Exhibit 99.2
Conformed Copy
8,000,000 Shares
FURNITURE BRANDS INTERNATIONAL, INC.
Common Stock
U.S. UNDERWRITING AGREEMENT
---------------------------
November 19, 1996
XXXXX XXXXXX INC.
CS FIRST BOSTON CORPORATION
XXXXXX, READ & CO. INC.
XXXXXXX XXXXX, XXXXXX XXXXXX & XXXXX INCORPORATED
WHEAT, FIRST SECURITIES, INC.
As Representatives of the Several U.S. Underwriters
c/o XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Certain stockholders named in Schedule II hereto (the "Selling
Stockholders") of Furniture Brands International, Inc. (the "Company"), propose
to sell an aggregate of 8,000,000 shares (the "Firm Shares") of the common
stock, no par value per share of the Company (the "Common Stock"), to the
several Underwriters named in Schedule I hereto (the "U.S. Underwriters"). The
Selling Stockholders also propose to sell to the U.S. Underwriters, upon the
terms and conditions set forth in Section 2 hereof, up to an additional
1,500,000 shares (the "Additional Shares") of Common Stock. The Firm Shares and
the Additional Shares are hereinafter collectively referred to as the "Shares".
It is understood that the Company and the Selling Stockholders are
currently entering into an International Underwriting Agreement, dated the date
hereof (the "International Underwriting Agreement"), providing for the sale of
2,000,000 shares of the Common Stock by the Selling Stockholders (the
"International Shares"), through arrangements with certain underwriters outside
the United States and Canada (the "Managers"), for whom Xxxxx Xxxxxx Inc., CS
First Boston Limited, Xxxxxx, Read & Co. Inc., Xxxxxxx Xxxxx International and
Wheat, First Securities, Inc. are acting as lead managers (the "Lead Managers").
The
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International Shares and the Shares, collectively, are herein called the
"Underwritten Shares".
The Company and the Selling Stockholders also understand that the
Representatives and the Lead Managers have entered into an agreement (the
"Agreement Between U.S. Underwriters and Managers") contemplating the
coordination of certain transactions between the U.S. Underwriters and the
Managers and that, pursuant thereto and subject to the conditions set forth
therein, the U.S. Underwriters may purchase from the Managers a portion of the
International Shares or sell to the Managers a portion of the Shares. The
Company and the Selling Stockholders understand that any such purchases and
sales between the U.S. Underwriters and the Managers shall be governed by the
Agreement Between U.S. Underwriters and Managers and shall not be governed by
the terms of this Agreement or the International Underwriting Agreement.
The Company and the Selling Stockholders wish to confirm as follows their
respective agreements with you (the "Representatives") and the other several
U.S. Underwriters on whose behalf you are acting, in connection with the several
purchases of the Shares by the U.S. Underwriters.
1. Registration Statement and Prospectus. The Company has prepared and
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filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-3 under the Act (the "registration
statement"), including a prospectus subject to completion relating to the
Underwritten Shares. The term "Registration Statement" as used in this
Agreement means the registration statement (including all financial schedules
and exhibits), as amended at the time it becomes effective, or, if the
registration statement became effective prior to the execution of this
Agreement, as supplemented or amended prior to the execution of this Agreement.
If it is contemplated, at the time this Agreement is executed, that a post-
effective amendment to the registration statement will be filed and must be
declared effective before the offering of the Shares may commence, the term
"Registration Statement" as used in this Agreement means the registration
statement as amended by said post-effective amendment. If an abbreviated
registration statement is prepared and filed with the Commission in accordance
with Rule 462(b) under the Act ("a
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Rule 462(b) Registration Statement"), the term "Registration Statement" as used
in this Agreement includes the Rule 462(b) Registration Statement. The term
"Prospectuses" as used in this Agreement means the prospectuses in the form
included in the Registration Statement, or, if the prospectuses included in the
Registration Statement omit information in reliance on Rule 430A under the Act
and such information is included in prospectuses filed with the Commission
pursuant to Rule 424(b) under the Act, the term "Prospectuses" as used in this
Agreement means the prospectuses in the form included in the Registration
Statement as supplemented by the addition of the Rule 430A information contained
in the prospectuses filed with the Commission pursuant to Rule 424(b). The term
"Prepricing Prospectuses" as used in this Agreement means the prospectuses
subject to completion in the form included in the registration statement at the
time of the initial filing of the registration statement with the Commission,
and as such prospectuses shall have been amended from time to time prior to the
date of the Prospectuses. Any reference in this Agreement to the registration
statement, the Registration Statement, any Prepricing Prospectus or the
Prospectuses shall be deemed to refer to and include the documents incorporated
by reference therein pursuant to Item 12 of Form S-3 under the Act, as of the
date of the registration statement, the Registration Statement, such Prepricing
Prospectus or the Prospectuses, as the case may be, and any reference to any
amendment or supplement to the registration statement, the Registration
Statement, any Prepricing Prospectus or the Prospectuses shall be deemed to
refer to and include any documents filed after such date under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") which, upon filing, are
incorporated by reference therein, as required by paragraph (b) of Item 12 of
Form S-3. As used herein, the term "Incorporated Documents" means the documents
which at the time are incorporated by reference in the registration statement,
the Registration Statement, any Prepricing Prospectus, the Prospectuses, or any
amendment or supplement thereto.
It is understood that two forms of Prepricing Prospectus and two forms of
Prospectus are to be used in connection with the offering and sale of the
Underwritten Shares: a Prepricing Prospectus and a Prospectus relating to the
Shares that are to be offered and sold in the United States (as defined herein)
or Canada (as defined herein) to U.S. or Canadian Persons (the "U.S. Prepricing
Prospectus" and the "U.S. Prospectus", respectively), and a Prepricing
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Prospectus and a Prospectus relating to the International Shares which are to be
offered and sold outside the United States and Canada to persons other than U.S.
or Canadian Persons (the "International Prepricing Prospectus" and the
"International Prospectus", respectively). The U.S. Prospectus and the
International Prospectus are herein collectively called the "Prospectuses," and
the U.S. Prepricing Prospectus and the International Prepricing Prospectus are
herein collectively called the "Prepricing Prospectuses". For purposes of this
Agreement: "U.S. or Canadian Person" means any resident or national of the
United States or Canada, any corporation, partnership or other entity created or
organized in or under the laws of the United States or Canada or any estate or
trust the income of which is subject to United States or Canadian income
taxation regardless of the source of its income (other than the foreign branch
of any U.S. or Canadian Person), and includes any United States or Canadian
branch of a person other than a U.S. or Canadian Person; "United States" means
the United States of America (including the states thereof and the District of
Columbia) and its territories, its possessions and other areas subject to its
jurisdiction; and "Canada" means Canada and its territories, its possessions and
other areas subject to its jurisdiction.
2. Agreements to Sell and Purchase. Subject to such adjustments as you
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may determine in order to avoid fractional shares, each Selling Stockholder
agrees, severally and not jointly, subject to all the terms and conditions set
forth herein, to sell to each U.S. Underwriter and, upon the basis of the
representations, warranties and agreements of the Company and the Selling
Stockholders herein contained and subject to all the terms and conditions set
forth herein, each U.S. Underwriter, severally and not jointly, agrees to
purchase from each Selling Stockholder at a price per share of $11.76 (the
"purchase price per share") the number of Firm Shares which bears the same
proportion to the number of Firm Shares set forth opposite the name of such
Selling Stockholder in Schedule II hereto as the number of Firm Shares set forth
opposite the name of such U.S. Underwriter in Schedule I hereto (or such number
of Firm Shares increased as set forth in Section 12 hereof) bears to the
aggregate number of Firm Shares to be sold by the Selling Stockholders.
Each Selling Stockholder also agrees, subject to all the terms and
conditions set forth herein, to sell to the U.S. Underwriters, and, upon the
basis of the
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representations, warranties and agreements of the Company and the Selling
Stockholders herein contained and subject to all the terms and conditions set
forth herein, the U.S. Underwriters shall have the right to purchase from the
Selling Stockholders, at the purchase price per share, pursuant to an option
(the "over-allotment option") which may be exercised at any time and from time
to time prior to 9:00 P.M., New York City time, on the 30th day after the date
of the U.S. Prospectus (or, if such 30th day shall be a Saturday or Sunday or a
holiday, on the next business day thereafter when the New York Stock Exchange is
open for trading), up to an aggregate of 1,500,000 Additional Shares.
Additional Shares may be purchased only for the purpose of covering over-
allotments made in connection with the offering of the Firm Shares. Upon any
exercise of the over-allotment option, each U.S. Underwriter, severally and not
jointly, agrees to purchase from each Selling Stockholder, and each Selling
Stockholder agrees, severally and not jointly, to sell to each U.S. Underwriter,
the number of Additional Shares (subject to such adjustments as you may
determine in order to avoid fractional shares) which bears the same proportion
to the total number of Additional Shares as the number of Firm Shares sold by
such Selling Stockholder to such U.S. Underwriter pursuant to the preceding
paragraph bears to the total number of Firm Shares.
Each U.S. Underwriter represents, warrants, covenants and agrees that,
except as contemplated under Section 2 of the Agreement Between U.S.
