-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, WA6igl75n+M8OD+GtN3pM4XqzAO8b0NRXWC9HlDGDY6N205yB3wFgL/0qgXBAjKh UWETWHgwE3vALwSME+i8Xg== 0000912238-94-000002.txt : 19940404 0000912238-94-000002.hdr.sgml : 19940404 ACCESSION NUMBER: 0000912238-94-000002 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940331 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOUSEHOLD INTERNATIONAL NETHERLANDS BV CENTRAL INDEX KEY: 0000912238 STANDARD INDUSTRIAL CLASSIFICATION: 0000 STATE OF INCORPORATION: IL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 34 SEC FILE NUMBER: 033-50351-01 FILM NUMBER: 94519788 BUSINESS ADDRESS: STREET 1: C/O ABN AMRO TRUST CO STREET 2: HOEKENRODE 6 1102 BR CITY: AMSTERDAM NETHERLAND BUSINESS PHONE: 7085646990 MAIL ADDRESS: STREET 1: 2700 SANDERS RD CITY: PROSPECT HEIGHTS STATE: IL ZIP: 60070 10-K 1 ANNUAL REPORT ON FORM 10-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) / X / ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Fee Required) For the fiscal year ended December 31, 1993. / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (No Fee Required) For the transition period from _______ to _______. Commission file number 33-50351. HOUSEHOLD INTERNATIONAL NETHERLANDS B.V. (Exact name of registrant as specified in its charter) The Netherlands Not Applicable (State or other jurisdiction (I.R.S.Employer incorporation or organization) Identification No.) Hoekenrode 6 1102 BR Amsterdam, Netherlands (Address of principal executive offices) Registrant's Telephone number, including area code: 011-31-20-6298033 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: 5.25% Senior Notes Due October 15, 1998 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes / X / No / / Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. / X / At March 25, 1994, there were 400 shares of the registrants voting securities outstanding, all of which are owned by Household Overseas Limited. 2 HOUSEHOLD INTERNATIONAL NETHERLANDS B.V. PART I. Item 1. Business. Household International Netherlands B.V. (the "Company") was organized under the Dutch Civil Code on September 14, 1990. All of the outstanding voting securities of the Company are owned by Household Overseas Limited, which is a wholly-owned subsidiary of Household International (U.K.) Limited ("HIUK"). The Company was created solely to act as a non-operating special purpose financing subsidiary of HIUK. The Company will only enter into agreements or arrangements to obtain funds for, or to provide financing options to, HFC Bank plc ("HFC Bank"), also a wholly- owned subsidiary of HIUK. The Company will not engage in any other type of business activity. Item 2. Properties. The Company does not and will not have any material physical properties. Item 3. Legal Proceedings. There is no litigation pending against the Company. Item 4. Submission of Matters to a Vote of Security Holders. Not applicable. PART II Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters. All voting securities of the Company are owned by Household Overseas Limited. 3 Item 6. Selected Financial Data. In thousands. 1993 1992 1991 1990* - ---------------------------------------------------------------- STATEMENTS OF OPERATIONS YEAR ENDED DECEMBER 31: Net interest margin $93.9 - - - General and administrative expenses 13.7 $ 3.1 $ 3.0 $ 0.7 Income taxes 32.1 - - - - ----------------------------------------------------------------- Net income (loss) $48.1 $(3.1) $(3.0) $(0.7) ================================================================= BALANCE SHEET DATA AS OF DECEMBER 31: Total assets $126,187.4 $20.0 $20.0 $20.0 Senior notes payable 124,711.7 - - - Shareholder's equity 61.3 13.2 16.3 19.3 - ----------------------------------------------------------------- *Household International Netherlands B.V. was incorporated on September 14, 1990. Therefore, there is no operating data for 1989. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. In October, 1993 the Company issued $125 million of 5.25% Senior Notes Due October 15, 1998 (the "Notes"). The Notes are unconditionally guaranteed, as to the payment of principal and interest, by Household International, Inc., a Delaware Corporation ("Household International"). Household International may, at any time, assume all the obligations of the Company with respect to Notes without the consent of any holder of the Notes. Household International files periodic reports under the Securities Exchange Act of 1934, as amended, with the Securities and Exchange Commission (File No. 1-8198), including audited financial statements which include the financial results of HIUK and its subsidiaries, including the Company. The Company loaned the proceeds of the above referenced Notes to HFC Bank pursuant to an intercompany loan agreement at the semi-annual rate of 5.50%. The Company anticipates that it will have no other source of income other than a lending relationship with HFC Bank. 4 Item 8. Financial Statements and Supplementary Data. STATEMENTS OF OPERATIONS In thousands. - -------------------------------------------------------------- YEAR ENDED DECEMBER 31 1993 1992 1991 - -------------------------------------------------------------- Interest income $1,499.5 - - Interest expense 1,405.6 - - - -------------------------------------------------------------- Net interest margin 93.9 - - General and administrative expenses 13.7 $ 3.1 $ 3.0 - -------------------------------------------------------------- Net income (loss) before income taxes 80.2 (3.1) (3.0) Income taxes 32.1 - - - -------------------------------------------------------------- Net income (loss) $ 48.1 $(3.1) $(3.0) ============================================================== The accompanying notes are an integral part of these financial statements. 5 BALANCE SHEETS In thousands. - --------------------------------------------------------------- DECEMBER 31 1993 1992 - --------------------------------------------------------------- ASSETS Cash $ 14.7 $20.0 Accrued interest receivable 1,461.1 - Intercompany loan 124,050.9 - Deferred issuance costs 660.7 - - --------------------------------------------------------------- Total assets $126,187.4 $20.0 =============================================================== LIABILITIES AND SHAREHOLDER'S EQUITY Accrued interest payable and accrued liabilities $ 1,414.4 $ 6.8 Senior notes payable 124,711.7 0 - --------------------------------------------------------------- Total liabilities 126,126.1 6.8 Shareholder's equity 61.3 13.2 - --------------------------------------------------------------- Total liabilities and shareholder's equity $126,187.4 $20.0 =============================================================== The accompanying notes are an integral part of these financial statements. 6 STATEMENTS OF CASH FLOWS In thousands. - --------------------------------------------------------------- YEAR ENDED DECEMBER 31 1993 1992 1991 - --------------------------------------------------------------- CASH PROVIDED BY OPERATIONS Net income (loss) $ 48.1 $(3.1) $(3.0) Adjustments to reconcile net income to net cash provided by operations: Accrued interest receivable (1,461.1) - - Arrangement fee 987.5 - - Deferred issuance costs (687.5) - - Accrued interest payable and accrued liabilities 1,407.7 3.1 3.0 - --------------------------------------------------------------- Cash provided by operations 294.7 0.0 0.0 - --------------------------------------------------------------- INVESTMENT IN OPERATIONS Intercompany loan originated (125,000.0) - - - --------------------------------------------------------------- Cash decrease from investments in operations (125,000.0) - - - --------------------------------------------------------------- FINANCING TRANSACTIONS Senior notes payable issued 124,700.0 - - - --------------------------------------------------------------- Cash increase from financing transactions 124,700.0 - - - --------------------------------------------------------------- Decrease in cash (5.3) 0.0 0.0 CASH AT JANUARY 1 20.0 20.0 20.0 - --------------------------------------------------------------- Cash at December 31 $ 14.7 $20.0 $20.0 =============================================================== The accompanying notes are an integral part of these financial statements. 