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                                                                    EXHIBIT 10.1

                                                                  EXECUTION COPY




                              AMENDMENT AND WAIVER


            AMENDMENT AND WAIVER dated as of February 16, 2001 (this "AMENDMENT
AND WAIVER"), to Credit Agreement dated as of December 12, 1996 (as such
agreement has been amended, supplemented or otherwise modified to the date
hereof, the "CREDIT AGREEMENT"), each among U.S. INDUSTRIES, INC. (formerly
known as USI, Inc.), a Delaware corporation ("USI"), USI GLOBAL CORP., a
Delaware corporation ("USI GLOBAL"), USI AMERICAN HOLDINGS, INC., a Delaware
corporation ("USI AMERICAN"; USI, USI Global and USI American are each referred
to herein, individually, as a "BORROWER", and, collectively, as the
"BORROWERS"), USI ATLANTIC CORP. (formerly known as U.S. Industries, Inc.), a
Delaware corporation ("USI ATLANTIC"; USI and USI Atlantic are each individually
referred to herein as a "GUARANTOR PARTY", and collectively, as the "GUARANTOR
PARTIES"), the several banks, financial institutions and other institutional
lenders party to the Credit Agreement and this Amendment and Waiver, BANC OF
AMERICA SECURITIES LLC, (formerly known as BA Securities, Inc.), as Arranger,
and BANK OF AMERICA, N.A., (formerly known as Bank of America National Trust and
Savings Association), as administrative agent for the Banks party to the Credit
Agreement (in such capacity, the "AGENT"), and as Issuing Bank and Swing Line
Bank. Capitalized terms used without definition in this Amendment and Waiver
shall have the respective meanings provided in the Credit Agreement.


                              W I T N E S S E T H:

            WHEREAS, the Borrowers have notified the Agent and the Banks that
the Borrowers are not in compliance with the requirements of the Consolidated
Leverage Ratio covenant under Section 8.10(a) of the Credit Agreement, and have
requested that the Banks waive the requirements of said Section and any Event of
Default arising by reason of such non-compliance;

            WHEREAS, the Borrowers have requested that the Banks amend the
financial covenants in Section 8.10 of the Credit Agreement and amend the
definition of the term Net Interest Expense in Section 1.01 of the Credit
Agreement, in each case, as hereinafter set forth; and

            WHEREAS, the Majority Banks are, in consideration of the amendments
to Sections 2.12(a) and 2.13(a)(i) of the Credit Agreement and the covenants of
the Borrowers set forth in Sections 5, 6 and 7 of this Amendment and Waiver,
willing to grant the request of the Borrowers as hereinafter set forth;

            NOW, THEREFORE, the parties agree as follows:

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            SECTION 1. WAIVER. The requirements of Section 8.10(a) of the Credit
Agreement as in effect prior to the date this Amendment and Waiver becomes
effective and any Event of Default arising by reason of the Borrowers' failure
to comply with said Section as then in effect are, effective as of December 30,
2000, and subject to the satisfaction of the conditions precedent set forth in
Section 3 hereof, hereby waived for all purposes of the Credit Agreement for the
period prior to the date this Amendment and Waiver becomes effective as set
forth in Section 3 hereof.

            SECTION 2. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is,
effective as of December 30, 2000, and subject to the satisfaction of the
conditions precedent set forth in Section 3 hereof, hereby amended, as follows:

            (a) DEFINITIONS; LOAN DOCUMENTS; NET INTEREST EXPENSE. The
      definitions of the terms Loan Documents and Net Interest Expense in
      Section 1.01 of the Credit Agreement are deleted and replaced in their
      entirety by the following new definitions for such terms:

            ""LOAN DOCUMENTS" means this Agreement (including the guaranty set
            forth in Article X) and all other agreements, instruments,
            certificates, Security Instruments or other documents evidencing the
            Loans, Letter of Credit Borrowings or the other obligations of Old
            USI or any Borrower hereunder or granting, evidencing or otherwise
            relating to any Lien granted by Old USI, any Borrower or any of
            their Subsidiaries to secure any such obligation."