Underwriters and Managers dated the date hereof (as described in the
Prospectuses under "Underwriting"), (i) it is not purchasing any Shares for the
account of anyone other than a U.S. or Canadian Person, (ii) it has not offered
or sold, and will not offer, sell, resell or deliver, directly or indirectly,
any Shares or distribute any U.S. Prospectus outside the United States or Canada
or to anyone other than a U.S. or Canadian Person, and (iii) any offer of Shares
in Canada will be made only pursuant to an exemption from the requirement to
file a prospectus in the relevant province of Canada in which such offer is made
and any such offer will not result in the Company being required to take any
action under any national, provincial and local law in Canada, except for the
filing with the securities regulatory authority of each province in which the
sale of the Shares are made of a trade report in the prescribed form, together
with the applicable fee.
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3. Terms of Public Offering. The Company and the Selling Stockholders
------------------------
have been advised by you that the U.S. Underwriters propose to make a public
offering of their respective portions of the Shares as soon after the
Registration Statement and this Agreement have become effective as in your
judgment is advisable and initially to offer the Shares upon the terms set forth
in the U.S. Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the U.S.
-------------------------------------------
Underwriters of and payment for the Firm Shares shall be made at the office of
Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, at 10:00 A.M., New
York City time, on November 25, 1996 (the "Closing Date"). The place of closing
for the Firm Shares and the Closing Date may be varied by agreement among you,
the Company and the Selling Stockholders.
Delivery to the U.S. Underwriters of and payment for any Additional Shares
to be purchased by the U.S. Underwriters shall be made at the aforementioned
office of Xxxxx Xxxxxx Inc. at such time on such date (the "Option Closing
Date"), which may be the same as the Closing Date but shall in no event be
earlier than the Closing Date nor earlier than two nor later than ten business
days after the giving of the notice hereinafter referred to, as shall be
specified in a written notice from you on behalf of the U.S. Underwriters to the
Selling Stockholders of the U.S. Underwriters' determination to purchase a
number, specified in such notice, of Additional Shares. The place of closing
for any Additional Shares and the Option Closing Date for such Shares may be
varied by agreement among you, the Company and the Selling Stockholders.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request prior to 9:30 A.M., New York City time, on the second
business day preceding the Closing Date or any Option Closing Date, as the case
may be. Such certificates shall be made available to you in New York City for
inspection and packaging not later than 9:30 A.M., New York City time, on the
business day next preceding the Closing Date or the Option Closing Date, as the
case may be. The certificates evidencing the Firm Shares and any Additional
Shares to be purchased hereunder shall be delivered to you on the Closing Date
or the Option Closing Date, as the case may be, against payment
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of the purchase price therefor in immediately available funds.
5. Agreements of the Company. The Company agrees with the several U.S.
-------------------------
Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
or any Rule 462(b) Registration Statement to be declared effective before the
offering of the Shares may commence, the Company will endeavor to cause the
Registration Statement or such post-effective amendment to become effective as
soon as possible and will advise you promptly and, if requested by you, will
confirm such advice in writing, when the Registration Statement or such post-
effective amendment has become effective.
(b) The Company will advise you promptly and, if requested by you,
will confirm such advice in writing: (i) of any request by the Commission for
amendment of or a supplement to the Registration Statement, any Prepricing
Prospectus or the Prospectuses or for additional information; (ii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the Shares for
offering or sale in any jurisdiction or the initiation of any proceeding for
such purpose; and (iii) within the period of time referred to in paragraph (f)
below, of any change in the Company's condition (financial or other), business,
prospects, properties, net worth or results of operations, or of the happening
of any event, which makes any statement of a material fact made in the
Registration Statement or the Prospectuses (as then amended or supplemented)
untrue or which requires the making of any additions to or changes in the
Registration Statement or the Prospectuses (as then amended or supplemented) in
order to state a material fact required by the Act or the regulations thereunder
to be stated therein or necessary in order to make the statements therein not
misleading, or of the necessity to amend or supplement the Prospectuses (as then
amended or supplemented) to comply with the Act or any other law. If at any
time the Commission shall issue any stop order suspending the effectiveness of
the Registration Statement, the Company will make every reasonable effort to
obtain the withdrawal of such order at the earliest possible time.
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(c) The Company will furnish to you, without charge (i) six copies of
the registration statement as originally filed with the Commission and of each
amendment thereto, including financial statements and all exhibits to the
Registration Statement, and of any Rule 462(b) Registration Statement and any
amendment thereto, (ii) such number of conformed copies of the Registration
Statement as originally filed and of each amendment thereto, but without
exhibits, as you may reasonably request, (iii) such number of copies of the
Incorporated Documents, without exhibits, and of any Rule 462(b) Registration
Statement and any amendment thereto, as you may reasonably request, and (iv) six
copies of the exhibits to the Incorporated Documents.
(d) The Company will not file any amendment to the Registration
Statement, any Rule 462(b) Registration Statement or amendment thereto, or make
any amendment or supplement to the Prospectuses or, prior to the end of the
period of time referred to in the first sentence in subsection (f) below, file
any document which, upon filing becomes an Incorporated Document, of which you
shall not previously have been advised or to which, after you shall have
received a copy of the document proposed to be filed, you shall reasonably
object.
(e) Prior to the execution and delivery of this Agreement, the Company
has delivered to you, without charge, in such quantities as you have requested,
copies of each form of the U.S. Prepricing Prospectus. The Company consents to
the use, in accordance with the provisions of the Act and with the securities or
Blue Sky laws of the jurisdictions in which the Shares are offered by the
several U.S. Underwriters and by dealers, prior to the date of the U.S.
Prospectus, of each U.S. Prepricing Prospectus so furnished by the Company.
(f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as in the opinion of
counsel for the U.S. Underwriters a prospectus is required by the Act to be
delivered in connection with sales by any U.S. Underwriter or dealer, the
Company will expeditiously deliver to each U.S. Underwriter and each dealer,
without charge, as many copies of the U.S. Prospectus (and of any amendment or
supplement thereto) as you may reasonably request. The Company consents to the
use of the U.S. Prospectus (and of any amendment or supplement thereto) in
accordance with the
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provisions of the Act and with the securities or Blue Sky laws of the
jurisdictions in which the Shares are offered by the several U.S. Underwriters
and by all dealers to whom Shares may be sold, both in connection with the
offering and sale of the Shares and for such period of time thereafter as the
U.S. Prospectus is required by the Act to be delivered in connection with sales
by any U.S. Underwriter or dealer. If during such period of time any event
shall occur that in the judgment of the Company or in the opinion of counsel for
the U.S. Underwriters is required to be set forth in the U.S. Prospectus (as
then amended or supplemented) or should be set forth therein in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary to supplement or amend the U.S.
Prospectus (or to file under the Exchange Act any document which, upon filing,
becomes an Incorporated Document) in order to comply with the Act or any other
law, the Company will forthwith prepare and, subject to the provisions of
paragraph (d) above, file with the Commission an appropriate supplement or
amendment thereto (or to such document), and will expeditiously furnish to the
U.S. Underwriters and dealers a reasonable number of copies thereof. In the
event that the Company and you, as Representatives of the several U.S.
Underwriters, agree that the U.S. Prospectus should be amended or supplemented,
the Company, if requested by you, will promptly issue a press release announcing
or disclosing the matters to be covered by the proposed amendment or supplement.
(g) The Company will cooperate with you and with counsel for the U.S.
Underwriters in connection with the registration or qualification of the Shares
for offering and sale by the several U.S. Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions as you may designate and will
file such consents to service of process or other documents necessary or
appropriate in order to effect such registration or qualification; provided that
in no event shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action which would
subject it to service of process in suits, other than those arising out of the
offering or sale of the Shares, in any jurisdiction where it is not now so
subject.
(h) The Company will make generally available to its security holders
a consolidated earnings statement, which need not be audited, covering the
period specified by
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Section 11(a) of the Act and Rule 158 thereunder, as soon as reasonably
practicable, which consolidated earnings statement shall satisfy the provisions
of Section 11(a) of the Act and Rule 158 thereunder.
(i) During the period of five years hereafter, the Company will
furnish to you (i) upon your request, at such address as you may specify, as
soon as available, a copy of each report of the Company mailed to stockholders
or filed with the Commission, and (ii) from time to time such other information
concerning the Company as you may reasonably request.
(j) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to the
second paragraph of Section 12 hereof or by notice given by you terminating this
Agreement pursuant to Section 12 or Section 13 hereof) or if this Agreement
shall be terminated by the U.S. Underwriters because of any failure or refusal
on the part of the Company or any of the Selling Stockholders to comply with the
terms or fulfill any of the conditions of this Agreement, the Company agrees to
reimburse the Representatives for all out-of-pocket expenses (including
reasonable fees and expenses of counsel for the U.S. Underwriters) incurred by
you in connection herewith.
(k) If Rule 430A of the Act is employed, the Company will timely file
the Prospectuses pursuant to Rule 424(b) under the Act and will advise you of
the time and manner of such filing.
(l) Except as provided in this Agreement, the Company will not sell,
contract to sell or otherwise dispose of any Common Stock (except shares issued
upon exercises of options outstanding under the Company's 1992 stock option plan
or upon exercise of outstanding warrants) or any securities convertible into or
exercisable or exchangeable for Common Stock, or grant any options (except any
options granted under the Company's 1992 stock option plan) or warrants to
purchase Common Stock, for a period of 120 days after the date of the U.S.
Prospectus, without the prior written consent of Xxxxx Xxxxxx Inc.
(m) The Company has furnished or will furnish to you "lock-up"
letters, in form and substance satisfactory to you, signed by each of its
current officers and directors listed on Schedule III hereto.
