Exhibit 1.1
FORM OF UNDERWRITING AGREEMENT
$___________ ____% Senior Notes Due ____
__________
Name(s) of Managing Underwriter
Address(es) of Managing Underwriter
As Representative of the several Underwriters
named in Schedule A
Dear Sirs:
1. Introductory. U.S. Industries, Inc., a Delaware corporation ("USI") USI
Global Corp., a Delaware corporation and an indirect wholly-owned subsidiary of
USI ("USIGC"), and USI American Holdings, Inc., a Delaware corporation and an
indirect wholly-owned subsidiary of USI ("USIAH", and together with USI and
USIGC, the "Companies"), propose, subject to the terms and conditions stated
herein, to issue and sell, on a joint and several basis, to the Underwriters
named in Schedule A hereto (the "Underwriters") U.S.$___________ principal
amount of its ___% [Senior] [Subordinated] Notes Due ____ (the "Notes"). The
Notes will be fully and unconditionally guaranteed by USI Atlantic Corp., a
Delaware corporation and a direct wholly-owned subsidiary of USI (the
"Guarantor"). The Notes are to be issued under the indenture, dated as of
October 27, 1998 (the "Indenture"), among the Companies, the Guarantor and The
First National Bank of Chicago, as trustee (the "Trustee").
The Companies hereby agree with the several Underwriters as follows:
2. Representations and Warranties of the Companies. The Companies represent
and warrant to, and agree with, the several Underwriters that:
(a) The Companies and the Guarantor meet the requirements for the use
of Form S-3 under the Securities Act of 1933, as amended (the "Act"), and
have prepared and filed with the Securities and Exchange Commission (the
"Commission"), pursuant to the Act and the rules and regulations
promulgated by the Commission thereunder (the "Regulations"), and the Trust
Indenture Act of 1939, as amended (the "TIA"), a registration statement on
Form S-3 (Registration No. 333-_____), including the related Base
Prospectus (as defined below) or prospectuses, covering the registration
of, among other securities, the Notes under the Act, and the offering
thereof from time to time in accordance with Rule 415 of
the Act. Such registration statement has been declared effective by the
Commission. The Companies and the Guarantor will prepare and file with the
Commission, pursuant to Rules 415 and 424(b)(2), (3) or (5), a prospectus
supplement to the form of prospectus included in such registration
statement reflecting the terms of the Notes and the terms of the offering
thereof. As filed, such prospectus supplement shall include all required
information with respect to the Notes and the offering thereof and, except
to the extent the Underwriters shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to you prior to
the Execution Time (as defined below) or, to the extent not completed at
the Execution Time, shall contain only such specific additional information
and other changes (beyond that contained in the Base Prospectus and any
Preliminary Prospectus (as defined below)) as the Companies and the
Guarantor have advised you, prior to the Execution Time, will be included
or made therein.
(i) The terms which follow, when used in this Agreement, shall
have the meanings indicated:
(ii) "Effective Date" means the date that the Registration
Statement and any post-effective amendment or amendments thereto are
declared effective by the Commission.
(iii) "Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
(iv) "Base Prospectus" shall mean the prospectus referred to
above contained in the Registration Statement relating to all
offerings of securities under the Registration Statement.
(v) "Preliminary Prospectus" shall mean any preliminary
prospectus supplement to the Base Prospectus which describes the Notes
and the offering thereof and is used prior to filing of the Final
Prospectus.
(vi) "Final Prospectus" shall mean the prospectus supplement
relating to the Notes that is first filed pursuant to Rule 424(b)
after the Execution Time, together with the Base Prospectus.
(vii) "Registration Statement" shall mean the registration
statement referred to above, as last amended prior to the time the
same was declared effective by the Commission, including all exhibits
and schedules thereto and all documents (including financial
statements, financial schedules and exhibits) incorporated therein by
reference.
(viii) "Rule 415," "Rule 424" and "Regulation S-K" refer to such
rules or regulations under the Act.
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Any reference herein to the Registration Statement, the Base
Prospectus, any Preliminary Prospectus or the Final Prospectus shall be
deemed to refer to and include the documents incorporated by reference
therein of Form S-3 that were filed under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), on or before the effective date of
the Registration Statement, or the issue date of the Base Prospectus, any
Preliminary Prospectus or the Final Prospectus, as the case may be, except
that any such documents shall be deemed to be modified or superseded to the
extent that a statement contained in such Base Prospectus, Preliminary
Prospectus or Final Prospectus or in any other subsequently filed document
that also is or is deemed to be incorporated by reference therein modifies
or supersedes such statement (all such documents being hereinafter referred
to as the "Incorporated Documents").