7 STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY All dollar amounts are stated in thousands. - --------------------------------------------------------------- Issued Number and Accumu- of Paid-in lated Shares Capital Deficit Total - --------------------------------------------------------------- Balance at December 31, 1990 400 $20.0 $ (.7) $19.3 Net loss - - (3.0) (3.0) - --------------------------------------------------------------- Balance at December 31, 1991 400 20.0 (3.7) 16.3 Net loss - - (3.1) (3.1) - --------------------------------------------------------------- Balance at December 31, 1992 400 20.0 (6.8) 13.2 Net income - - 48.1 48.1 - --------------------------------------------------------------- Balance at December 31, 1993 400 $20.0 $41.3 $61.3 =============================================================== The accompanying notes are an integral part of these financial statements. Notes to Financial Statements Household International Netherlands B.V. (the "Company") was organized under the Dutch Civil Code on September 14, 1990. All of the outstanding voting securities of the company are owned by Household Overseas Limited, which is a wholly-owned subsidiary of Household International (U.K.) Limited ("HIUK"). The ultimate parent company is Household International, Inc. ("Household International"), a Delaware corporation. The Company was organized solely to serve as a source of financing, directly or indirectly, for HFC Bank plc ("HFC Bank"), also a wholly-owned subsidiary of HIUK. The Company's functional currency is the U.S. dollar, as the majority of the Company's activities are denominated in U.S. dollars. 1. EXPLANATION ADDED TO FINANCIAL STATEMENTS PREPARED FOR USE IN THE UNITED STATES The Company maintains its accounts in accordance with accounting principles and practices employed by enterprises in the Netherlands. The accompanying financial statements reflect certain adjustments not recorded on the Company's books, to present these statements in accordance with generally accepted accounting principles of the U.S., and therefore differ from the statements prepared for use in the Netherlands. These adjustments, which only affect 1993 and had no impact on either net income for the year ended December 31, 1993 or shareholder's equity at that date, were as follows: A. Deferral of a $987,500 loan arrangement fee. This amount has been netted against the intercompany loan and is being amortized over the expected term of the loan. The amortization was included in interest income in the accompanying statements of operations. 8 B. Deferral of $687,500 in senior notes payable issuance costs. These costs have been recorded as an asset and are being amortized over the expected term of the notes. The amortization was included in interest expense in the accompanying statements of operations. C. Deferral of $300,000 in senior notes payable discount. The discount has been netted against the senior notes payable and is being amortized over the expected term of the notes. The amortization was included in interest expense in the accompanying statements of operations. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Debt discount and deferred issuance costs - Debt discount and deferred issuance costs are amortized using a method which approximates the effective yield method over the expected term of the related senior notes payable. Income taxes - The Company has obtained a ruling from the tax authorities of the Netherlands. Under this ruling a certain minimum taxable income is to be reported during the year. Income tax expense as included in the accompanying statements of operations has been calculated in accordance with this tax ruling. 3. INTERCOMPANY LOANS In thousands. --------------------------------------------------------- AT DECEMBER 31 1993 1992 --------------------------------------------------------- Due from HFC Bank plc $125,000.0 - Unamortized arrangement fee (949.1) - --------------------------------------------------------- Total $124,050.9 - ========================================================= The Company granted a long-term loan to HFC Bank. The loan bears an annual interest rate of 5.50 percent and matures on October 15, 1998. HFC Bank has entered into an agreement ("arrangement fee") to reimburse the Company for the discount on the senior notes payable and issuance costs. This arrangement fee is netted against the principal balance and is amortized into interest income using a method which approximates the effective yield method over the expected term of the loan. 4. SENIOR NOTES PAYABLE In thousands. --------------------------------------------------------- AT DECEMBER 31 1993 1992 --------------------------------------------------------- Notes payable, 5.25% due October 15, 1998 $125,000.0 - Unamortized discounted (288.3) - --------------------------------------------------------- Total notes payable $124,711.7 - ========================================================= 9 The senior notes payable, which were issued in the U.S., are guaranteed as to the payment of principal and interest until maturity by Household International. 5. SHAREHOLDER'S EQUITY The Company is authorized to issue 2,000 shares of common stock with a stated par value of 100 Netherland guilders. At December 31, 1993 and 1992, 400 shares were issued and outstanding. 10 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS Household International Netherlands B.V.: We have audited the accompanying balance sheets of Household International Netherlands B.V. (a Netherlands corporation) as of December 31, 1993 and 1992, and the related statements of operations, changes in shareholder's equity and cash flows for each of the three years in the period ended December 31, 1993. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Household International Netherlands B.V. as of December 31, 1993 and 1992, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1993 in conformity with generally accepted accounting principles (see Note 1). ARTHUR ANDERSEN & CO. Chicago, Illinois, February 25, 1994 11 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. Not applicable. PART III Item 10. Directors and Executive Officers of the Registrant. The following individuals are executive officers and/or directors of the Company: John W. Blenke, age 38, is President, Chairman of the Board, Chief Executive Officer and Secretary of the Company since March 1994. Mr. Blenke was elected Secretary in October 1993. Mr. Blenke is also currently an Assistant General Counsel and Secretary of Household International, having been appointed Secretary in 1993. Mr. Blenke joined Household International in 1989 as Corporate Finance Counsel, was promoted to Assistant General Counsel-Securities & Corporate Law and Assistant Secretary in 1991. Prior to joining Household, Mr. Blenke was employed with a subsidiary of Transamerica Corporation. Joseph P. Hoff, age 43, was appointed the Vice President, Treasurer and Chief Financial Officer, as well as a Director of the Company on September 8, 1993. Mr. Hoff is also currently an Assistant Treasurer of Household International and a Vice President and Assistant Treasurer of Household Finance Corporation, also a subsidiary of Household, positions which he has held since 1989. Prior to 1989, Mr. Hoff was a Senior Vice President of Household Commercial Financial Services. David A. Schoenholz, age 42, was appointed Vice President, Controller and Chief Accounting Officer of the Company on September 8, 1993. Mr. Schoenholz is also currently the Vice President-Chief Accounting Officer of Household International, having been so appointed in 1993. Mr. Schoenholz was appointed Vice President in 1989 and Controller in 1987. He joined Household International in 1985 as Director-Internal Audit. Prior to joining Household International, Mr. Schoenholz was employed by the Commodore Corporation, a manufacturer of mobile homes, as Vice President/Controller from 1983 to 1985. ABN-AMRO Trust Company (Nederland) B.V. was apppointed a Director of the Company on September 8, 1993, and is a limited liability company incorporated on August 27, 1991 in Amsterdam, Netherlands. ABN-AMRO Trust Company (Nederland) B.V. and its subsidiaries serve as director to approximately 1,000 Netherlands incorporated holding and finance companies. ABN-AMRO Trust Company (Nederland) B.V. acts as a manager, administrator and advisor with respect to various financial and commercial activities of companies located or operating in the Netherlands. Item 11. Executive Compensation. None of the officers of the Company receive compensation for serving as officers of the Company. 12 Item 12. Security Ownership of Certain Beneficial Owners and Management. Not applicable. Item 13. Certain Relationships and Related Transactions. Not applicable. PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K. (a) Financial Statements. The following financial statements, together with the report of Arthur Andersen & Co., dated February 25, 1994, appearing on pages 4 through 10 hereof. Household International Netherlands B.V.: Statements of Operations for the Three Years Ended December 31, 1993. Balance Sheets, December 31, 1993 and 1992. Statements of Cash Flows for the Three Years Ended December 31, 1993. Statements of Changes in Shareholder's Equity for the Three Years Ended December 31, 1993. Notes to Financial Statements. (b) Reports on Form 8-K. During the three months ended December 31, 1993, the Company filed no Reports on Form 8-K. (c) Exhibits. 3(a) Articles of Incorporation of the Company. 