            ""NET INTEREST EXPENSE" means, for any Measurement Period:

                  (a) the aggregate amount of interest expense of New USI and
            its consolidated Subsidiaries for such period, as determined on a
            consolidated basis in accordance with GAAP:

            less

                  (b) the sum for such period of:

                        (i) the aggregate interest income of New USI and its
                  consolidated Subsidiaries, as determined in accordance with
                  GAAP (other than any interest accrued on any of those certain
                  12-1/2% senior notes due 2007 issued by Strategic Finance
                  Company which is included in such aggregate interest income
                  for any period during which such notes are not in default);
                  and

                        (ii) the amortization of all fees (including, other than
                  in connection with a calculation of the Consolidated Leverage
                  Ratio, upfront costs and expenses under Interest Rate
                  Protection Agreements fairly allocated to such Interest Rate
                  Protection Agreements as expenses for such period) payable in
                  connection with the incurrence of Indebtedness to the extent
                  included in interest expense.";

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            (b) INTEREST. Section 2.12(a) and (b) of the Credit Agreement are
      deleted and replaced in their entirety by the following new Sections
      2.12(a) and (b):

                        "2.12 INTEREST. (a) Except as provided in PARAGRAPHS (C)
                  or (G) below, each Loan shall bear interest on the outstanding
                  principal amount thereof from the Borrowing Date applicable
                  thereto until it becomes due at a rate per annum equal to the
                  Base Rate, IBOR or LIBOR, as the case may be, plus 1.75%.

                         (b) [Intentionally Deleted.]";

            (c) FEES. Section 2.13(a)(i) of the Credit Agreement is deleted and
      replaced in its entirety by the following new Section 2.13(a)(i):

                        "2.13 FEES.  In addition to fees described in SECTION
                  3.08:

                        (a) FACILITY FEES. (i) The Borrowers shall pay to the
                  Agent for the account of each Bank a facility fee on the
                  average of such Bank's Commitment, regardless of the
                  utilization thereof, computed on a quarterly basis in arrears
                  on each Interest Payment Date for Base Rate Committed Loans
                  based upon the average daily amount of such Bank's Commitment
                  for the previous three month period as calculated by the Agent
                  and payable on such date, equal to 0.50% per annum.";

            (d) LIENS. Section 8.01(a) of the Credit Agreement is deleted and
      replaced in its entirety by the following new Section 8.01(a):

                        "(a) Liens which were granted prior to the date hereof
                  securing Indebtedness or other obligations having an aggregate
                  principal or face amount not exceeding $5,000,000, and
                  refinancings, renewals and extensions thereof to the extent
                  not encumbering additional property; and Liens granted by the
                  Borrowers and their Subsidiaries from time to time pursuant to
                  any of the Loan Documents in favor of the Banks and the Agent
                  (and any other holders of Indebtedness of any Borrower or any
                  Guarantor Party which may be ratably secured by any such Loan
                  Document);";

            (e) FINANCIAL COVENANTS. Section 8.10 of the Credit Agreement is
      deleted and replaced in its entirety by the following new Section 8.10:

                  "8.10 FINANCIAL COVENANTS.

                        (a) CONSOLIDATED LEVERAGE RATIO. New USI shall not
                  permit its Consolidated Leverage Ratio as determined for any
                  Measurement Period to be greater than (i) 4.00:1, for the
                  Measurement Period ending December 31, 2000, (ii) 4.25:1, for
                  the Measurement Period ending March 31, 2001, (iii) 4.00:1,
                  for the Measurement Period ending June 30, 2001, and (iv)
                  3.75:1, for the Measurement Period ending September 30, 2001.


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                        (b) MAXIMUM TOTAL FUNDED DEBT. New USI will not
                  permit its ratio of Total Funded Debt to Capital to exceed
                  0.65:1.00."; and

            (f) AMENDMENTS AND WAIVERS. Section 12.01(a) of the Credit Agreement
      is amended by deleting the word "or" at the end of clause (v) thereof and
      adding the following new clause (vii) immediately following clause (vi)
      thereof:

                  "or (vii) release all or substantially all of the Collateral
                  (as defined in the Loan Documents), except as specifically
                  permitted by the Loan Documents;".