The Companies and the Guarantor understand that the Underwriters
propose to make a public offering of their respective portion of the Notes
on the terms and in the manner set forth in the Final Prospectus, as soon
as the Underwriters deem advisable after this Agreement has been executed
and delivered.
(b) The Registration Statement has become effective under the Act; no
stop order suspending the effectiveness of the Registration Statement is in
effect; and no proceedings for such purpose are pending before or, to its
knowledge, threatened by the Commission.
(c) On the Effective Date, and at all times subsequent thereto and
including the Closing Date, (as defined below), and during such longer
period as the Final Prospectus may be required to be delivered in
connection with sales by the Underwriters or a dealer, and during such
longer period until any post-effective amendment to the Registration
Statement becomes effective, the Registration Statement (including any
registration statement filed with the Commission pursuant to Rule 462(b))
and the Final Prospectus (as amended or supplemented if the Company shall
have filed with the Commission an amendment or supplement thereto)
complied, and will comply, in all material respects with the applicable
provisions of the Act and the Regulations, and did not, and will not,
contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements made therein (in the case of the Base Prospectus,
Preliminary Prospectus or Final Prospectus, in light of the circumstances
under which they were made) not misleading. No representation and warranty,
however, is made in this paragraph (a)(1)(ii) with respect to written
information contained in or omitted from the Registration Statement, the
Base Prospectus, any Preliminary Prospectus or the Final Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with
information furnished to the Company by or on behalf of you with respect to
the Underwriters and the plan of distribution of the Notes expressly for
use in connection with the preparation thereof.
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(d) Each of the Incorporated Documents, when the same was first filed
with the Commission, complied in all material respects with the applicable
provisions of the Act, the Regulations, the Exchange Act and the
regulations promulgated thereunder or the TIA, as applicable, and any
further documents so filed and incorporated by reference will, when they
are filed with the Commission, comply in all material respects with the
applicable provisions of the Act, the Exchange Act or the TIA and such
regulations. None of such filed documents when they were filed (or, if an
amendment with respect thereto was filed, when such amendment was filed),
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of circumstances under which they were made,
not misleading, and no such further document, when it is filed with the
Commission, will contain an untrue statement of a material fact required to
be stated therein or necessary to make the statements made therein, in
light of the circumstances under which they were made, not misleading.
(e) The Companies and the Guarantor have been duly incorporated and
are existing corporations in good standing under the laws of the State of
Delaware, with power and authority (corporate and otherwise) to own their
properties and conduct their business as described in the Registration
Statement and as shall be described in the Final Prospectus; and the
Companies and the Guarantor are duly qualified to do business as foreign
corporations in good standing in all other jurisdictions (foreign or
domestic) in which their ownership or lease of property or the conduct of
their business requires such qualification, except where the failure to so
qualify or to be in good standing would not reasonably be expected to have
a material adverse effect on the condition (financial or otherwise),
earnings or business affairs of the Companies, the Guarantor and their
subsidiaries, considered as one enterprise ("Material Adverse Effect").
(f) Each direct or indirect significant subsidiary (as such term is
defined in Rule 405 of the Regulations) (the "Significant Subsidiaries") of
the Companies has been duly incorporated and is an existing corporation in
good standing under the laws of the jurisdiction of its incorporation, with
power and authority (corporate and otherwise) to own its properties and
conduct its business as described in the Registration Statement and as
shall be described in the Final Prospectus with such exceptions as would
not reasonably be expected to have a Material Adverse Effect; each such
Significant Subsidiary is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions (foreign or
domestic) in which its ownership or lease of property or the conduct of its
business requires such qualification with such exceptions as would not
reasonably be expected to have a Material Adverse Effect; all of the issued
and outstanding capital stock of each such Significant Subsidiary of the
Company, except the Significant Subsidiaries listed on Schedule B hereto,
has been duly authorized and validly issued and is fully paid and
nonassessable and is owned by
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USI, directly or indirectly free and clear of any lien, encumbrance or
defect of any kind whatsoever.
(g) The Companies have full power and authority to authorize, issue
and sell the Notes as contemplated by this Agreement and to perform their
obligations under the Indenture, the Notes; the execution, delivery and
performance by the Companies and the Guarantor of this Agreement, the
Indenture, and the transactions contemplated hereunder and thereunder,
including the offer and sale of the Notes, have been duly authorized by all
corporate or other action by each of the Companies and the Guarantor, as
the case may be and when the Notes are authenticated by the Trustee in the
manner provided for in the Indenture, such Notes will constitute valid and
legally binding obligations of USI, USIGC, USIAH and the Guarantor, as the
case may be, enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles and except as rights to
indemnification and contribution under this Agreement and the Indenture may
be limited by applicable law.