4(a) Indenture dated as of September 9, 1993, between the Company, Household and The First National Bank of Boston, as Trustee (incorporated by reference to Exhibit 4(a) of the Company's Registration Statement on Form S-3 (No. 33-50351), filed on September 21, 1993). 10(a) Loan Agreement dated October 21, 1993 between the Company and HFC Bank plc. 12(a) Statement on the Computation of Ratio of Earnings to Fixed Charges of the Company. 13 12(b) Statement on the Computation of Ratio of Earnings to Fixed Charges and to Combined Fixed Charges and Preferred Stock Dividends of Household International (incorporated by reference to Exhibit 12 of Household International's Annual Report on Form 10-K for the fiscal year ended December 31, 1993). 23 Consent of Independent Public Accountants (d) Schedules. None. 14 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Household International Netherlands B.V. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. HOUSEHOLD INTERNATIONAL NETHERLANDS B.V. Dated: March 31, 1994 By: /s/ John W. Blenke -------------------------------- President, Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of Household International Netherlands B.V. and in the capacities and on the dates indicated. Signature Title Date --------- ----- ---- /s/ John W. Blenke President, March 31, 1994 - ----------------------- Chairman of the Board (John W. Blenke) and Chief Executive Officer /s/ Joseph W. Hoff Vice President, March 31, 1994 - ----------------------- Treasurer, Chief (Joseph W. Hoff) Financial Officer and Director /s/ David A. Schoenholz Vice President, March 31, 1994 - ----------------------- Controller and (David A. Schoenholz) Chief Accounting Officer Director March 31, 1994 - ----------------------- ABN-AMRO Trust Company (Nederland) B.V. 15 EXHIBIT INDEX EXHIBIT NO. DESCRIPTION - ------- ----------- 3(a) Articles of Incorporation of the Company. 4(a) Indenture dated as of September 9, 1993, between the Company, Household and The First National Bank of Boston, as Trustee (incorporated by reference to Exhibit 4(a) of the Company's Registration Statement on Form S-3 (No. 33-50351), filed on September 21, 1993). 10(a) Loan Agreement dated October 21, 1993 between the Company and HFC Bank plc. 12(a) Statement on the Computation of Ratio of Earnings to Fixed Charges of the Company. 12(b) Statement on the Computation of Ratio of Earnings to Fixed Charges and to Combined Fixed Charges and Preferred Stock Dividends of Household International (incorporated by reference to Exhibit 12 of Household International's Annual Report on Form 10-K for the fiscal year ended December 31, 1993). 23 Consent of Independent Public Accountants EX-3 2 EXHIBIT 3(A) TO ANNUAL REPORT ON FORM 10-K EXHIBIT 3(a) Articles of Association of the "besloten vennootschap met beperkte aansprakelijkheid" (private company with limited liability under Dutch Law): HOUSEHOLD INTERNATIONAL NETHERLANDS B.V. CONTENTS -------- Article - ------- 1 Definitions 2 Name and Registered Office 3 Objects 4 Capital and shares 5 Register of shareholders 6 Notices, announcements, communications and statements 7 Issue of shares 8 Own shares 9 Decrease of capital 10 Transfer of shares 11 and 12 "Blokkeringsregeling" - Provisions governing the transfer of or change in any other way of ownership in shares 13, 14 and 15 Management 16 Financial Year, annual accounts, annual report and publication 17 Profit appropriation 18, 19, 20, 21 and 22 General Meeting 23 Resolutions without holding a meeting 24 Winding-up On this, the fourteenth day of September one thousand nine hundred and ninety, came and appeared before me, MICHIEL GEORGE VAN RAVESTEYN, LL.M., civil-law notary, practising at Rotterdam: FRANK EVERT ROOS, LL.M., a notarial candidate, residing at Rotterdam, who declared and said that he was acting as written attorney of Household Global Funding Inc., a company under the laws of the state Delaware, United States of America, having its principle place of business at Wilmington DE 19801, 1209 Orange Street, United States of America. The said power of attorney appears from an non-notarial instrument of attorney, which, after having been acknowledged according to the law, is attached to the present Deed. The Appearer declared and said that he hereby forms and establish a "besloten vennootschap met beperkte aansprakelijkheid" (private company with limited liability under Dutch Law - hereinafter called "the private limited company"), which shall be governed by the following: ARTICLES OF ASSOCIATION ----------------------- DEFINITIONS ----------- Article 1 - --------- In these Articles of Association the expression: a. The Company shall mean: HOUSEHOLD INTERNATIONAL NETHERLANDS B.V., having its Registered Office at Rotterdam; b. The Board of Directors shall mean: the management of the Company; c. General Meeting shall mean: both the body formed by shareholders and the meeting of shareholders; d. Annual Meeting shall mean: the general meeting called and convened for the purpose of considering and confirming the annual accounts, the annual report and the other documents and writings required by law; e. Subsidiary Company: 1. a legal entity, in which the Company or one or more of its Subsidiaries can, whether or not pursuant to an agreement with other persons entitled to vote, jointly or alone, exercise more than one-half of the voting rights at the general meeting; 2. a legal entity, of which the Company or one or more of its Subsidiaries is a member or shareholder and can, whether or not pursuant to an agreement with other persons entitled to vote, jointly or alone, appoint or dismiss more than one-half of the Directors or Supervisory Directors, even if all the persons entitled to vote cast votes; 3. a company acting under its own name, of which the Company or one or more of its Subsidiaries is a fully liable partner; f. Group Company shall mean: a legal entity or a company which is associated with the Company in a group; g. Payable reserves shall mean: that part of the Company's own property which is in excess of the paid-up and called-up part of the capital, increased by the reserves which require to be kept under and by virtue of the law and these Articles of Association; h. Annual accounts shall mean: the balance sheet, the profit and loss account and the explanatory notes on these accounts. NAME AND REGISTERED OFFICE -------------------------- Article 2 - --------- 1. The name of the Company is: HOUSEHOLD INTERNATIONAL NETHERLANDS B.V. 2. Its Registered Office is situate at Rotterdam. 3. The Company may have branch offices and branch establishments elsewhere, both at home and abroad. OBJECTS ------- Article 3 - --------- The objects of the Company are to participate in, manage and administer the business or and to finance other enterprises, whatever their objects, as also (partly) to bind itself for the debts of group-companies and, finally, to do all such acts and things as are incidental or may be conducive thereto, the foregoing to be construed in the widest sense of the words. CAPITAL AND SHARES ------------------ Article 4 - --------- 1. The authorized capital of the Company is: two hundred thousand guilders (Dfls 200,000.--). 2. It is divided into two thousand (2,000) shares of one hundred guilders (Dfls 100.--) nominal each. 3. The shares shall be registered shares and shall be numbered consecutively. No share certificates can be issued. 4. If the sum of the paid and called up part of the issued capital and the reserves which require to be kept in pursuance of a statutory provision is less than the statutory minimum capital as last fixed, then the Company must keep a reserve to the extent and the amount of such difference. 5. The Company shall not give its co-operation to the issue of depositary receipts. The voting right attaching to shares shall not be capable of being granted to a pledgee or usufructuary. REGISTER OF SHAREHOLDERS ------------------------ Article 5 - --------- 1. The "Directie" (Board of Directors) shall keep a register, in which shall be recorded the names and addresses of all the shareholders, at the same time stating the amount paid up on each share. The register shall be kept up-to-date. 2. Each shareholder shall take due care to see that his address is known to the Company. 3. Finally, every release from liability for calls that have not yet been paid shall be recorded in the register as also - in case of transfer or partly paid-up shares - the date of transfer. 4. On being so requested, the Board of Directors shall furnish a shareholder, a usufructuary and a pledgee with an extract from the register in respect of his right to a share, free of charge. 