            SECTION 3. CONDITIONS OF EFFECTIVENESS. This Amendment and Waiver
shall become effective as of December 30, 2000, when, and only when, the Agent
shall have received, the following (the date of such receipt is sometimes
referred to herein as the "EFFECTIVE DATE"), each in form and substance
satisfactory to the Agent:

            (a) AMENDMENT AND WAIVER. counterparts of this Amendment and Waiver
      duly executed by each of the Borrowers, USI Atlantic, and the Majority
      Banks or, as to any such Bank, advice satisfactory to the Agent that such
      Bank has executed this Amendment and Waiver;

            (b) AMENDMENT AND WAIVER TO 364-DAY CREDIT AGREEMENT. a waiver of
      Section 7.10 of that certain Credit Agreement dated as of October 27, 2000
      (the "364-DAY AGREEMENT"), among the Borrowers, USI Atlantic and Bank of
      America, N.A., as a bank thereunder, and as administrative agent for
      itself and the other banks thereunder, similar to the waiver in Section 1
      of this Amendment and Waiver and an amendment to the 364-Day Agreement
      amending the definitions of the terms Loan Documents and Net Interest
      Expense under Section 1.01 thereof, and Sections 2.10(a) and (b), 2.11(a),
      7.01(a) and 7.10 thereof on terms substantially similar to the amendments
      in Section 2 of this Amendment and Waiver, each duly executed by each
      Borrower, USI Atlantic, and Bank of America, N.A.; and each of the other
      conditions precedent to the effective date thereunder shall have been
      satisfied;

            (c) SECRETARY'S CERTIFICATE; CHARTER; BY-LAWS; RESOLUTIONS;
      INCUMBENCY. certificates of the secretary or assistant secretary of each
      of the Borrowers and USI Atlantic (each Borrower and USI Atlantic are
      sometimes referred to herein as an "OBLIGOR") dated the Effective Date
      (the statements made in each certificate shall be true as of such date),
      certifying as to (and attaching, as applicable):

                  (i) a true and correct copy of the charter of such Obligor,
            and each amendment thereto; that such charter, as so amended, has
            not been further amended, supplemented or otherwise modified; that
            such Obligor has been duly incorporated and is in good standing and
            validly existing as a corporation organized under the laws of the
            jurisdiction of its incorporation; and that no proceedings for the
            dissolution or liquidation of such Obligor have been commenced or
            are continuing;


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                  (ii) a true and correct copy of the by-laws of such Obligor
            and each amendment thereto; and that such by-laws, as so amended,
            have not been further amended, supplemented or otherwise modified;

                  (iii) copies of the resolutions of the board of directors of
            such Obligor approving and authorizing the execution, delivery and
            performance by such Obligor of this Amendment and Waiver and of each
            of the other Loan Documents to be delivered by such Obligor
            hereunder, and the consummation of the transactions contemplated by
            such Loan Documents to be consummated by such Obligor; and

                  (iv) the names and true signatures of the officers of such
            Obligor authorized to execute, deliver and perform, as applicable,
            the Loan Documents to which it is, or will be, a party, and all
            notices, requests and other communications to be delivered by it
            hereunder or thereunder;

            (d) CERTIFICATE. a certificate signed by a Responsible Officer of
      USI and each other Obligor, dated as of the Effective Date stating that
      (and the following statements shall be true and correct in all material
      respects on and as of the Effective Date):

                  (i) the representations and warranties of each Obligor
            contained in Section 4 of this Amendment and Waiver are true and
            correct on and as of such date, as though made on and as of such
            date (except to the extent such representations and warranties
            expressly relate to an earlier date, in which case such
            representations and warranties shall be true and correct as of such
            earlier date); and

                  (ii) no event has occurred and is continuing that constitutes
            a Default or Event of Default;