(h) No consent, approval, authorization, or order of, or filing with,
any U.S. or non-U.S. governmental agency, body or court or of any third
party, including, without limitation, the holders of the 7 1/4% Notes
originally issued by USIAH in 1996, is required for the issuance and sale
of the Notes by the Companies or for the performance by the Companies and
the Guarantor, as the case may be, of their obligations under this
Agreement, the Indenture, the Notes except as may be required under federal
and state securities laws
(i) The execution, delivery and performance by the Companies and the
Guarantor, as applicable, of the Indenture, and this Agreement, and the
issuance and sale of the Notes and compliance with the terms and provisions
thereof will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, (i) any statute, any rule,
regulation or order of any U.S. or non-U.S. governmental agency, body or
court, having jurisdiction over the Companies or any of their subsidiaries
or any of their properties, or (ii) any agreement of instrument to which
the Companies or any such subsidiary is a party or by which the Companies
or any such subsidiary is bound or to which any of the properties of the
Companies or any such subsidiary is subject, or (iii) the charter or
by-laws of the Companies or any such subsidiary, in the case of (i) an (ii)
with such exceptions as would not reasonably be expected to have a Material
Adverse Effect.
(j) This Agreement has been duly authorized, executed and delivered by
each of the Companies and the Guarantor.
(k) The Companies and their respective subsidiaries have good and
marketable title to all real property and all other property and assets
owned by
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them, in each case free from any lien, encumbrance or defect that would
affect the value thereof or interfere with the use made or to be made
thereof by them; and the Companies and their subsidiaries hold any leased
real or personal property under valid and enforceable leases with no
exceptions that would interfere with the use made or to be made thereof by
them, in each case with such exceptions as would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
(l) The Companies and their subsidiaries possess adequate
certificates, authorities or permits issued by appropriate U.S. or non-U.S.
governmental agencies or bodies necessary to conduct the business now
operated by them and have not received any notice of proceedings, relating
to the revocation or modification of any such certificate, authority or
permit that, if determined adversely to the Companies or any of their
subsidiaries, would individually or in the aggregate be reasonably expected
to have a Material Adverse Effect.
(m) No labor dispute with the employees of the Companies or any
subsidiary exists or, to the knowledge of the Companies, is imminent that
might reasonably be expected to have a Material Adverse Effect.
(n) The Companies and their subsidiaries own, possess or can acquire
on reasonable terms, adequate trademarks, trade names and other rights to
inventions, know-how, patents, copyrights, confidential information and
other intellectual property necessary to conduct the business now operated
by them, or presently employed by them and have not received any notice of
infringement of or conflict with asserted rights of others with respect to
any such intellectual property rights, in each case with such exceptions as
would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect.
(o) Except as disclosed in the Registration Statement and as shall be
disclosed in the Final Prospectus, neither the Companies nor any of their
Significant Subsidiaries are in violation of any statute, rule, regulation,
decision or order of any governmental agency or body or any court, domestic
or foreign, relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the environment
or human exposure to hazardous or toxic substances, owns or operates any
real property contaminated with any substance that is subject to any such
environmental laws, is liable for any off-site disposal or contamination
pursuant to any such environmental laws, or is subject to any claim
relating to any environmental laws, which violation, contamination,
liability or claim would individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect; and neither of the Companies is
aware of any pending investigation which reasonably can be expected to lead
to such a claim.
(p) Except as disclosed in the Registration Statement and as shall be
disclosed in the Final Prospectus, there are no pending or, to the
Companies'
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knowledge, threatened or contemplated, actions, suits or proceedings
against or affecting either of the Companies, any of their subsidiaries or
any of their respective properties that, if determined adversely to the
Companies or any of their respective subsidiaries, would individually or in
the aggregate reasonably be expected to have a Material Adverse Effect or
would materially and adversely affect the ability of the Companies to
perform their obligations under this Agreement or under the Indenture, the
Notes.
(q) The financial statements included or incorporated by reference in
the Registration Statement and as shall be included or incorporated by
reference into the Final Prospectus present fairly the financial position
of USI and its consolidated subsidiaries as of the dates shown and their
results of operations and cash flows for the periods shown, such financial
statements have been prepared in conformity with the generally accepted
accounting principles in the United States ("GAAP") applied on a consistent
basis; the assumptions used in preparing the pro forma financial statements
included in certain of the documents incorporated into the Registration
Statement and as shall be included or incorporated by reference into the
Final Prospectus provide a reasonable basis for presenting the significant
effects directly attributable to the transactions or events described
therein, the related pro forma adjustments give appropriate effect to those
assumptions, and the pro forma columns therein reflect the proper
application of those adjustments to the corresponding historical financial
statement amounts.
