the Registration Statement, omits certain information included in
the Registration Statement. Statements made in this Prospectus as to the
contents of any contract, agreement or other document are not necessarily
complete. With respect to each such contract, agreement or other document filed
as an exhibit to the Registration Statement, we refer you to such exhibit for a
more complete description of the matter involved, and each such statement is
deemed qualified in its entirety to such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file with
the SEC. 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 SEC subsequent to this
Prospectus will automatically be deemed to update and supersede this
information. Any information so updated or superseded shall not be a part of
this Prospectus except as so updated or superseded. We incorporate by reference
the following documents which have been filed with the SEC:
1. Our Annual Report on Form 10-K for the year ended October 3, 1998 filed
December 14, 1998 (the "Form 10-K"); and
2. Our Proxy Statement, dated January 4, 1999.
We 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 the Exchange Offer.
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, other than exhibits
to such documents, unless such exhibits are specifically incorporated by
reference in such documents. Requests for such copies and information should be
directed to George H.
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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.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus, including the documents incorporated by reference herein,
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 deemed 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 such forward-looking statements,
including factors which are outside our control, such as interest rates, foreign
currency exchange rates, instability in domestic and foreign financial markets,
consumer spending patterns, availability of consumer and commercial credit,
levels of residential and commercial construction, levels of automotive
production and changes in raw material costs and Year 2000 issues, along with
the other factors noted in this Prospectus, and in the other documents
incorporated by reference herein. In addition, our future results are subject to
uncertainties relating to our ability to consummate our business strategy,
including realizing marketing synergies and cost savings 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 the
foregoing factors.
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PROSPECTUS SUMMARY
This brief summary highlights selected information from the Prospectus. It
does not contain all of the information that is important to you. We urge you to
carefully read and review the entire Prospectus and the other documents to which
it refers to fully understand the terms of the New Notes and the exchange offer.
In this Prospectus, unless otherwise indicated, the terms "the Company,"
"we," "us" and "our" refer to USI and its consolidated subsidiaries.
THE COMPANY
We manufacture and distribute a broad range of consumer and industrial
products through four operating divisions which are summarized below. Our
businesses have operations and markets both inside and outside the United
States. Please refer to our Form 10-K for further information.
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, ladders, windows and metal television picture tube components.
Its brand names include Ames, Garant, Spear and Jackson and Woodings-Verona
tools; Keller ladders; and BiltBest windows.
o USI DIVERSIFIED manufactures a wide range of consumer and industrial
products. These include Rainbow vacuum cleaners; Ertl die-cast toys and
replicas; Georgia Boot and Durango footwear; leather, metal and plastic
automotive components; overhauled aircraft engine bearings; and leadframes
for the electronics industry.
5
<PAGE>
THE EXCHANGE OFFER
Securities To Be Exchanged........ On October 27, 1998, we issued $250 million
aggregate principal amount of Old Notes to
Credit Suisse First Boston Corporation, BT
Alex. Brown Incorporated and NationsBanc
Montgomery Securities LLC (the "Initial
Purchasers") in a transaction exempt from
the registration requirements of the
Securities Act (the "Initial Offering"). The
terms of the New Notes and the Old Notes are
substantially identical in all material
respects, except for the elimination of
certain transfer restrictions, registration
rights and liquidated damages provisions
relating to the Old Notes. See "Description
of the New Notes."
The Exchange Offer................ We are offering to exchange $1,000 principal
amount of New Notes in exchange for each
$1,000 principal amount of Old Notes.
As of the date hereof, Old Notes
representing $250 million aggregate
principal amount are outstanding.
Resales of the New Notes.......... We believe that New Notes issued pursuant to
the Exchange Offer may be offered for
resale, resold or otherwise transferred by
you, without compliance with the
registration and prospectus delivery
requirements of the Securities Act if:
(i) the New Notes are acquired in the
ordinary course of your business;
(ii) you are not engaging in and do not
intend to engage in a distribution of such
New Notes;
(iii) you do not have an arrangement or
understanding with any person to participate
in the distribution of such New Notes; and
(iv) you are not an "affiliate" of ours.
If you do not meet all of the above
conditions and you transfer any New Note
issued to you without delivering a
prospectus meeting the requirements of the
Securities Act or without an exemption from
registration of your Notes from such
requirements, you may incur liability under
the Securities Act. We do not assume, or
indemnify you against, such liability. Each
broker-dealer that receives New Notes for
its own account in exchange for Old Notes
which were acquired by such broker-dealer as
a result of market-making activities or
6
<PAGE>
other trading activities, must acknowledge
that it will deliver a prospectus meeting
the requirements of the Securities Act in
connection with any resales of such New
Notes. A broker-dealer may use this
Prospectus for an offer to resell or
otherwise transfer the New Notes.
Registration Rights Agreement..... You are entitled under a Registration Rights
Agreement entered into in connection with
the Initial Offering to exchange your Old
Notes for New Notes with substantially
identical terms. The Exchange Offer is
intended to satisfy these rights. After the
Exchange Offer is complete, except in very
limited circumstances described in this
Prospectus under "The Exchange Offer," you
will no longer be entitled to any exchange
or registration rights with respect to your
Notes.
Expiration Date................... The Exchange Offer will expire at 5:00 p.m.,
New York City time, on _________ __, 199_,
unless we decide to extend the Exchange
Offer.
Withdrawal........................ You may withdraw the tender of your Old
Notes at any time prior to 5:00 p.m., New
York City time, on ____________ __, 199_, or
such later date and time to which we extend
the Exchange Offer. We will return to you
any Old Notes not accepted for exchange for
any reason without expense to you as soon as
practicable after the expiration or
termination of the Exchange Offer.
Interest On The New Notes
And The Old Notes................. The New Notes and the Old Notes
(collectively, the "Notes") will pay
interest at the rate of 7-1/8% per annum,
payable on April 15 and October 15 of each
year, commencing April 15, 1999. Interest on
the New Notes will accrue from the date of
the original issuance of the Old Notes or
from the date of the last periodic payment
of interest on the Old Notes, whichever is
later. No additional interest will be paid
on Old Notes tendered and accepted for
exchange.
Conditions To The Exchange Offer.. The Exchange Offer is subject to certain
customary conditions, certain of which may
be waived by us. See "The Exchange Offer."
Procedures For Tendering
Old Notes......................... If you wish to tender your Old Notes
pursuant to the Exchange Offer you must
transmit to The First National Bank of
Chicago, as the Exchange Agent, by 5:00
p.m., New York City time, on the Expiration
Date:
7
<PAGE>
o a properly completed and duly executed
Letter of Transmittal, which accompanies
this Prospectus, or a facsimile of the
Letter of Transmittal, including all other
documents required by the Letter of
Transmittal, to the Exchange Agent at its
address set forth on the cover page of the
Letter of Transmittal and one or more
outstanding certificated Old Notes, or
o an Agent's Message transmitted by means of
The Depository Trust Company's ("DTC")
Automated Tender Offer Program ("ATOP")
system and received by the Exchange Agent
and forming part of a confirmation of
book-entry transfer in which you acknowledge
and agree to be bound by the terms of the
Letter of Transmittal,
and either:
o a timely confirmation of book-entry transfer
of your Old Notes into the Exchange Agent's
account at DTC, pursuant to the procedure
for book-entry transfers described in this
Prospectus under "Procedures for Tendering
Old Notes," or
o the documents necessary for compliance with
the guaranteed delivery procedures set forth
below.
By executing the Letter of Transmittal, you
will represent to us that, among other
things, (i) the New Notes acquired pursuant
to the Exchange Offer are being obtained in
the ordinary course of your business, (ii)
you are not engaging in and do not intend to
engage in a distribution of such New Notes,
(iii) you do not have an arrangement or
understanding with any person to participate
in the distribution of such new Notes, and
(iv) you are not our "affiliate," as defined
under Rule 405 of the Securities Act.
Pursuant to the Registration Rights
Agreement, we are required to file a
registration statement for a continuous
offering pursuant to Rule 415 of the
Securities Act in respect of the Old Notes
of any holder that would not receive freely
tradeable New Notes in the Exchange Offer or
is ineligible to participate in the Exchange
Offer and indicates that it wishes to have
its Old Notes registered under the
Securities Act. See "Procedures for
Tendering Old Notes."
8
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Exchange Agent.................... The First National Bank of Chicago is
serving as Exchange Agent (the "Exchange
Agent") in connection with the Exchange
Offer.
Federal Income Tax Considerations.. The exchange of Old Notes for New Notes
pursuant to the Exchange Offer should not
constitute a sale or an exchange for federal
income tax purposes. See "Certain Federal
Income Tax Considerations."
Effect Of Not Tendering........... If you do not participate in the Exchange
Offer, upon completion of the Exchange
Offer, the liquidity of the market for your
Old Notes could be adversely affected.
9
<PAGE>
TERMS OF THE NEW NOTES
Issuers........................... U.S. Industries, Inc.
USI American Holdings, Inc.
Securities Offered................ $250 million aggregate principal amount of
7-1/8% Senior Notes due 2003 which have been
registered under the Securities Act.
Maturity Date..................... October 15, 2003.
Interest.......................... The New Notes will bear interest at a rate
of 7-1/8% per annum, payable semi-annually
on each April 15 and October 15, commencing
April 15, 1999.
Sinking Fund...................... None.
Optional Redemption............... The New Notes are redeemable, in whole or in
part, at our option on 30 days' prior notice
at the redemption prices set forth herein,
plus accrued and unpaid interest to the date
of redemption. See "Description of the New
Notes-Optional Redemption."
Consolidation, Merger, Conveyance,
Transfer or Lease................. We have agreed that we will not enter into
any merger, consolidation or amalgamation,
or liquidate, wind up or dissolve the
Company (or suffer any liquidation or
dissolution), or convey, sell, lease,
assign, transfer or otherwise dispose of,
all or substantially all of our respective
properties, business or assets. See
"Description of the New Notes-Consolidation,
Merger, Conveyance, Transfer or Lease."
Guarantees........................ The New Notes are fully and unconditionally
guaranteed (the "Guarantee") on a senior
unsecured basis by the Guarantor. The
obligation of the Guarantor with respect to
the Guarantee will rank equally with all
existing and future unsecured and
unsubordinated indebtedness of the
Guarantor. See "Description of the New
Notes-Guarantees."
Ranking........................... The New Notes are general unsecured
obligations of the Company. The Notes will
rank equally with all other existing and
future unsecured and unsubordinated
indebtedness of the Issuers.
Events of Default................. The Indenture enumerates certain
circumstances which are considered Events of
Default with respect to any series of Notes
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offered pursuant thereto. See "Description
of the New Notes-Events of Default."
Restrictive Covenants............. The Indenture contains certain limitations
on our ability and the ability of our
subsidiaries to, among other things, incur
additional indebtedness, create liens, and
enter into certain sale and leaseback
transactions. See "Description of the New
Notes-Certain Covenants."
Use of Proceeds................... The Company will not receive any cash
proceeds from the Exchange Offer.
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USE OF PROCEEDS
The Exchange Offer is intended to satisfy certain of the Issuers'
obligations under the Registration Rights Agreement. The Issuers will not
receive any cash proceeds from the issuance of the New Notes offered hereby. In
consideration for issuing the New Notes contemplated by this Prospectus, the
Issuers will receive in exchange Old Notes in like principal amount, the terms
of which are identical in all material respects to the terms of the New Notes,
except as otherwise described in this Prospectus. The Old Notes surrendered in
exchange for the New Notes will be retired and cancelled and cannot be reissued.
Accordingly, the issuance of the New Notes will not result in any increase or
decrease in the indebtedness of the Issuers.
The net proceeds of the Initial Offering, after deducting the estimated
underwriting discounts and expenses, were $247 million. We applied $200 million
of the net proceeds to repay all amounts outstanding under a short-term note.
The remainder was used to repay borrowings under uncommitted bank credit lines,
and for general corporate purposes.
CAPITALIZATION
The following table, which is unaudited, sets forth the capitalization of
the Company at September 30, 1998 on an adjusted basis after giving effect to
the Initial Offering and the use of proceeds therefrom, reduced by transaction
costs, fees and costs paid in October 1998 to settle outstanding interest rate
protection agreements net of tax benefits. See "Use of Proceeds." This table
should be read in conjunction with the financial information included in the
Form 10-K. See "Incorporation of Certain Documents by Reference."
Actual As Adjusted
------ -----------
($ in millions)
Cash and cash equivalents.................... $ 44 $ 44
===== =====
Short-term debt(1)........................... $ 19 $ 19
Long-term Debt:..............................
Credit Facility:........................... 456 456
7 1/4% Notes Due 2006...................... 123 123
7 1/8% Notes Due 2003...................... - 250
Other(2)................................... 368 134
----- -----
Total debt.............................. 966 982
----- -----
Stockholders' equity......................... 960 960
----- -----
Total capitalization....................$1,926 $1,942
====== ======
- ------------------------
(1) Consists of notes payable and current maturities of long-term debt.
(2) Primarily includes borrowings under a short-term note (see "Use of
Proceeds") and borrowings under uncommitted bank lines of credit which
are classified as long-term as they are expected to be refinanced with
long-term borrowings.
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RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the Company for fiscal 1998, 1997, 1996, 1995 and 1994:
FISCAL YEAR ENDED SEPTEMBER 30,
- ------------------------------------------------------------------------
1998 1997 1996 1995 1994
- -------------- -------------- ------------- ----------- -----------
2.1(1) 4.5x 3.6x 1.1x(2) 1.9x
(1)The ratio of earnings to fixed charges for fiscal 1998 was affected by
non-recurring and unusual pre-tax charges of $154 million. Before taking into
account such charges, the ratio of earnings to fixed charges for fiscal 1998
would have been 4.0x.
(2)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 such charges, the ratio of earnings
to fixed charges for fiscal 1995 would have been 2.0x.
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.