            (e) BRING-DOWN CERTIFICATES. a good standing certificate for each
      Obligor from the Secretary of State (or similar office) of its state of
      incorporation, dated a date not earlier than five Business Days prior to
      the Effective Date;

            (f) AMENDMENT FEE. payment to the Agent for the account of each Bank
      which has delivered to the Agent a counterpart of this Amendment and
      Waiver duly executed by such Bank of a fee equal to 0.075% of the
      Commitment of such Bank; and

            (g) PAYMENT OF FEES AND EXPENSES. evidence that all fees and
      reasonable costs and expenses (including Attorney Costs) payable by the
      Borrowers to Bank of America, N.A. and Banc of America Securities LLC on
      or before the Effective Date have been paid.

            This Amendment and Waiver is subject to the provisions of Section
12.01 of the Credit Agreement.


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            SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE BORROWERS. The
Borrowers represent and warrant as follows, on and as of the Effective Date
hereof after giving effect to this Amendment and Waiver:

            (a) the execution and delivery by each Obligor of this Amendment and
      Waiver and the performance by such Obligor of its obligations hereunder
      have been authorized by all necessary corporate actions, and do not and
      will not:

                  (i) contravene the terms of such Obligor's charter or by-laws;

                  (ii) conflict with or result in any breach or contravention
            of, or the creation of any Lien under (except as contemplated by
            Sections 5, 6 and 7 of this Amendment and Waiver), any document,
            evidencing any material Contractual Obligation to which such Obligor
            or any of its Subsidiaries is a party or any order, injunction, writ
            or decree of any Governmental Authority to which such Person or its
            property is subject; or

                  (iii) violate any Requirement of Law;

            (b) the representations and warranties contained in Article VI of
      the Credit Agreement are correct on and as of the date hereof as though
      made on and as of the date hereof, other than any such representations or
      warranties that, by their terms, refer to a specific date; and

            (c) no event has occurred and is continuing that constitutes a
      Default or Event of Default.

            SECTION 5. POST-EFFECTIVE DATE DELIVERIES. Promptly, and in any case
on or prior to April 30, 2001 (the "PERFECTION DATE"), each Obligor shall, and
shall cause each of its Subsidiaries which is organized under the laws of any
state of the United States of America (such Subsidiaries, together with any such
Subsidiaries which are organized or acquired after the Perfection Date, are
sometimes referred to herein as "SUBSIDIARY PLEDGORS"), to deliver to the Agent:

            (a) COLLATERAL TRUST AGREEMENT. a collateral trust agreement in
      substantially the form delivered by the Agent to the Borrowers prior to
      the Effective Date, with such changes thereto as the Borrowers may request
      and the Agent may agree, in its sole discretion (the "COLLATERAL TRUST
      AGREEMENT"), executed by Wilmington Trust Company or such other trust
      company as the Borrowers and the Agent may agree, as collateral trustee
      for the Banks and the Agent and certain other holders of senior
      Indebtedness of the Obligors (the "COLLATERAL TRUSTEE"), each Obligor and
      each Subsidiary Pledgor, together with a copy of each agreement and
      certificate delivered to the Collateral Trustee by the Borrowers pursuant
      to the terms of the Collateral Trust Agreement (which shall include,
      without limitation, copies of the 364-Day Agreement, the Senior Notes
      Documents, the 7-1/8% Notes Documents (as defined in the 364-Day
      Agreement), and each other document evidencing the Indebtedness of the
      Borrowers to any such holders which is ratably secured thereunder, in
      each case, as amended, supplemented or otherwise in effect on the
      Perfection Date);