(r) None of the Companies or the Guarantor is subject to any material
liability, including material contingent liabilities arising out of or in
connection with the Companies tax returns and filings, any purchase or sale
of any business, including any acquired companies, any employee benefit
plans or arrangements, any insurance maintained by the Companies, any
litigation or proceedings or any environmental laws of any kind to which
the Companies or their subsidiaries are or may be subject, that are not, to
the extent required by GAAP, fully reserved for and reflected as such on
the financial statements included in the Registration Statement and as
shall be included or incorporated by reference into the Final Prospectus.
(s) Since ______ ____, being the date of the latest financial
statements included in or incorporated by reference in the Registration
Statement and as shall be in included in or incorporated by reference into
the Final Prospectus, there has been no Material Adverse Effect, nor any
development or event involving a prospective Material Adverse Effect, and,
except for regular quarterly cash dividends of $.___ per share of USI
Common Stock paid on _______, and ________ __, ____, there has been no
dividend or distribution of any kind declared, paid or made by either of
the Companies on any class of its capital stock or default or renegotiation
by any of the Companies or any of their subsidiaries or affiliates in the
payment of any indebtedness.
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(t) Each of the Companies and their subsidiaries maintains a risk
management program, including appropriate insurance, with respect to their
properties and business against loss or damage of the kinds customarily
insured against by corporations of established reputation engaged in the
same or similar businesses and similarly situated, of such types and in
such amounts as are customarily carried under similar circumstances by such
other corporations; and neither of the Companies nor their subsidiaries has
any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business
at a cost that would not have a Material Adverse Effect.
(u) The Companies and their Subsidiaries have filed all federal,
state, local and foreign tax returns that are required to be filed or have
duly requested extensions thereof and have paid all taxes required to be
paid by any of them and any related assessments, fines or penalties, except
for any such tax, assessment, fine or penalty that is being contested in
good faith and by appropriate proceedings and with such exceptions as would
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect; and adequate charges, accruals and reserves have
been provided for in the financial statements referred to herein in respect
of all material federal, state, local and foreign taxes for all periods as
to which the tax liability of either Company or any of their subsidiaries
has not been finally determined or remains open to examination by
applicable taxing authorities.
(v) Neither of the Companies or the Guarantor is an open-end
investment company, unit investment trust or face-amount certificate
company that is or is required to be registered under the United States
Investment Company Act of 1940; and neither of the Companies or the
Guarantor is nor, after giving effect to the offering and sale of the Notes
and the application of the proceeds thereof as described in the
Registration Statement and as shall be described in the Prospectus, will be
an "investment company" as defined in such Act.
(w) The Guarantor on the date hereof is, and immediately after the
Closing Date will be, solvent. As used herein, the term "Solvent" means,
with respect to the Guarantor on a particular date, that on such date (A)
the fair market value of the assets of the Guarantor is greater than the
total amount of liabilities (including, without limitation, contingent
liabilities) of the Guarantor, (B) the present fair saleable value of the
assets of the Guarantor is greater than the amount that will be required to
pay the probable liabilities of the Guarantor on its debts as they become
absolute and matured, (C) the Guarantor is able to realize upon its assets
and pay its debts and other liabilities, including contingent obligations,
as they mature and (D) the Guarantor is in possession of sufficient capital
to meet its obligations as such obligations mature or become due and to
operate its businesses.
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(x) All disclosures regarding Year 2000 compliance required to be
described under the Act or the Regulations (including disclosures required
by Staff Legal Bulletin Xx. 0, XXX Xxxxxxx Xx. 00-0000, July 29, 1998) have
been included or incorporated by reference in the Final Prospectus. Neither
the Company nor any of its subsidiaries will incur significant operating
expenses or costs to ensure that its information systems will be year 2000
compliant.
(y) Any certificate signed by any officer of the Company and delivered
to the Underwriters or to counsel for the Underwriters pursuant to the
terms of this Agreement shall be deemed a representation and warranty by
such party to each Underwriter as to the matters covered thereby.
3. Purchase and Sale of the Notes; Deliver and Payment.
(a) Subject to the terms and conditions and in reliance upon the
representations and warranties of the Company herein set forth:
(i) the Company agrees to sell to the Underwriters, and the
Underwriters agree, severally and not jointly, to purchase from the
Company, at an aggregate purchase price of _____% of the principal
amount [at maturity] thereof (the "Purchase Price"), the aggregate
principal amount [at maturity] of the Notes set forth opposite such
Underwriter's name on Schedule A hereto.