13
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THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
Exchange Offer Registration Statement. We issued the Old Notes on October
27, 1998 (the "Initial Issue Date"). The Initial Purchasers have advised us that
they subsequently resold the Old Notes to "qualified institutional buyers" in
reliance on Rule 144A under the Securities Act. As a condition to the Initial
Offering, we entered into the Registration Rights Agreement, pursuant to which
we agreed for the benefit of all holders of the Old Notes, at our own expense,
to do the following:
(1) to file the Registration Statement with the SEC within 90 days after the
Initial Issue Date with respect to the Exchange Offer of the Old Notes for
the New Notes,
(2) to use our best efforts to cause the Registration Statement to be declared
effective under the Securities Act within 180 days after the Initial Issue
Date,
(3) to use our best efforts to keep the Registration Statement effective until
the closing of the Exchange Offer, and
(4) to use our best efforts to cause the Exchange Offer to be consummated
within 210 days after the Initial Issue Date.
We also agreed that promptly upon the Registration Statement being
declared effective, we would offer to all holders of the Old Notes an
opportunity to exchange the Old Notes for the New Notes. Further, we agreed to
keep the Exchange Offer open for acceptance for not less than 20 business days
(or longer if required by applicable law), after the date notice of the Exchange
Offer is mailed to the holders of Old Notes. For each Old Note validly tendered
pursuant to the Exchange Offer and not withdrawn, the holder of such Old Note
will receive a New Note having a principal amount equal to that of the tendered
Old Note. Interest on each New Note will accrue from the last date on which
interest was paid on the tendered Old Note in exchange therefor or, if no
interest was paid on such Old Note, from the Initial Issue Date.
The following is a summary of the Registration Rights Agreement. It does
not purport to be complete and it does not contain all of the information you
might find useful. For further information you should read the Registration
Rights Agreement, a copy of which has been filed as an exhibit to the
Registration Statement of which this Prospectus is a part. The Exchange Offer is
intended to satisfy certain of the Issuers' and the Guarantor's obligations
under the Registration Rights Agreement.
Transferability. We issued the Old Notes on October 27, 1998 in a
transaction exempt from the registration requirements of the Securities Act and
applicable state securities laws. Accordingly, the Old Notes may not be offered
or sold in the United States unless registered or pursuant to an applicable
exemption under the Securities Act and applicable state securities laws. Based
on no-action letters issued by the staff of the SEC with respect to similar
transactions, we believe that the New Notes issued pursuant to the Exchange
Offer in exchange for Old Notes may be offered for resale, resold and otherwise
transferred by holders of Notes who are not affiliates of the Issuers without
further compliance with the registration and prospectus delivery requirements of
the Securities Act, provided that such holder represents to us that:
(i) such New Notes are acquired in the ordinary course of such holders'
business; and
(ii) such holders are not engaged in, have no understanding with any person
to participate in, and do not intend to engage in, any distribution of the New
Notes.
However, we have not sought a no-action letter with respect to the Exchange
Offer and we can not assure you that the staff of the SEC would make a similar
determination with respect to the Exchange Offer. Any holder who tenders his Old
Notes in the Exchange Offer with any intention of participating in a
distribution of New Notes (1) cannot rely on such an interpretation by the staff
of the SEC, (2) will not be able to validly tender Old Notes in the Exchange
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<PAGE>
Offer and (3) must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any secondary resale
transactions.
In addition, each broker-dealer that receives New Notes for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Notes. The Letter of
Transmittal accompanying this Prospectus states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
acting in the capacity of an "underwriter" within the meaning of Section 2(11)
of the Securities Act. This Prospectus, as it may be amended or supplemented
from time to time, may be used by a broker-dealer in connection with resales of
New Notes received in exchange for Old Notes where such Old Notes were acquired
by such broker-dealer as a result of market-making activities or other trading
activities. Pursuant to the Registration Rights Agreement, we agreed to make
this Prospectus available to any broker-dealer for use in connection with any
such resale.
Shelf Registration Statement. We will, at our cost, (a) as promptly as
practicable, file with the SEC a Shelf Registration Statement covering resales
of the Notes, (b) use our best efforts to cause the Shelf Registration Statement
to be declared effective under the Securities Act and (c) use our best efforts
to keep the Shelf Registration Statement effective for a period of two years
after its effective date if:
(1) there are any changes in law or the applicable interpretations of the
staff of the SEC which do not permit us to effect the Exchange Offer;
(2) for any other reason the Exchange Offer is not consummated within 210 days
after the Initial Issue Date;
(3) the Initial Purchasers so request with respect to Old Notes not eligible
to be exchanged for New Notes in the Exchange Offer; or
(4) there is a request by a holder who is not permitted by applicable law to
participate in the Exchange Offer or by a holder who elected to
participate in the Exchange Offer but did not receive fully tradeable New
Notes pursuant to the Exchange Offer.
We will, in the event of the filing of the Shelf Registration Statement,
provide to each holder of the Old Notes copies of the prospectus which is a part
of the Shelf Registration Statement, notify each such holder when the Shelf
Registration Statement for the Old Notes has become effective and take certain
other actions as are required to permit unrestricted resales of the Old Notes. A
holder of Old Notes who sells such Old Notes pursuant to the Shelf Registration
Statement generally will (1) be required to be named as a selling
security-holder in the related prospectus, (2) be required to deliver the
prospectus to purchasers, (3) be subject to certain of the civil liability
provisions under the Securities Act in connection with such sales and (4) be
bound by the provisions of the Registration Rights Agreement which are
applicable to such holder (including certain indemnification obligations). In
addition, each holder of the Old Notes will be required to deliver information
to be used in connection with the Shelf Registration Statement and to provide
comments on the Shelf Registration Statement within the time periods set forth
in the Registration Rights Agreement in order to have their Old Notes included
in the Shelf Registration Statement and to benefit from the provisions regarding
the increase in interest rate set forth in the following paragraph.
Interest Rate Increase. The interest rate borne by the Old Notes (for each
Note which has not been exchanged in the Exchange Offer) shall be increased by
0.5% per annum if:
(1) the Registration Statement is not declared effective on or prior to
April 25, 1999,
(2) neither the Exchange Offer is consummated nor the Shelf Registration
Statement is declared effective on or prior to May 25, 1999, or
(3) the Exchange Offer Registration Statement is declared effective but
thereafter ceases to be effective or usable.
Upon (x) the effectiveness of the Registration Statement in the case of
clause (1) above, (y) the date of the consummation of the Exchange Offer or the
effectiveness of the Shelf Registration Statement in the case of clause (2)
above, or (z) the effectiveness of the Shelf Registration Statement, in the case
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of clause (3) above, the interest rate stated on the Old Notes from the date of
such filing, effectiveness or the date of such consummation or effectiveness, as
the case may be, will be reduced to the original interest rate set forth on the
cover of this Prospectus; provided, however, that, if after any such reduction
in interest rate, a different event specified in clause (1), (2) or (3) above
occurs, the interest rate shall again be increased pursuant to the foregoing
provisions.
TERMS OF THE EXCHANGE OFFER
Upon satisfaction or waiver of all of the conditions of the Exchange
Offer, we will accept, any and all Old Notes properly tendered and not withdrawn
prior to the Expiration Date and will issue the New Notes promptly after
acceptance of the Old Notes. See "-Conditions to the Exchange Offer" and
"Procedures for Tendering Old Notes." We will issue $1,000 principal amount of
New Notes in exchange for each $1,000 principal amount of outstanding Old Notes
accepted in the Exchange Offer. As of the date of this Prospectus, $250,000,000
aggregate principal amount of the Old Notes are outstanding. Holders may tender
some or all of their Old Notes pursuant to the Exchange Offer. However, Old
Notes may be tendered only in integral multiples of $1,000.
The New Notes are identical to the Old Notes except for the elimination of
certain transfer restrictions, registration rights and liquidated damages
provisions. The New Notes will evidence the same debt as the Old Notes and will
be issued pursuant to, and entitled to the benefits of, the Indenture pursuant
to which the Old Notes were issued and will be deemed one issue of notes,
together with the Old Notes.
This Prospectus, together with the Letter of Transmittal, is being sent to
all registered holders and to others believed to have beneficial interests in
the Old Notes. Holders of Old Notes do not have any appraisal or dissenters'
rights under the General Corporation Law of the State of Delaware or the
Indenture in connection with the Exchange Offer. We intend to conduct the
Exchange Offer in accordance with the applicable requirements of the Securities
Act, the Exchange Act and the rules and regulations of the Commission
promulgated thereunder.
For purposes of the Exchange Offer, we will be deemed to have accepted
validly tendered Old Notes when, as and if we have given oral or written notice
thereof to the Exchange Agent. The Exchange Agent will act as our agent for the
tendering holders for the purpose of receiving the New Notes from us. If we do
not accept any tendered Old Notes because of an invalid tender, the occurrence
of certain other events set forth in this Prospectus or otherwise, we will
return such unaccepted Old Notes, without expense, to the tendering holder
thereof as promptly as practicable after the Expiration Date.
Holders who tender Old Notes in the Exchange Offer will not be required to
pay brokerage commissions or fees or, except as set forth below under "-Transfer
Taxes," transfer taxes with respect to the exchange of Old Notes pursuant to the
Exchange Offer. We will pay all charges and expenses, other than certain
applicable taxes, in connection with the Exchange Offer. See "-Fees and
Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on ,
1999, unless we, in our sole discretion, extend the Exchange Offer, in which
case the term "Expiration Date" shall mean the latest date and time to which the
Exchange Offer is extended. In order to extend the Exchange Offer, we will
notify the Exchange Agent by oral or written notice and each registered holder
by means of press release or other public announcement of any extension, in each
case, prior to 9:00 a.m., New York City time, on the next Business Day after the
previously scheduled Expiration Date. We reserve the right, in our sole
discretion, (1) to delay accepting any Old Notes, (2) to extend the Exchange
Offer, (3) to terminate the Exchange Offer if the conditions set forth below
under "-Conditions" shall not have been satisfied, or (4) to amend the terms of
the Exchange Offer in any manner. We will notify the Exchange Agent of any
delay, extension, termination or amendment by oral or written notice. We will
additionally notify each registered holder of any amendment. We will give to the
Exchange Agent written confirmation of any oral notice.
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EXCHANGE DATE
As soon as practicable after the close of the Exchange Offer (the
"Exchange Date"), we will accept for exchange all Old Notes properly tendered
and not validly withdrawn prior to 5:00 p.m., New York City time, on the
Expiration Date pursuant to the Exchange Offer in accordance with the terms of
the Registration Statement and the Letters of Transmittal.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer, and subject to
our obligations under the Registration Rights Agreement, we (1) shall not be
required to accept any Old Notes for exchange, (2) shall not be required to
issue New Notes in exchange for any Old Notes and (3) may terminate or amend the
Exchange Offer, if at any time before the acceptance of such New Notes for
exchange, any of the following events shall occur:
(1) any injunction, order or decree shall have been issued by any court or any
governmental agency that would prohibit, prevent or otherwise materially
impair our ability to proceed with the Exchange Offer; or
(2) the Exchange Offer shall violate any applicable law or any applicable
interpretation of the staff of the SEC.
The foregoing conditions are for our sole benefit and may be asserted by
us regardless of the circumstances giving rise to any such condition or may be
waived by us in whole or in part at any time and from time to time in our sole
discretion. Our failure at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right and such right shall be deemed an
ongoing right which may be asserted at any time and from time to time.
In addition, we will not accept for exchange any Old Notes tendered, and
no New Notes will be issued in exchange for any such Old Notes, if at such time
any stop order shall be threatened by the Commission or be in effect with
respect to the Registration Statement of which this Prospectus is a part or the
qualification of the Indenture under the Trust Indenture Act of 1939, as amended
(the "TIA").
The Exchange Offer is not conditioned on any minimum aggregate principal
amount of Old Notes being tendered for exchange.
CONSEQUENCES OF FAILURE TO EXCHANGE
Any Old Notes not tendered pursuant to the Exchange Offer will remain
outstanding and continue to accrue interest. Such Old Notes will remain
"restricted securities" (within the meaning of the Securities Act). Accordingly,
prior to the date that is two years after the later of the Initial Issue Date
thereof and the last date on which we or any of our affiliates was the owner of
such Old Notes, such Old Notes may be resold only (1) to us, (2) to a person
whom the seller reasonably believes is a "qualified institutional buyer"
purchasing for its own account or for the account of another "qualified
institutional buyer" in compliance with the resale limitations of Rule 144A, (3)
to an Institutional Accredited Investor that, prior to such transfer, furnishes
to the Trustee a written certification containing certain representations and
agreements relating to the restrictions on transfer of the Notes (the form of
which letter can be obtained from the Trustee), (4) pursuant to the limitations
on resale provided by Rule 144 under the Securities Act (if available), (5)
pursuant to the resale provisions of Rule 904 of Regulation S under the
Securities Act, (6) pursuant to an effective registration statement under the
Securities Act, or (7) pursuant to any other available exemption from the
registration requirements of the Securities Act, subject in each of the
foregoing cases to compliance with applicable state securities laws. As a
result, the liquidity of the market for such non-tendered Old Notes could be
adversely affected upon completion of the Exchange Offer. The foregoing
restrictions on resale will no longer apply after the second anniversary of the
Initial Issue Date or the purchase of the Notes from us or an affiliate.
FEES AND EXPENSES
We will not make any payments to brokers, dealers or others soliciting
acceptances of the Exchange Offer. The principal solicitation is being made by
mail; however, additional solicitations may be made in person or by telephone by
our officers and employees.
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Expenses incurred in connection with the Exchange Offer will be paid by us
and are estimated in the aggregate to be approximately $100,000 which includes
the fees and expenses of the Trustee and the Exchange Agent, accounting and
legal fees and other miscellaneous fees and expenses.
ACCOUNTING TREATMENT
We will not recognize any gain or loss for accounting purposes upon the
consummation of the Exchange Offer. We will amortize the expenses of the
Exchange Offer over the term of the New Notes.
PROCEDURES FOR TENDERING OLD NOTES
TENDERING OLD NOTES
The tender of Old Notes pursuant to any of the procedures set forth in
this Prospectus and in the Letter of Transmittal will constitute a binding
agreement between the tendering holder and us in accordance with the terms and
subject to the conditions set forth in this Prospectus and in the Letter of
Transmittal. The tender of Old Notes will constitute an agreement to deliver
good and marketable title to all tendered Old Notes prior to the Expiration Date
free and clear of all liens, charges, claims, encumbrances, interests and
restrictions of any kind.