5. The Board of Directors shall make the register available at the Company's office for inspection and perusal by the shareholders. The data and particulars contained in the register concerning partly paid-up shares shall be available for public inspection; a copy of or an extract from such data and particulars shall be furnished at a price not exceeding the cost-price. NOTICES, ANNOUNCEMENTS, COMMUNICATIONS AND STATEMENTS ----------------------------------------------------- Article 6 - --------- Notices, announcements, communications and statements in pursuance of these Articles of Association shall be given and made by letter or by Writ and shall be sent to or served upon shareholders to or at the addresses referred to in Article 5 hereof, and to the Board of Directors both to or at the office of the Company and to or at the home-addresses of all the Directors. ISSUE OF SHARES --------------- Article 7 - --------- 1. Unsubscribed shares shall be issued by the Board of Directors in pursuance of a resolution of the General Meeting of Shareholders at such points of time, upon such terms and conditions and to such persons as the General Meeting shall determine. The preceding sentence shall apply correspondingly to the granting of rights and the taking of shares, but shall not be applicable to the issue of shares to a person who exercises a right to take shares acquired by him already previously. 2. Within fourteen days after the General Meeting has taken a resolution within the meaning of paragraph 1 of this Article, the Board of Directors shall give notice thereof to all the shareholders. 3. Shareholders shall, in proportion to the number of shares already held by them, have a preferential right of subscription to the shares to be issued. They may exercise this right only by a communication to that effect to the Board of Directors within six weeks after the despatch of the notice mentioned in paragraph 2 of this Article. 4. Shareholders shall have no preferential right of subscription to shares which are issued to employees of the Company or of a group-company. 5. The preferential right of subscription may - each time in respect of only one issue - be limited or excluded by resolution of the General Meeting. 6. For the purposes of the provisions laid down in paragraphs 3, 4 and 5 of this Article the granting of a right to take shares shall rank equally with the issue of shares. However, the shareholders shall have no preferential right of subscription to shares which are issued to a person who exercises a right to take shares acquired by him already previously. 7. Upon the issue of a share at least one-fourth part of the nominal amount shall require to be paid up thereon. The non-paid-up part of the nominal amount shall require to be paid only after the Board of Directors shall have called up the same on behalf of the Company. OWN SHARES ---------- Article 8 - --------- 1. Upon any issue of shares the Company cannot take own shares. 2. The Company may acquire fully-paid shares in its own capital or depositary receipts therefor only under gratuitous or universal title or if: a. the Company's own assets, decreased by the acquisition- price, is not less than the paid-up and called-up part of the capital, increased by the reserves that require to be kept under and in pursuance of the statutory provisions or the provisions of these Articles of Association, b. the nominal amount of the shares to be acquired and the shares already held jointly by the Company and its subsidiary companies in its capital is not in excess of one-half of the issued capital, and c. the authorization for such acquisition has been granted by the General Meeting or by another organ of the company that has been designated for that purpose by the General Meeting. For the validity of such acquisition shall be decisive the extent of the Company's own assets according to the balance sheet as last confirmed and adopted, decreased by the acquisition-price for the shares or the depositary receipts therefor in the capital of the company and payments out of the profits or reserves to others, in which itself and its subsidiary companies became indebted after the date of the balance sheet. If a financial year has elapsed for a period in excess of six months without the annual accounts having been confirmed and adopted, then acquisition in conformity with this paragraph 2 shall not be allowed. 3. Neither the Company nor one of its subsidiary companies may give security, grant a guarantee as regards the rate of exchange, guarantee in any other way or severally or in any other way bind itself in addition to or for other persons with a view to the taking or acquisition of shares or depositary receipts therefor in the Company. Loans granted by the Company for the abovementioned purpose shall be allowed up to a sum not exceeding the payable reserves. The Company shall keep a non-payable reserve up to the outstanding amount of the loans mentioned in the immediately preceding sentence. 4. Alienation of shares held by the Company in its own capital shall be effected only in pursuance of a resolution of the General Meeting. Upon taking the resolution to alienate such shares or depositary receipts, the terms and conditions of such alienation shall also be determined. Shareholders shall, in proportion to the number of shares already held by them, have a preferential right of subscription to the shares so to be alienated. 5. No votes can be cast at a general meeting on a share owned by the Company or a Subsidiary thereof, nor on a share, the depositary receipts for which are held by one of them. 6. Upon determining to which extent shareholders cast votes, are present or represented, or to which extent the share capital is supplied or is represented, shares, in regard to which it is provided by Statute that no votes may be cast thereon, shall not be taken into account. DECREASE OF CAPITAL ------------------- Article 9 - --------- 1. The General Meeting may resolve upon decrease of the issued capital by calling in shares or by decreasing the amount of shares by means of an alteration of the Articles of Association. 2. A resolution to call in shares can relate only to: a. shares which are held by the Company itself; or b. all the shares of a class, all the holders of which shares have approved of such calling-in; or c. all the shares of a class, provided always that such calling-in is coupled with repayment. 3. Decrease of the amount of shares without repayment and without release of the obligation to pay calls must be effected in proportion to all the shares of one and the same class. 4. Part repayment on shares or release of the obligation to pay calls shall, besides in proportion to all the shares, likewise be possible on shares of a class separately. 5. The requirements of ratio mentioned in paragraphs 3 and 4 of this Article may be deviated from with the approval of all the shareholders concerned. 6. The notice convening a meeting, in which a resolution is taken as referred to in this Article, shall state the purpose of the decrease of capital and the manner of execution. TRANSFER OF SHARES ------------------ Article 10 - ---------- Transfer of shares shall require an instrument of transfer and service of such instrument upon the Company or the written acknowledgment of such transfer by the Company upon the grounds of submission of that instrument to the Company. If it concerns the transfer of shares that have not been paid up in full, such acknowledgment can take place only, if the instrument of transfer bears a fixed date. PROVISIONS GOVERNING THE TRANSFER OF OR CHANGE IN ANY OTHER WAY OF OWNERSHIP IN SHARES ------------------------------------------------- Article 11 - ---------- 1. A valid transfer of shares shall require the approval of the General Meeting. 2. The application for such approval shall require to be made to the Board of Directors, stating at the same time the number of shares which and the name of the person to whom the applicant wishes to transfer. 3. The Board of Directors shall call and convene a General Meeting, to be held within two months after it has received the application, at which meeting a decision shall be given on the said application. The Board of Directors shall forthwith notify the decision of that Meeting to the applicant. 4. The approval shall be deemed to have been granted: a. if the period mentioned above has expired without a decision on such application having been given; b. if in the decision - by which the approval is refused - no claimant or claimants has or have been named, who is or are prepared and who is or are able to purchase against payment in cash all the shares to which the application relates. 5. If the approval has been granted or is deemed to have been granted, the applicant may during a period of three months thereafter transfer his shares in the manner as such transfer was described in his application for approval. 