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(n) Except as stated in this Agreement and in the Prepricing
Prospectuses and Prospectuses, the Company has not taken, nor will it take,
directly or indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price of the
Common Stock to facilitate the sale or resale of the Shares.
(o) The Company will use all reasonable efforts to satisfy on or
before the Closing Date or any Option Date, as the case may be, all conditions
to the U.S. Underwriters' obligations to purchase the Shares.
6. Agreements of the Selling Stockholders. Each of the Selling
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Stockholders agrees with the several U.S. Underwriters as follows:
(a) Such Selling Stockholder will cooperate to the extent necessary
to cause the registration statement or any post-effective amendment thereto to
become effective at the earliest possible time.
(b) Such Selling Stockholder will pay all Federal and other taxes, if
any, on the transfer or sale of such Shares that are sold by the Selling
Stockholder to the U.S. Underwriters.
(c) Such Selling Stockholder will do or perform all things required
to be done or performed by the Selling Stockholder prior to the Closing Date or
any Option Closing Date, as the case may be, to satisfy all conditions precedent
to the delivery of the Shares pursuant to this Agreement.
(d) Except as provided in this Agreement and in the lock-up letter
referred to in paragraph (e) below, such Selling Stockholder will not sell or
otherwise dispose of any Common Stock for a period of 120 days after the date of
the U.S. Prospectus, without the prior written consent of Xxxxx Xxxxxx Inc.
(e) Such Selling Stockholder has furnished or will furnish to you a
"lock-up" letter, in form and substance satisfactory to you.
(f) Except as stated in this Agreement and the International
Underwriting Agreement and in the Prepricing Prospectuses and the Prospectuses,
such Selling Stockholder
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has not taken, nor will it take, directly or indirectly, any action designed to
or that might reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale or resale
of the Shares.
7. Representations and Warranties of the Company. The Company represents
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and warrants to each U.S. Underwriter and Selling Stockholder that:
(a) Each U.S. Prepricing Prospectus included as part of the
registration statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the Act, complied when
so filed in all material respects with the provisions of the Act; except that
this representation and warranty does not apply to statements in or omissions
from such U.S. Prepricing Prospectus (or any amendment or supplement thereto)
made in reliance upon and in conformity with information relating to any Selling
Stockholder or to any U.S. Underwriter or Manager furnished to the Company in
writing by a U.S. Underwriter through the Representatives or by a Manager
through the Lead Managers or by a Selling Stockholder expressly for use therein.
The Commission has not issued any order preventing or suspending the use of any
Prepricing Prospectus.
(b) The Company and the transactions contemplated by this Agreement
meet the requirements for using Form S-3 under the Act. The registration
statement in the form in which it became or becomes effective and also in such
form as it may be when any post-effective amendment thereto or any Rule 462(b)
Registration Statement or amendment thereto shall become effective and the U.S.
Prospectus and any supplement or amendment thereto when filed with the
Commission under Rule 424(b) under the Act, complied or will comply in all
material respects with the provisions of the Act and will not at any such times
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; except that this representation and warranty does not apply to
statements in or omissions from the Registration Statement or the U.S.
Prospectus made in reliance upon and in conformity with information relating to
any Selling Stockholder or to any U.S. Underwriter or Manager furnished to the
Company in writing by a U.S. Underwriter through the Representatives or
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by a Manager through the Lead Managers or by a Selling Stockholder expressly for
use therein.
(c) The Incorporated Documents included in the Registration Statement
heretofore filed, when they were filed (or, if any amendment with respect to any
such document was filed, when such amendment was filed), conformed in all
material respects with the requirements of the Exchange Act and the rules and
regulations thereunder, and any further Incorporated Documents so filed will,
when they are filed, conform in all material respects with the requirements of
the Exchange Act and the rules and regulations thereunder; no such document when
it was filed (or, if an amendment with respect to any such document was filed,
when such amendment was filed), contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading; and no such further
document, when it is filed, will contain an untrue statement of a material fact
or will omit to state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading.
(d) All the outstanding shares of Common Stock of the Company,
including the Underwritten Shares, have been duly authorized and validly issued,
are fully paid and nonassessable and are free of any preemptive or similar
rights; and the capital stock of the Company conforms to the description thereof
in the Registration Statement and the Prospectuses.
(e) The Company is a corporation duly organized and validly existing
in good standing under the laws of the State of Delaware with full corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectuses, and is
duly registered and qualified to conduct its business and is in good standing in
each jurisdiction or place where the nature of its properties or the conduct of
its business requires such registration or qualification, except where the
failure so to register or qualify does not, individually or in the aggregate,
have a material adverse effect on the condition (financial or other), business,
properties, net worth or results of operations of the Company and the
Subsidiaries (as hereinafter defined) taken as a whole (a "Material Adverse
Effect").
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(f) All the Company's subsidiaries (collectively, the "Subsidiaries")
are listed in an exhibit to the Company's Annual Report on Form 10-K which is
incorporated by reference into the Registration Statement (except for certain
immaterial subsidiaries formed since the filing thereof). Each of Action
Industries, Inc., Broyhill Furniture Industries, Inc., The Lane Company,
Incorporated, and Thomasville Furniture Industries, Inc. (the "Material
Subsidiaries") is a corporation duly organized, validly existing and in good
standing in the jurisdiction of its incorporation, with full corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Registration Statement and the Prospectuses, and is duly
registered and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of its
business requires such registration or qualification, except where the failure
so to register or qualify does not, individually or in the aggregate, have a
Material Adverse Effect; all the outstanding shares of capital stock of each of
the Material Subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable, and are owned by the Company, free and clear of
any lien, adverse claim, security interest, equity, or other encumbrance,
except as described in the Registration Statement.
(g) There are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened, against the Company or any of the
Subsidiaries, or to which the Company or any of the Subsidiaries, or to which
any of their respective properties is subject, that are required to be described
in the Registration Statement or the Prospectuses but are not described as
required, and there are no agreements, contracts, indentures, leases or other
instruments that are required to be described in the Registration Statement or
the Prospectuses or to be filed as an exhibit to the Registration Statement or
any Incorporated Document therein that are not described or filed as required by
the Act or the Exchange Act.
(h) Neither the Company nor any of the Subsidiaries is in violation of
its certificate or articles of incorporation or by-laws, or other organizational
documents, or of any law, ordinance, administrative or governmental rule or
regulation applicable to the Company or any of the Subsidiaries or of any decree
of any court or governmental agency or body having jurisdiction over the
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Company or any of the Subsidiaries, except any violations which will not,
individually or in the aggregate, have a Material Adverse Effect, or in default
in any material respect in the performance of any material obligation, agreement
or condition contained in any bond, debenture, note or any other evidence of
indebtedness or in any material agreement, indenture, lease or other instrument
to which the Company or any of the Subsidiaries is a party or by which any of
them or any of their respective properties may be bound (except where any such
default or defaults would not, individually or in the aggregate, have a Material
Adverse Effect).
(i) Neither the sale of the Underwritten Shares, the execution,
delivery or performance of this Agreement by the Company nor the consummation by
the Company of the transactions contemplated hereby (i) requires any consent,
approval, authorization or other order of or registration or filing with, any
court, regulatory body, administrative agency or other governmental body, agency
or official (except such as may be required for the registration of the Shares
under the Act and compliance with the securities or Blue Sky laws of various
jurisdictions, both of which have been or will be effected in accordance with
this Agreement) or conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the certificate or articles of
incorporation or bylaws, or other organizational documents, of the Company or
any of the Subsidiaries or (ii) conflicts or will conflict with or constitutes
or will constitute a breach of, or a default under, any agreement, indenture,
lease or other instrument to which the Company or any of the Subsidiaries is a
party or by which any of them or any of their respective properties may be
bound, or violates or will violate any statute, law, regulation or filing
(except the securities or Blue Sky laws of the various jurisdictions, as to
which no representation or warranty is made) or judgment, injunction, order or
decree applicable to the Company or any of the Subsidiaries or any of their
respective properties, or will result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of the
Subsidiaries pursuant to the terms of any agreement or instrument to which any
of them is a party or by which any of them may be bound or to which any of the
property or assets of any of them is subject.
(j) The accountants, KPMG Peat Marwick LLP, who have certified or
shall certify the financial statements
16
included or incorporated by reference in the Registration Statement and the
Prospectuses (or any amendment or supplement thereto) are independent public
accountants as required by the Act.
(k) The financial statements, together with related schedules and
notes, included or incorporated by reference in the Registration Statement and
the Prospectuses (and any amendment or supplement thereto), present fairly, in
all material respects, the consolidated financial position, results of
operations and changes in financial position of the Company and the Subsidiaries
on the basis stated in the Registration Statement at the respective dates or for
the respective periods to which they apply; such statements and related
schedules and notes have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved,
except as disclosed therein; and the other financial and statistical information
and data relating to the Company and the Subsidiaries included or incorporated
by reference in the Registration Statement and the Prospectuses (and any
amendment or supplement thereto) are accurately presented in all material
respects and prepared on a basis consistent with such financial statements and
the books and records of the Company and the Subsidiaries.
(l) The execution and delivery of, and the performance by the Company
of its obligations under, this Agreement have been duly and validly authorized
by the Company, and this Agreement has been duly executed and delivered by the
Company and constitutes the valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as rights
to indemnity and contribution hereunder may be limited by federal or state
securities laws and subject to the qualification that the enforceability of the
Company's obligations hereunder may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium, and other laws relating to
or affecting creditors' rights generally, and by general equitable principles.