(b) Delivery and payment for the Notes shall be made at the offices of
___________________ at 10:00 a.m., New York City time, on _______________,
or such later date and time, if any, as the Underwriters and the Company
shall agree (such date and time of delivery and payment for the Notes being
herein called the "Closing Date"). Delivery of the Notes shall be made to
the Underwriters against payment by the Underwriters of the Purchase Price
by wire transfer of immediately available funds to an account specified by
the Company.
Certificates for the Notes shall be in global form and registered in such
names and in such denominations as you, on behalf of the Underwriters, shall
request in writing not less than two full business days prior to the Closing
Date or the Option Closing Date. The Notes and any Option Notes shall be
delivered to you on the Closing Date Date, as the case may be, with any transfer
taxes payable in connection with the transfer of the Notes to you duly paid,
against payment of the Purchase Price therefor.
4. Certain Agreements of the Companies. Each of the Companies and the
Guarantor agrees with the several Underwriters that:
(a) The Company will promptly advise you (on behalf of the
Underwriters), and confirm such advice in writing, (i) when any
post-effective amendment to the Registration Statement has become
effective, (ii) of any request by the Commission for any amendment of or
supplement to the Registration
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Statement or Final Prospectus or for any additional information, (iii) of
the initiation or threatening of any proceedings for, or receipt by the
Company of any notice with respect to, the suspension of the qualification
of the Notes for sale in any jurisdiction or the issuance by the Commission
of any order suspending the effectiveness of the Registration Statement and
(iv) of receipt by the Company or any representative of or attorney for the
Company of any other communications from the Commission relating to the
Company, the Registration Statement, any Preliminary Prospectus, the Final
Prospectus or the transactions contemplated by this Agreement.
(b) During the period of time when a prospectus relating to the Notes
is required to be delivered hereunder or under the Act or the Regulations,
the Company shall comply with all requirements imposed upon it by the Act
and the TIA, as now existing or hereafter amended, and by the Regulations,
as from time to time in force, so far as may be necessary to permit the
continuance of sales of and dealings in the Notes as contemplated by the
provisions thereof and the Final Prospectus. If, at any time when a
prospectus relating to the Notes is required to be delivered under the Act,
any event shall have occurred as a result of which, in the judgment of the
Company, you or your counsel, the Final Prospectus as then amended or
supplemented shall contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to
make the statements made therein, in the light of the circumstances under
which they were made, not misleading, or if it shall be necessary at any
time to amend the Registration Statement or supplement the Final Prospectus
to comply with the Act, the TIA and the Regulations, the Company shall
notify the Representative promptly and prepare and file with the Commission
an appropriate post-effective amendment to the Registration Statement or
supplement to the Final Prospectus that will correct such untrue statement
or such omission and will use its best efforts to have any such
post-effective amendment to the Registration Statement declared effective
as soon as possible.
(c) The Company shall promptly deliver to you and counsel for the
Underwriters a copy of the Registration Statement, including exhibits and
all documents incorporated by reference therein and all amendments thereto,
and, so long as delivery if a prospectus may be required by the Act, as
many copies of each Preliminary Prospectus, the Final Prospectus, all
amendments of and supplements to such documents, if any, as you reasonably
may request.
(d) The Company shall make generally available (within the meaning of
Section 11(a) of the Act and Rule 158 of the Regulations) to its security
holders and to you, in such numbers as you may reasonably request for
distribution to the Underwriters, as soon as practicable but in no event
later than 45 days after the end of the Company's fiscal quarter in which
the first anniversary of the Effective Date occurs, an earnings statement
(which need not be audited), covering a period of at least twelve
consecutive full calendar months
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commencing after the Effective Date, that satisfies the provisions of
Section 11(a) of the Act and Rule 158 of the Regulations.
(e) For five years following the Closing Date, each of the Companies
and the Guarantor will furnish to you and, upon request, to each of the
other Underwriters, as soon as practicable after the end of each fiscal
year, a copy of its annual report to shareholders for such year; and each
of the Companies and the Guarantor will furnish to you (on behalf of the
Underwriters) (i) as soon as available, a copy of each report and any
definitive proxy statement of each of the Companies and the Guarantor filed
with the Commission under the Exchange Act or mailed to shareholders, if
any, and (ii) from time to time, such other information as shall be
furnished by the Companies and the Guarantor generally to the holders of
the Offering Securities.
(f) The Company will use its best efforts in cooperation with the
Underwriters to permit the Notes to be eligible for clearance and
settlement through The Depository Trust Company.
(g) The Company shall apply the net proceeds from the sale of the
Notes as shall be set forth under the caption "Use of Proceeds" in the
Final Prospectus.