EXCEPT AS PROVIDED IN "-GUARANTEED DELIVERY PROCEDURES," UNLESS THE OLD
NOTES BEING TENDERED ARE DEPOSITED BY YOU WITH THE EXCHANGE AGENT PRIOR TO THE
EXPIRATION DATE (ACCOMPANIED BY A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF
TRANSMITTAL), WE MAY, AT OUR OPTION, REJECT SUCH TENDER. ISSUANCE OF NEW NOTES
WILL BE MADE ONLY AGAINST DEPOSIT OF TENDERED OLD NOTES AND DELIVERY OF ALL
OTHER REQUIRED DOCUMENTS. NOTWITHSTANDING THE FOREGOING, DTC PARTICIPANTS
TENDERING THROUGH ATOP WILL BE DEEMED TO HAVE MADE VALID DELIVERY WHERE THE
EXCHANGE AGENT RECEIVES AN AGENT'S MESSAGE (DEFINED BELOW) PRIOR TO THE
EXPIRATION DATE.
Accordingly, to properly tender Old Notes, the following procedures must
be followed:
Notes held through a Custodian. Each beneficial owner holding Old Notes
through a DTC Participant must instruct such DTC Participant to cause its Old
Notes to be tendered in accordance with the procedures set forth in this
Prospectus.
Notes held through DTC. Pursuant to an authorization given by DTC to the
DTC Participants, each DTC Participant holding Old Notes through DTC must (1)
electronically transmit its acceptance through ATOP, and DTC will then edit and
verify the acceptance, execute a book-entry delivery to the Exchange Agent's
account at DTC and send an Agent's Message to the Exchange Agent for its
acceptance, or (2) comply with the guaranteed delivery procedures set forth
below and in the Notice of Guaranteed Delivery. See "-Guaranteed Delivery
Procedures-Notes held through DTC."
The Exchange Agent will (promptly after the date of this Prospectus)
establish accounts at DTC for purposes of the Exchange Offer with respect to Old
Notes held through DTC. Any financial institution that is a DTC Participant may
make book-entry delivery of interests in Old Notes into the Exchange Agent's
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account through ATOP. However, although delivery of interests in the Old Notes
may be effected through book-entry transfer into the Exchange Agent's account
through ATOP, an Agent's Message in connection with such book-entry transfer,
and any other required documents, must be, in any case, transmitted to and
received by the Exchange Agent at its address set forth under "-Exchange Agent,"
or the guaranteed delivery procedures set forth below must be complied with, in
each case, prior to the Expiration Date. Delivery of documents to DTC does not
constitute delivery to the Exchange Agent. The confirmation of a book-entry
transfer into the Exchange Agent's account at DTC as described above is referred
to herein as a "Book-Entry Confirmation."
The term "Agent's Message" means a message transmitted by DTC to, and
received by, the Exchange Agent and forming a part of the Book-Entry
Confirmation, which states that DTC has received an express acknowledgement from
each DTC Participant tendering through ATOP that such DTC Participants have
received a Letter of Transmittal and agree to be bound by the terms of the
Letter of Transmittal and that either of the Issuers may enforce such agreement
against such DTC Participants.
Cede & Co., as the holder of the Rule 144A Global Note, will tender a
portion of the Rule 144A Global Note equal to the aggregate principal amount due
at the stated maturity for which instructions to tender are given by DTC
Participants.
Notes held by Holders. Each holder must (1) complete and sign the
accompanying Letter of Transmittal, and mail or deliver such Letter of
Transmittal, and any other documents required by the Letter of Transmittal,
together with certificate(s) representing all tendered Old Notes, to the
Exchange Agent at its address set forth under "-Exchange Agent," or (2) comply
with the guaranteed delivery procedures set forth below and in the Notice of
Guaranteed Delivery. See "-Guaranteed Delivery Procedures-Notes held by
Holders."
All signatures on a Letter of Transmittal must be guaranteed by a
recognized participant in the Securities Transfer Agents Medallion Program, the
New York Stock Exchange Medallion Signature Program or the Stock Exchange
Medallion Program; provided, however, that signatures on a Letter of Transmittal
need not be guaranteed if such Old Notes are tendered for the account of an
Eligible Institution (as defined herein).
If a Letter of Transmittal or any Old Note is signed by a corporation or
person acting in a fiduciary or representative capacity, such person must so
indicate when signing, and proper evidence satisfactory to us of the authority
of such person must be submitted.
Holders should indicate in the applicable box in the Letter of Transmittal
the name and address to which substitute certificates evidencing Old Notes for
amounts not tendered are to be issued or sent, if different from the name and
address of the person signing the Letter of Transmittal. In the case of issuance
in a different name, the employer identification or social security number of
the person named must also be indicated. If no instructions are given, the
untendered Old Notes will be returned to the person signing the Letter of
Transmittal.
By tendering, each holder and each DTC Participant will represent to us
that, among other things, (1) it is not an affiliate of either Issuer, (2) it is
not a broker-dealer tendering Old Notes acquired directly from either Issuer for
its own account, (3) the New Notes acquired pursuant to the Exchange Offer are
being obtained in the ordinary course of business of such holder and (4) it has
no understandings with any person to participate in the Exchange Offer for the
purpose of distributing the New Notes.
We will not accept any alternative, conditional, irregular or contingent
tenders (unless waived by us). By executing a Letter of Transmittal or
transmitting an acceptance through ATOP, as the case may be, each tendering
holder waives any right to receive any notice of the acceptance for purchase of
its Old Notes.
We will resolve all questions as to the validity, form, eligibility
(including time of receipt) and acceptance of tendered Old Notes, and such
determination will be final and binding. We reserve the absolute right to reject
any or all tenders that are not in proper form or the acceptance of which may,
in the opinion of our counsel, be unlawful. We also reserve the absolute right
to waive any condition to the Exchange Offer and any irregularities or
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conditions of tender as to particular Old Notes. Our interpretation of the terms
and conditions of the Exchange Offer (including the instructions in the Letter
of Transmittal) will be final and binding. Unless waived, any irregularities in
connection with tenders must be cured within such time as we shall determine.
We, along with the Exchange Agent, shall be under no duty to give notification
of defects in such tenders and shall not incur liabilities for failure to give
such notification. Tenders of Old Notes will not be deemed to have been made
until such irregularities have been cured or waived. Any Old Notes received by
the Exchange Agent that are not properly tendered and as to which the
irregularities have not been cured or waived will be returned by the Exchange
Agent to the tendering holder, unless otherwise provided in the Letter of
Transmittal, as soon as practicable following the Expiration Date.
LETTERS OF TRANSMITTAL AND OLD NOTES MUST BE SENT ONLY TO THE EXCHANGE
AGENT. DO NOT SEND LETTERS OF TRANSMITTAL OR OLD NOTES TO EITHER OF THE ISSUERS,
THE GUARANTOR OR DTC.
The method of delivery of Old Notes, Letters of Transmittal, any required
signature guaranties and all other required documents, including delivery
through DTC and any acceptance through ATOP, is at the election and risk of the
persons tendering and delivering acceptances or Letters of Transmittal and,
except as otherwise provided in the applicable Letter of Transmittal, delivery
will be deemed made only when actually received by the Exchange Agent. If
delivery is by mail, it is suggested that the holder use properly insured,
registered mail with return receipt requested, and that the mailing be made
sufficiently in advance of the Expiration Date to permit delivery to the
Exchange Agent prior to the Expiration Date.
GUARANTEED DELIVERY PROCEDURES
Notes held through DTC. DTC Participants holding Old Notes through DTC who
wish to cause their Old Notes to be tendered, but who cannot transmit their
acceptances through ATOP prior to the Expiration Date, may cause a tender to be
effected if:
(1) guaranteed delivery is made by or through a firm or other entity
identified in Rule 17Ad- 15 under the Exchange Act (an "Eligible
Institution"), including (as such terms are
defined therein):
o a bank;
o a broker, dealer, municipal securities dealer, municipal securities
broker, government securities dealer or government securities broker;
o a credit union;
o a national securities exchange, registered securities association or
clearing agency; or
o a savings institution that is a participant in a Securities Transfer
Association recognized program;
(2) prior to the Expiration Date, the Exchange Agent receives from such
Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by mail, hand delivery, facsimile transmission or
overnight courier) substantially in the form provided with this
Prospectus; and
(3) Book-Entry Confirmation and an Agent's Message in connection therewith (as
described above) are received by the Exchange Agent within three NYSE
trading days after the date of the execution of the Notice of Guaranteed
Delivery.
Notes held by Holders. Holders who wish to tender their Old Notes but (1)
whose Old Notes are not immediately available and will not be available for
tendering prior to the Expiration Date, or (2) who cannot deliver their Old
Notes, the Letter of Transmittal, or any other required documents to the
Exchange Agent prior to the Expiration Date, may effect a tender if:
o the tender is made by or through an Eligible Institution;
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o prior to the Expiration Date, the Exchange Agent receives from such
Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by mail, hand delivery, facsimile transmission or
overnight courier) substantially in the form provided with this
Prospectus; and
o a properly completed and executed Letter of Transmittal, as well as
the certificate(s) representing all tendered Old Notes in proper form
for transfer, and all other documents required by the Letter of
Transmittal, are received by the Exchange Agent within three NYSE
trading days after the date of the execution of the Notice of
Guaranteed Delivery.
WITHDRAWAL RIGHTS
You may withdraw tenders of Old Notes (or any portion of such Old Notes in
integral multiples of $1,000 principal amount due at the stated maturity) at any
time prior to 5:00 p.m., New York City time, on the Expiration Date. Any Old
Notes properly withdrawn will be deemed to be not validly tendered for purposes
of the Exchange Offer.
Notes held through DTC. DTC Participants holding Old Notes who have
transmitted their acceptances through ATOP may, prior to 5:00 p.m., New York
City time, on the Expiration Date, withdraw the instruction given thereby by
delivering to the Exchange Agent, at its address set forth under "-Exchange
Agent," a written, telegraphic or facsimile notice of withdrawal of such
instruction. Such notice of withdrawal must contain the name and number of the
DTC Participant, the principal amount due at the stated maturity of Old Notes to
which such withdrawal related and the signature of the DTC Participant. Receipt
of such written notice of withdrawal by the Exchange Agent effectuates a
withdrawal.
Notes held by Holders. Holders may withdraw their tender of Old Notes,
prior to 5:00 p.m., New York City time, on the Expiration Date, by delivering to
the Exchange Agent, at its address set forth under "-Exchange Agent," a written,
telegraphic or facsimile notice of withdrawal. Any such notice of withdrawal
must (1) specify the name of the person who tendered the Old Notes to be
withdrawn, (2) contain a description of the Old Notes to be withdrawn and
identify the certificate number or numbers shown on the particular certificates
evidencing such Old Notes and the aggregate principal amount due at the stated
maturity represented by such Old Notes and (3) be signed by the holder of such
Old Notes in the same manner as the original signature on the Letter of
Transmittal by which such Old Notes were tendered (including any required
signature guaranties), or be accompanied by (x) documents of transfer in a form
acceptable to us, in our sole discretion and (y) a properly completed
irrevocable proxy that authorized such person to effect such revocation on
behalf of such holder. If the Old Notes to be withdrawn have been delivered or
otherwise identified to the Exchange Agent, a signed notice of withdrawal is
effective immediately upon written, telegraphic or facsimile notice of
withdrawal even if physical release is not yet effected.
All signatures on a notice of withdrawal must be guaranteed by a
recognized participant in the Securities Transfer Agents Medallion Program, the
New York Stock Exchange Medallion Signature Program or the Stock Exchange
Medallion Program; provided, however, that signatures on the notice of
withdrawal need not be guaranteed if the Old Notes being withdrawn are held for
the account of an Eligible Institution.
A withdrawal of an instruction or a withdrawal of a tender must be
executed by a DTC Participant or a holder of Notes, as the case may be, in the
same manner as the person's name appears on its transmission through ATOP or
Letter of Transmittal, as the case may be, to which such withdrawal relates. If
a notice of withdrawal is signed by a trustee, partner, executor, administrator,
guardian, attorney-in-fact, agent, officer of a corporation or other person
acting in a fiduciary or representative capacity, such person must so indicate
when signing and must submit with the revocation appropriate evidence of
authority to execute the notice of withdrawal. A DTC Participant or a holder may
withdraw an instruction or a tender, as the case may be, only if such withdrawal
complies with the provisions of this Prospectus.
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A withdrawal of a tender of Old Notes by a DTC Participant or a holder, as
the case may be, may be rescinded only by a new transmission of an acceptance
through ATOP or execution and delivery of a new Letter of Transmittal, as the
case may be, in accordance with the procedures described herein.
EXCHANGE AGENT
The First National Bank of Chicago has been appointed as Exchange Agent
for the Exchange Offer. Questions, requests for assistance and requests for
additional copies of this Prospectus or of the Letter of Transmittal should be
directed to the Exchange Agent addressed as follows:
By Registered or Certified Mail By Hand
or By Overnight Courier:
The First National Bank of Chicago
as Exchange Agent
153 West 51st Street
New York, NY 10019
Facsimile: By Telephone:
(212) 373-1383 (212) 373-1339
The Exchange Agent also acts as trustee under the Indenture.
TRANSFER TAXES
Holders of Old Notes who tender their Old Notes for exchange will not be
obligated to pay any transfer taxes in connection therewith, except that holders
who instruct us to register New Notes in the name of, or request that Old Notes
not tendered or not accepted in the Exchange Offer be returned to, a person
other than the registered tendering holder will be responsible for the payment
of any applicable transfer tax thereon.
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DESCRIPTION OF THE NEW NOTES
The New Notes will be issued, and the Old Notes were issued, under an
Indenture among the Issuers, the Guarantor and The First National Bank of
Chicago, as Trustee (the "Trustee"). A copy of the Indenture will be filed as an
exhibit to the Registration Statement which includes this Prospectus.
The following description of certain provisions of the Indenture and the
Notes are summaries. It does not restate those provisions in their entirety.
Because the following is only a summary of the Indenture and the Notes, it does
not contain all information that you may find useful. For further information
about the Indenture and the Notes, you should read the Indenture. Numerical
references in parentheses are to sections in the Indenture. For the meaning of
capitalized terms used without definition, see "-Definitions."
As used in this Section of the Prospectus, the terms "we", "us" and "our"
mean U.S. Industries, Inc. and USI American Holdings, Inc. and are used
interchangeably within the term the "Issuers."