(m) Except as disclosed in the Registration Statement and the
Prospectuses (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectuses (or any amendment or supplement thereto), neither
the Company nor any of the
17
Subsidiaries has incurred any liability or obligation, direct or contingent, or
entered into any transaction, not in the ordinary course of business, that is
material to the Company and the Subsidiaries taken as a whole, and there has not
been any change in the capital stock of the Company, or material increase in the
short-term debt or long-term debt of the Company or any of the Subsidiaries, or
any material adverse change, or any development involving or which may
reasonably be expected to involve, a prospective material adverse change, in the
condition (financial or other), business, net worth or results of operations of
the Company and the Subsidiaries taken as a whole.
(n) With only such exceptions as would not, individually or in the
aggregate, have a Material Adverse Effect, each of the Company and the
Subsidiaries has good and, in the case of real property, marketable title to all
property (real and personal) described in the Prospectuses as being owned by it,
free and clear of all liens, claims, security interests or other encumbrances
except such as are described in the Registration Statement and the Prospectuses
or in a document filed as an exhibit to the Registration Statement and all the
property described in the Prospectuses as being held under lease by each of the
Company and the Subsidiaries is held by it under valid, subsisting and
enforceable leases.
(o) The Company has not distributed and, prior to the later to occur
of (i) the Closing Date and (ii) completion of the distribution of the Shares,
will not distribute any offering material in connection with the offering and
sale of the Shares other than the Registration Statement, the Prepricing
Prospectuses, the Prospectuses or other materials, if any, permitted by the Act.
(p) The Company and each of the Subsidiaries has such material
permits, licenses, franchises and authorizations of governmental or regulatory
authorities ("permits") as are necessary to own its respective properties and to
conduct its business in all material respects in the manner described in the
Prospectuses, subject to such qualifications as may be set forth in the
Prospectuses; the Company and each of the Subsidiaries has fulfilled and
performed all its material obligations with respect to such permits and no event
has occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material impairment of
the rights of the holder of any such
18
permit, subject in each case to such qualification as may be set forth in the
Prospectuses; and, except as described in the Prospectuses, none of such permits
contains any restriction that is materially burdensome to the Company or any of
the Subsidiaries.
(q) The properties, assets and operations of the Company and its
Subsidiaries comply with all applicable Environmental Laws (as defined below),
except to the extent that failure so to comply would not, individually or in the
aggregate, have a Material Adverse Effect. Except as specifically described in
the Prospectuses, none of the property, assets or operations of the Company or
its Subsidiaries is the subject of any investigation by any federal, state,
local or foreign governmental agency evaluating whether any remedial action is
needed to respond to a release of any Hazardous Materials (as defined below)
into the environment or a release of any Hazardous Materials that is in
contravention of any federal, state, local or foreign law, order or regulation,
in each case that is likely to have a Material Adverse Effect, and neither the
Company nor any Subsidiary has received notice of any such investigation.
Except as described in the Prospectuses, neither the Company nor any Subsidiary
has received any notice or claim, nor are there pending, reasonably anticipated
or, to the best knowledge of the Company, threatened lawsuits against any of
them, with respect to violations of an Environmental Law or in connection with
any release of any Hazardous Materials into the environment that, if adversely
determined, could have a Material Adverse Effect. Except as disclosed in the
Prospectuses, with respect to the business of the Company or its Subsidiaries,
including any previously or currently owned, leased, or used properties or
operations, there are no past, present, or, to the best knowledge of the
Company, reasonably anticipated future events, conditions, circumstances,
activities, practices, incidents, actions or plans that may interfere with or
prevent compliance or continued compliance with the Environmental Laws in any
material respect. As used herein, "Environmental Laws" means any federal,
state, local or foreign law, common law, doctrine, rule, order, decrees,
judgment, injunction, license, permit or regulation relating to environmental
matters, and "Hazardous Materials" means those substances that are regulated by
or form the basis of liability under any Environmental Laws.
(r) The Company and each other person or entity that, together with
the Company, is treated as a single
19
employer under Section 414 of the Internal Revenue Code of 1986, as amended (the
"Code") (each such person or entity being an "ERISA Affiliate"), complies in all
material respects with the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and the Code with respect to each pension plan (as defined in
Section 3(2) of ERISA) maintained by the Company or such ERISA Affiliate, and
none of the Company or any of its ERISA Affiliates has incurred any material
liability under Title IV of ERISA to any pension plan or to the Pension Benefit
Guaranty Corporation that has not been fully paid as of the date hereof.
(s) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(t) To the knowledge of the Company, neither the Company nor any of
its Subsidiaries nor any employee or agent of the Company or any Subsidiary has
made any payment of funds of the Company or any Subsidiary or received or
retained any funds in violation of any law, rule or regulation, which payment,
receipt or retention of funds is of a character required to be disclosed in the
Prospectuses.
(u) The Company and each of the Subsidiaries have filed all material
tax returns required to be filed, which returns are complete and correct in all
material respects, and neither the Company nor any Subsidiary is in default in
the payment of any taxes which were payable pursuant to said returns or any
assessments with respect thereto.
(v) No holder of any security of the Company has any right (except as
has been satisfied or waived) to require registration of shares of Common Stock
or any other security of the Company because of the filing of the registration
statement or consummation of the transactions contemplated by this Agreement.
20
(w) The Company and the Subsidiaries own or possess all patents,
trademarks, trademark registrations, service marks, service xxxx registrations,
trade names, copyrights, licenses, inventions, trade secrets and rights
described in the Prospectuses as being owned by them or any of them or to the
Company's knowledge necessary for the conduct of their respective businesses,
and the Company is not aware of any claim to the contrary or any challenge by
any other person to the rights of the Company and the Subsidiaries with respect
to the foregoing which will have a Material Adverse Effect.
(x) The Company has complied with all provisions of Florida Statutes,
(S)517.075, relating to issuers doing business with Cuba.
8. Representations and Warranties of the Selling Stockholders. Each
----------------------------------------------------------
Selling Stockholder represents and warrants to each U.S. Underwriter and the
Company that:
(a) Such Selling Stockholder now has, and on the Closing Date and any
Option Closing Date will have, full legal right, power and authorization, and
any approval required by law, to sell, assign, transfer and deliver such Shares
in the manner provided in this Agreement, and upon delivery of and payment for
such Shares hereunder, the several U.S. Underwriters will acquire valid and
marketable title to such Shares free and clear of any lien, claim, security
interest, or other encumbrance.
(b) The execution and delivery of, and the performance by such
Selling Stockholder of its obligations under, this Agreement have been duly and
validly authorized by such Selling Stockholder, and this Agreement has been duly
executed and delivered by such Selling Stockholder and constitutes the valid and
legally binding agreement of such Selling Stockholder, enforceable against such
Selling Stockholder in accordance with its terms, except as limited by federal
or state securities laws and subject to the qualification that the
enforceability of the Selling Stockholder's obligations hereunder may be limited
by bankruptcy, fraudulent conveyance, insolvency reorganization, moratorium, and
other laws relating to or affecting creditors' rights generally, and by general
equitable principles.
(c) Neither the sale of the Shares nor the execution, delivery or
performance of this Agreement by or
21
on behalf of such Selling Stockholder nor the consummation by or on behalf of
such Selling Stockholder of the transactions contemplated hereby (i) requires
any consent, approval, authorization or other order of, or registration or
filing with, any court, regulatory body, administrative agency or other
governmental body, agency or official (except such as may be required for the
registration of the Shares under the Act or compliance with the securities or
Blue Sky laws of various jurisdictions), or (ii) conflicts or will conflict with
or constitutes or will constitute a breach of, or a default under, any
agreement, indenture, lease or other instrument to which such Selling
Stockholder is a party or by which such Selling Stockholder is or may be bound,
or violates or will violate any statute, law, regulation or filing or judgment,
injunction, order or decree applicable to such Selling Stockholder, or will
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of such Selling Stockholder pursuant to the terms of any
agreement or instrument to which such Selling Stockholder is a party or by which
such Selling Stockholder may be bound or to which any of the property or assets
of such Selling Stockholder is subject.
(d) The Registration Statement and the Prospectuses, insofar as they
contain information relating to such Selling Stockholder, do not and will not
contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading.
(e) Such Selling Stockholder has not taken, directly or indirectly,
any action designed to or that might reasonably be expected to cause or result
in stabilization or manipulation of the price of the Common Stock to facilitate
the sale or resale of the Shares, except for the lock-up arrangements referred
to in the Prospectuses.
(f) Such Selling Stockholder (without undertaking any independent
investigation) does not have any knowledge that the Registration Statement or
the Prospectuses (or any amendment or supplement thereto) contains any untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading.
9. Indemnification and Contribution. (a) The Company agrees to indemnify
--------------------------------
and hold harmless each of you and each
22
other U.S. Underwriter and each person, if any, who controls any U.S.
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages, liabilities
and expenses (including reasonable costs of investigation) arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in any U.S. Prepricing Prospectus or in the Registration Statement or
the U.S. Prospectus or in any amendment or supplement thereto, or arising out of
or based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
expenses arise out of or are based upon any untrue statement or omission or
alleged untrue statement or omission which has been made therein or omitted
therefrom in reliance upon and in conformity with the information relating to
such U.S. Underwriter or Manager furnished in writing to the Company by or on
behalf of any U.S. Underwriter through you or by or on behalf of any Manager
through a Lead Manager expressly for use in connection therewith; provided,
however, that the indemnification contained in this paragraph (a) with respect
to any U.S. Prepricing Prospectus shall not inure to the benefit of any U.S.