(h) The Companies and the Guarantor will arrange for the qualification
of the Notes for sale and the determination of their eligibility for
investment under the laws of such jurisdictions in the United States and
Canada as you (on behalf of the Underwriters) designate and will continue
such qualification in effect so long as required for the resale of the
Notes by the Underwriters, provided that neither of the Companies or the
Guarantor will be required to qualify as a foreign corporation or a dealer
in securities or to file a general consent to service of process in any
such state or to subject itself to taxation in respect of doing business in
any jurisdiction in which it is not otherwise subject.
(i) For two years following the Closing Date, neither of the Companies
will be or become an open-end investment company, unit investment trust or
face-amount certificate company that is or is required to be registered
under Section 8 of the Investment Company Act of 1940.
(j) The Companies and the Guarantor will pay all expenses incident to
the performance of their obligations under this Agreement and the
Indenture, including (i) the fees and expenses of the Trustee and its
professional advisers; (ii) all expenses in connection with the execution,
issue, authentication, packaging and initial delivery of the Notes, the
preparation and printing of this Agreement, the Notes, the Indenture, the
Registration Statement, the Base Prospectus, the Preliminary Prospectus,
the Final Prospectus and amendments and supplements thereto, and any other
document relating to the issuance offer, sale and delivery of the Notes;
(iii) the cost of any advertising approved by the Companies in
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connection with the issue of the Notes; (iv) for reasonable documented
expenses (including fees and disbursements of counsel) incurred in
connection with qualification of the Notes for sale under the laws of such
jurisdictions in the United States and Canada as you designate and the
printing of memoranda relating thereto; (v) for any fees charged by
investment rating agencies for the rating of the Notes; and (vi) for
expenses incurred in distributing the Registration Statement, the Base
Prospectus, the Preliminary Prospectus, the Final Prospectus and the Notes
(including any amendments and supplements thereto) to the Underwriters. The
Companies and the Guarantor will also pay or reimburse the Underwriters (to
the extent incurred by them) for all reasonable travel expenses of the
Underwriters and the Companies' respective officers and employees and any
other reasonable expenses of the Underwriters and the Companies in
connection with attending or hosting meetings with prospective purchasers
of the Notes from the Underwriters. Except as provided in this Section 4(j)
and in Section 6, the Underwriters shall pay all of their own costs and
expenses, including the fees of their counsel and transfer taxes on resales
by them of the Notes.
(k) In connection with the offering, until you shall have notified the
Companies and the Guarantor and the other Underwriters of the completion of
the resale of the Notes, neither of the Companies nor any of their
affiliates has or will, either alone or with one or more other persons, bid
for or purchase for any account in which it or any of its affiliates has a
beneficial interest any Notes or attempt to induce any person to purchase
any Notes; and neither it nor any of its affiliates will make bids or
purchases for the purposes of creating actual, or apparent, active trading
in, or of raising the price of, the Offered Securities.
5. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriter to purchase and pay for the Notes on the Closing Date
will be subject to the accuracy of the representations and warranties on the
part of the Companies and the Guarantor herein, to the accuracy of the
statements of officers of each of the Companies and the Guarantor made pursuant
to the provisions hereof as of the Closing Date, to the performance by the
Companies and the Guarantor of their obligations hereunder and to the following
additional conditions precedent:
(a) Any post-effective amendments to the Registration Statement
required to be filed by the Company prior to the Closing Date shall have
become effective and no stop order suspending the effectiveness of the
Registration Statement or any such post-effective amendment shall have been
issued and no proceedings therefor shall have been initiated or, to the
knowledge of the Company, threatened by the Commission.
(b) On the Closing Date, the Final Prospectus shall not contain an
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
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(c) The Underwriters shall have received a letter, dated the date of
this Agreement, of Ernst & Young LLP, confirming that they are independent
public accountants within the meaning of the Securities Act and the
applicable published rules and regulations thereunder ("Accounting Rules
and Regulations") substantially in the form set forth in Exhibit A hereto:
(d) Subsequent to the execution and delivery of this Agreement there
shall not have occurred (A) any change, or any development or event
involving a prospective change, in the condition (financial or other),
business, properties, results of operations or prospects of the Companies
or their subsidiaries which, in your judgment, is material and adverse and
makes it impractical or inadvisable to proceed with completion of the
offering or the sale of and payment for the Notes; (B) any downgrading in
the rating of any debt securities of the Companies or the Guarantor by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Securities Act), or any public
announcement that any such organization has under surveillance or review
its rating of any debt securities of either of the Companies or the
Guarantor (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of such
rating or any of their subsidiaries); (C) any suspension or limitation of
trading in securities generally on the New York Stock Exchange or any
setting of minimum prices for trading on such exchange, or any suspension
of trading of any securities of either of the Companies or the Guarantor on
any exchange or in the over-the-counter market; (D) any banking moratorium
declared by U.S. Federal or New York authorities; or (E) any outbreak or
escalation of major hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national or
international calamity or emergency if, in your judgment, the effect of any
such outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the offering or
sale of and payment for the Notes.