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            (b) PLEDGE AND SECURITY AGREEMENT. a pledge and security agreement
      in substantially the form delivered by the Agent to the Borrowers prior to
      the Effective Date, with such changes thereto as the Borrowers may request
      and the Agent may agree, in its sole discretion (the "PLEDGE AND SECURITY
      AGREEMENT"), executed by each Obligor and each Subsidiary Pledgor,
      together with (i) a receipt executed by the Collateral Trustee
      acknowledging receipt of certificates representing 100% of the outstanding
      capital stock of any Obligor and any Subsidiary Pledgor owned by each
      Obligor and each Subsidiary Pledgor and 65% of the outstanding capital
      stock of any other Subsidiary owned by such Obligor or such Subsidiary
      Pledgor, each accompanied by undated stock powers executed in blank, and
      (ii) duly executed financing statements in form for filing under the
      uniform commercial code of all jurisdictions that the Agent may reasonably
      deem necessary or desirable in order to perfect and protect the first
      priority liens and security interests created under the Pledge and
      Security Agreement covering the Collateral owned by each Obligor and each
      Subsidiary Pledgor on the Effective Date;

            (c) LIEN SEARCHES. lien search reports with respect to each Obligor
      and each Subsidiary Pledgor in the applicable records of the jurisdiction
      where such Person is organized, the jurisdiction where such Person
      maintains its chief executive office, each other jurisdiction where such
      Person maintains any material item or items of the Collateral, and each
      Governmental Authority referred to in SUBSECTION (d) below, which reports
      shall identify all effective financing statements, tax liens, judgments
      and other Liens of record filed against such Person in any such
      jurisdiction, together with (i) copies of each such filing, and (ii)
      evidence satisfactory to the Agent that any such filing which is not
      permitted under the Credit Agreement has been released of record by the
      filing of appropriate release documentation with any applicable
      Governmental Authority;

            (d) INTELLECTUAL PROPERTY. an intellectual property security
      agreement, in substantially the form delivered by the Agent to the
      Borrowers prior to the Effective Date, with such changes thereto as the
      Borrowers may request and the Agent may agree, in its sole discretion,
      duly executed by each Obligor and each Subsidiary Pledgor, together with
      evidence reasonably satisfactory to the Agent that all filings with any
      Governmental Authority that the Agent may deem necessary or desirable in
      order to perfect and protect the first priority liens and security
      interests created thereunder in the Collateral which is not Immaterial IP
      Collateral (as defined in the Pledge and Security Agreement) have been
      made;

            (e) LIEN PERFECTION. evidence reasonably satisfactory to the Agent
      that all other actions that the Agent may deem necessary or desirable in
      order to perfect and protect the first priority liens and security
      interests created under the Pledge and Security Agreement, but excluding,
      however, until such time as such action may be required pursuant to
      Section 6 of this Amendment and Waiver, (i) any such action as may be
      necessary to perfect such lien in any motor vehicles or any other item of
      Collateral as to which the Agent has determined that the cost and expense
      of perfecting and maintaining such Lien with respect to such item of
      Collateral is disproportionately high relative to the estimated fair
      market value of such item of Collateral (determined based on good faith
      estimates of such value provided by USI) and (ii) the execution and
      delivery of any control agreements with respect to any bank accounts or
      security accounts;


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            (f) SECRETARY'S CERTIFICATE; CHARTER; BY-LAWS; RESOLUTIONS;
      INCUMBENCY. certificates of the secretary or assistant secretary of each
      Subsidiary Pledgor dated the Perfection Date (the statements made in each
      certificate shall be true as of such date), certifying as to (and
      attaching, as applicable):

                  (i) a true and correct copy of the charter of such Subsidiary
            Pledgor, and each amendment thereto; that such charter, as so
            amended, has not been further amended, supplemented or otherwise
            modified; that such Subsidiary Pledgor has been duly incorporated
            and is in good standing and validly existing as a corporation
            organized under the laws of the jurisdiction of its incorporation;
            and that no proceedings for the dissolution or liquidation of such
            Subsidiary Pledgor have been commenced or are continuing;

                  (ii) a true and correct copy of the by-laws of such Subsidiary
            Pledgor and each amendment thereto; and that such by-laws, as so
            amended, have not been further amended, supplemented or otherwise
            modified;