GENERAL
The Notes, which mature on October 15, 2003, will be limited to $250
million in aggregate principal amount. The Notes will bear interest at the rate
and dates shown on the front cover of this Prospectus. Interest on the Notes
will accrue 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. Any Old
Notes that remain outstanding after the completion of the Exchange Offer,
together with the New Notes issued in connection with the Exchange Offer, will
be treated as a single class of securities under the Indenture. See "The
Exchange Offer."
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 (which initially will be the office of the Trustee located at
153 West 51st Street, New York, NY 10019) or, at our option, interest may be
paid by check mailed to the address of the person entitled thereto as such
address appears in the security register. (Sections 305, 307 and 1002)
The Notes will be issued only in registered form without coupons and only
in denominations of $1,000 and integral multiples of $1,000 (Section 302);
provided that any purchase of Notes will be subject to a minimum initial
purchase obligation of $250,000 for each person acquiring Notes. 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
therewith. (Section 305)
You may present Old Notes for exchange and you may present New Notes for
transfer (1) in the manner, (2) at the places and (3) subject to the
restrictions set forth in the Notes and this Prospectus. We will provide you
those services without charge, although you may have to pay any tax or other
governmental charge payable in connection with any exchange or transfer, as set
forth in the Indenture.
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. Any Old Notes that remain outstanding after the consummation
of the Exchange Offer and the New Notes will be treated as separate series of
securities under the Indenture. If we do not file a registration statement
relating to the Exchange Offer or if the registration statement is not declared
effective within a prescribed period or if certain other conditions are not
satisfied, all as further described under "The Exchange Offer-Interest Rate
Increase," the interest rate on the Notes may increase.
FURTHER ISSUES
The Indenture is an open-ended indenture that permits the issuance of
additional series of notes. Any notes subsequently offered under the Indenture
will rank equally or subordinate to the Notes. 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 such additional notes
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may be consolidated and form a single series with all outstanding notes. In
addition, we may from time to time, without the consent of the holders, create
and issue one or more series of notes or other indebtedness that is subordinate
to the Notes. We may not issue any indebtedness under the Indenture that is
senior in right of payment to the Notes.
GUARANTEE
Our obligations under the Notes will be fully and unconditionally
guaranteed by USI Atlantic. The Guarantee will be on a senior unsecured basis
and will be limited to an amount not to exceed the maximum amount allowed under
applicable law. If the Guarantee were made void by a court, it could be ranked
behind all other indebtedness (including guarantees and other contingent
liabilities) of USI Atlantic and, depending on the amount of such indebtedness,
the liability of USI Atlantic on the Guarantee could be reduced to zero.
RELEASE OF USI ATLANTIC AS GUARANTOR AND USIAH
AS CO-ISSUER
USI Atlantic will be released from its obligations under the Guarantee,
and the Guarantee will terminate, if:
(1) the obligations of the Issuers under the Indenture are assumed by an
acquiring or successor person (other than any of our subsidiaries)
pursuant to the consolidation, merger and sale provisions of the Indenture
(see "-Consolidation, Merger, Conveyance, Transfer or Lease"),
(2) USI Atlantic is disposed of in a transaction that results in USI Atlantic
no longer being our subsidiary, or all or substantially all the assets of
USI Atlantic are disposed of other than to us or one of our subsidiaries,
or
(3) upon repayment of all amounts outstanding or the voluntary release of USI
Atlantic under (x) the 7 1/4% Senior Notes due 2006 (the "7 1/4% Notes"),
(y) the Credit Facility and (z) any Debt of the Company or any subsidiary
of the Company Incurred to extend, renew, refinance or refund any part of
the 7 1/4% Notes or the Credit Facility.
Immediately after such release we must be in compliance with the
Indenture's limitation on indebtedness of Restricted Subsidiaries and the other
covenants contained in the Indenture. Furthermore, as a condition to a release
pursuant to clause (3), we must certify to the Trustee that immediately
following the release of USI Atlantic as Guarantor, USI Atlantic will not
immediately thereafter be a guarantor of any Restricted Subsidiary Funded Debt
in excess of the amount of the Debt Basket.
USIAH will be released from its obligations under the Notes if:
(1) the obligations of the Issuers under the Indenture are assumed by an
acquiring or successor person (other than a subsidiary of either of the
Issuers) pursuant to the consolidation, merger and sale provisions of the
Indenture,
(2) USIAH is disposed of in a transaction that results in USIAH no longer
being our subsidiary, or all or substantially all the assets of USIAH are
disposed of other than to us or one of our subsidiaries, or
(3) upon repayment of all amounts outstanding under (x) the 7 1/4% Notes, (y)
the Credit Facility and (z) any Debt of the Company or any subsidiary of
the Company Incurred to extend, renew, refinance or refund any part of the
7 1/4% Notes and the Credit Facility.
Immediately after such release we must be in compliance with the
Indenture's limitation on indebtedness of Restricted Subsidiaries and the other
covenants contained in the Indenture. Furthermore, as a condition to release of
USIAH as co-obligor of the Notes under clause (3), we must certify to the
Trustee that immediately following the release of USIAH from its obligations
under the Notes, USIAH will not immediately thereafter be an obligor under any
Restricted Subsidiary Funded Debt in excess of the amount of the Debt Basket.
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RANKING
The Notes are senior unsecured obligations and rank equally to our
existing and future unsecured and unsubordinated indebtedness. The Notes rank
senior to our subordinated indebtedness. In addition, the Guarantee is a senior
unsecured obligation of the Guarantor and ranks equally to all other existing
and future unsecured and unsubordinated indebtedness of the Guarantor and is
senior in right of payment to all subordinated indebtedness of the Guarantor.
The Notes and the Guarantee are effectively subordinated to all existing and
future (i) secured indebtedness of the Issuers and the Guarantor, to the extent
of the value of the assets securing such indebtedness and (ii) indebtedness of
any subsidiaries of the Issuers and of the Guarantor (other than USIAH).
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 hereby, to receive proceeds from the
assets of any subsidiary upon such subsidiary's liquidation or recapitalization
will be subject to the prior claims of such subsidiary's creditors. At September
30, 1998, the total indebtedness of the subsidiaries of USI (other than USIAH
and the Guarantor) was approximately $67 million.
The Indenture does not restrict (1) the Incurrence of secured or unsecured
indebtedness by the Issuers or unrestricted subsidiaries of the Issuers, (2) a
change in control of the Issuers or the Guarantor or (3) a highly leveraged
transaction involving the Issuers or the Guarantor. Restricted Subsidiaries of
the Issuers are, however, limited in the amount of indebtedness that may be
Incurred by them. See "Certain Covenants-Limitation on Restricted Subsidiary
Funded Debt."
OPTIONAL REDEMPTION
The Notes will be subject to redemption, in whole or in part, at any time
or from time to time, at the option of the Issuers, acting jointly, on at least
30 days' prior notice by mail, at a redemption price (the "Redemption Price")
equal to the greater of (i) 100% of the principal amount of the Notes to be
redeemed, or (ii) the sum of the present values of the remaining scheduled
payments of principal and interest thereon discounted to the date of redemption
on a semiannual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Treasury Rate plus 50 basis points, plus, in each case, accrued
but unpaid interest to the date of redemption. On and after the redemption date,
interest will cease to accrue on the Notes or portions of Notes called for
redemption on such date.
In the case of any partial redemption, selection of the Notes for
redemption will be made by the Trustee on a pro rata basis, by lot or by such
other method as the Trustee in its sole discretion shall deem to be fair and
appropriate, although 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 such Note shall state the portion of the
principal amount thereof to be redeemed. A new Note in principal amount equal to
the unredeemed portion thereof will be issued in the name of the Holder thereof
upon cancellation of the original Note. (Section 1109 and Section 202)
For this purpose, the following terms shall have the meaning set forth
below:
"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. "Independent Investment Bank" means one of the Reference Treasury
Dealers appointed by the Trustee after consultation with the Issuers.
"Comparable Treasury Price" means, with respect to any redemption date,
(i) the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
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Government Securities," or (ii) if such release (or any successor release) is
not published or does not contain such prices on such business day (A) the
average of the Reference Treasury Dealer Quotations for such redemption date,
after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (B) if the Trustee obtains fewer than three such Reference
Treasury Dealer Quotations, the average of all such Quotations.
"Reference Treasury Dealer" means Credit Suisse First Boston Corporation
and its successors and/or such other primary U.S. Government securities dealers
in New York City (a "Primary Treasury Dealer") as shall be designated by the
Issuers from time to time, in each case provided that such entity continues to
be a Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. EST on the
third business day preceding such redemption date.
"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for such Comparable Treasury Issue (expressed
as a percentage of its principal amount) equal to the Comparable Treasury Price
for such redemption date.
Any notice to the Holders of such a redemption need not set forth the
redemption price but need only set forth the method of calculation thereof as
described in the first paragraph of this section entitled "Optional Redemption."
The redemption price, calculated as aforesaid, shall be set forth in an
Officers' Certificate to the Trustee no later than two business days prior to
the redemption.
REDEMPTION IN CIRCUMSTANCES INVOLVING TAXATION
If, as the result of any change in or any amendment to the laws, including
any applicable double taxation treaty or convention, of the United Kingdom (or
any Other Jurisdiction, as defined below under "-Payment of Additional
Amounts"), or of any political subdivision or taxing authority thereof,
affecting taxation, or any change in the application or interpretation of such
laws, double taxation treaty or convention, which change or amendment becomes
effective on or after the original issuance date of the Notes (or, in certain
circumstances, such later date on which any assignee of the Issuers, the
Guarantor or a successor corporation to either of the Issuers or the Guarantor
becomes such as permitted under the Indenture), it is determined, by the
Issuers, acting jointly, the Guarantor or such assignee (which terms, for
purposes of the remainder of this paragraph, include any successor thereto) that
(i) the Issuers, the Guarantor or their respective assignee would be required to
make additional payments in respect of principal, premium, if any, or interest
on the next succeeding date for the payment thereof, or (ii) based upon an
opinion of independent counsel to the Issuers, the Guarantor or their respective
assignee, as a result of any action taken by any taxing authority of, or any
action brought in a court of competent jurisdiction in, the United Kingdom (or
the Other Jurisdiction), or any political subdivision or taxing authority
thereof or therein (whether or not such action was taken or brought with respect
to the Issuers, the Guarantor or their respective assignee), which action is
taken or brought on or after the original issuance date of the Notes (or, in
certain circumstances, such later date on which a corporation becomes a
successor or an assignee), the circumstances described in clause (i) would
exist, the Issuers may, acting jointly, at their option, redeem any series of
Notes in whole at any time at a redemption price equal to 100% of the principal
amount thereof plus accrued but unpaid interest to the date fixed for redemption
(the "Tax Redemption Price"). (Section 1102)
NO SINKING FUND OR COLLATERAL
The Notes will not be entitled to the benefit of any sinking fund or any
collateral.
CERTAIN COVENANTS
The Indenture contains, among others, the following covenants:
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Limitation on Liens. We will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, create, incur, assume or suffer to exist
any Lien (as defined) upon any of our respective properties, assets or revenues,
whether now owned or hereafter acquired, to secure any Debt without making, or
causing such Restricted Subsidiary to make, effective provision for securing the
Notes (and, if we shall so determine, any other Debt of either or both of the
Issuers which is not subordinate in right of payment to the Notes) (a) equally
and ratably with (or prior to) such Debt as to such property or assets for so
long as such debt shall be so secured, or (b) in the event such Debt is
subordinate in right of payment to the Notes, prior to such Debt as to such
property or assets for so long as such Debt shall be so secured. The foregoing
restrictions will not apply to Permitted Liens (as defined in the Indenture),
which shall include:
(i) Liens securing only the Notes or the Guarantee;
(ii) Liens in favor of only the Issuers, the Guarantor or a Restricted
Subsidiary;
(iii) Liens existing on the date of the Indenture;
(iv) Liens on property of a Person existing at the time such Person is
merged into or consolidated with either Issuer or a Restricted Subsidiary or
becomes a Restricted Subsidiary of either Issuer (and not in anticipation of or
in connection with such event), provided that the Debt secured by such Lien is
otherwise permitted to be Incurred under the Indenture;
(v) Liens on property existing immediately prior to the time of
acquisition thereof from a non-Affiliate (and not Incurred in anticipation of or
in connection with the financing of such acquisition), provided that the Debt
secured by such Lien is otherwise permitted to be Incurred under the Indenture;
(vi) Liens to secure Debt Incurred for the purpose of financing all or any
part of the purchase price or the cost of construction or improvement of the
property subject to such Liens (including carrying charges) and, in the case of
a Restricted Subsidiary all or substantially all of whose assets consist of such
property, any Lien on ownership interests or investments in such Restricted
Subsidiary Incurred in connection with the acquisition or construction of such
property, and the Incurrence of such Debt is otherwise permitted under the
Indenture and such Debt is Incurred prior to, at the time of, or within 180 days
after, the acquisition of such property, the completion of such construction or
the making of such improvements;
(vii) Liens on property of the Issuers or any of their Restricted
Subsidiaries in favor of the United States of America or any state thereof, or
any instrumentality of either, to secure certain payments pursuant to any
contract or statute;
(viii) 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;
(ix) Liens to secure obligations under workmen's compensation, temporary
disability, social security, retiree health or similar laws or under
unemployment insurance;
(x) Liens Incurred to secure the performance of statutory obligations,
bids, tenders, leases, contracts (other than contracts for the repayment of
Debt), surety or appeal bonds, performance or return-of-money bonds or other
obligations of a like nature Incurred in the ordinary course of business;
(xi) Judgment and attachment Liens not giving rise to a Default or Event
of Default;
(xii) 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;
(xiii) Liens securing documentary letters of credit; provided such Liens
attach only to the property or goods to which such letter of credit relates;
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(xiv) 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
(xv) Liens to secure Debt Incurred to extend, renew, refinance or refund
(or successive extensions, renewals, refinancings or refundings), in whole or in
part, Debt secured by any Lien referred to in the foregoing clauses (i) through
(xiv) inclusive, so long as such Lien does not extend to any additional property
(other than property attributable to improvements, alterations and repairs) and
the principal amount of the Debt secured pursuant to this clause (xv) shall not
exceed the principal amount of Debt so extended, renewed, refinanced or refunded
(assuming all available amounts were borrowed) plus the aggregate amount of
premiums, other payments, costs and expenses required to be paid or incurred in
connection with such extension, renewal, refinancing or refunding at the time of
such extension, renewal, refinancing or refunding.