(e) The Underwriters shall have received opinions, dated the Closing
Date, of (i) Weil, Gotshal & Xxxxxx, LLP, counsel for the Companies, and
(ii) Xxxxxx XxxXxxx, General Counsel of the Companies and the Guarantor,
substantially to the effect set forth in Exhibits B-1 and B-2 hereto.
(f) The Underwriters shall have received from _________, counsel for
the Underwriters, an opinion as to such matters as Underwriters shall
request and the Companies and the Guarantor shall have furnished to such
counsel such documents as they request for the purpose of enabling them to
pass upon such matters.
(g) The Underwriters shall have received a certificate, dated the
Closing Date, of the President, Treasurer or any Vice President and a
principal financial or accounting officer of the Companies and the
Guarantor, as the case may be, in which such officers, to the best of their
knowledge, shall state that the
13
representations and warranties of the Companies in this Agreement are true
and correct, that the Companies and the Guarantor have complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date, and that, subsequent
to the date of the most recent financial statements in the Final
Prospectus, there has been no Material Adverse Effect.
(h) The Underwriters shall have received a letter, dated the Closing
Date, of Ernst & Young LLP which meets the requirements of subsection (c)
of this Section, except that the specified date referred to in such
subsection will be a date not more than three business days prior to the
Closing Date for the purposes of this subsection.
For purposes of the foregoing, the Companies will furnish the Underwriter
with such conformed copies of such opinion, certificates, letters and documents
as the Underwriters reasonably request. You may in your sole discretion waive on
behalf of the Underwriters compliance with any conditions to the obligations of
the Underwriters hereunder.
6. Indemnification and Contribution.
(a) The Companies and the Guarantor, on a joint and several basis,
will indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter
may become subject, under the Securities Act or the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus or Final Prospectus, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that
(A) the Companies and the Guarantor will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or
is based upon an untrue statement or alleged untrue statement in or
omission or alleged omission from any of such documents made in reliance
upon and in conformity with written information furnished to the Companies
by any Underwriter specifically for use therein, and (B) such indemnity
with respect to any untrue statement or omission or alleged untrue
statement or omission in the Preliminary Prospectus shall not inure to the
benefit of the Underwriter from whom the person asserting such claim
purchased the Notes if such person was not sent a copy of the Final
Prospectus at or prior to the confirmation of the initial resale of the
Notes to such
14
person when such statement or omission contained in the Preliminary
Prospectus was corrected in the Final Prospectus.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless the Companies and the Guarantor against any losses, claims,
damages or liabilities to which the Companies may become subject, under the
Securities Act or the Exchange Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus or Final Prospectus, or any amendment or supplement thereto, or
arise out of or are based upon the omission or the alleged omission to
state therein a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, in each case to the extent, but only to the extent that such
untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written
information furnished to the Companies by such Underwriters specifically
for use therein, and will reimburse any legal or other expenses reasonably
incurred by the Companies in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under subsection (a) or (b) above. In case any such
action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and after notice from the indemnifying party to
such indemnified party of its election so to assume the defense thereof,
the indemnifying party will not be liable to such indemnified party under
this Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of
any pending or threatened action in respect of which any indemnified party
is or could have been a party and indemnity could have been sought
hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action.
15
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a)
or (b) above, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Companies on the one hand and the Underwriters on the other
from the offering of the Notes or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Companies and the Guarantor on
the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The
relative benefits received by the Companies and the Guarantor on the one
hand and the Underwriter on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Companies and the Guarantor bear to the total
discounts and commissions received by the Underwriters from the Companies
and the Guarantor under this Agreement. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Companies and the Guarantor or the Underwriter and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim
which is the subject of this subsection (d). Notwithstanding the provisions
of this subsection (d), no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Notes
purchased by it were resold exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. The Underwriters'
obligations in this subsection (d) to contribute are several in proportion
to their respective purchase obligations and not joint.
(e) The obligations of the Companies and the Guarantor under this
Section shall be in addition to any liability which the Companies and the
Guarantor may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within the
meaning of the Securities Act or the Exchange Act; and the obligations of
the Underwriter under this Section shall be in addition to any liability
which the respective Underwriter may otherwise have and shall extend, upon
the same terms and conditions, to each person, if any, who controls either
of the Companies within the meaning of the Securities Act or the Exchange
Act.
