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USI Holdings Corporation Announces Offer to Purchase and Consent Solicitation



  USI Holdings Corporation Announces Offer to Purchase and Consent
  Solicitation

Business Wire

BRIARCLIFF MANOR, N.Y. -- December 04, 2012

USI Holdings Corporation  (“USI” or the “Company”) announced today that it has
commenced a cash tender offer (the “Offer to Purchase”) and consent
solicitation (the “Consent Solicitation,” and together with the Offer to
Purchase, the “Offer”) for any and all of its $225,000,000 aggregate principal
amount of Senior Floating Rate Notes due 2014 (CUSIP Nos. 90333HAD3 and
U91218AB0) (the “2014 Notes”) and $175,000,000 aggregate principal amount of
9.750% Senior Subordinated Notes due 2015 (CUSIP Nos. 90333HAE1 and U91218AC8)
(the “2015 Notes,” and together with the 2014 Notes, the “Notes”). The Offer
is described in the Offer to Purchase and Consent Solicitation Statement dated
December 3, 2012 (the “Statement”). The Offer will expire at 11:59 p.m., New
York City time, on December 31, 2012 unless extended or earlier terminated by
the Company in its sole discretion (the “Expiration Date”).

As previously announced, Onex Corporation (“Onex”) (TSX: OCX) has agreed to
acquire USI (the “Acquisition”) from GS Capital Partners VI Fund, L.P. (“GS
Partners”), and certain of its affiliates, pursuant to the agreement and plan
of merger, dated November 25, 2012 (the “Acquisition Agreement”), among
affiliates of Onex and GS Partners.

Holders who validly tender their Notes and provide their consents to the
proposed amendments to the indentures governing the Notes (the “Indentures”)
prior to the consent payment deadline of 5:00 p.m., New York City time, on
December 14, 2012, unless extended or earlier terminated by the Company in its
sole discretion (the “Consent Payment Deadline”), will receive $1,000.47 per
$1,000 principal amount of the 2014 Notes (which amount includes a consent
payment of $50.00 per $1,000 principal amount of the 2014 Notes) and $1,025.19
per $1,000 principal amount of the 2015 Notes (which amount includes a consent
payment of $50.00 per $1,000 principal amount of the 2015 Notes), plus, in
each case, any accrued and unpaid interest on the Notes up to, but not
including, the payment date for such Notes. The principal purpose of the Offer
is to acquire all of the outstanding Notes, or in the event that less than all
of any series of Notes are accepted for purchase, to eliminate substantially
all of the currently existing affirmative and restrictive covenants, certain
events of default and certain other related provisions contained in the
Indentures. Adoption of the proposed amendments could have adverse
consequences upon non-tendering holders of the Notes because Notes that remain
outstanding after consummation of the Offer would not be entitled to the
benefits of the affirmative and restrictive covenants or event of default and
related provisions that are eliminated by the adoption of such amendments,
subject to the Conditional Notice of Redemption described below.

Holders who validly tender their Notes after the Consent Payment Deadline, but
on or prior to the Expiration Date, will receive $950.47 per $1,000 principal
amount of the 2014 Notes and $975.19 per $1,000 principal amount of the 2015
Notes, plus, in each case, any accrued and unpaid interest on the Notes up to,
but not including, the payment date for such Notes. Holders of Notes tendered
after the Consent Payment Deadline will not receive a consent payment.

Promptly following the receipt of the consent of the holders of at least a
majority in aggregate principal amount of such series of Notes (excluding
Notes owned by the Company or any affiliate of the Company) after the Consent
Payment Deadline, the Company and the Trustee (as defined below) will enter
into supplemental indentures that will amend and supplement the Indentures to
give effect to the amendments to the applicable Indenture. However, each
supplemental indenture will provide that the amendments will not become
operative, unless and until validly tendered related Notes are purchased
pursuant to the Offer. If the amendments become operative, all Holders,
including non-tendering Holders, of Notes governed by an Indenture amended as
described herein will be bound by such amendments.

Notes tendered pursuant to the Offer to Purchase may be subsequently validly
withdrawn, and Consents delivered pursuant to the Consent Solicitation may be
validly revoked at any time prior to 5:00 p.m., New York City time, on
December 14, 2012, unless extended by the Company in its sole discretion (the
“Withdrawal Date”), but not thereafter, unless the Company is otherwise
required by applicable law to permit the withdrawal and revocation or unless
the Offer is terminated without any Notes being purchased thereunder, by
following the procedures described therein. A valid withdrawal of tendered
Notes will constitute the concurrent valid revocation of Consents. A Consent
may not be revoked without a concurrent valid withdrawal of the related Notes.