In addition to the foregoing, we and our Restricted Subsidiaries may incur
a Lien to secure any Debt, without securing the Notes, if, after giving effect
thereto, the sum, without duplication, of (i) the aggregate principal amount of
all outstanding Debt secured by Liens Incurred by us and our Restricted
Subsidiaries (with the exception of secured Debt which is excluded pursuant to
clauses (i) through (xv) inclusive, described above) and (ii) the aggregate
amount of all Attributable Debt of all sale and leaseback transactions involving
Principal Properties (with the exception of Attributable Debt excluded pursuant
to clauses (i), (ii) and (iii) described below under "-Limitation on Sale and
Leaseback Transactions") does not exceed 15% of Consolidated Net Tangible Assets
(the "Lien Basket"); provided, however, that the Lien Basket shall be reduced,
without duplication, by the amount of outstanding Funded Debt Incurred from time
to time pursuant to the Debt Basket (as defined below). (Section 1009)
Limitation on Sale and Leaseback Transactions. We will not, and will not
permit any of our Restricted Subsidiaries to, enter into any arrangement after
the date we first issued Notes pursuant to the Indenture with any bank,
insurance company or other lender or investor (other than either of us or
another Restricted Subsidiary) providing for the leasing by either of us or any
such Restricted Subsidiary of any Principal Property (except a lease for a
temporary period not to exceed three years by the end of which it is intended
that the use of such Principal Property by the lessee will be discontinued),
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 thereof by either
of us or such Restricted Subsidiary, to such lender or investor or to any Person
to whom funds have been or are to be advanced by such lender or investor on the
security of such Principal Property (herein referred to as a "Sale and Leaseback
Transaction") unless either:
(i) the Attributable Debt of the Issuers and their Restricted Subsidiaries
in respect of such sale and leaseback transaction and all other sale and
leaseback transactions entered into after the date we first issued Notes
pursuant to the Indenture (other than such sale and leaseback transactions as
are permitted by paragraph (ii) or (iii) below), plus the aggregate principal
amount of Funded Debt secured by Liens on Principal Properties and Restricted
Securities then outstanding (excluding any such Funded Debt secured by Permitted
Liens) without equally and ratably securing the Notes, would not exceed 15% of
Consolidated Net Tangible Assets (the "Leaseback Basket");
(ii) 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 the net
proceeds of such sale or transfer or fair market value of the Principal Property
so sold and leased back at the time of entering into such 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 (other than Debt subordinated
to the Notes) or Debt of a Restricted Subsidiary, having a stated maturity more
than 12 months from the date of such application or which is extendible at the
option of the obligor thereon to a date more than 12 months from the date of
such application (and, unless otherwise expressly provided with respect to any
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one or more series of Notes, any redemption of Notes pursuant to this provision
shall not be deemed to constitute a refunding operation or anticipated refunding
operation for the purposes of any provision limiting our right to redeem Notes
of any one or more such series when such redemption involves a refunding
operation or anticipated refunding operation); provided that the amount to be so
applied shall be reduced by (A) the principal amount of Notes delivered within
120 days after such sale or transfer to the Trustee for retirement and
cancellation, and (B) the principal amount of any such Debt of the Issuers or a
Restricted Subsidiary, other than Notes, voluntarily retired by us or a
Restricted Subsidiary within 120 days after such sale or transfer.
Notwithstanding the foregoing, no retirement referred to in this paragraph (ii)
may be effected by payment at maturity or pursuant to any mandatory sinking fund
payment or any mandatory prepayment provision; or
(iii) the Issuers, within 180 days prior or subsequent to such sale or
transfer, apply or cause a Restricted Subsidiary to apply an amount equal to the
net proceeds of such sale or transfer to an investment in another Principal
Property; provided, however, that this exception shall apply only if such
proceeds invested in such other Principal Property shall not exceed the total
acquisition, alteration, repair and construction cost of the Issuers or any
Restricted Subsidiary in such other Principal Property less amounts secured by
any purchase money or construction mortgage on such other Principal Property.
(Section 1010)
Limitation on Restricted Subsidiary Funded Debt. We will not permit any
Restricted Subsidiary of ours or of the Guarantor to Incur any Funded Debt.
Notwithstanding the foregoing, any Restricted Subsidiary may Incur the following
Funded Debt:
(i) Funded Debt of any Restricted Subsidiary constituting Existing Funded
Debt;
(ii) Funded Debt Incurred by a Special Purpose Funding Subsidiary,
provided that such Restricted Subsidiary remains at all times a Special Purpose
Funding Subsidiary;
(iii) Funded Debt owed by a Restricted Subsidiary to the Guarantor, either
of us or a Wholly-Owned Subsidiary of either of us (provided that such Funded
Debt is at all times held by the Guarantor, either of us or a Person which is a
Wholly-Owned Subsidiary of either of us); provided, however, that upon either
(A) that transfer or other disposition by the Guarantor, either of us or such
Wholly-Owned Subsidiary of any Funded Debt so permitted to a Person other than
the Guarantor, either of us or another Wholly-Owned Subsidiary of any either of
us, or (B) the issuance (other than directors' qualifying shares), sale, lease,
transfer or other disposition of shares of Capital Stock (including by
consolidation or merger) of such Wholly-Owned Subsidiary to a Person other than
the Guarantor, either of us or another such Wholly-Owned Subsidiary, the
provisions of this clause (iii) shall no longer be applicable to such Funded
Debt and such Funded Debt shall be deemed to have been Incurred at the time of
such transfer or other disposition;
(iv) Funded Debt Incurred by a Person before such Person became a
Restricted Subsidiary in an acquisition by either of or both of us from a
non-Affiliate (whether through a stock acquisition, merger, consolidation or
otherwise) after the date of the Indenture (provided such Funded Debt was not
Incurred in anticipation of or in connection with and was outstanding prior to
such acquisition);
(v) Funded Debt Incurred in connection with the acquisition, purchase,
improvement or development of property or assets used or held by any Subsidiary
of either of us prior to, or within 180 days after, the time of such
acquisition, purchase, improvement or development; or
(vi) Funded Debt Incurred to extend, renew, refinance or refund (or
successive extensions, renewals, refinancings or refundings) in whole or in
part, of any Funded Debt referred to in the foregoing clauses (i), (iv) and (v),
provided that the principal amount of the Funded Debt Incurred pursuant to this
clause (vi) shall not exceed the principal amount of Funded Debt so extended,
renewed, refinanced or refunded, plus the aggregate amount of premiums, other
payments, costs and expenses required to be paid or incurred in connection with
such extension, renewal, refinancing or refunding at the time of such extension,
renewal, refinancing or refunding; and
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(vii) Funded Debt (not otherwise permitted under the foregoing exceptions)
in an aggregate principal amount which, when aggregated with all other Funded
Debt (without duplication) of all of our Restricted Subsidiaries then
outstanding (other than Funded Debt otherwise permitted under the foregoing
exceptions) does not exceed 15% of Consolidated Net Tangible Assets (the "Debt
Basket"); provided, however, that the Debt Basket shall be reduced, without
duplication, by the amount of Debt secured by the Lien Basket and by the amount
of Attributable Debt Incurred pursuant to the Leaseback Basket, in each case to
the extent such secured Debt and such Attributable Debt may from time to time be
outstanding. (Section 1011)
Applicability of Covenants. The covenants described herein apply to the
Notes. The Indenture provides, however, that the covenants applicable to future
issuances of securities under the Indenture may have covenants similar or
different from those set forth herein.
EVENTS OF DEFAULT
The Indenture provides that the following are Events of Default with
respect to any series of Notes offered pursuant thereto:
(i) default in the payment of any interest on the Notes of such series, or
any related coupon, when such interest or coupon becomes due and payable, and
continuance of such default for a period of 30 days;
(ii) default in the payment of the principal of (or premium, if any, on)
the Notes of such series at their Maturity and continuance of such default for a
period of five Business Days;
(iii) 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 such series (other than a default in the performance, or breach
of a covenant or agreement which is specifically dealt with elsewhere in Section
501 of the Indenture), and continuance of such default or breach for a period of
60 days after there has been given, by registered or certified mail, to the
Issuers or the Guarantor, as the case may be, by the Trustee or to the Issuers
or the Guarantor and the Trustee for such series of Notes by the Holders of at
least 25% in principal amount of all Outstanding Notes of such series a written
notice specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" under the Indenture;
(iv) an event of default shall have occurred under any mortgage, bond,
indenture, loan agreement or other document evidencing any Debt of either of us
or any Restricted Subsidiary of either of us, which Debt is outstanding in a
principal amount in excess of $25,000,000 in the aggregate, and such default
shall result in such Debt becoming, whether by declaration or otherwise, due and
payable prior to the date on which it would otherwise become due and payable or
(b) a default in any payment when due at final maturity of any such Debt;
(v) 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 either of us or
any Restricted Subsidiary of ours, 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 any right
under applicable law or applicable security documents to take ownership of such
assets in lieu of foreclosure;
(vi) final judgments or orders rendered against either 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 such
judgment or order or (b) there shall have been a period of 60 days during which
a stay of enforcement of such judgment or order, by reason of pending appeal or
otherwise, was not in effect;
(vii) the entry of a decree or order by a court having jurisdiction in the
premises adjudging either of us or the Guarantor as bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of either of us or the Guarantor
under the Federal Bankruptcy Code or any other applicable federal or state law,
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or appointing a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of either of us or the Guarantor or of any substantial part of
our respective properties, or ordering the winding up or liquidation of our
affairs, and the continuance of any such decree or order unstayed and in effect
for a period of 90 consecutive days;
(viii) the institution by either of us or the Guarantor of proceedings to
be adjudicated a bankrupt or insolvent, or the consent by any of us to the
institution of bankruptcy or insolvency proceedings against us, or the filing by
any of us of a petition or answer or consent seeking reorganization or relief
under the Federal Bankruptcy Code or any other applicable federal or state law,
or the consent by any of us to the filing of any such petition or to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of either of us or the Guarantor or of any substantial part of
our respective properties, or the making by any of us of an assignment for the
benefit of creditors, or the admission by any of us in writing of our inability
to pay our debts generally as they become due; and
(ix) 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 such effect (other than by reason of the
termination of the Indenture or the release of the Guarantee in accordance with
the Indenture). (Section 501)
The Indenture provides that if an Event of Default for any series of Notes
offered pursuant thereto specified above (other than an Event of Default of the
type described in clauses (vii) and (viii) above) shall occur and be continuing,
either the Trustee or the Holders of at least 25% in principal amount of the
Outstanding Notes of such series may declare the principal of all Notes of such
series to be due and payable immediately. If an Event of Default specified in
clause (vii) or (viii) 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 such series rescind and annul a
declaration of acceleration. (Section 502)
The Indenture provides that the Trustee shall not be liable for any action
taken, suffered 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 thereunder, for 60 days, to act after it has received a request to
enforce such Indenture by the Holders of at least 25% in aggregate principal
amount of the then Outstanding Notes of such series (in the case of an Event of
Default other than the type described in clauses (vii) and (viii) above) or a
request to enforce such Indenture by the Holders of at least 25% in aggregate
principal amount of all of the Notes then Outstanding (in the case of an Event
of Default specified in clauses (vii) and (viii) above), and an offer of
reasonable indemnity. (Section 507) This provision will not prevent any Holder
of Notes from enforcing payment of the principal thereof (and premium, if any)
and interest thereon at the respective due dates thereof. (Section 508) 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 such series. The Trustee may,
however, refuse to follow any direction that it determines may not lawfully be
taken or would be illegal or in conflict with the Indenture or involve it in
personal liability or which would be unjustly prejudicial to Holders not joining
therein. (Section 512)
The Indenture provides that the Trustee will, within 90 days after the
occurrence of a default with respect to the Notes of any series thereunder, give
to the Holders of Notes of such series notice of such default, if such default
has not been cured or waived. (Section 601) Except in the case of a default in
the payment of principal of (or premium, if any) or interest on, or in the
payment of any sinking fund installment in respect of, any Note, the Trustee
shall be protected in withholding such notice if it determines in good faith
that the withholding of such notice is in the interest of the Holders of the
Notes. (Section 601)
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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. (Section 1005)
MODIFICATION AND WAIVER
Subject to certain exceptions, we, along with the Guarantor and the
Trustee, may amend the Indenture, including the Guarantee contained therein,
only with the consent of the holders of a majority in principal amount of the
outstanding notes of each series affected by such modification or amendment.
However, no such 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 premium, if any) or any
installment of interest on any note, or reduce the principal amount
thereof (or premium, if any) or the rate of interest, if any, thereon, or
change any obligation of the Issuers to pay additional amounts
contemplated by Section 1013 of the Indenture (except as contemplated by
Section 801(1) and permitted by Section 901(1)), 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 thereof or the
amount thereof 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 thereon is payable;
(3) impair the right to institute suit for the enforcement of any such payment
on or after the stated maturity thereof (or, in the case of redemption or
repayment at the option of the holder, on or after the Redemption Date or
Repayment Date, as the case may be);
(4) adversely affect any right to exchange any Note provided pursuant to
Section 301 of 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 thereunder and their consequences provided for in the Indenture;
(6) reduce the requirements of Section 104 of 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 any such 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.
(Section 902)
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) 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;
(5) make any change that does not adversely affect the rights of any holder;
or
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(6) comply with any requirement of the Commission in connection with the
qualification of the Indenture under the Trust Indenture Act of 1939, as
amended.
We may, with respect to any series of notes, choose in certain particular
instances not to comply with any term, provision or condition which affects the
notes of such series set forth in the Indenture if the holders of at least a
majority in principal amount of the notes of each series affected by such term,
provision or condition, by act of such holders, waive such compliance in such
instance with such term, provision or condition. No such waiver shall extend to
or affect such term, provision or condition except to the extent so expressly
waived, and, until such waiver shall become effective, our obligations and the
duties of the Trustee to holders of notes of each series in respect of any such
term, provision or condition shall remain in full force and effect. (Section
1012) The holders of 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) 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 all such holders, waive any past default under the Indenture with
respect to such notes except a default in the payment of the principal of (or
premium, if any) 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 thereby.