6. If a decision - by which the approval has not been granted - does contain the name of a claimant/the names of claimants, who is or are prepared and who is or are able to purchase against payment in cash all the shares to which the application relates, the price of the shares to be transferred shall - unless the persons concerned shall otherwise agree - be fixed by one independent expert to be designated by the Chairman of the Chamber of Commerce and Industry, within whose area the Company's corporate seat is situate, upon the application of whichever of the parties first makes the same. The Board of Directors shall give to the expert its full co- operation in fixing such price. As soon as the price is known to the Board of Directors, it shall give notice thereof to the parties forthwith. The purchase agreement shall come into being only after the applicant notifies to the Board of Directors within one month after the price has been fixed that he accepts the claimant/claimants named to him and the price so fixed. 7. The costs incidental to such price-fixing shall be borne and paid by the Company. Article 12 - ---------- The Company itself may be claimant within the meaning of paragraph 6 of Article 11 only with the approval of the applicant, to which approval the applicant may attach the condition that in addition to the price so fixed the Company shall refund to him the tax loss he sustains as a result of transfer to the Company instead of to a third party. MANAGEMENT ---------- Article 13 - ---------- 1. The Company shall be managed by a "Directie" (Board of Directors), consisting of one or more "Directeuren" (Directors), the number thereof to be fixed by the General Meeting. The General Meeting may grant to a Director the title of "President-Directeur" (Chairman of the Board of Directors). Both a natural person and a legal entity may be Director. 2. The General Meeting shall appoint the Directors and it may at any time suspend or remove them from office. It shall fix the remuneration and determine the other conditions of service of the Directors. 3. A suspension cannot - event after it has been extended - last longer than three months. If after expiry of that period of time a decision has not yet been taken on the termination of the suspension or removal from office, the suspension from office shall cease to exist. 4. If there is more than one Director in office, the Directors shall mutually determine the duties to be discharged by each of them, to the extent that the General Meeting has not regulated and arranged this by a code of rules. 5. The Board of Directors shall meet whenever a Director shall so demand. It shall pass resolutions by absolute majority of votes. If the votes are equal, the General Meeting shall decide. Article 14 - ---------- 1. The General Meeting shall be empowered to submit resolutions of the Board of Directors to its approval, by virtue of a resolution of the General Meeting in which such resolutions are clearly defined. 2. For the rest, the Board of Directors shall conform to the directives of the General Meeting relating to the general lines of the financial, social, economic and staff policy to be conducted and pursued. Article 15 - ---------- 1. Each Director shall have power to represent the Company. 2. If a Director privately enters into an agreement with the Company or privately litigates against the Company, it shall - without prejudice to the competency and power of the General Meeting to designate a person for that purpose, which person may also be the Director with regard to whom the conflicting interest subsists - be represented by one of the other Directors. If a Director has in any way other than that hereinbefore referred to an interest conflicting with the Company's interest, he, as also each of the other Directors, shall have power to represent the Company. 3. If the office of a Director is vacated or if a Director is otherwise prevented from acting, the remaining Director or the remaining Directors shall be vested with the management of the Company. If the office of the sole Director or the offices of all the Directors is or are vacated or if the sole Director or all the Directors is or are otherwise prevented from acting, the person, designated to that purpose every year by the General Meeting, shall temporarily be vested with the management, not later than until the point of time, at which the situation of vacancy or prevention from acting in respect of at least one Director has ceased to exist. FINANCIAL YEAR, ANNUAL ACCOUNTS, ANNUAL REPORT AND PUBLICATION ---------------------------------------------- Article 16 - ---------- 1. The financial year shall be equal to the calendar year. 2. Each year, within five months after the close of the financial year - subject to extension of this period by the General Meeting on the grounds of circumstances of an exceptional nature by at most six months -, the Board of Directors shall draw up the annual accounts and make these available for inspection and perusal in the manner set out in paragraph 3 of this Article. Within this period the Board of Directors shall also make available for inspection and perusal the annual report, unless Article 403 of Book 2 of the (Dutch) Civil Code shall apply to the Company. The annual accounts shall be signed by all the Directors. If the signature of one or more of them fails, mention thereof shall be made and the reason therefore stated. 3. From the day, on which notice of the annual general meeting has been given, until the close of that meeting the accounts mentioned in paragraph 2 of this Article shall, together with the data and particulars to be added in pursuance of Article 392 of Book 2 of the (Dutch) Civil Code, be made available at the Company's office for inspection and perusal by all the shareholders, and each of them may obtain copies thereof, free of charge. 4. Confirmation - without qualification or reservation - of the annual accounts by the General Meeting shall constitute a discharge to the Directors for the management conducted by them during the past financial year, subject to the statutory restrictions. 5. The Company shall proceed to publication of the accounts, data and particulars referred to in this Article, if and in so far as and in the manner as Articles 394 et sqq. of Book 2 of the (Dutch) Civil Code so prescribe. PROFIT APPROPRIATION -------------------- Article 17 - ---------- 1. a. The Company may make payments to the shareholders and to other persons entitled to the profit capable of being distributed only up to a sum not exceeding the amount of the payable reserves. b. Payment of profit shall be made after confirmation of the annual accounts showing that the same is allowed. c. No profit shall be distributed on shares for the benefit of the Company. 2. The distributable profit shall be at the free disposal of the General Meeting. 3. In calculating the profit appropriation the shares held by the Company in its own capital shall not count, unless a usufruct has been created in these shares. 4. To the extent that profit is available in the Company, the Board of Directors may with the approval of the General Meeting resolve upon payment of an interim-dividend on account of the dividend to be expected, provided always that the provisions laid down in paragraph 1, sub-paragraph a., of this Article have been satisfied. 5. The General meeting may resolve upon (interim-) dividends being wholly or partly distributed in a manner other than by payment in cash. 6. The (interim-) dividend shall be made payable fourteen days of it being declared; the General Meeting may when resolving upon declaration of such dividend extend the period by a term not exceeding two weeks. 7. Dividends which have not been collected within five years after they became payable shall be forfeited for the benefit of the Company. GENERAL MEETING --------------- Article 18 - ---------- The annual meeting shall be held within six months after the close of the financial year and is called and convened for the purpose of: a. except in case extension has been granted for the drawing-up of the annual accounts, considering the annual accounts and, if prescribed by Statute, the annual report and the other data and particulars within the meaning of Article 392 of Book 2 of the (Dutch) Civil Code; b. confirming the annual accounts, except in case extension has been granted for the drawing-up of the annual accounts; c. determination of the profit appropriation; d. fixing the possible bonuses for the Directors; e. designating the person meant in paragraph 3 of Article 15; f. the doing of all such acts as are otherwise prescribed by Statute. Article 19 - ---------- 1. The General meeting shall - within the limits set by Statute and these Articles of Association - be vested with all such powers as have not been conferred upon others. 2. The Board of Directors shall furnish the General Meeting with all such information as demanded by it, unless a weighty interest of the Company opposes thereto. 3. The General Meeting may appoint an expert, who shall regularly examine and audit the books of account and/or report to the Board of Directors on the annual accounts drawn up by the Board of Directors. 