Underwriter (or to the benefit of any person controlling such U.S. Underwriter)
on account of any such loss, claim, damage, liability or expense arising from
the sale of the Shares by such U.S. Underwriter to any person if a copy of the
U.S. Prospectus shall not have been delivered or sent to such person within the
time required by the Act and the regulations thereunder, and the untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in such U.S. Prepricing Prospectus was corrected in the
U.S. Prospectus, provided that the Company has delivered the U.S. Prospectus to
the several U.S. Underwriters in requisite quantity on a timely basis to permit
such delivery or sending. The foregoing indemnity agreement shall be in
addition to any liability which the Company may otherwise have.
(b) Each Selling Stockholder agrees, severally and not jointly, to
indemnify and hold harmless you and each other U.S. Underwriter and each person,
if any, who controls any U.S. Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act with the same exceptions and to the
same extent as the foregoing indemnity from the Company to each U.S.
Underwriter, but only with respect to information relating to such Selling
Stockholder furnished
23
in writing by or on behalf of such Selling Stockholder expressly for use in the
Registration Statement, the U.S. Prospectus or any U.S. Prepricing Prospectus,
or any amendment or supplement thereto. The foregoing indemnity agreement shall
be in addition to any liability which any Selling Stockholder may otherwise
have.
(c) If any action, suit or proceeding shall be brought against any U.S.
Underwriter or any person controlling any U.S. Underwriter in respect of which
indemnity may be sought against the Company, any Selling Stockholder or both,
such U.S. Underwriter or such controlling person shall promptly notify in
writing the parties against whom indemnification is being sought (the
"indemnifying parties"), and such indemnifying parties shall assume the defense
thereof, including the employment of counsel and payment of all fees and
expenses. Such U.S. Underwriter or any such controlling person shall have the
right to employ separate counsel in any such action, suit or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such U.S. Underwriter or such controlling person
unless (i) the indemnifying parties have agreed in writing to pay such fees and
expenses, (ii) the indemnifying parties have failed to assume the defense and
employ counsel, or (iii) the named parties to any such action, suit or
proceeding (including any impleaded parties) include both such U.S. Underwriter
or such controlling person and the indemnifying parties and such U.S.
Underwriter or such controlling person shall have been advised by its counsel in
writing, with a copy furnished to the Company upon request, that representation
of such indemnified party and the indemnifying parties by the same counsel would
be inappropriate under applicable standards of professional conduct (whether or
not such representation by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case the indemnifying
parties shall not have the right to assume the defense of such action, suit or
proceeding on behalf of such U.S. Underwriter or such controlling person). It
is understood, however, that the indemnifying parties shall, in connection with
any one such action, suit or proceeding or separate but substantially similar or
related actions, suits or proceedings in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of only one separate firm of attorneys (in addition to any local
counsel) at any time for all such U.S. Underwriters and controlling persons not
having actual or potential differing interests with you or
24
among themselves, which firm shall be designated in writing by Xxxxx Xxxxxx
Inc., and that all such fees and expenses shall be reimbursed as they are
incurred. The indemnifying parties shall not be liable for any settlement of
any such action, suit or proceeding effected without its written consent, but if
settled with such written consent, or if there be a final judgment for the
plaintiff in any such action, suit or proceeding, the indemnifying parties agree
to indemnify and hold harmless any U.S. Underwriter, to the extent provided in
the preceding paragraph, and any such controlling person from and against any
loss, claim, damage, liability or expense by reason of such settlement or
judgment.
(d) Each U.S. Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement, any person who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act and the Selling
Stockholders, to the same extent as the foregoing indemnity from the Company and
the Selling Stockholders to each U.S. Underwriter, but only with respect to
information relating to such U.S. Underwriter furnished in writing by or on
behalf of such U.S. Underwriter through you expressly for use in the
Registration Statement, the U.S. Prospectus or any U.S. Prepricing Prospectus,
or any amendment or supplement thereto. If any action, suit or proceeding shall
be brought against the Company, any of its directors, any such officer, any such
controlling person or any Selling Stockholder based on the Registration
Statement, the U.S. Prospectus or any U.S. Prepricing Prospectus, or any
amendment or supplement thereto, and in respect of which indemnity may be sought
against any U.S. Underwriter pursuant to this paragraph (d), such U.S.
Underwriter shall have the rights and duties given to the Company and the
Selling Stockholders by paragraph (c) above (except that if the Company or the
Selling Stockholders shall have assumed the defense thereof such U.S.
Underwriter shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof, but the fees and expenses of
such counsel shall be at such U.S. Underwriter's expense), and the Company, its
directors, any such officer, any such controlling person and the Selling
Stockholders shall have the rights and duties given to the U.S. Underwriters by
paragraph (c) above. The foregoing indemnity agreement shall be in addition to
any liability which any U.S. Underwriter may otherwise have.
25
(e) If the indemnification provided for in this Section 9 is unavailable to
an indemnified party under paragraphs (a), (b) or (d) hereof in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then an
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company and
the Selling Stockholders on the one hand and the U.S. Underwriters on the other
hand from the offering of the Shares, or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Selling Stockholders on
the one hand and the U.S. Underwriters on the other in connection with the
statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling Stockholders on
the one hand and the U.S. Underwriters on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company and the Selling Stockholders bear to the total
underwriting discounts and commissions received by the U.S. Underwriters, in
each case as set forth in the table on the cover page of the U.S. Prospectus;
provided that, in the event that the U.S. Underwriters shall have purchased any
Additional Shares hereunder, any determination of the relative benefits received
by the Company, the Selling Stockholders or the U.S. Underwriters from the
offering of the Shares shall include the net proceeds (before deducting
expenses) received by the Company and the Selling Stockholders, and the
underwriting discounts and commissions received by the U.S. Underwriters, from
the sale of such Additional Shares, in each case computed on the basis of the
respective amounts set forth in the notes to the table on the cover page of the
U.S. Prospectus. The relative fault of the Company and the Selling Stockholders
on the one hand and the U.S. Underwriters on the other hand shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company and the Selling
Stockholders on the one hand or by the U.S. Underwriters on the other hand and
the parties' relative intent, knowledge,
26
access to information and opportunity to correct or prevent such statement or
omission.
(f) The Company, the Selling Stockholders and the U.S. Underwriters agree
that it would not be just and equitable if contribution pursuant to this Section
9 were determined by a pro rata allocation (even if the U.S. Underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in
paragraph (e) above. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities and expenses referred to in
paragraph (e) above shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating any claim or defending any such action,
suit or proceeding. Notwithstanding the provisions of this Section 9, no U.S.
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price of the Shares underwritten by it and distributed to the
public exceeds the amount of any damages which such U.S. Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The U.S. Underwriters' obligations to contribute pursuant to
this Section 9 are several in proportion to the respective numbers of Firm
Shares set forth opposite their names in Schedule I hereto (or such numbers of
Firm Shares increased as set forth in Section 12 hereof) and not joint.
(g) No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action,
suit or proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such action, suit or proceeding.
(h) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 9 shall be paid by the indemnifying party to the indemnified party
27
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 9 and the
representations and warranties of the Company and the Selling Stockholders set
forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any U.S. Underwriter
or any person controlling any U.S. Underwriter, the Company, its directors or
officers or the Selling Stockholders, any director, officer or partner of a
Selling Stockholder or any person controlling the Company or any Selling
Stockholder, (ii) acceptance of any Shares and payment therefor hereunder, and
(iii) any termination of this Agreement. A successor to any U.S. Underwriter or
any person controlling any U.S. Underwriter, or to the Company, its directors or
officers, or to a Selling Stockholder, any director, officer or partner of a
Selling Stockholder or any person controlling the Company or any Selling
Stockholder shall be entitled to the benefits of the indemnity, contribution and
reimbursement agreements contained in this Section 9.
10. Conditions of U.S. Underwriters' Obligations. The several obligations
--------------------------------------------
of the U.S. Underwriters to purchase the Firm Shares hereunder are subject to
the following conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the registration statement or a post-effective amendment thereto
(or a Rule 462(b) Registration Statement) to be declared effective before the
offering of the Shares may commence, the registration statement or such post-
effective amendment or Rule 462(b) Registration Statement shall have become
effective not later than 5:30 P.M., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by you, and all
filings, if any, required by Rules 424 and 430A under the Act shall have been
timely made; no stop order suspending the effectiveness of the registration
statement shall have been issued and no proceeding for that purpose shall have
been instituted or, to the knowledge of the Company or any U.S. Underwriter,
threatened by the Commission, and any request of the Commission for additional
information (to be included in the registration statement or the Prospectuses or
otherwise) shall have been complied with to your reasonable satisfaction.
28
(b) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change, or any development involving a prospective
change, in or affecting the condition (financial or other), business,
properties, net worth, or results of operations of the Company or the
Subsidiaries not contemplated by the Prospectuses, which in your reasonable
opinion, as Representatives of the several U.S. Underwriters, would materially,
adversely affect the market for the Shares, or (ii) any event or development
relating to or involving the Company or any officer or director of the Company
which makes any statement made in the Prospectuses untrue or which, in the
opinion of the Company and its counsel or the U.S. Underwriters and their
counsel, requires the making of any addition to or change in the Prospectuses in
order to state a material fact required by the Act or any other law to be stated
therein or necessary in order to make the statements therein not misleading, if
amending or supplementing the Prospectuses to reflect such event or development
would, in your reasonable opinion, as Representatives of the several U.S.
Underwriters, materially adversely affect the market for the Shares.
(c) You shall have received on the Closing Date, an opinion of Xxxxxx,
Xxxxx & Xxxxxxx LLP, counsel for the Company, dated the Closing Date and
addressed to you, as Representatives of the several U.S. Underwriters, to the
effect that:
(i) The Company is a corporation validly existing in good standing
under the laws of the State of Delaware with corporate power and authority to
own, lease and operate its properties and to conduct its business as described
in the Registration Statement and the Prospectuses (and any amendment or
supplement thereto);
(ii) Each of the Material Subsidiaries is a corporation validly
existing in good standing under the laws of the jurisdiction of its
organization, with corporate power and authority to own, lease, and operate its
properties and to conduct its business as described in the Registration
Statement and the Prospectuses (and any amendment or supplement thereto);
(iii) The authorized and outstanding capital stock of the Company is
as set forth under the caption "Capitalization" in the Prospectuses; and the
authorized capital stock of the Company conforms in all material
29
respects as to legal matters to the description thereof contained in the
Prospectuses under the caption "Description of Capital Stock";
(iv) All the outstanding shares of capital stock of the Company have
been duly authorized and validly issued, and are fully paid and nonassessable;
(v) The Registration Statement and all post-effective amendments, if
any, have become effective under the Act and, to the knowledge of such counsel,
no stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose are pending before or
contemplated by the Commission; and any required filing of the Prospectuses
pursuant to Rule 424(b) has been made in accordance with Rule 424(b);
(vi) The Company has corporate power and authority to enter into this
Agreement and this Agreement has been duly authorized, executed and delivered by
the Company and is a valid, legal and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as
enforcement of rights to indemnity and contribution hereunder may be limited by
Federal or state securities laws or principles of public policy and subject to
the qualification that the enforceability of the Company's obligations hereunder
may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium, and other laws relating to or affecting creditors' rights generally,
and by general equitable principles;
(vii) Neither the offer, sale or delivery of the Shares, the
execution, delivery or performance of this Agreement, compliance by the Company
and the Selling Stockholders with the provisions hereof nor consummation by the
Company and the Selling Stockholders of the transactions contemplated hereby
conflicts or will conflict with or constitutes or will constitute a breach of,
or a default under, the certificate or articles of incorporation or bylaws, or
other organizational documents, of the Company or any of the Material
Subsidiaries or any agreement, indenture, lease or other instrument to which the
Company or any of the Material Subsidiaries is a party or by which any of them
or any of their respective properties is bound that is an exhibit to the
Registration Statement or to any Incorporated Document, or is known to such
counsel, or will
30
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of the Material Subsidiaries, nor will
any such action result in any violation of any existing law, regulation, ruling
(assuming compliance with all applicable state securities and Blue Sky laws),
judgment, injunction, order or decree known to such counsel, applicable to the
Company, the Material Subsidiaries or any of their respective properties;
(viii) The Registration Statement and the Prospectuses and any
supplements or amendments thereto (except for the financial statements and the
notes thereto and the schedules and other financial and statistical data
included therein, as to which such counsel need not express any opinion) comply
as to form in all material respects with the requirements of the Act; and each
of the Incorporated Documents included in the Registration Statement (except for
the financial statements and the notes thereto and the schedules and other
financial and statistical data included therein, as to which counsel need not
express any opinion) complies as to form in all material respects with the
Exchange Act and the rules and regulations of the Commission thereunder;
(ix) To the knowledge of such counsel, (A) other than as described or
contemplated in the Prospectuses (or any supplement thereto), there are no legal
or governmental proceedings pending or threatened against the Company or any of
the Subsidiaries, or to which the Company or any of the Subsidiaries, or any of
their property, is subject, which are required to be described in the
Registration Statement or Prospectuses (or any amendment or supplement thereto)
and (B) there are no agreements, contracts, indentures, leases or other
instruments, that are required to be described in the Registration Statement or
the Prospectuses (or any amendment or supplement thereto) or to be filed as an
exhibit to the Registration Statement or any Incorporated Document that are not
described or filed as required, as the case may be;
(x) The following statements in the Prospectuses, insofar as they are
descriptions of contracts, agreements or other legal documents, or refer to
statements of law or legal conclusions, are accurate and present fairly the
information required to be shown: on page 10, under "Risk Factors - Leverage",
the second sentence relating to the Secured Credit Agreement amount, the third
sentence relating
31
to the Receivables Securitization Facility amount and the last sentence relating
to the interest rate swap agreement amounts; on page 10, under "Risk Factors -
Restrictive Covenants in Certain Debt Instruments", the entire paragraph; on
page 11, under "Risk Factors - Absence of Dividends", the first sentence
relating to restrictions on the payment of dividends under the Secured Credit
Agreement; on page 11, under "Risk Factors - Anti-Takeover Provisions", the
entire paragraph; on page 12, under "Price Range of Common Stock and Dividend
Policy", the first sentence of the last paragraph relating to restrictions on
the payment of dividends under the Secured Credit Agreement; on page 16, under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - General", the third sentence of the third paragraph relating to no
ownership interest or management control of the footwear business upon the
completion of the restructuring; on page 21, under Management's Discussion and
Analysis of Financial Condition and Results of Operations - Financial Condition
and Liquidity", the first five sentences of the fourth paragraph on the page
relating to the Secured Credit Agreement, the first three sentences of the fifth
paragraph on the page relating to the Receivables Securitization Facility and
the entire sixth paragraph on the page; on page 33, under "Business -
Environmental Matters", the entire first and second paragraphs; on page 35,
under "Certain Transactions", the entire paragraph; on page 36, under "Selling
Stockholders", the entire second paragraph on the page; on page 36, under
"Description of Capital Stock", the entire section; on page 38, under "Certain
U.S. Tax Consequences to Non-U.S. Stockholders", the entire section; on page 41,
under "Underwriting", the first sentence of the third paragraph relating to the
obligations of the several underwriters; and
(xi) Although counsel has not undertaken, except as otherwise
indicated, to determine independently, and does not assume any responsibility
for, the accuracy or completeness of the statements in the Registration
Statement, such counsel has participated in the preparation of the Registration
Statement and the Prospectuses, including review and discussion of the contents
thereof (including review and discussion of the contents of all Incorporated
Documents), and nothing has come to the attention of such counsel that has
caused them to believe that the Registration Statement (including the
Incorporated Documents) at the time the Registration Statement became effective,
or the Prospectuses, as of the date thereof and
32
as of the Closing Date or the Option Closing Date, as the case may be, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or that any amendment or supplement to the Prospectuses, as of the
respective date thereof, and as of the Closing Date or the Option Closing Date,
as the case may be, contained any untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading (it
being understood that such counsel need express no belief with respect to the
financial statements and the notes thereto and the schedules and other financial
and statistical data included in the Registration Statement or the Prospectuses
or any Incorporated Document).
In rendering such opinion as aforesaid, counsel may limit their
opinion to the federal laws of the United States, the General Corporation Law of
the State of Delaware, and the laws of the States of New York and Pennsylvania,
and may assume that the laws of the Commonwealth of Virginia and the State of
North Carolina are in all relevant respects the same as the Delaware General
Corporation Law.
(d) You shall have received on the Closing Date an opinion from Akin,
Gump, Strauss, Xxxxx & Xxxx, LLP, counsel for the Selling Stockholders, dated
the Closing Date and addressed to you, as Representatives of the several U.S.
Underwriters to the effect that:
(i) This Agreement has been duly executed and delivered by or on
behalf of each of the Selling Stockholders;
(ii) Each Selling Stockholder has full legal right, power and
authorization, and any approval required by law, to sell, assign, transfer
and deliver good and marketable title to the Shares which such Selling
Stockholder has agreed to sell pursuant to this Agreement and, upon
delivery of the Shares to the U.S. Underwriters against payment therefor in
accordance with the provisions of this Agreement, the U.S. Underwriters
will acquire the Shares free of any adverse claim within the meaning of
Section 8-302 of the Uniform Commercial Code as in effect in the State of
New York, assuming the U.S. Underwriters have
33
acquired the Shares in good faith and without notice of any adverse claim;
and
(iii) The execution and delivery of this Agreement by the Selling
Stockholders and the consummation of the transactions contemplated hereby
will not conflict with, violate, result in a breach of or constitute a
default under the terms or provisions of the partnership agreement of any
Selling Stockholder, or, to such counsel's knowledge, any agreement,
indenture, lease or other instrument to which any Selling Stockholder is a
party or by which any of them or any of their assets or property is bound,
or violate any statute, law, regulation, court order or decree known to
such counsel to be applicable to any Selling Stockholder or to any of the
property or assets of any Selling Stockholder, except for any such
conflicts, breaches, defaults or violations that would not, individually or
in the aggregate, have a Material Adverse Effect on the ability of such
Selling Stockholder to consummate the transactions contemplated by this
Agreement.
In rendering their opinion as aforesaid, counsel may, as to factual matters,
rely upon written certificates or statements of officers of the Selling
Stockholders and, as to matters of law, may limit their opinion to the federal
laws of the United States, the General Corporation Law of the State of Delaware
and the laws of the State of New York.
(e) You shall have received on the Closing Date, an opinion of Xxxx
Xxxxxxxxxxxx, Esq., general counsel for the Company, dated the Closing Date and
addressed to you, as Representatives of the several U.S. Underwriters, to the
effect that:
(i) The Company and each of the Subsidiaries has corporate power and
authority, and, to such counsel's knowledge, all necessary governmental
authorizations, approvals, orders, licenses, certificates, franchises and
permits of and from all governmental regulatory officials and bodies (except
where the failure so to have any such authorizations, approvals, orders,
licenses, certificates, franchises or permits, individually or in the aggregate,
would not have a Material Adverse Effect), to own their respective properties
and to conduct their respective businesses as now being conducted, as described
in the Prospectuses;
34
(ii) Each of the Company and the Material Subsidiaries is duly
qualified to transact business as a foreign corporation in good standing in the
jurisdictions listed in an attached schedule, which are all jurisdictions in
which they own, lease or operate manufacturing facilities;
(iii) Neither the Company nor any of the Material Subsidiaries is in
violation of its respective certificate or articles of incorporation or bylaws,
or other organizational documents, to the knowledge of such counsel, or is in
default in the performance of any material obligation, agreement or condition
contained in any bond, debenture, note or other evidence of indebtedness, to the
knowledge of such counsel, except as may be disclosed in the Prospectuses;
(iv) Except as disclosed in the Prospectuses, the Company owns of
record, directly or indirectly, all the outstanding shares of capital stock of
each of the Subsidiaries free and clear of any lien, adverse claim, security
interest, equity, or other encumbrance, and all the outstanding shares of
capital stock of each of the Subsidiaries have been duly authorized and validly
issued, are fully paid and nonassessable;
(v) Other than as described or contemplated in the Prospectuses (or
any supplement thereto), to such counsel's knowledge after reasonable inquiry,
there are no legal or governmental proceedings pending or threatened against the
Company or any of the Subsidiaries, or to which the Company or any of the
Subsidiaries, or any of their property, is subject, which are required to be
described in the Registration Statement or Prospectuses (or any amendment or
supplement thereto);
(vi) To such counsel's knowledge after reasonable inquiry, there are
no agreements, contracts, indentures, leases or other instruments, that are
required to be described in the Registration Statement or the Prospectuses (or
any amendment or supplement thereto) or to be filed as an exhibit to the
Registration Statement or any Incorporated Document therein that are not
described or filed as required, as the case may be;
(vii) The Company and the Subsidiaries own all patents, trademarks,
trademark registrations, service marks, service xxxx registrations, trade names,
copyrights,
35
licenses, inventions, trade secrets and rights described in the Prospectuses as
being owned by them or any of them or, to the knowledge of such counsel,
necessary for the conduct of their respective businesses, and such counsel is
not aware of any claim to the contrary or any challenge by any other person to
the rights of the Company and the Subsidiaries with respect to the foregoing;
(viii) To such counsel's knowledge after reasonable inquiry, neither
the Company nor any of the Subsidiaries is in violation of any law, ordinance,
administrative or governmental rule or regulation applicable to the Company or
any of the Subsidiaries or of any decree of any court or governmental agency or
body having jurisdiction over the Company or any of the Subsidiaries except for
violations that would not, individually or in the aggregate, have a Material
Adverse Effect;
(ix) Except as described in the Prospectuses, there are no
outstanding options, warrants or other rights calling for the issuance of, and
such counsel does not know of any commitment, plan or arrangement to issue, any
shares of capital stock of the Company or any security convertible into or
exchangeable or exercisable for capital stock of the Company; and
(x) Except as described in the Prospectuses, there is no holder of
any security of the Company or any other person who has the right, contractual
or otherwise, to cause the Company to sell or otherwise issue to them, or to
permit them to underwrite the sale of, the Shares or the right to have any
Common Stock or other securities of the Company included in the registration
statement or the right, as a result of the filing of the registration statement,
to require registration under the Act of any shares of Common Stock or other
securities of the Company.
(f) You shall have received on the Closing Date an opinion of Cravath,
Swaine & Xxxxx, counsel for the U.S. Underwriters, dated the Closing Date and
addressed to you, as Representatives of the several U.S. Underwriters, with
respect to the matters as you may reasonably request.
(g) You shall have received letters addressed to you, as Representatives of
the several U.S. Underwriters, and dated the date hereof and the Closing Date
from KPMG Peat Marwick LLP, independent certified public accountants,
substantially in the forms heretofore approved by you.
36
(h)(i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been taken or, to the knowledge of the Company, shall be contemplated by the
Commission at or prior to the Closing Date; (ii) there shall not have been any
material change in the capital stock of the Company nor any material increase in
the short-term or long-term debt of the Company (other than in the ordinary
course of business) from that set forth or contemplated in the Registration
Statement or the Prospectuses (or any amendment or Supplement thereto); (iii)
there shall not have been, since the respective dates as of which information is
given in the Registration Statement and the Prospectuses (or any amendment or
supplement thereto), except as may otherwise be stated in the Registration
Statement and Prospectuses (or any amendment or supplement thereto), any
material adverse change in the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Company and the
Subsidiaries taken as a whole; (iv) the Company and the Subsidiaries shall not
have any liabilities or obligations, direct or contingent (whether or not in the
ordinary course of business), that are material to the Company and the
Subsidiaries, taken as a whole, other than those reflected in the Registration
Statement or the Prospectuses (or any amendment or supplement thereto); and (v)
all the representations and warranties of the Company contained in this
Agreement shall be true and correct on and as of the date hereof and on and as
of the Closing Date as if made on and as of the Closing Date, and you shall have
received a certificate of the Company, dated the Closing Date and signed on
behalf of the Company by the chief executive officer and the chief financial
officer of the Company (or such other officers as are acceptable to you), to the
effect set forth in this Section 10(h) and in Section 10(i) hereof.
(i) The Company shall not have failed at or prior to the Closing Date to
have performed or complied with any of its agreements herein contained and
required to be performed or complied with by it hereunder at or prior to the
Closing Date.
(j) All the representations and warranties of the Selling Stockholders
contained in this Agreement shall be true and correct on and as of the date
hereof and on and as of the Closing Date as if made on and as of the Closing
Date and you shall have received a certificate, dated the Closing Date, signed
by or on behalf of each Selling Stockholder to
37
the effect set forth in this Section 10(j) and in Section 10(k) hereof.
(k) The Selling Stockholders shall not have failed at or prior to the
Closing Date to have performed or complied with any of their agreements
contained in this Agreement and required to be performed or complied with by
them at or prior to the Closing Date.
(l) The Company and the Selling Stockholders shall have furnished or caused
to be furnished to you such further certificates and documents as you shall have
reasonably requested.
(m) The closing under the International Underwriting Agreement shall have
occurred on the Closing Date concurrently with the closing hereunder.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to you and your counsel.
Any certificate or document signed by any officer of the Company or by any
Selling Stockholder and delivered to you, as Representatives of the U.S.
Underwriters, or to counsel for the U.S. Underwriters, shall be deemed a
representation and warranty by the Company or such Selling Stockholder to each
U.S. Underwriter as to the statements made therein.
The several obligations of the U.S. Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction on and as of any Option Closing
Date of the conditions set forth in this Section 10, except that, if any Option
Closing Date is other than the Closing Date, the certificates, opinions and
letters referred to in paragraphs (c) through (k) shall be dated the Option
Closing Date in question and the opinions called for by paragraphs (c), (d), (e)
and (f) shall be revised to reflect the sale of Additional Shares.
11. Expenses. The Company and the Selling Stockholders agree to pay the
--------
following costs and expenses and all other costs and expenses incident to the
performance by them of their obligations hereunder: (i) the preparation,
printing or reproduction, and filing with the Commission of the registration
statement (including
38
financial statements and exhibits thereto), each of the Prepricing Prospectuses,
the Prospectuses, and each amendment or supplement to any of them; (ii) the
printing (or reproduction) and delivery (including postage, air freight charges
and charges for counting and packaging) of such copies of the registration
statement, each U.S. Prepricing Prospectus, the U.S. Prospectus, and all
amendments or supplements to any of them as may be reasonably requested for use
in connection with the offering and sale of the Shares; (iii) the preparation,
printing, authentication, issuance and delivery of certificates for the Shares,
including any stamp taxes in connection with the original issuance and sale of
the Shares; (iv) the cost of production (or reproduction) and delivery of this
Agreement, the preliminary and supplemental Blue Sky Memoranda and all other
agreements, memoranda, correspondence and other documents printed (or
reproduced) and delivered in connection with the original issuance and sale of
the Shares; (v) the registration or qualification of the Shares for offer and
sale under the securities or Blue Sky laws of the several jurisdictions as
provided in Section 5(g) hereof (including the reasonable fees, expenses and
disbursements of counsel for the U.S. Underwriters and Managers relating to the
preparation, printing or reproduction, and delivery of the preliminary and
supplemental Blue Sky Memoranda and such registration and qualification); (vi)
the filing fees in connection with any filings required to be made with the
National Association of Securities Dealers, Inc.; (vii) the transportation and
other expenses incurred by or on behalf of representatives of the Company in
connection with presentations to prospective purchasers of the Shares; (viii)
the fees and expenses of the Company's accountants and the fees and expenses of
counsel (including local and special counsel) for the Company and the Selling
Stockholders; (ix) the underwriting discounts and commissions (in proportion to
the number of Shares being offered by each Selling Stockholder, including any
Additional Shares that the U.S. Underwriters have elected to purchase); and (x)
the performance by the Company and the Selling Stockholders of their other
obligations under this Agreement.
12. Effective Date of Agreement. This Agreement shall become effective:
---------------------------
(i) upon the execution and delivery hereof by the parties hereto; or (ii) if, at
the time this Agreement is executed and delivered, it is necessary for the
registration statement or a post-effective amendment thereto to be declared
effective before the offering of the Shares
39
may commence, when notification of the effectiveness of the registration
statement or such post-effective amendment has been released by the Commission.
Until such time as this Agreement shall have become effective, it may be
terminated by the Company or the Selling Stockholders, by notifying you, or by
you, as Representatives of the several U.S. Underwriters, by notifying the
Company and the Selling Stockholders.
If any one or more of the U.S. Underwriters shall fail or refuse to
purchase Shares which it or they are obligated to purchase hereunder on the
Closing Date, and the aggregate number of Shares which such defaulting U.S.
Underwriter or U.S. Underwriters are obligated but fail or refuse to purchase is
not more than one-tenth of the aggregate number of Shares which the U.S.
Underwriters are obligated to purchase on the Closing Date, each non-defaulting
U.S. Underwriter shall be obligated, severally, in the proportion which the
number of Firm Shares set forth opposite its name in Schedule I hereto bears to
the aggregate number of Firm Shares set forth opposite the names of all non-
defaulting U.S. Underwriters or in such other proportion as you may specify in
accordance with Section 20 of the Master Agreement Among Underwriters of Xxxxx
Xxxxxx Inc., to purchase the Shares which such defaulting U.S. Underwriter or
U.S. Underwriters are obligated, but fail or refuse, to purchase. If any one or
more of the U.S. Underwriters shall fail or refuse to purchase Shares which it
or they are obligated to purchase on the Closing Date and the aggregate number
of Shares with respect to which such default occurs is more than one-tenth of
the aggregate number of Shares which the U.S. Underwriters are obligated to
purchase on the Closing Date and arrangements satisfactory to you and the
Selling Stockholders for the purchase of such Shares by one or more non-
defaulting U.S. Underwriters or other party or parties approved by you and the
Selling Stockholders are not made within 36 hours after such default, this
Agreement will terminate without liability on the part of any non-defaulting
U.S. Underwriter, the Company or any Selling Stockholder. In any such case
which does not result in termination of this Agreement, either you or the
Company shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and the Prospectuses or any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting U.S. Underwriter from liability in
40
respect of any such default of any such U.S. Underwriter under this Agreement.
The term "U.S. Underwriter" as used in this Agreement includes, for all purposes
of this Agreement, any party not listed in Schedule I hereto who, with your
approval and the approval of the Company, purchases Shares which a defaulting
U.S. Underwriter is obligated, but fails or refuses, to purchase.
Any notice under this Section 12 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
13. Termination of Agreement. This Agreement shall be subject to
------------------------
termination in your absolute discretion, without liability on the part of any
U.S. Underwriter to the Company or any Selling Stockholder by notice to the
Company, if prior to the Closing Date or any Option Closing Date (if different
from the Closing Date and then only as to the Additional Shares), as the case
may be, (i) trading in securities generally on the New York Stock Exchange, the
American Stock Exchange or the Nasdaq National Market shall have been suspended
or materially limited, (ii) a general moratorium on commercial banking
activities in New York shall have been declared by either federal or state
authorities, or (iii) there shall have occurred any outbreak or escalation of
hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions, the effect of which on the
financial markets of the United States is such as to make it, in your judgment,
impracticable or inadvisable to commence or continue the offering of the Shares
at the offering price to the public set forth on the cover page of the U.S.
Prospectus or to enforce contracts for the resale of the Shares by the U.S.
Underwriters. Notice of such termination may be given to the Company and the
Selling Stockholders by telegram, telecopy or telephone and shall be
subsequently confirmed by letter.
14. Information Furnished by the U.S. Underwriters. The statements set
----------------------------------------------
forth in the last paragraph on the cover page, the stabilization legend on the
inside front cover, and the statements in the first, second, fourth, seventh,
eighth, ninth, tenth and thirteenth paragraphs under the caption "Underwriting"
in any U.S. Prepricing Prospectus and in the U.S. Prospectus, constitute the
only information furnished by or on behalf of the U.S. Underwriters through you
as such information is referred to in Sections 7(b) and 9 hereof.
41
15. Miscellaneous. Except as otherwise provided in Sections 5, 12 and 13
-------------
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Company, at the office of the
Company at Furniture Brands International, Inc., 000 Xxxxx Xxxxxx Xxxx, Xx.
Xxxxx, Xxxxxxxx 00000, Attention: Xxxx Xxxxxxxxxxxx, Esq., General Counsel; (ii)
if to the Selling Stockholders, at Apollo Investment Fund, L.P., care of CICB
Bank and Trust Company (Cayman) Limited, Xxxxxx Street, Georgetown, Grand
Cayman, Cayman Islands, British West Indies and Xxxx Xxxxxxxx, X.X., Xxx
Xxxxxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000; or (iii) if to you, as
Representatives of the several U.S. Underwriters, care of Xxxxx Xxxxxx Inc., 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Manager, Investment
Banking Division.
This Agreement has been and is made solely for the benefit of the several
U.S. Underwriters, the Company, its directors and officers, and the other
controlling persons referred to in Section 9 hereof and the Selling Stockholders
and their respective successors and assigns, to the extent provided herein, and
no other person shall acquire or have any right under or by virtue of this
Agreement. Neither the term "successor" nor the term "successors and assigns"
as used in this Agreement shall include a purchaser from any U.S. Underwriter of
any of the Shares in his status as such purchaser.
16. Applicable Law; Counterparts. This Agreement shall be governed by and
----------------------------
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
42
Please confirm that the foregoing correctly sets forth the agreement among
the Company, the Selling Stockholders and the several U.S. Underwriters.
Very truly yours,
FURNITURE BRANDS INTERNATIONAL, INC.
By /s/ Xxxxx Xxxxxx
........................
Name: Xxxxx Xxxxxx
Title: Vice President
APOLLO INVESTMENT FUND, L.P.
By: Apollo Advisors, L.P.,
Managing General Partner
By: Apollo Capital Management,
Inc., General Partner
By /s/ Xxxxxxx Xxxxx
........................
Name: Xxxxxxx Xxxxx
Title: Vice President
LION ADVISORS, L.P.,
on behalf of an investment account
under management
By: Lion Capital Management, Inc.
General Partner
By /s/ Xxxxxxx Xxxxx
........................
Name: Xxxxxxx Xxxxx
Title: Vice President
43
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
U.S. Underwriters named in Schedule I
hereto.
XXXXX XXXXXX INC.
CS FIRST BOSTON CORPORATION
XXXXXX, READ & CO. INC
XXXXXXX XXXXX, XXXXXX XXXXXX & XXXXX INCORPORATED
WHEAT, FIRST SECURITIES, INC.
As Representatives of the Several U.S. Underwriters
By XXXXX XXXXXX INC.
By ..........................
Name:
Title: Director
44
SCHEDULE I
FURNITURE BRANDS INTERNATIONAL, INC.
U.S. Underwriter Firm Shares
---------------- -----------
Xxxxx Xxxxxx Inc...................... 1,210,000
CS First Boston Corporation........... 1,210,000
Xxxxxx, Read & Co. Inc................ 1,210,000
Xxxxxxx Xxxxx, Xxxxxx Xxxxxx & Xxxxx 1,210,000
Incorporated........................
Wheat, First Securities, Inc.......... 1,210,000
Advest, Inc........................... 75,000
Bear, Xxxxxxx & Co. Inc............... 125,000
BT Securities Corporation............. 125,000
The Chicago Corporation............... 75,000
Xxxxxxxxx & Co. of Virginia, Inc...... 75,000
X. X. Xxxxxxxx & Co. Incorporated..... 75,000
Xxxx Xxxxxx Xxxxxxxx Inc.............. 125,000
Xxxxxxxx & Xxxxxxxx, Incorporated..... 75,000
X. X. Xxxxxxx & Sons, Inc............. 125,000
Xxxxxxx, Xxxxx & Co................... 125,000
Huntleigh Securities Corporation...... 75,000
Interstate/Xxxxxxx Lane Corporation... 75,000
Xxxxxxxxx & Company, Inc.............. 75,000
Xxxxxx Brothers Inc................... 125,000
Xxxxxx Xxxxxxx & Co. Incorporated..... 125,000
PaineWebber Incorporated.............. 125,000
Xxxxxxx Xxxxx & Associates, Inc....... 75,000
Salomon Brothers Inc.................. 125,000
Xxxxx & Xxxxxxxxxxxx, Inc............. 75,000
Xxxxxx Xxxxxxx Incorporated........... 75,000
_________
Total........................... 8,000,000
=========
45
SCHEDULE II
FURNITURE BRANDS INTERNATIONAL, INC.
Selling Stockholders
--------------------
Number of
Name Firm Shares
---- -----------
Apollo Investment Fund, L.P........ 4,000,000
Lion Advisors, L.P., on behalf of 4,000,000
an investment account under
management.........................
_________
Total 8,000,000
=========
46
SCHEDULE III
FURNITURE BRANDS INTERNATIONAL, INC.
Required Stockholder Lock-Ups
-----------------------------
1. Xxxxxxx X. Xxxxx
2. Xxxxxxx X. Xxxxxxxx, Xx.
3. Xxxxx X. Xxxxxxx
4. K. Xxxxx Xxxxx, Xx.
5. Xxxxxxxxx X. Xxxxx
6. Xxxxx X. Xxxxxx
7. Xxxx Xxxxxxxxxxxx
8. Xxxxxx X. Xxxxxxx