                  (iii) copies of the resolutions of the board of directors of
            such Subsidiary Pledgor approving and authorizing the execution,
            delivery and performance by such Subsidiary Pledgor of each of the
            Loan Documents to be delivered by such Subsidiary Pledgor hereunder,
            and the consummation of the transactions contemplated by such Loan
            Documents to be consummated by such Subsidiary Pledgor; and

                  (iv) the names and true signatures of the officers of such
            Subsidiary Pledgor authorized to execute, deliver and perform, as
            applicable, the Loan Documents to which it is, or will be, a party,
            and all notices, requests and other communications to be delivered
            by it hereunder or thereunder;

            (g) CERTIFICATE. a certificate signed by a Responsible Officer of
      USI and each other Obligor, dated as of the Perfection Date stating that
      (and the following statements shall be true and correct in all material
      respects on and as of the Perfection Date):

                  (i) set forth on a schedule attached to such certificate is a
            complete and accurate list of all direct and indirect Subsidiaries
            of USI, showing as of the Perfection Date (as to each such
            Subsidiary) the jurisdiction of its incorporation, the number of
            shares of each class of its capital stock authorized, and the number
            outstanding, on the date thereof and the percentage of each such
            class of its capital stock owned (directly or indirectly) by USI or
            any other Subsidiary of USI and the number of shares covered by all
            outstanding options, warrants, rights of conversion or purchase and
            similar rights at the Perfection Date; and that, as of the
            Perfection Date, all of the outstanding capital stock in each such
            Subsidiary shall have been validly issued, fully paid and
            non-assessable and owned by USI or the Subsidiary of USI specified
            on such schedule, free and clear of all Liens, other than the Lien
            of the Loan Documents;


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                                       9


                  (ii) the representations and warranties of each Obligor
            contained in Section 4 of this Amendment and Waiver and in each Loan
            Document are true and correct on and as of such date (references in
            Section 4 of this Amendment and Waiver to the date hereof or to the
            Effective Date being deemed to be references to the Perfection Date
            for these purposes), as though made on and as of such date (except
            to the extent that the representations and warranties in the Credit
            Agreement expressly relate to an earlier date, in which case such
            representations and warranties shall be true and correct as of such
            earlier date); and

                  (iii) no event has occurred and is continuing that constitutes
            a Default or Event of Default;

            (h) BRING-DOWN CERTIFICATES. a good standing certificate for each
      Subsidiary Pledgor from the Secretary of State (or similar office) of its
      state of incorporation, dated a date not earlier than ten Business Days
      prior to the Perfection Date;

            (i) LEGAL OPINIONS. the following legal opinions:

                  (i) a satisfactory opinion of the general counsel to each of
            the Obligors and each Subsidiary Pledgor addressed to the Collateral
            Trustee, the Agent and the Banks, as to such matters as the Agent
            may reasonably request; and

                  (ii) a satisfactory opinion of Cadwalader, Wickersham & Taft,
            special New York counsel to the Obligors and the Subsidiary
            Pledgors, addressed to the Agent, the Collateral Trustee and the
            Borrowers, as to such matters as the Agent may reasonably request;
            and

            (j) PAYMENT OF FEES AND EXPENSES. evidence that all fees and
      reasonable costs and expenses (including Attorney Costs) payable by the
      Borrowers to Bank's, the Agent and the Collateral Trustee on or before the
      Perfection Date have been paid.

            SECTION 6. COVENANTS TO GIVE ADDITIONAL SECURITY. (a) Upon the
written request of the Agent either (a) following the occurrence and during the
continuance of a Default, or (b) at any time that the long-term, unsecured,
senior, non-credit enhanced debt rating of USI is equal to or less than BB+ from
S&P and Ba1 from Moody's, each Obligor shall, in each case at the Borrowers'
expense:

            (i) within 20 days after such request, furnish to the Agent a
      description of the real properties owned by the Obligors and the
      Subsidiary Pledgors in detail reasonably satisfactory to the Agent;