4. In cases where such is prescribed by Statute, the General meeting shall, without prejudice to the other statutory provisions relating thereto, give a "registeraccountant" (chartered accountant) or another expert within the meaning of Article 393 of Book 2 of the (Dutch) Civil Code or an organization, in which such experts are working together, the instruction to examine and audit the annual accounts. That expert shall report on his examination and audit to the Board of Directors and shall lay down the result of his examination and audit in a certificate. 5. Without prejudice to the statutory provisions, the General Meeting shall at all times be empowered to revoke the appointment mentioned in paragraph 3 of this Article and/or to cancel and withdraw the instruction given in paragraph 4 of this Article. Article 20 - ---------- 1. General meetings shall be held whenever the shareholders shall be called and convened for that purpose by the Board of Directors. 2. If one or more shareholders, together representing at least one-tenth part of the issued capital, have requested the Board of Directors in writing to call and convene a general meeting, at the same time specifying the items of business to be transacted thereat, and the Board of Directors has not compiled with such request in such a way that the general meeting can be held within six weeks of such requisition, the requisitionists can be authorized by the President of the District Court within whose jurisdiction the Company's Registered Office according to its Articles of Association is situate to call such meeting themselves. Article 21 - ---------- 1. General meetings shall be held in the municipality where the Company's Registered Office according to its Articles of Association is situate. At a general meeting held elsewhere valid resolutions can be taken, if the entire issued capital is represented. 2. The General Meeting itself shall choose its chairman. 3. The Chairman of the meeting shall designate a secretary, who need not be shareholder, for taking minutes of the business transacted thereat, which minutes shall be recorded in a book therefor intended. Minutes shall be confirmed either during the meeting or by a subsequent meeting, in witness whereof they shall be signed by the Chairman and the secretary of the meeting concerned. Minutes need not be taken, if a notarial record is prepared of the business transacted at the meeting. The costs incidental to such notarial record shall be borne and paid by the Company, unless the General Meeting has opposed the preparation of a notarial record, in which case those costs shall be for the account of the shareholders, who have made application for the drawing-up of the notarial record, pro rata to the nominal amount of the number of shares held by each of them. 4. At least fifteen day's previous notice of any general meeting shall be given to the shareholders. The convening notice shall, in addition to the place, date and hour of the meeting, specify the items of business to be transacted. 5. Each share shall entitle the holder thereof to cast one vote. Valid votes may also be cast by person who in any capacity other than as shareholder would by the resolution to be taken granted any right as against the Company or who would thereby be released from any obligation towards it. 6. Shareholders may cause themselves to be represented at any meeting only by virtue of a written power of attorney, which shall include a power of attorney by teleprinter message, by telefax or by telegram. 7. All resolutions shall be taken by absolute majority of votes, Blank votes shall be regarded as not having been cast. 8. Votings concerning persons shall be by folded ballot-papers, unless the General Meeting unanimously otherwise decides. Ballot-papers shall be destroyed immediately after the result of the voting has been made known. Votings concerning things shall be oral, unless a shareholder prefers a voting by ballot. Article 22 - ---------- 1. If a general meeting has been called and convened at a period of notice shorter than the prescribed period of notice or if such meeting is held without having given notice thereof, then valid resolutions can be taken only by a unanimous vote at a meeting, at which the entire issued capital is represented. 2. If at a general meeting items of business are brought up for discussion, which have not been announced in the convening notice or in a supplemental convening notice with due observance of the period of notice prescribed for the calling of meetings, then valid resolutions can be taken thereon only by a unanimous vote at a meeting, at which the entire issued capital is represented. THE TAKING OF RESOLUTIONS WITHOUT HOLDING A MEETING --------------------------------------------------- Article 23 - ---------- 1. The General meeting can also pass resolutions without holding a meeting, provided always that any such resolution is taken in writing, by teleprinter message, telefax or telegram and, furthermore, by a unanimous vote of all the voting shareholders. 2. Resolutions that have been passed without holding a meeting shall - with the addition of the documents and writings which may still appertain thereto - be recorded in the relative minute-book and read out in the next following meeting. WINDING-UP ---------- Article 24 - ---------- 1. If the Company is dissolved, its affairs shall be liquidated by the Board of Directors, unless the General Meeting should at the time of taking the resolution to dissolve the Company otherwise resolve thereon. 2. During the liquidation proceedings the provisions of these Articles of Association shall as far as possible continue in force. 3. The balance on liquidation shall be distributed to all the shareholders pro rate to the nominal value of the shares held by each of them. 4. The books and records of the dissolved Company shall for a period of thirty years after completion of the winding-up remain in the custody of the persons to be designated for that purpose by the General meeting. FINALLY, THE APPEARER DECLARED AND SAID: a. that the issued capital amounts to forty thousand guilders (Dfl 40,000.--); b. that the issued capital of the Company is held by the founder, Household Global Funding Inc. as to four hundred (400) shares; subject to the requirement of those shares being paid up in full; c. that those shares have meanwhile been paid up in full and that the Company accepts by this Deed the calls that have been paid in money on the shares that have been subscribed for; d. that by the present Deed David Dwayne Wesselink, residing at Northbrook, 1133 Western Avenue, Illenois 600 62, United States of America, born at Western City, Iowa, United States of America on the fifth day of September one thousand nine hundred and forty-two and of American nationality, has been appointed Director; e. that the first financial year of the Company will end on the thirty-first day of December one thousand nine hundred and ninety; f. that the ministerial Certificate of No Impediments was issued on the fifteenth day of June one thousand nine hundred and ninety, Ministry of Justice, Main Division Private Law, number B.V. 383.748. A declaration as referred to in paragraph 1 of Article 203A of Book 2 of the (Dutch) Civil Code is attached to this Original. The Appearer is known to me, the civil-law notary. WHEREOF THE PRESENT DEED, - ------------------------ the Original of which was executed at Rotterdam the day and year first above written. After the substance of the present Deed had been made known to the Appearer, he declared that he had taken cognizance of the full contents thereof and that he did not wish the same to be read out to him in full. Immediately after the present Deed had been read out in part, the Appearer and I, the civil-law notary, thereunto appended our several signatures. (signed): F.E. Roos, M.G. van Ravesteyn. A:\WP51\BVK-EX3A.WP EX-10 3 EXHIBIT 10(A) TO ANNUAL REPORT ON FORM 10-K Exhibit 10(a) This Loan Agreement is made on the 21st day of October 1993 B E T W E E N : (1) HOUSEHOLD INTERNATIONAL NETHERLANDS B.V. of ("the Lender); and (2) HFC BANK PLC of North Street, Winkfield, Windsor, Berkshire SL4 4TD ("the Bank). WHEREAS The Lender is desirous of lending to the Bank a total sum of US$125,000,000 upon the terms and conditions hereinafter appearing. It is hereby agreed as follows: 1. DEFINITIONS ----------- In this Agreement unless the context otherwise requires:- (a) "Business Day" means a day on which banks are open for business in London and New York. (b) "Loan" means the sum referred to in clause 2 or the principal amount thereof from time to time outstanding. (c) "Dollars" and "US$" means the lawful currency of the United States of America. (d) "Event of Default" shall the meaning specified in clause 12. (e) Interest Period" in relation to the Loan shall have the meaning specified in clause 4. (f) "Maturity Date" shall mean 15th October 1998 or if such day is not a Business Day, on the next succeeding Business Day, unless otherwise agreed in writing by the parties hereto. (g) "Taxes" includes all present and future income and other taxes, levies, imposts, deductions, charges, compulsory loans and withholdings whatsoever together with interest thereon and penalties with respect thereto, if any, and any payments made on or in respect thereof; and "Tax" shall be construed accordingly. (h) "Qualifying Bank" means a bank which is recognised by the Inland Revenue as carrying on a bona fide banking business in the United Kingdom for the purpose of Section 349 of the Income and Corporation Taxes Act 1988. All references herewith to Clauses are reference to clauses of this Agreement. 2. AMOUNT OF LOAN -------------- The maximum aggregate amount which may be borrowed under this Agreement is One hundred and twenty five million Dollars (US$125,000,000). 3. DRAWING OF LOAN --------------- Subject to the terms and conditions of this Agreement, as from the date hereof the Lender agrees to lend the Bank and the Bank agrees to borrow from the Lender the Loan. 4. INTEREST PERIODS ---------------- (a) The duration of each Interest Period shall be six months or such other period as may be nominated in writing by the Bank from time to time. (b) If any Interest Period would end on a day which is not a Business Day such Interest Period shall be extended to the next succeeding Business Day and interest shall be adjusted accordingly. (c) Save as is otherwise provided in this Clause 4, any Interest Period which commences upon the last Business Day of a calendar month or on a day for which there is no numerically corresponding day in the calendar month in which that Interest Period is to end shall end on the last Business Day in that later calendar month. 5. INTEREST -------- (1) Interest on the Loan shall accrue from day to day and be calculated on the basis of a year of 360 days and the actual number of days elapsed and shall be payable gross in arrears on the last day of each Interest Period at a semi-annual rate of 5.50%. (2) The Lender's certificate as to each amount payable under this Clause shall, in the absence of manifest error, be conclusive evidence of each such amount. 6. TAXES ----- (a) All sums payable by the Bank hereunder shall be paid without set-off, counterclaim, withholding or deduction whatsoever unless required by law, in which event the Bank shall pay the net amount to the Lender, after the deduction of such amount required by law. (b) All Taxes in respect of this Agreement or in respect of any amounts paid or payable hereunder shall be paid by the Bank or as the case may be, the Lender when due and in any event prior to the date on which penalties attach thereto. The Bank will indemnify the Lender in respect of all such Taxes in respect of amounts paid or payable by the Bank hereunder. In addition, if any Taxes or amounts in respect thereof must be deducted from any amounts payable or paid by the Bank hereunder the Bank shall pay such additional amounts as may be necessary to ensure that the Lender receives and is able to retain on the due date a net amount equal to the full amount which it would have received had payment not been made subject to the deduction of such Tax. Notwithstanding anything else contained in this paragraph nothing shall oblige the Bank to make payment of or indemnify in respect of an amount equal to Tax imposed on the income of the Lender in the place where it is incorporated which is calculated and levied by reference to its net income. (c) If the Lender intends to make a claim pursuant to Clause 6(b) the Lender shall promptly notify the Bank of the event by reason of which it is entitled to do so, giving the reasons for such claim and setting out a calculation in reasonable detail as to the amount claimed (such notice being prima facie evidence of the amount in question). (d) Within thirty days of each payment by the Bank hereunder of Tax or in respect of Taxes, the Bank shall deliver to the Lender evidence satisfactory to the Lender (including all relevant original Tax receipts or certified copies thereof) that such Tax has been duly remitted to the appropriate authority. (e) If following the imposition of any United Kingdom Tax upon any payment by the Bank in consequence of which the Bank is required to pay any additional amount under Clause 6(b) to the Lender (and the Bank in fact pays such additional amount when due and complies with its corresponding obligation under clause 6(d)), the Lender shall, in its sole opinion and based on its own interpretation of any relevant laws or regulations, receive in relation to or in respect of such additional amount, or the payment to which such additional amount relates, the benefit of a credit against, or of a remission for or a deduction from or in respect of, any such Tax payable by it, or shall obtain the benefit of any other relief in respect of the profits or income of the Lender (any of the foregoing being referred to as a "saving"), the Lender shall, to the extent that it can do so without prejudice to the retention of the relevant saving and subject to the Bank's obligation to repay such amount to the Lender if the relevant saying is subsequently disallowed or cancelled, reimburse the Bank with such amount as the Lender shall in its sole opinion have concluded to be the amount or value of the relevant saving. Nothing herein contained shall interfere with the right of the Lender to arrange its Tax affairs in whatsoever manner it thinks fit and, in particular, the Lender shall not be under any obligation to claim relief from its corporate profits or similar Tax liability in respect to such Tax in priority to any other claims, reliefs, credits or deductions available to it. 7. PAYMENTS -------- (a) If the Bank fails to pay any amount payable by it herein on the due date therefor, the Bank shall on demand from time to time pay to the Lender interest on such unpaid amount from the due date therefor up to the date of actual payment (as well after as before judgement) at such rate or rates as is equal to the Lender's cost of funding such unpaid amount in such manner and for such period or periods as the Lender may from time to time select plus 1% (say, one per cent) per annum. The Lender's certificate as to any such rate of interest shall be conclusive, save in the case of manifest error. Interest accruing under this Clause 7(a) shall be compounded upon the last day of each period selected by the Lender as aforesaid. The Bank acknowledges that each such rate is intended to compensate the Lender for any failure by the Bank to pay any amount payable by it hereunder. Nothing contained in this clause shall prejudice any of the Lender's other rights under this Agreement. (b) Save as provided in Clause 4(c) of this Agreement whenever any payment hereunder shall become due on a day which is not a Business Day, the due date therefor shall be extended to the next succeeding Business Day. 8. REPAYMENT AND CANCELLATION -------------------------- (1) Subject to the terms of this Agreement the Loan shall be repaid in full and in one amount on the Maturity Date together with all monies accrued due or owing to the Lender hereunder on the Maturity Date in respect of the Loan. (2) The Loan shall not be repaid otherwise than in accordance with the terms of this Agreement. (3) The Bank may with the agreement of the Lender prepay the Loan or part thereof prior to the Maturity Date. (4) On receipt of any amount prepaid in accordance with this clause the Lender shall calculate the accrued interest thereon, the amount of interest accruing on the Loan thereafter and the amount of interest payable on the next interest payment date and shall notify the Bank accordingly. 9. PAYMENTS -------- (a) By the Lender The Lender shall remit the Loan to such account of the Bank as the Bank shall specify, before 3.00 p.m. (London time) in immediately available London funds and may deduct therefrom the Arrangement Fee payable by the Bank to the Lender in accordance with the provisions of clause 16 hereof. (b) By the Bank On each date on which any sum is due from the Bank to the Lender it shall remit that sum to such account of the Lender as the Lender shall specify from time to time before 10.00 a.m. (London time) in immediately available funds. (c) Non-Business Days Any payment to be made by the Bank which would otherwise be due on a non Business Day shall instead be due on the next Business Day (and interest shall be adjusted accordingly). (d) Currency Dollars are the sole currency of account and for payment of all sums payable hereunder. 10. REPAYMENT --------- Notwithstanding anything contained in this Agreement, if any law or regulation or any change therein or in the interpretation or application thereof by any relevant authority or Court shall make it unlawful for the Lender to make, maintain or fund the Loan or to perform any of its obligations hereunder the Lender may by written notice to the Bank declare that the Loan and the Lender's obligations hereunder shall be terminated forthwith, whereupon the Loan and such obligations shall be so terminated and the Bank shall repay to the Lender forthwith the Loan together with all accrued interest thereon and all other monies (if any) accrued due or owing hereunder. 