16
7. Default by an Underwriter.
(a) If any Underwriter shall default, in whole or in part, in its
obligation to purchase Notes hereunder, and if the Notes with respect to
which such default relates do not (after giving effect to arrangements, if
any, made pursuant to subsection (b) below) exceed in the aggregate 10% of
the total number of Notes that all Underwriters have agreed to purchase
hereunder, then the Notes to which the default relates shall be purchased
by the non-defaulting Underwriters on a pro rata basis based on the amount
of Notes to be purchased as set forth on Schedule A.
(b) If such default relates to more than 10% of the Notes, the you may
in your discretion arrange for another party or parties (including the
non-defaulting Underwriters, if they should so agree) to purchase those of
the Notes to which such default relates on the terms contained herein. If
within thirty-six (36) hours after such a default you do not arrange for
the purchase of those of the Notes to which such default relates as
provided in this Section 7, this Agreement shall thereupon terminate,
without liability on the part of the Company with respect thereto (except
in each case as provided in Section 6) or the non-defaulting Underwriters
(except as provided in Section 6), but nothing in this Agreement shall
relieve any defaulting Underwriter of its liability, if any, to the other
Underwriters and the Company for damages occasioned by its or their default
hereunder.
(c) If the Notes to which the default relates are to be purchased by
any non-defaulting Underwriters, or are to be purchased by another party or
parties as aforesaid, you or the Company shall have the right to postpone
the Closing Date for a period not exceeding five (5) business days, in
order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Final Prospectus or in any other documents
and arrangements, and the Company agrees to file promptly any amendment or
supplement to the Registration Statement or the Final Prospectus that, in
the opinion of Underwriters' counsel, may thereby be made necessary or
advisable. The term "Underwriter" as used in this Agreement shall include
any party substituted under this Section with like effect as if it had
originally been a party to this Agreement with respect to such Notes.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Companies or their respective officers and of the several Underwriters set forth
in or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made by
or on behalf of any Underwriter , the Companies, the Guarantor and any of their
respective representatives, officers or directors or any controlling person, and
will survive delivery of and payment for the Notes. If this Agreement is
terminated pursuant to Section 8 or if for any reason the purchase of the Notes
by the Underwriter is not consummated, the Companies shall remain responsible
for the expenses to be paid or reimbursed by them pursuant to Section
17
5 and the respective obligations of the Companies and the Underwriters pursuant
to Section 7 shall remain in effect. If the purchase of the Notes by the
Underwriter is not consummated for any reason other than solely because of the
termination of this Agreement pursuant to Section 7 or the occurrence of any
event specified in clause (C), (D) or (E) of Section 6(d), the Companies will
reimburse the Underwriters for all out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by them in connection with the
offering of the Notes.
9. Notices. All communications hereunder will be in writing and, if sent to
the Underwriters will be mailed, delivered or faxed and confirmed to the
Underwriters, c/o _____________________, Attention: ____________________, or, if
sent to the Companies, will be mailed, delivered or telegraphed and confirmed to
them, c/o U.S. Industries, Inc., 000 Xxxx Xxxxxx Xxxxx, X.X. Xxx 000, Xxxxxx,
Xxx Xxxxxx 00000-0000, Attention: Xxxxxx X. XxxXxxx, Esq.; provided, however,
that any notice to a Underwriter pursuant to Section 6 will be mailed, delivered
or telegraphed and confirmed to such Underwriter .
10. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the controlling
persons referred to in Section 6, and no other person will have any right or
obligation hereunder.
11. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
12. Submission to Jurisdiction. The Companies and the Guarantor hereby
submit to the non-exclusive jurisdiction of the Federal and state courts in the
Borough of Manhattan in The City of New York in any suit or proceeding arising
out of or relating to this Agreement or the transactions contemplated hereby.
13. Application Law; Jurisdiction. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
18
If the foregoing is in accordance with the your understanding of our
agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement between the Companies and the
several Underwriters in accordance with its terms.
Very truly yours,
U.S. INDUSTRIES, INC., as Co-Issuer
By: _____________________________________
Name:
Title:
USI GLOBAL CORP., as Co-Issuer
By: _____________________________________
Name:
Title:
USI AMERICAN HOLDINGS, INC., as
Co-Issuer
By: _____________________________________
Name:
Title:
USI ATLANTIC CORP., as Guarantor
By: _____________________________________
Name:
Title:
19
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written.
[MANAGING UNDERWRITER]
By: ______________________
Name:
Title:
[OTHER UNDERWRITERS]
By: ______________________
Name:
Title:
20
SCHEDULE A
UNDERWRITERS
Name of Underwriter Amount of Notes to be
Purchased
_____________________.................................
-----------
_____________________.................................
-----------
_____________________.................................
-----------
_____________________.................................
-----------
TOTAL: ===========
A-1
Schedule B
B-1
Exhibit A
[Accountant's Comfort Letter]
A-1