The Offer is subject to a number of conditions that are set forth in the
Statement, including, without limitation, (i) the receipt of the consent of
the holders of at least a majority in aggregate principal amount of the Notes
and the supplemental indentures having been executed by the Company and the
Trustee (the “Supplemental Indenture Condition”), (ii) the consummation of the
Acquisition and the transactions contemplated by the Acquisition Agreement,
which are conditioned upon satisfaction or waiver of each condition precedent
thereto contained in the Acquisition Agreement (the “Acquisition Condition”),
(iii) the receipt of sufficient financing proceeds to fund the Acquisition and
the Offer (the “Financing Condition”) and (iv) the Company having satisfied
all conditions precedent set forth in the Conditional Notice of Redemption
(described below) issued by the Company on November 30, 2012, which includes a
scheduled redemption date of December 31, 2012 (the “Conditional Redemption
Satisfaction Condition”). There can be no assurance that the Acquisition and
the transactions contemplated by the Acquisition Agreement will be consummated
or that any other condition to the Offer will be satisfied. The Company
reserves the right to waive any of the conditions to the including, but not
limited to, the Supplemental Indenture Condition (other than Conditional
Redemption Satisfaction Condition). The Company may not waive the Conditional
Redemption Satisfaction Condition. If the Company fails to meet the
Conditional Redemption Satisfaction Condition by the Expiration Date, it will
terminate the Offer.

If the Company elects to exercise the early purchase option, the early payment
date will be a date following the Consent Payment Deadline and following the
waiver or fulfillment of the conditions to the Offer, including the
Acquisition Condition and the Financing Condition, on which the Company
accepts for payment, pursuant to the Offer, Notes which are validly tendered,
and not validly withdrawn, on or prior to the Consent Payment Deadline.
Because the conditions to the Offer are not expected to be satisfied by the
Consent Payment Deadline, the Company currently expects that there will be a
delay in the acceptance of the Notes tendered on or prior to the Consent
Payment Deadline until all of the conditions to the Offer are satisfied or
waived. The Company currently expects the early settlement date to be December
27, 2012, in the event the conditions to the Offer are satisfied or waived
prior to such date, although such date may be changed by the Company in its
sole discretion without prior notice. The final payment date will be a date
promptly following the date on which the Company accepts for payment, pursuant
to the Offer, Notes which are validly tendered after the Consent Payment
Deadline and on or before the Expiration Date.

On November 30, 2012, the Company sent a conditional notice of redemption (the
“Conditional Notice of Redemption”) to holders electing to redeem the Notes on
December 31, 2012 (the “Redemption Date”), subject to the terms and conditions
set forth in the Indentures, at a redemption price for the 2014 Senior Notes
of 100.000% of the principal amount thereof and for the 2015 Subordinated
Notes of 102.438% of the principal amount thereof, plus, in each case, accrued
and unpaid interest on the Notes redeemed to, but not including, the
Redemption Date. Those Notes which are not validly tendered or withdrawn
according to the terms of this Offer are currently expected to be redeemed
pursuant to the satisfaction of the terms and conditions of the Conditional
Notice of Redemption on December 31, 2012. The Conditional Notice of
Redemption is expressly conditioned upon the closing of the Acquisition and
related financings contemplated by the Acquisition Agreement that will
generate sufficient net proceeds to pay the redemption price for the Notes
(the “Redemption Condition”). In the event the Redemption Condition is not
satisfied, the Company will promptly notify The Bank of New York Mellon (as
successor to The Bank of New York), as Trustee and Paying Agent, and the
holders of the Notes that the Notes will no longer be redeemed. Thereafter,
the Company may still redeem any of the Notes that remain outstanding in
accordance with the terms of the Indentures. The Offer does not constitute a
call for redemption. The Company currently intends to satisfy and discharge
its obligations with respect to the Indentures in connection with the
Acquisition pursuant to the Acquisition Agreement.

The Company has engaged Morgan Stanley & Co. LLC as Dealer Manager for the
Offer. Persons with questions regarding the Offer should contact Morgan
Stanley & Co. LLC at (212) 761-1057 (Call Collect) or (800) 624-1808 (Toll
Free). Requests for copies of the Statement or other tender offer materials
may be directed to D.F. King & Company, Inc., the Tender Agent and Information
Agent for the Offer, at (800) 290-6426.

This press release does not constitute an offer to purchase the Notes, a
solicitation of consents to amend the related indentures or a call for
redemption. The Offer is made solely pursuant to the Statement. The Offer is
not being made to holders of Notes in any jurisdiction in which the making or
acceptance thereof would not be in compliance with the securities, blue sky or
other laws of such jurisdiction.

About USI

Founded in 1994, USI is the 9th largest insurance broker in the United States
and the 13th largest in the world. USI is headquartered in Briarcliff Manor,
NY, and operates out of approximately 100 offices across the United States.
Additional information about USI may be found at www.usi.biz.

Forward-Looking Statements

This news release may contain forward-looking statements that are based on
management's current expectations and are subject to known and unknown
uncertainties and risks, which could cause actual results to differ materially
from those contemplated or implied by such forward-looking statements. USI is
under no obligation to update any forward-looking statements contained herein
should material facts change due to new information, future events or
otherwise.

Contact:

USI Insurance Services
Edward J. Bowler, 914-749-8504
ed.bowler@usi.biz
or
Cecile M. Locurto, 914-747-6331
cecile.locurto@usi.biz
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