11. REPRESENTATIONS AND WARRANTIES ------------------------------ (a) The Bank hereby represents and warrants to the Lender as of the date hereof:- (i) it has the power to enter into the obligations under this Agreement and to utilise the Loan hereunder and all necessary regulations binding on it or its Board of Directors have been complied with in accepting the Loan; (ii) the utilisation by it of the Loan hereunder will not constitute a breach of any existing law or regulation binding on it or of Memorandum and Articles of Association, and will not cause any borrowing limit binding upon it to be exceeded; (iii) this Agreement constitutes its valid and binding obligation enforceable against it and its obligations hereunder are and will be its direct, unconditional and general obligations; (iv) no Event of Default or other event which, with the giving of notice and/or lapse of time, might constitute an Event of Default has occurred and is continuing unremedied; (v) it is not engaged in any litigation, arbitration or administrative proceeding, nor is any such litigation, arbitration or administrative proceeding pending or threatened against it, which in any such case might have a material adverse effect on its ability to perform its obligations hereunder. (b) The Bank hereby represents and warrants that as of the date hereof and as of each day on which the Loan is outstanding that it is an authorised institution as defined in the Banking Act 1987. 12. UNDERTAKINGS ------------ (a) The Bank hereby undertakes to the Lender that from the date hereof and so long as any part of the Loan and any other monies due or to become due hereunder shall be or remain accrued due or owing, the Loan will rank at least pari passu in right of repayment and in point of security with all its other present and future unsubordinated unsecured indebtedness (other than obligations preferred by law); and (b) The Bank hereby undertakes to the Lender that it will for the period of the Loan maintain its status as an authorised institution as defined in the Banking Act 1987 or as a similar institution regulated by the Banking Act 1987 (or any statute which amends or replaces the Banking Act 1987). 13. EVENTS OF DEFAULT ----------------- (a) Each of the following events shall be an Event of Default:- (i) if either the Bank shall fail to pay principal or interest or any other sum due hereunder on the due date for payment thereof and such failure shall not if capable of remedy be remedied within 5 Business Days of such failure; or (ii) if the Bank shall commit any breach of or omit to observe any of its obligations or undertakings contained in this Agreement which if capable of remedy are not remedied within 30 Business Days of the happening of such event; or (iii) if any representation or warranty made or deemed to be made by the Bank in or pursuant to this Agreement is or would be if repeated at any time hereafter with reference to the facts subsisting at the time of such repetition, incorrect or untrue in any material respect as at the date of its being made, deemed to be made or repeated as aforesaid; or (iv) if the Bank ceases or threatens to cease to carry on its business or is unable to pay its debts as they fall due or if a petition is presented or if any order is made or an effective resolution is passed for its winding up, or a receiver is appointed in respect of all or any part of its undertaking, property or assets; or (v) if a distress execution or other process is levied or enforced on or against any of the Bank's property or assets, or a judgment or order of any Court is made against it for a sum considered by the Lender to be material unless contested in good faith; (vi) if the Bank convenes a meeting of or enters or proposes to enter into any arrangement or composition for the benefit of its creditors; or (vii) if any event or series of events (whether related or not) occurs or any situation shall develop or any legislation shall be enacted which would, in the opinion of the Lender, entitle the Bank of England to revoke the Bank's status as an authorised institution under the Banking Act 1987; or (viii) if at any time Household International Inc. shall cease to be the beneficial owner of at least 75% of the issued share capital of the Bank; (ix) if the Bank shall cease to be an authorised institution as defined in the Banking Act 1987 (or any statute which amends or replaces the banking Act 1987); or (x) if there is any change in the circumstances of the Bank, which change would materially and adversely affect the Bank's ability to perform its obligations hereunder and the Bank will notify the Lender forthwith in writing of any occurrence of any Event of Default. (b) The Lender shall be entitled at any time after the happening of an Event of Default (whether or not the Bank shall have given notice as aforesaid) by notice in writing to the Bank to declare the Loan and all interest accrued thereon and all other monies accrued due or owing (whether actually or contingently) pursuant to this Agreement to be immediately due and payable whereupon the same shall become immediately due and payable to the Lender. 14. INDEMNITY --------- The Bank hereby agrees to keep the Lender indemnified from and against all losses, costs and expenses which the Lender may incur by reason of the occurrence of any Event of Default, including (without limiting the foregoing) all reasonable expenses incurred by the Lender in preserving and/or enforcing its rights hereunder. 15. INFORMATION ----------- (a) During the period of the Facility and whilst any amount remains accrued, due or owing hereunder the Bank shall provide to the Lender within 180 days of the close of its financial year a copy of its audited Annual Report and Accounts. (b) The Bank also undertakes to provide promptly to the Lender any other financial information that the Lender may from time to time reasonably require. 16. ARRANGEMENT FEE --------------- The Bank shall pay to the Lender on the date hereof an Arrangement Fee in the sum specified in a letter signed by the Bank and of even date herewith. 17. DELAY ----- No delay of whatever length by the Lender in giving notice or exercising any of the Lender's rights hereunder shall operate as a waiver of any of such rights. 18. COUNTERPARTS ------------ This Agreement may be signed in any number of counterparts each of which will be an original but all of which together shall constitute one Agreement. 19. GOVERNING LAW ------------- This Agreement shall be governed and construed in accordance with the laws of England and shall be binding upon and enure for the benefit of the successors of the parties but shall not be assignable by the Lender (except to an affiliate of the Lender provided that such affiliate shall enter into such further agreement as the Bank or the Bank of England shall reasonably require) or the Bank. As witness the hand of the duly authorised representatives of each party the day and year first before written. For and on behalf of Household International Netherlands B.V. /s/ Joseph W. Hoff For and on behalf of HFC Bank plc /s/ J. Piers Williamson A:\BVK-EX10A.WP EX-12 4 EXHIBIT 12 TO ANNUAL REPORT ON FORM 10-K EXHIBIT 12 HOUSEHOLD INTERNATIONAL NETHERLANDS B.V. COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (All dollar amounts are stated in millions.) Year ended December 31 1993* - ----------------------------------------------- Income from operations $ 48.1 - ----------------------------------------------- Income taxes 32.1 - ----------------------------------------------- Fixed charges: Interest expense 1,405.6 - ----------------------------------------------- Total earnings as defined $1,485.8 =============================================== Ratio of earnings to fixed charges 1.06 =============================================== *Prior to 1993, the Company had no active operations; consequently, the ratio of earnings to fixed charges for the years 1990 through 1992 are not meaningful and have been omitted. A:\WP51\BVK-EX12.WP EX-23 5 EXHIBIT 23 TO ANNUAL REPORT ON FORM 10-K EXHIBIT 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS Household International Netherlands B.V.: As independent public accountants, we hereby consent to the incorporation of our report dated February 25, 1994, included in this annual report on Form 10-K of Household International Netherlands B.V. for the year ended December 31, 1993, into the Company's previously filed Registration Statement No. 33-50351 on Form S-3. ARTHUR ANDERSEN & CO. Chicago, Illinois, March 31, 1994 -----END PRIVACY-ENHANCED MESSAGE-----