            (ii) within 25 days after such request, duly execute and deliver,
      and cause each Subsidiary Pledgor to duly execute and deliver, to the
      Collateral Trustee, mortgages, deeds of trust and other Security
      Instruments, as specified by and in form and substance reasonably
      satisfactory to the Agent, securing payment of all the Obligations under,
      and as defined in, the Loan Documents, and constituting Liens on all such
      properties (other than any such property as to which the Agent has
      determined that the cost and expense of creating, perfecting and
      maintaining the Lien of the Loan Documents with respect to such


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      property are disproportionately high relative to the fair market value of
      such property (determined based on good faith estimates of such value
      provided by USI));

            (iii) within 45 days after such request, take, and cause each of its
      Subsidiaries to take, whatever action (including, without limitation, the
      recording of mortgages and deeds of trust, the filing of Uniform
      Commercial Code fixture filings, the giving of notices and the endorsement
      of notices on title documents) may be necessary or reasonably advisable in
      the opinion of the Agent to vest in the Collateral Trustee (or in any
      representative of the Collateral Trustee designated by it) valid and
      subsisting Liens on the properties purported to be subject to such Loan
      Documents, enforceable against all third parties in accordance with their
      terms, including without limitation, obtaining landlords', warehousemen's
      and bailees' waiver and consent agreements with respect to equipment and
      inventory locations identified pursuant to schedules to be attached to the
      Pledge and Security Agreement, as such schedule may be supplemented from
      time to time, and control agreements with respect to bank accounts and
      securities accounts identified pursuant to schedules to be attached to the
      Pledge and Security Agreement, as such schedule may be supplemented from
      time to time (notwithstanding that delivery of any such waiver and consent
      agreement or control agreement, as the case may be, was not previously
      required pursuant to Section 5 of this Amendment and Waiver or pursuant to
      the Pledge and Security Agreement);

            (iv) within 60 days after such request, deliver to the Collateral
      Trustee, upon the request of the Agent in its sole discretion, a signed
      copy of a favorable opinion or opinions, addressed to the Agent, the
      Collateral Trustee and the Banks, of counsel for the Obligors and the
      Subsidiary Pledgors acceptable to the Agent as to the matters contained in
      clauses (ii) and (iii) above, as to such mortgages, deeds of trust and
      other Security Instruments being legal, valid and binding obligations of
      each Obligor or Subsidiary Pledgor party thereto enforceable in accordance
      with their terms, as to the matters contained in clause (iii) above, as to
      such recordings, filings, notices, endorsements and other actions being
      sufficient to create valid perfected Liens on such properties, and as to
      such other matters as the Agent may reasonably request;

            (v) as promptly as practicable after such request, deliver, upon the
      request of the Agent in its sole discretion, to the Collateral Trustee
      with respect to each parcel of real property owned or held by the entity
      that is the subject of such request, any title reports, surveys and
      engineering, soils and other reports, and environmental assessment
      reports, each in scope, form and substance satisfactory to the Agent; and

            (vi) at any time and from time to time, promptly execute and deliver
      any and all further instruments and documents and take all such other
      action as the Agent may deem necessary or reasonably desirable in
      obtaining the full benefits of, or in perfecting and preserving the Liens
      of, such Loan Documents.

            SECTION 7. NEW SUBSIDIARIES. Within 10 days after the formation or
acquisition of any new direct or indirect Subsidiary by any Obligor or
Subsidiary Pledgor after the Perfection Date, each Obligor shall cause each such
Subsidiary which is a Subsidiary Pledgor to duly execute and deliver to the
Collateral Trustee a supplement or supplements to the Loan


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Documents, in form and substance satisfactory to the Agent, as may be necessary
or advisable to cause such Subsidiary to become a party to the Collateral Trust
Agreement, the Pledge and Security Agreement and any other Security Instrument
referred to in Section 5 or 6 of this Amendment and Waiver, and to deliver to
the Collateral Trustee all stock certificates, certificates and instruments,
financing statements and other Security Instruments required to be delivered
pursuant to the terms of the Loan Documents.