(Section 1012)
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Pursuant to the Indenture, we may not enter into any merger, consolidation
or amalgamation, or liquidate, wind up or dissolve ourselves, 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 either of the Issuers may be merged or consolidated with
or into either of the Issuers (if the respective Issuer is the continuing
or surviving corporation, or with or into any one or more wholly-owned
subsidiaries of Issuer if the wholly-owned subsidiary or subsidiaries 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 either 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 thereof may be merged or consolidated with
or into another entity; provided that no Default or Event of Default shall
have occurred and be continuing or would occur as a result thereof; and
provided further that if the Issuers shall not be the continuing or
surviving corporation, such continuing or surviving corporation shall
succeed to the Indenture. (Sections 801 and 802)
The Indenture also provides that the Guarantor shall not consolidate with
or 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 such consolidation or merger (if other
than the Guarantor) or to which such properties and assets are transferred
assumes all of the obligations of such Guarantor under the Indenture and
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the Guarantee, pursuant to a supplemental indenture in form and substance
satisfactory to the Trustee;
(2) immediately after giving effect to such 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 such transaction
complies with the requirements of the Indenture.
PAYMENT OF ADDITIONAL AMOUNTS
The Indenture provides that any amounts paid by the Issuers or their
assignee (or any successor thereto) or paid by any successor to the Issuers will
be paid without deduction for taxes collected for the account of the United
Kingdom or the jurisdiction of incorporation or residence (other than the United
States) of any assignee of the Issuers or any successor to either Issuer or the
Guarantor (an "Other Jurisdiction") or, if deduction of taxes shall at any time
be required by the United Kingdom or an Other Jurisdiction, the Issuers, their
assignee or any relevant successor will pay such additional amounts ("Additional
Amounts") in respect of principal, premium or interest as may be necessary in
order that the net amounts paid to the holders of the Notes or the Trustee under
the Indenture, after such deduction, shall equal the respective amounts of
principal, premium or interest as specified in the Notes to which such Holders
or the Trustee are entitled; provided, however, that the foregoing 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 such payment became due or was
provided for, whichever is later, (3) any taxes 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
holders failure to comply with any reporting requirements concerning the
nationality, residence, identity or connection with the United Kingdom or the
Other Jurisdiction or any other relevant jurisdiction of the holder or
beneficial owner of the relevant Note, (5) any taxes (A) which would not have
been so imposed if the beneficial owner of the relevant Note had been the holder
of such Note, or (B) which, if the beneficial owner of such Note had held the
Note as the Holder of such Note, would have been excluded pursuant to clauses
(1) through (4) above, or (6) any estate, inheritance, gift, sale, transfer,
personal property or similar tax. (Section 1013)
The Indenture does not provide for the payment of additional amounts with
respect to the Indenture or the Guarantee due to any deduction requirement
imposed by any governmental unit other than the United Kingdom or an Other
Jurisdiction.
DEFEASANCE
With respect to any series of Notes, we, at our option:
(1) will be discharged from any and all obligations in respect of such series
of Notes (except for certain obligations to replace stolen, lost or
mutilated notes, maintain Paying Agencies, and hold money for payment in
trust); or
(2) will not be subject to certain covenants in the Indenture and any other
specified covenants with respect to such series of Notes, in each case if
the Issuers deposit with the Trustee, in trust, money or Government
Obligations which through the payment of interest thereon and principal
thereof in accordance with their terms will provide money in an amount
sufficient to pay all the principal (including any mandatory sinking fund
payments) of, and interest on, the outstanding Notes of the relevant
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series on the dates such payments are due in accordance with the terms
thereof.
To exercise any such option, we are required to 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 such series to
recognize income, gain or loss for federal income tax purposes;
(2) in the case of a discharge pursuant to clause (i) above, either a ruling
to the effect specified in this clause (1) received from or published by
the United States Internal Revenue Service or an opinion that there has
been a change in applicable federal income tax law to such effect; and
(3) an Officer's Certificate stating that no Event of Default with respect to
such series of Notes has occurred and is continuing. (Sections 1401-1404)
BOOK-ENTRY; DELIVERY AND FORM
General. The Notes will be represented by one or more permanent Global
Notes in definitive, fully registered book-entry form (each, a "Global Note")
which will be registered in the name of a nominee of DTC and deposited on behalf
of the purchasers of the Notes with a custodian for DTC for credit to the
respective accounts of the purchasers (or to such other accounts as they may
direct).
Notes that are issued as described below under "-Physical Notes" will be
issued in definitive form. Upon the transfer of a Note of any series in
definitive form, such Note will be exchanged for an interest in a Global Note
representing the principal amount of Notes being transferred, unless the Global
Notes for such series have previously been exchanged for Notes in definitive
form.
The Global Notes. We expect that pursuant to procedures established by DTC
(a) upon deposit of the Global Notes, DTC or its custodian will credit on its
internal system portions of the Global Notes which shall be comprised of the
corresponding respective principal amount of the Global Notes to the respective
accounts of persons who have accounts with such depositary and (b) ownership of
the Notes will be shown on, and the transfer of ownership thereof will be
effected only through, records maintained by DTC or its nominee and the records
of Participants.
So long as DTC or its nominee is the registered owner or holder of the
Global Notes, DTC or such nominee, as the case may be, will be considered the
sole record owner or holder of the Notes represented by the Global Notes for all
purposes under the Indenture and the Notes. No beneficial owner of an interest
in the Global Notes will be able to transfer such interest except in accordance
with the applicable procedures of DTC and its Participants, in addition to those
provided for under the Indenture.
We will make payments of the principal or premium and interest on the
Global Notes to DTC or its nominee, as the registered owner thereof. 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 such
beneficial ownership interest.
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
such 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 such customers. Such payments will be
the responsibility of such Participants.
Transfers between Participants in DTC will be effected in accordance with
DTC rules and will be settled in immediately available funds. If a holder
requires physical delivery of a certificated Note for any reason, including to
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sell Notes to persons in states which require physical delivery of such
securities or to pledge such securities, such holder must transfer its interest
in the Global Notes in accordance with the normal procedures of DTC and in
accordance with the procedures set forth in the Indenture.
DTC has advised the Issuers and the Guarantor that DTC will take any
action permitted to be taken by a holder of Notes (including the presentation of
Notes for exchange as described below) only at the direction of one or more
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 such
Participant has given such 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: DTC is a limited
purpose trust company organized under the laws of the State of New York, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the Uniform Commercial Code and a "clearing agency" registered
pursuant to 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
book-entry changes in accounts of its Participants, thereby eliminating 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, either directly or indirectly.
Although DTC and its Participants are expected to follow the foregoing
procedures in order to facilitate transfers of interests in the Global Notes
among Participants, they are under no obligation to perform such procedures, and
such 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. Interests in the Global Notes will be exchangeable or
transferable, as the case may be, for Notes issued in definitive, registered
form without coupons ("Physical Notes") if (1) DTC notifies the Issuers that it
is unwilling or unable to continue as depositary for such Global Notes, or DTC
ceases to be a "clearing agency" registered under the Exchange Act, and a
successor depositary is not appointed by the Issuers 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% 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 a book-entry system through DTC
or such depositary with respect to the Global Notes is no longer required. Upon
the occurrence of any of the events described in the preceding sentence, we will
cause the appropriate Physical Notes to be delivered. (Section 314)
THE TRUSTEE
The Indenture provides that, except during the continuance of an Event of
Default, the Trustee will perform only such duties as are specifically set forth
in the Indenture. If an Event of Default has occurred and is continuing, the
Trustee will exercise such rights and powers vested in it under the Indenture
and use the same degree of care and skill in its exercise as a prudent person
would exercise under the circumstances in the conduct of such person's own
affairs. (Section 602)
The Indenture and provisions of the TIA incorporated by reference therein
contain limitations on the rights of the Trustee thereunder, should it become a
creditor of either of the Issuers, to obtain payment of claims in certain cases
or to realize on certain property received by it in respect of any such claims,
as security or otherwise. The Trustee is permitted to engage in other
transactions; provided, however, that if it acquires any conflicting interest
(as defined in the TIA) it must eliminate such conflict or resign.
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SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made in immediately available funds. All
payments of principal, premium, if any, and interest will be made by the 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, such obligations or their
creation. Each holder of Notes by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes and the Guarantee. Such waiver may not be effective to waive
liabilities under the federal securities laws and it is the view of the
Commission that such waiver is against public policy. (Section 115)
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
Set forth below is a summary of certain of the defined terms used in the
Indenture. Reference is made to the Indenture for the full definition of all
such terms, as well as such other terms used herein for which no definition is
provided.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Attributable Debt" means, as to any particular lease under which either
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 thereof is to be
determined, the total net amount of rent required to be paid by either the
Issuers or any Restricted Subsidiary under such lease during the remaining term
thereof (excluding any subsequent renewal or other extension options held by the
lessee), discounted from the respective due dates thereof to such date at the
rate per annum equivalent to the interest rate inherent in such lease. The net
amount of rent required to be paid under any such lease for any such period
shall be the aggregate amount of the rent payable by the lessee with respect to
such period after excluding amounts required to be paid on account of
maintenance and repairs, services, insurance, taxes, assessments, water rates
and similar charges and contingent rents (such as those based on sales). In the
case of any lease which is terminable by the lessee upon the payment of a
penalty, such net amount of rent shall include the lesser of (i) the total
discounted net amount of rent required to be paid from the later of the first
date upon which such lease may be so terminated or the date of the determination
of such net amount of rent, as the case may be, and (ii) the amount of such
penalty (in which event no rent shall be considered as required to be paid under
such lease subsequent to the first date upon which it may be so terminated).
"Business Day", when used with respect to any Place of Payment or any
other particular location referred to in the Indenture or in the Securities,
means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
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which banking institutions in that Place of Payment or other location are
authorized or obligated by law or executive order to close.
"Capital Stock" means with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) in equity of such Person, whether outstanding on the date
hereof or issued thereafter, including, without limitation, all common stock and
preferred stock.
"Consolidated Net Tangible Assets" means the total amount of assets
appearing on the most recent Consolidated balance sheet of the Company and its
Subsidiaries, prepared in accordance with GAAP after deducting therefrom (i) all
current liabilities (excluding any current liabilities which are by their terms
extendible or renewable at the option of the obligor thereon to a time more than
12 months after the time as of which the amount thereof is being computed) and
(ii) 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 such Person and each of its Subsidiaries if and to the extent
the accounts of such Person and each of its Subsidiaries would normally be
consolidated with those of such Person, all in accordance with GAAP. The term
"Consolidated" shall have a similar meaning.
"Credit Facility" means the Credit Agreement, dated as of December 12,
1996, among USI American Holdings, Inc., USI Funding, Inc., as borrowers, U.S.
Industries, Inc., as guarantor, Bank of America Illinois, as Issuing Bank and
Swingline Bank, the additional financial institutions set forth therein, as
lenders, Bank of America National Trust and Savings Association, as Agent, and
BA Securities, Inc., as Arranger, as such agreement may be amended from time to
time (or any one or more renewals, extension, refinancings, or refundings
thereof).
"Currency" means any currency or currencies, composite currency or
currency unit or currency units, including, without limitation, the Euro, issued
by the government of one or more countries or by any recognized confederation or
association of such governments.
"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 thereto.
"Debt Basket" shall have the meaning set forth in the "Limitation on Sale
and Leaseback Transactions" covenant.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"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 pursuant to the Credit Facility) existing on the date of the
Indenture.
"Funded Debt" means Debt that by its terms (i) matures more than one year
from the date of original issuance or creation or (ii) matures within one year
from such date but is renewable or extendible at the option of any obligor to a
date more than one year from such date.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as approved by a significant segment of the accounting profession
in the United States, from time to time.
"Government Obligations" means securities which are:
(i) direct obligations of the government which issued the Currency in
which the Notes are payable; or
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(ii) 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 thereof 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, pursuant
to Article 12 of the Indenture, which is subject to release under certain
circumstances as described herein.
"Holder" means the Person in whose name a Note is registered in the
Security Register.
"Incur" means, with respect to any Debt of any Person, to create, issue,
incur (by conversion, exchange or otherwise), assume, guarantee or otherwise
become, directly or indirectly, liable in respect of such Debt or the recording,
as required pursuant to GAAP or otherwise, of any such Debt on the balance sheet
of such Person (and "Incurrence", "Incurred", "Incurrable" and "Incurring" shall
have meanings correlative to the foregoing); provided, however, that a change in
GAAP that results in an obligation of such Person that exists at such time
becoming Debt shall not be deemed an Incurrence of such Debt.
"Lien" means any pledge, mortgage, lien, charge, encumbrance or security
interest.
"Lien Basket" shall have the meaning set forth in the "Limitation on
Liens" covenant.
"Maturity", when used with respect to any Note, means the date on which
the principal of such Note or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, notice of option to elect
repayment or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman, the
President, Vice President, Treasurer, an Assistant Treasurer, the Secretary or
an Assistant Secretary of either of the Issuers or the Guarantor, or any other
officer of either of the Issuers or the Guarantor having substantially the same
authority and responsibility.
"Original Issue Date" means the date on which the Notes are originally
issued.
"Original Issue Discount Security" means any Note which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502 of
the Indenture.
"Outstanding", when used with respect to Notes, means, as of the date of
determination, all Notes theretofore authenticated and delivered under the
Indenture, except:
(i) Notes theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Notes, or portions thereof, for whose payment or redemption or
repayment at the option of the Holder money in the necessary amount has
been theretofore deposited with the Trustee or any Paying Agent (other
than either of the Issuers) in trust or set aside and segregated in trust
by the Issuers (if each of the Issuers shall act as its own Paying Agent)
for the Holders of such Notes; provided that, if such Notes are to be
redeemed, notice of such redemption has been duly given pursuant to the
Indenture or provision therefor satisfactory to the Trustee has been made;
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(iii) Notes, except to the extent provided in Sections 1402 and 1403
of the Indenture, with respect to which the Issuers have effected
defeasance and/or covenant defeasance as provided in Article Fourteen of
the Indenture; and
(iv) Notes which have been paid pursuant to Section 306 of the
Indenture or in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to the Indenture, other than any such
Notes in respect of which there shall have been presented to the Trustee
proof satisfactory to it that such Notes are held by a bona fide purchaser
in whose hands such Notes are valid obligations of the Issuers;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by TIA Section 313:
(i) the principal amount of an Original Issue Discount Security that
may be counted in making such determination or calculation and that shall
be deemed to be Outstanding for such purpose shall be equal to the amount
of principal thereof that would be (or shall have been declared to be) due
and payable, at the time of such determination, upon a declaration of
acceleration of the maturity thereof pursuant to Section 502 of the
Indenture;
(ii) the principal amount of any Notes denominated in a Foreign
Currency that may be counted in making such determination or calculation
and that shall be deemed Outstanding for such purpose shall be equal to
the Dollar equivalent, determined as of the date such Security is
originally issued by either of the Issuers as set forth in an Exchange
Rate Officers' Certificate delivered to the Trustee, of the principal
amount (or, in the case of an Original Issue Discount Security, the Dollar
equivalent as of such date of original issuance of the amount determined
as provided in clause (i) above) of such Note;
(iii) the principal amount of any Indexed Security that may be counted
in making such determination or calculation and that shall be deemed
outstanding for such purpose shall be equal to the principal face amount
of such Indexed Security at original issuance; and
(iv) Notes owned by either of the Issuers or any other obligor upon
the Notes or any Affiliate of either of the Issuers or of such other
obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in making such
calculation or in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes which the Trustee knows
to be so owned shall be so disregarded. Notes so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Notes and that the pledgee is not either of the
Issuers or any other obligor upon the Notes or any Affiliate of either of
the Issuers or such other obligor.
"Paying Agent" means any Person (including either of the Issuers acting as
Paying Agent) authorized by the Issuers to pay the principal of (or premium, if
any) or interest, if any, on any Notes on behalf of the Issuers.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Place of Payment" means 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 thereof,
owned by either of the Issuers or any Restricted Subsidiary and located in the
40
<PAGE>
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
any such manufacturing plant or warehouse or any portion thereof (together with
the land upon which it is erected and fixtures comprising a part thereof) 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.
"Redemption Date", when used with respect to any Note to be redeemed, in
whole or in part, means the date fixed for such redemption by or pursuant to the
Indenture.
"Redemption Price", when used with respect to any Note to be redeemed,
means the price at which it is to be redeemed pursuant to the Indenture.
"Repayment Date" means, when used with respect to any Note to be repaid at
the option of the Holder, the date fixed for such repayment pursuant to the
Indenture.
"Restricted Subsidiary" means each Subsidiary other than Unrestricted
Subsidiaries.
"Special Purpose Funding Subsidiary" means a direct Wholly-Owned
Subsidiary of either of the Issuers (i) that serves as a cash management company
for either of the Issuers and its respective Subsidiaries and has no other
material operations or business, (ii) that for every transfer of funds to it,
records a corresponding liability on its books and records to the transferor
thereof, and (iii) whose assets do not materially exceed its liabilities.
"Stated Maturity", when used with respect to any Note or any installment
of principal thereof or interest thereon, 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 pursuant
to the provisions of Section 308 of the Indenture.
"Subsidiary" means any corporation of which at the time of determination
either of the Issuers, directly and/or indirectly through one or more
Subsidiaries, owns more than 50% of the shares of Voting Stock.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as in
force at the date as of which the Indenture was executed, except as provided in
Section 905 of the Indenture.
"Trustee" means The First National Bank of Chicago until a successor
Trustee shall have become such pursuant to the applicable provisions of this
Offering Circular and/or the Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder.
"Unrestricted Subsidiary" means any Subsidiary of either of the Issuers
that (i) is organized under the laws of a jurisdiction other than a jurisdiction
in the United States of America, (ii) does not constitute a "significant
subsidiary" of the Company within the meaning of Rule 1-02(w) of Regulation S-X
promulgated under the Exchange Act or any successor provision thereto or (iii)
in the case of USI Atlantic and USIAH, is (but only for so long as and only to
the extent it is) or is acting as a co-issuer or guarantor of any indebtedness
of USI that is pari passu in right of payment with the indebtedness under the
Notes.
"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
"Wholly-Owned Subsidiary" of any Persons means a Subsidiary of such Person
all the outstanding Capital Stock or other ownership interests of which (other
than directors' qualifying shares) shall at the time be owned by such Person or
by one or more Wholly-Owned Subsidiaries of such Person or by such Person and
one or more Wholly-Owned Subsidiaries of such Person.
41
<PAGE>
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following discussion of taxation is intended only as a summary and
does not purport to be a complete analysis of all potential tax effects relevant
to the Notes. The statements of United States tax law set forth below are based
on the laws, regulations and administrative and judicial decisions applicable as
of the date of this Prospectus, and are subject to any changes in relevant
United States authorities occurring after that date. Any such changes, which
could be retroactive, could affect the continuing validity of this discussion.
Persons considering the exchange of Old Notes for New Notes pursuant to
the Exchange Offer should consult their own tax advisors concerning the
application of United States federal income tax laws, as well as the laws of any
state, local, or other taxing jurisdiction applicable to their particular
situations.
UNITED STATES FEDERAL INCOME TAXATION
The exchange of the Old Notes for New Notes pursuant to the Exchange Offer
should not be a taxable exchange for U.S. federal income tax purposes. As a
result, there should be no federal income tax consequences to a holder
exchanging an Old Note for a New Note pursuant to the Exchange Offer. A holder
should have the same adjusted basis and holding period in the New Note as it had
in the Old Note immediately before the exchange.
The foregoing statement summarizes certain of the material U.S. federal
income tax consequences associated with the exchange of the Old Notes for new
Notes pursuant to the Exchange Offer. This summary applies only to those persons
who are the initial holders of Old Notes, who acquired Old Notes for cash and
who hold Old Notes as capital assets, and assumes that the Old Notes were not
issued with "original issue discount," as defined in the Internal Revenue Code
of 1986, as amended (the "Code"). This summary also does not address the U.S.
federal income tax consequences of the exchange of Notes not held as capital
assets within the meaning of Section 1221 of the Code, or the U.S. federal
income tax consequences to investors subject to special treatment under the U.S.
federal income tax laws, such as dealers in securities or foreign currency,
tax-exempt entities, banks, thrifts, insurance companies, persons that hold the
Notes as part of a "straddle", a "hedge" against currency risk or a "conversion
transaction", persons that have a "functional currency" other than the U.S.
dollar and investors in pass-through entities. It also does not address any
consequences arising under U.S. federal gift and estate taxes or under the tax
laws of any state, local or foreign jurisdiction.
UNITED KINGDOM INCOME TAXATION
Payments of principal and interest on a New Note by USI Atlantic under the
Guarantee received by a beneficial owner not otherwise taxable in the United
Kingdom will generally be exempt from United Kingdom tax. However, USI
Atlantic's understanding of current Inland Revenue practice is that where a
United Kingdom company (including a company considered to be a United Kingdom
"dual resident" for tax purposes, such as USI Atlantic) is obliged to make a
payment of interest under a guarantee which in default would be enforced in the
United Kingdom, that payment will have a United Kingdom source. Accordingly, the
payment will be subject to United Kingdom withholding tax in the absence of an
available exemption under an applicable double taxation treaty or convention.
42
<PAGE>
Such an exemption should be available under the double taxation treaty
between the United States and the United Kingdom to beneficial owners of New
Notes who timely satisfy the conditions for exemption therein and who comply
with the relevant administrative arrangements. If, however, an exemption is not
available and a United Kingdom withholding tax is imposed on a payment in
respect of interest (or any additional interest) under the Guarantee, subject to
the exceptions set forth above under "Description of the New Notes--Payment of
Additional Amounts," the Issuers or the Guarantor or their successors or
assigns, will be obligated to pay or cause to be paid such Additional Amounts in
respect of the relevant interest as may be necessary in order that the net
amount of interest paid to a Holder of a New Note shall equal the amount of
interest to which such Holder is entitled. If the Issuers or the Guarantor are
required to pay Additional Amounts by reason of current Inland Revenue practice,
the Issuers may redeem the Notes in accordance with the provisions described
under "Description of the New Notes-Redemption in Circumstances Involving
Taxation."
Beneficial owners of New Notes should consult their own tax advisors as to
the conditions for exemption and the relevant administrative arrangements.
43
<PAGE>
NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS
The distribution of the Notes in Canada is being made only on a private
placement basis exempt from the requirement that the Issuers prepare and file a
prospectus with the securities regulatory authorities in each province where
trades of Notes are effected. Accordingly, any resale of the Notes in Canada
must be made in accordance with applicable securities laws which will vary
depending on the relevant jurisdiction, and which may require resales to be made
in accordance with available statutory exemptions or pursuant to a discretionary
exemption granted by the applicable Canadian securities regulatory authority.
Purchasers are advised to seek legal advice prior to any resale of the Notes.
REPRESENTATIONS OF PURCHASERS
Each purchaser of Notes in Canada who receives a purchase confirmation
will be deemed to represent to the Issuers and the dealer from whom such
purchase confirmation is received that (i) such purchaser is entitled under
applicable provincial securities laws to purchase such Notes without the benefit
of a prospectus qualified under such securities laws, (ii) where required by
law, such purchaser is purchasing as principal and not as agent and (iii) such
purchaser has reviewed the text above under "-Resale Restrictions."
RIGHTS OF ACTION (ONTARIO PURCHASERS)
The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
section 32 of the Regulation under the Securities Act (Ontario). As a result,
Ontario purchasers must rely on other remedies that may be available, including
common law rights of action for damages or rescission or rights of action under
the civil liability provisions of the U.S. federal securities laws. Following a
decision of the U.S. Supreme Court, it is possible that Ontario purchasers will
not be able to rely upon the remedies set out in Section 12(2) of the United
States Securities Act of 1933 where securities are being offered under a U.S.
private placement memorandum such as this document.
ENFORCEMENT OF LEGAL RIGHTS
All of the Issuers' directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be possible
for Canadian purchasers to effect service of process within Canada upon the
issuer or such persons. All or a substantial portion of the assets of the issuer
and such persons may be located outside of Canada and, as a result, it may not
be possible to satisfy a judgment against the issuer or such persons in Canada
or to enforce a judgment obtained in Canadian courts against the issuer or
persons outside of Canada.
NOTICE TO BRITISH COLUMBIA RESIDENTS
A purchaser of Notes to whom the Securities Act (British Columbia) applies
is advised that such purchaser is required to file with the British Columbia
Securities Commission a report within ten days of the sale of any Notes acquired
by such purchaser pursuant to this Offering. Such report must be in the form
attached to British Columbia Securities Commission Blanket Order BOR #95/17, a
copy of which may be obtained from the Issuers. Only one such report must be
filed in respect of Notes acquired on the same date and under the same
prospectus exemption.
TAXATION AND ELIGIBILITY FOR INVESTMENT
Canadian purchasers of Notes should consult their own legal and tax
advisors with respect to the tax consequences of an investment in the Notes in
their particular circumstances and with respect to the eligibility of the Notes
for investment by the purchaser under relevant Canadian legislation.
44
<PAGE>
LEGAL MATTERS
The validity of the New Notes and the new Guarantees will be passed upon
for USI, USI Atlantic and USIAH by Weil, Gotshal & Manges LLP, New York, New
York.
EXPERTS
The consolidated financial statements and schedule of U.S. Industries,
Inc. appearing in its Annual Report on Form 10-K for the year ended October 3,
1998, have been audited by Ernst & Young LLP, independent auditors, as set forth
in their report thereon included therein and 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. Such consolidated
financial statements and schedule are incorporated in this Prospectus by
reference in reliance upon such report given upon the authority of such firms as
experts in accounting and auditing.
45
<PAGE>
U.S. INDUSTRIES, INC.
USI AMERICAN HOLDINGS, INC.
USI ATLANTIC CORP.
$250,000,000
71/8% Senior Notes due 2003
PROSPECTUS
WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED
IN THIS PROSPECTUS. THIS PROSPECTUS DOES NOT OFFER TO SELL OR BUY ANY SECURITIES
IN ANY JURISDICTION WHERE IT IS UNLAWFUL.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. 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 such action, suit or proceeding provided that such
director or officer acted in good faith and in a manner reasonably believed to
be in or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, provided that such director or officer had
no reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
director or officer, or former director or officer, who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that such person acted in any of the capacities set forth
above, against expenses (including attorneys' fees) actually and reasonably
incurred in connection with the defense or settlement of such action or suit
provided that such director or officer acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification may be made in respect of any claim,
issue or matter as to which such director or officer shall have been adjudged to
be liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such director or officer is fairly and reasonably
entitled to indemnity for such expenses which the court shall deem proper.
Section 145 further provides that to the extent a director or officer of a
corporation has been successful in the defense of any action, suit or proceeding
referred to in subsections (a) or (b) or in the defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith; provided
that indemnification provided for by Section 145 or granted pursuant thereto
shall not be deemed exclusive of any other rights to which the indemnified party
may be entitled; and
II-1
<PAGE>
empowers the corporation to purchase and maintain insurance on behalf of a
director of officer of the corporation against any liability asserted against
him or incurred by him in any such capacity or arising out of his status as such
whether or not the corporation would have the power to indemnify him against
such liabilities under Section 145.
In addition, Section 102(b)(7) of the DGCL permits Delaware corporations to
include a provision in their certificates of incorporation eliminating or
limiting the personal liability of a director to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
provided that such provisions shall not eliminate or limit the liability of a
director (i) for any breach of the director's duty of loyalty to the corporation
or its stockholders, (ii) for acts or omissions not in good faith or that
involved intentional misconduct or a knowing violation of law, (iii) for
unlawful payment of dividends or other unlawful distributions, or (iv) for any
transactions from which the director derived an improper personal benefit.
Each of the 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 such person because of his or her status as an
officer or director upon receipt of an undertaking to repay such advances unless
it is ultimately determined that he or she is entitled to indemnification by the
respective corporation.
The directors and officers of each of the Issuers and the Guarantor are
insured against certain civil liabilities, including liabilities under federal
securities laws, which might be incurred by them in such capacity.
ITEM 21. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
Exhibit
No. Description of Document
3.1(a) Amended and Restated Certificate of Incorporation of USI (filed as
Exhibit 3.1 to the Form 10-K).*
3.1(b) Certificate of Incorporation of USIAH (filed as Exhibit 3.1(a) to the
Registration Statement on Form S-4 of USIAH (Registration No. 333-20183
(the "USIAH Form S-4")).*
3.1(c) Amended and Restated Certificate of Incorporation of USI Atlantic.***
II-2
<PAGE>
3.2(a) Amended and Restated Bylaws of USI (filed as Exhibit 3.2 to the Form
10-K).*
3.2(b) Bylaws of USIAH (filed as Exhibit 3.2(a) to the USIAH Form S-4).*
3.2(c) Amended and Restated Bylaws of USI Atlantic.***
4.1 Indenture, dated as of October 27, 1998, among the Issuers, the
Guarantor and The First National Bank of Chicago, as Trustee (filed as
Exhibit 4.4 to the Form 10-K).*
4.2 Specimen New Notes (included in Exhibit 4.1).*
4.3 Registration Rights Agreement, dated October 22, 1998, among the
Issuers, the Guarantor and Credit Suisse First Boston Corporation on
behalf of the Initial Purchasers.***
5.1 Opinion of Weil, Gotshal & Manges LLP.**
10.1 Credit Agreement, dated December 12, 1996, among the Issuers, the
Guarantor, Various Banks named therein, Bank of America National Trust
and Savings Association, as Issuing Bank, Swingline Bank and Agent, and
BA Securities, Inc., as Arranger (filed as Exhibit 10.13 to the Form
10-K).*
12.1 Computation of Ratio of Earnings to Fixed Charges.***
23.1 Consent of Ernst & Young LLP.**
23.2 Consent of PricewaterhouseCoopers LLP.**
23.4 Consent of Weil, Gotshal & Manges LLP (included in Exhibit 5.1).***
24.1 Powers of Attorney.**
25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of the Trustee under the Indenture.***
99.1 Form of Letter of Transmittal.***
99.2 Form of Notice of Guaranteed Delivery.***
99.3 Form of Letter to Brokers.***
99.4 Form of Letter to Clients.***
- ------------------
* Incorporated herein by reference.
** Filed herewith.
*** To be filed by amendment.
(b) Financial Statement Schedules.
II. Valuation and Qualifying Accounts (included in Item 8 of the
Company's 1998 Annual Report), which is incorporated herein by reference.
(c) Not applicable.
II-3
<PAGE>
ITEM 22. UNDERTAKINGS
(a) The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(b) The undersigned Registrants hereby undertake to deliver or cause to be
delivered with the Prospectus, to each person to whom the Prospectus
is sent or given, the latest annual report, to security holders that
is incorporated by reference in the Prospectus and furnished pursuant
to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the
Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-X is
not set forth in the Prospectus, to deliver, or cause to be delivered
to each person to whom the Prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
Prospectus to provide such interim financial information.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
(d) The undersigned Registrants hereby undertake to respond to requests
for information that is incorporated by reference into the Prospectus
pursuant to Item 4, 10(b), 11, or 13 of this form, within one business
day of receipt of such request, and to send the incorporated documents
by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective
date of the Registration Statement through the date of responding to
the request.
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<PAGE>
(e) The undersigned Registrants hereby undertake to supply by means of a
post-effective amendment all information concerning a transaction, and
the company being acquired involved therein, that was not the subject
of and included in the Registration Statement when it became effective.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrants named
below have duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Iselin, State of New
Jersey, on January 13, 1999.
USI AMERICAN HOLDINGS, INC.
USI ATLANTIC CORP.
U.S. INDUSTRIES, INC.
By: /s/ George H. MacLean
----------------------------------------
Name: George H. MacLean
Title: Senior Vice President, General
Counsel and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each of the following persons 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, and any and all amendments to this Registration
Statement, 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.
<TABLE>
<CAPTION>
USI AMERICAN HOLDINGS, INC.
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ David H. Clarke Chairman of the Board and January 13, 1999
- ---------------------------- Chief Executive Officer
David H. Clarke (Principal Executive Officer)
Director, President and Chief
/s/ John G. Raos Operating Officer January 13, 1999
- ----------------------------
John G. Raos
/s/ George H. MacLean Director, Senior Vice January 13, 1999
- ---------------------------- President, General Counsel
George H. MacLean and Secretary
/s/ James O'Leary Senior Vice President and January 13, 1999
- ---------------------------- Chief Financial Officer
James O'Leary (Principal Financial Officer)
/s/ Robert P. Noonan Corporate Controller January 13, 1999
- ---------------------------- (Principal Accounting
Robert P. Noonan Officer)
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
USI ATLANTIC CORP.
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ David H. Clarke Chairman of the Board and Chief January 13, 1999
- ----------------------------- Executive Officer (Principal Executive
David H. Clarke Officer)
/s/ Brian C. Beazer Director January 13, 1999
- -----------------------------
Brian C. Beazer
/s/ Sir Harry Solomon Director January 13, 1999
- -----------------------------
Sir Harry Solomon
/s/ Royall Victor III Director January 13, 1999
- -----------------------------
Royall Victor III
/s/ George H. MacLean Director, Senior Vice President, January 13, 1999
- ----------------------------- General Counsel and Secretary
George H. MacLean
/s/ James O'Leary Senior Vice President and Chief January 13, 1999
- ----------------------------- Financial Officer (Principal Financial
James O'Leary Officer)
/s/ Robert P. Noonan Corporate Controller (Principal January 13, 1999
- ----------------------------- Accounting Officer)
Robert P. Noonan
</TABLE>
II-7
<PAGE>
<TABLE>
<CAPTION>
U.S. INDUSTRIES, INC.
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ David H. Clarke Chairman of the Board and Chief January 13, 1999
- ----------------------------- Executive Officer (Principal Executive
David H. Clarke Officer)
/s/ John G. Raos Director, President and Chief Operating January 13, 1999
- ----------------------------- Officer
John G. Raos
/s/ Brian C. Beazer Director January 13, 1999
- -----------------------------
Brian C. Beazer
Director January __, 1999
- -----------------------------
William E. Butler
/s/ John J. McAtee, Jr. Director January 13, 1999
- -----------------------------
John J. McAtee, Jr.
Director January __, 1999
- -----------------------------
The Hon. Charles H. Price II
/s/ Sir Harry Solomon Director January 13, 1999
- -----------------------------
Sir Harry Solomon
/s/ Royall Victor III Director January 13, 1999
- -----------------------------
Royall Victor III
Director January __, 1999
- -----------------------------
Mark Vorder Bruegge
/s/ Robert R. Womack Director January 13, 1999
- -----------------------------
Robert R. Womack
/s/ James O'Leary Senior Vice President and Chief January 13, 1999
- ----------------------------- Financial Officer (Principal Financial
James O'Leary Officer)
/s/ Robert P. Noonan Corporate Controller January 13, 1999
- ----------------------------- (Principal Accounting Officer)
Robert P. Noonan
</TABLE>
II-8
<PAGE>
EXHIBIT INDEX
-------------
Exhibit
No. Description of Document
3.1(a) Amended and Restated Certificate of Incorporation of USI (filed as
Exhibit 3.1 to the Form 10-K).*
3.1(b) Certificate of Incorporation of USIAH (filed as Exhibit 3.1(a) to the
Registration Statement on Form S-4 of USIAH (Registration No. 333-20183
(the "USIAH Form S-4")).*
3.1(c) Amended and Restated Certificate of Incorporation of USI Atlantic.***
3.2(a) Amended and Restated Bylaws of USI (filed as Exhibit 3.2 to the Form
10-K).*
3.2(b) Bylaws of USIAH (filed as Exhibit 3.2(a) to the USIAH Form S-4).*
3.2(c) Amended and Restated Bylaws of USI Atlantic.***
4.1 Indenture, dated as of October 27, 1998, among the Issuers, the
Guarantor and The First National Bank of Chicago, as Trustee (filed as
Exhibit 4.4 to the Form 10-K).*
4.2 Specimen New Notes (included in Exhibit 4.1).*
4.3 Registration Rights Agreement, dated October 22, 1998, among the
Issuers, the Guarantor and Credit Suisse First Boston Corporation on
behalf of the Initial Purchasers.***
5.1 Opinion of Weil, Gotshal & Manges LLP.**
10.1 Credit Agreement, dated December 12, 1996, among the Issuers, the
Guarantor, Various Banks named therein, Bank of America National Trust
and Savings Association, as Issuing Bank, Swingline Bank and Agent, and
BA Securities, Inc., as Arranger (filed as Exhibit 10.13 to the Form
10-K).*
12.1 Computation of Ratio of Earnings to Fixed Charges.***
23.1 Consent of Ernst & Young LLP.**
23.2 Consent of PricewaterhouseCoopers LLP.**
23.4 Consent of Weil, Gotshal & Manges LLP (included in Exhibit 5.1).***
24.1 Powers of Attorney.**
25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of the Trustee under the Indenture.***
99.1 Form of Letter of Transmittal.***
99.2 Form of Notice of Guaranteed Delivery.***
99.3 Form of Letter to Brokers.***
99.4 Form of Letter to Clients.***
- ------------------
* Incorporated herein by reference.
** Filed herewith.
*** To be filed by amendment.
II-9
WEIL, GOTSHAL & MANGES LLP
A LIMITED LIABILITY PARTNERSHIP
INCLUDING PROFESSIONAL CORPORATIONS
767 FIFTH AVENUE
NEW YORK, NY 10153
212-310-8000
(FAX) 212-310-8007
January 13, 1999
U.S. Industries, Inc.
USI American Holdings, Inc.
USI Atlantic Corp.
101 Wood Avenue South
Iselin, New Jersey 08830
Ladies and Gentlemen:
We have acted as counsel to U.S. Industries, Inc., a Delaware
corporation ("USI" and, collectively with its consolidated subsidiaries, the
"Company"), USI's wholly-owned indirect subsidiary, USI American Holdings, Inc.,
a Delaware corporation ("USIAH" or the "Co-Issuer" and, together with USI,
collectively the "Issuers"), and USI's wholly-owned direct subsidiary, USI
Atlantic Corp., a Delaware corporation ("USI Atlantic" or the "Guarantor"), in
connection with the preparation and filing with the Securities and Exchange
Commission of the Registration Statement on Form S-4 (the "Registration
Statement") of the Issuers and the Guarantor for registration under the
Securities Act of 1933, as amended (the "Securities Act"), of $250 million
aggregate principal amount of the Issuers' 7-1/8% Senior Notes due 2003 (the
"New Notes") and the Guarantor's guarantee in connection therewith (the "New
Guarantee"), each issuable in connection with the exchange offer of New Notes
for the Issuers' 7-1/8% Senior Notes due 2003, which were not registered under
the Securities Act (the "Old Notes").
In so acting, we have examined originals or copies, certified or
otherwise identified to our satisfaction, of the Registration Statement, the
Indenture, dated as of October 27, 1998 (the "Indenture"), among the Issuers,
the Guarantor and The First National Bank of Chicago, as Trustee (the
"Trustee"), pursuant to which the New Notes will be issued, the form of the New
Notes included as Exhibit 4.2 to the Registration Statement and such corporate
records, agreements, documents and other
NYFS11...:\95\78595\0012\2011\OPN1129R.130
<PAGE>
U.S. Industries, Inc.
USI American Holdings, Inc.
USI Atlantic Corp.
January 13, 1999
Page 2
instruments, and such certificates or comparable documents of public officials
and of officers and representatives of the Issuers and the Guarantor, and have
made such inquiries of such officers and representatives, as we have deemed
relevant and necessary as a basis for the opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
documents submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such latter documents. As to all questions of
fact material to this opinion that have not been independently established, we
have relied upon certificates or comparable documents of officers and
representatives of the Issuers and the Guarantor.
Based on the foregoing, and subject to the qualifications stated
herein, we are of the opinion that:
1. The New Notes have been duly authorized by the Issuers and, when
executed on behalf of the Issuers, authenticated by the Trustee and delivered in
accordance with the terms of the Indenture and as contemplated by the
Registration Statement, and upon the exchange by holders of Old Notes of Old
Notes for New Notes, will constitute valid and legally binding obligations of
the Issuers entitled to the benefits provided by the Indenture, enforceable
against the Issuers in accordance with their terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws affecting creditors' rights and remedies generally and, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
sought in a proceeding at law or in equity).
2. The Guarantee has been duly authorized by the Guarantor and when
executed and delivered by the Guarantor in accordance with the terms of the
Indenture and as contemplated by the Registration Statement, will constitute a
valid and legally binding obligation of the Guarantor entitled to the benefits
provided by the Indenture, enforceable against the Guarantor in accordance with
their terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws affecting
creditors' rights and remedies
<PAGE>
U.S. Industries, Inc.
USI American Holdings, Inc.
USI Atlantic Corp.
January 13, 1999
Page 3
generally and, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether sought in a proceeding at law or in equity).
The opinions expressed herein are limited to the laws of the State
of New York, the corporate laws of the State of Delaware and the federal laws of
the United States, and we express no opinion as to the effect on the matters
covered by this opinion of the laws of any other jurisdiction.
We consent to the reference to our name under the caption "Legal
Matters" in the prospectus which is a part of the Registration Statement.
Very truly yours,
WEIL, GOTSHAL & MANGES LLP
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-4 and related Prospectus of U.S. Industries,
Inc. and USI American Holdings, Inc. for the registration of their 7 1/8% Senior
Notes due 2003 and to the incorporation of our report dated November 12, 1998,
with respect to the consolidated financial statements and schedule of U.S.
Industries, Inc. included in its Annual Report on Form 10-K for the year ended
October 3, 1998, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
New York, New York
January 11, 1999
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EXHIBIT 23.2
CONSENT OF PRICEWATERHOUSECOOPERS LLP
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-4 of U.S. Industries,
Inc. of our report dated November 14, 1997 appearing on page 21 of the U.S.
Industries, Inc. Annual Report on Form 10-K for the year ended October 3, 1998.
We also consent to the reference to us under the headings "Experts" in such
Prospectus.
/s/ PricewaterhouseCoopers LLP
Florham Park, New Jersey
January 11, 1999
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