            SECTION 8. EFFECT ON THE CREDIT AGREEMENT; LOAN DOCUMENTS. (a) On
and after the effectiveness of this Amendment and Waiver, each reference in the
Credit Agreement to "this Agreement", "hereunder", "hereof" or words of like
import referring to the Credit Agreement, and each reference in the other Loan
Documents to "the Credit Agreement", "thereunder", "thereof" or words of like
import referring to the Credit Agreement, shall mean and be a reference to the
Credit Agreement, as amended and waived by this Amendment and Waiver.

            (b) The Credit Agreement, as specifically amended and waived by this
      Amendment and Waiver, is and shall continue to be in full force and effect
      and is hereby in all respects ratified and confirmed.

            (c) The execution, delivery and effectiveness of this Amendment and
      Waiver shall not, except as expressly provided herein, operate as an
      amendment or waiver of any right, power or remedy of any Bank or the Agent
      under the Credit Agreement or any of the other Loan Documents, nor
      constitute an amendment or waiver of any provision of the Credit Agreement
      or any of the other Loan Documents.

            (d) Each of this Amendment and Waiver, the Collateral Trust
      Agreement, the Pledge and Security Agreement and each other instrument or
      agreement delivered by an Obligor or any Subsidiary Pledgor pursuant to
      Sections 5, 6 or 7 of this Amendment and Waiver is, and shall be
      considered to be, a Loan Document for all purposes of the Credit
      Agreement. If any representation made by any Borrower, any Guarantor Party
      or any Subsidiary Pledgor in this Amendment and Waiver or in any such
      other Loan Document shall prove to be incorrect in any material respect on
      or as of the date made, or USI, any other Obligor or any Subsidiary
      Pledgor shall fail to perform or observe any covenant contained in this
      Amendment and Waiver or in any such other Loan Document, then such act or
      occurrence shall constitute a Default or an Event of Default, as the case
      may be, at the time provided in Section 9.01 of the Credit Agreement.

            SECTION 9. CONSENT OF GUARANTOR PARTIES. Each Guarantor Party hereby
consents to the Credit Agreement, as amended and waived by this Amendment and
Waiver.

            SECTION 10. EXECUTION IN COUNTERPARTS. This Amendment and Waiver may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute but one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Amendment and Waiver by telecopier shall be effective as delivery of a manually
executed counterpart of this Amendment and Waiver.


<PAGE>
                                       12


            SECTION 11. GOVERNING LAW. This Amendment and Waiver shall be
governed by, and construed in accordance with, the laws of the State of New
York.



                                      * * *



<PAGE>

                                 Signature Page


            IN WITNESS WHEREOF, the parties hereto have caused this Amendment
and Waiver to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.

                                    U.S. INDUSTRIES, INC.


                                    By:
                                       ---------------------------------
                                       Title: VP & Chief Financial Officer


                                    By:
                                       ---------------------------------
                                       Title: Assistant Treasurer


                                    USI GLOBAL CORP.


                                    By:
                                       ---------------------------------
                                       Title: VP & Chief Financial Officer


                                    By:
                                       ---------------------------------
                                       Title: Assistant Treasurer


                                    USI AMERICAN HOLDINGS, INC.


                                    By:
                                       ---------------------------------
                                       Title: VP & Chief Financial Officer


                                    By:
                                       ---------------------------------
                                        Title: Assistant Treasurer


                                    USI ATLANTIC CORP.


                                    By:
                                       ---------------------------------
                                    Title: VP & Chief Financial Officer


                                    By:
                                       ---------------------------------
                                    Title: Assistant Treasurer



<PAGE>

                                 Signature Page





                                    BANK OF AMERICA, N.A., as Agent,
                                       and as a Bank, as the Issuing Bank,
                                       and as the Swingline Bank


                                    By:
                                       ---------------------------------
                                       Title: Managing Director




                                    BANC OF AMERICA SECURITIES LLC,
                                       as Arranger


                                    By:
                                       ---------------------------------
                                       Title: Managing Director




<PAGE>

                                 Signature Page





                                    ------------------------------,
                                       as a Bank


                                    By:
                                       ---------------------------------------
                                       Title: