<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
FURNITURE BRANDS INTERNATIONAL, INC.
-----------------------------------------------------
(Name of Issuer)
Common Stock
---------------------------------------
(Title of Class of Securities)
458507100
-----------------------------
(CUSIP Number)
Morgan, Lewis & Bockius
John F. Hartigan, Esquire
801 South Grand Avenue
Los Angeles, California 90017-4615
(213) 612-2630
---------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
November 25, 1996
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
Check the following box if a fee is being paid with the statement [_]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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SCHEDULE 13D
CUSIP No. 458507100
-------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Apollo Investment Fund, L.P.
- ------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_]
(b) [_]
- ------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- ------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or (E) [_]
- ------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 11,994,358 shares of Common Stock (including
SHARES 145,439 shares issuable upon exercise of Warrants)
BENEFICIALLY
OWNED BY -----------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON -----------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
11,994,358 shares of Common Stock (including
145,439 shares issuable upon exercise of Warrants)
-----------------------------------------------------
10 SHARED DISPOSITIVE POWER
-----------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11,994,358 shares of Common Stock (including
145,439 shares issuable upon exercise of Warrants)
- ------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_]
- ------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.5%
- ------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- ------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 458507100
------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Lion Advisors, L.P.
- ------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_]
(b) [_]
- ------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- ------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or (E) [_]
- ------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 11,987,562 shares of Common Stock (including
SHARES 145,382 shares issuable upon exercise of Warrants)
BENEFICIALLY
OWNED BY -----------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON -----------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
11,987,562 shares of Common Stock (including
145,382 shares issuable upon exercise of Warrants)
-----------------------------------------------------
10 SHARED DISPOSITIVE POWER
- ------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11,987,562 shares of Common Stock (including
145,382 shares issuable upon exercise of Warrants)
- ------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_]
- ------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.5%
- ------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- ------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
STATEMENT PURSUANT TO RULE 13d-1
OF THE
GENERAL RULES AND REGULATIONS
UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
-----------------------------------------------------------------
-----------------------------------------------------------------
This Amendment No.1 to Schedule 13D (the "Amendment") supplements and
amends the Statement on Schedule 13D filed by Apollo Investment Fund, L.P. and
Lion Advisors, L.P. on December 23, 1994 (the "Original Statement," and together
with the Amendment the "Statement").
Item 1. Security and Issuer.
- ------ -------------------
Item 1 is hereby amended by deleting it in its entirety and substituting
following therefor:
This Statement on Schedule 13D relates to the Common Stock, no par value
("Common Stock"), and warrants to purchase Common Stock ("Warrants") of
Furniture Brands International, Inc., a Delaware corporation ("Furniture
Brands"), formerly named INTERCO INCORPORATED. The principal executive offices
of Furniture Brands are located at 101 South Hanley Road, St. Louis, Missouri,
63105.
Item 2. Identity and Background.
- ------ -----------------------
Appendix A to Item 2 is amended by deleting it in its entirety and
substituting Appendix A to Item 2 attached hereto.
Item 4. Purpose of Transaction.
- ------ ----------------------
Item 4 is hereby amended by deleting it in its entirety and substituting
the following therefor:
The Reporting Person acquired beneficial ownership of the shares of
Common Stock and Warrants to which the Original Statement related as a
result of the consummation of the Plan of Dissolution of Apollo Interco
described therein. The Plan of Dissolution
<PAGE>
effected a change in the nominal beneficial ownership of the shares previously
beneficially owned by Apollo Interco, but did not effect Apollo Interco's
partners' pecuniary interests in such shares. The dissolution of Apollo Interco
transfers from Apollo Interco to the Reporting Persons the power to control or
influence control of Furniture Brands, and the Reporting Persons may attempt to
exercise such influence from time to time. The Reporting Persons may change
their current intentions, or acquire additional shares of Common Stock or
Warrants or sell or otherwise dispose of all or any part of the Common Stock or
Warrants beneficially owned by such Reporting Persons, or take any other action
with respect to Furniture Brands or any of its debt or equity securities in any
manner permitted by law.
On October 4, 1996, Furniture Brands filed a Registration Statement on
Form S-3 (No. 333-13427), as amended by Amendment No. 1 filed on October 21,
1996, Amendment No. 2 filed on November 6, 1996 and Amendment No. 3 filed on
November 19, 1996 (the "Registration Statement") with the Securities and
Exchange Commission (the "Commission"). The Registration Statement relates to
the public offering of an aggregate of 10,000,000 shares of Common Stock (of
which 8,000,000 shares are being offered for sale in the United States and
Canada and a total of 2,000,000 shares are being offered in a concurrent
international offering outside of the United States and Canada) which are being
sold by the Reporting Persons, plus up to an additional 1,500,000 shares to be
sold upon exercise by the U.S. Underwriters (as hereinafter defined). On
November 19, 1996, the Registration Statement was declared effective by the
Commission.
On November 19, 1996, the Reporting Persons signed a U.S. Underwriting
Agreement (the "U.S. Underwriting Agreement") among the Reporting Persons,
Furniture Brands and the Underwriters named therein (the "U.S. Underwriters")
committing to sell 8,000,000 shares of Common Stock (plus 1,500,000 shares that
are subject to the Underwriters' over-allotment option) at a price per share of
$11.76. On the same date, the Reporting Persons signed an International
Underwriting Agreement (the "International Underwriting Agreement") among the
Reporting Persons, Furniture Brands and the Underwriters named therein (the
"International Underwriters") committing to sell 2,000,000 shares of Common
Stock at a price per share of $11.76. The sale of 10,000,000 firm commitment
shares in connection with the U.S. Underwriting Agreement and the International
Underwriting Agreement was completed on November 25, 1996. The U.S. Underwriting
Agreement and the International Underwriting Agreement are filed as exhibits to
this Schedule.
The Reporting Persons intend to review on a continuing basis their
investment in the Common Stock of the Company and may dispose or acquire from
time to time additional shares of the Common Stock of the Company. The Reporting
Persons retain the right at all times to sell or otherwise dispose of all or any
part of their holdings of the Common Stock of the Company in private or open
market transactions or pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the
-2-
<PAGE>
"Securities Act"), and applicable state securities laws, or under an
exemption from such registration available under the Securities Act
(including Rule 144 and Rule 144A) and applicable state securities laws and
subject, nevertheless, to the disposition of its property being at all times
within its control. Except as disclosed in this Item 4, the Reporting
Persons have no current plans or proposals which relate or would result in
any of the events described in Items (a) through (j) of the instructions to
Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
- ------ ------------------------------------
Item 5 is hereby amended by deleting it in its entirety and substituting the
following therefor:
(a) The Reporting Persons beneficially own an aggregate of
23,981,920 shares of Common Stock (including Warrants to purchase an
additional 290,821 shares of Common Stock), or approximately 38.9% of the
outstanding Common Stock. If the U.S. Underwriter's overallotment option is
exercised, the Reporting Persons will beneficially own an aggregate
22,481,920 shares of Common Stock (including Warrants to purchase an
additional 290,821 shares of Common Stock), or approximately 36.4% of the
outstanding Common Stock.
(b) The number of shares of Common Stock as to which there is sole
power to vote or to direct the vote, shared power to vote or to direct the
vote, sole power to dispose or direct the disposition, or shared power to
dispose or direct the disposition for the Reporting Persons is set forth in
the cover pages and such information is incorporated herein by reference.
(c) Except as otherwise disclosed in this Statement, the Reporting
Persons have not effected any transactions in shares of Common Stock during
the preceding 60 days.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or
- ------ Relationships With Respect to Securities of the Issuer.
------------------------------------------------------
Item 6 is hereby amended by deleting it in its entirety and substituting the
following therefor:
The responses of Item 3, Item 4 and Item 5 are incorporated by reference. In
addition, the Reporting Persons have demand registration and "piggy-back"
registration rights with respect to substantially all of the Common Stock
reported herein.
-3-
<PAGE>
Item 7. Material to be filed as Exhibits.
- ------ --------------------------------
Item 7 is amended by adding the following exhibits.
99.2 U.S. Underwriting Agreement, dated November 19, 1996, among the
Reporting Persons, Furniture Brands and the U.S. Underwriters.
99.3 International Underwriting Agreement, dated November 19, 1996, among
the Reporting Persons, Furniture Brands and the International
Underwriters.
-4-
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct and agree that this statement may be jointly filed with
Lion Advisors, L.P.
Dated: November 25, 1996
APOLLO INVESTMENT FUND, L.P.
By: Apollo Advisors, L.P.,
Managing General Partner
By: Apollo Capital Management, Inc.,
General Partner
By: /s/ Michael D. Weiner
---------------------
Michael D. Weiner
Vice President, Apollo Capital Management, Inc.
-5-
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct and agree that this statement may be jointly filed with
Apollo Investment Fund, L.P.
Dated: November 25, 1996
LION ADVISORS, L.P.
By: Lion Capital Management, Inc.,
General Partner
By: /s/ Michael D. Weiner
---------------------
Michael D. Weiner
Vice President, Lion Capital Management, Inc.
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<PAGE>
APPENDIX A TO ITEM 2
The following sets forth information with respect to the general partners,
executive officers, directors and principal shareholders of Lion Advisors, Lion
Capital, which is the sole general partner of Lion Advisors, Apollo, Apollo
Advisors, L.P. ("Apollo Advisors"), which is the managing general partner of
Apollo, Apollo Capital Management, Inc., a Delaware corporation which is the
general partner of Apollo Advisors ("Capital Management"), and Apollo Fund
Administration Limited ("Administration"), the administrative general partner of
Apollo.
Messrs. Leon D. Black and John J. Hannan, each of whom is a United States
citizen, are founding principals of Apollo Advisors and executive officers and
directors of Capital Management. Messrs. Black and Hannan are also founding
principals of Lion Advisors and Apollo Real Estate Advisors, L.P. ("AREA"). The
principal business of Apollo Advisors and Lion Advisors is to provide advice
regarding investments in securities and the principal business of AREA is to
provide advice regarding investments in real estate and real estate-related
investments. Apollo Advisors, together with an affiliate, acts as managing
general partner of Apollo , AIF II, L.P. and Apollo Investment Fund III, L.P.
private securities investment funds, and AREA, together with an affiliate acts
as managing general partner of Apollo Real Estate Investment Fund, L.P. and
Apollo Real Estate Investment Fund II, L.P., private real estate investment
funds. Capital Management is principally engaged in the business of serving as
general partner of Apollo Advisors. The principal offices of Lion Capital, Lion
Advisors and Capital Management are located at Two Manhattanville Road,
Purchase, New York 10577.
Mr. Black is the President and a director of Lion Capital and the
President and a director of Capital Management. Mr. Black's business address is
1301 Avenue of the Americas, New York, New York 10019.
Mr. Hannan is a Vice President and director of Lion Capital and a Vice
President and director of Capital Management. Mr. Hannan's business address is
1301 Avenue of the Americas, New York, New York 10019.
Peter Henry Lardner, Michael Francis Benedict Gillooly, Ian Thomas Patrick
and Martin William Laidlaw, each of whom is a British citizen, each serve as a
director of Administration. Each of the above four individuals is principally
employed by CIBC Bank and Trust Company (Cayman) Limited ("CIBC") in the
following positions: Mr. Lardner, Managing Director; Mr. Gillooly, Deputy
Managing Director; Mr. Patrick, Manager-Accounting Services; and Mr. Laidlaw,
Senior Fund Accountant. CIBC is a Cayman Islands corporation which is
principally engaged in the provision of trust, banking and corporate
administration services, the principal address of which is Edward Street, Grand
Cayman, Cayman Islands, British West Indies. It provides accounting,
administrative and other services to Administration pursuant to a contract.
Messrs. Black and Hannan are the beneficial owners of the stock of
Administration.
-7-
<PAGE>
Exhibit 99.2
Conformed Copy
8,000,000 Shares
FURNITURE BRANDS INTERNATIONAL, INC.
Common Stock
U.S. UNDERWRITING AGREEMENT
---------------------------
November 19, 1996
SMITH BARNEY INC.
CS FIRST BOSTON CORPORATION
DILLON, READ & CO. INC.
MERRILL LYNCH, PIERCE FENNER & SMITH INCORPORATED
WHEAT, FIRST SECURITIES, INC.
As Representatives of the Several U.S. Underwriters
c/o SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
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 Smith Barney Inc., CS
First Boston Limited, Dillon, Read & Co. Inc., Merrill Lynch International and
Wheat, First Securities, Inc. are acting as lead managers (the "Lead Managers").
The
<PAGE>
2
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
-------------------------------------
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
<PAGE>
3
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
<PAGE>
4
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
-------------------------------
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
<PAGE>
5
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.
<PAGE>
6
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
Smith Barney Inc., 388 Greenwich Street, New York, NY 10013, 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 Smith Barney 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
<PAGE>
7
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.
<PAGE>
8
(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
<PAGE>
9
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
<PAGE>
10
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 Smith Barney 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.
<PAGE>
11
(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
--------------------------------------
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 Smith Barney 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
<PAGE>
12
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
---------------------------------------------
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
<PAGE>
13
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").
<PAGE>
14
(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
<PAGE>
15
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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.
<PAGE>
20
(w) The Company and the Subsidiaries own or possess all patents,
trademarks, trademark registrations, service marks, service mark 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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
24
among themselves, which firm shall be designated in writing by Smith Barney
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.
<PAGE>
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,
<PAGE>
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
<PAGE>
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.
<PAGE>
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 Morgan,
Lewis & Bockius 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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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, Hauer & Feld, 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
<PAGE>
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 Lynn
Chipperfield, 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;
<PAGE>
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 mark registrations, trade names,
copyrights,
<PAGE>
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 & Moore, 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.
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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 Smith
Barney 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
<PAGE>
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.
<PAGE>
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., 101 South Hanley Road, St.
Louis, Missouri 63105, Attention: Lynn Chipperfield, Esq., General Counsel; (ii)
if to the Selling Stockholders, at Apollo Investment Fund, L.P., care of CICB
Bank and Trust Company (Cayman) Limited, Edward Street, Georgetown, Grand
Cayman, Cayman Islands, British West Indies and Lion Advisors, L.P., Two
Manhattanville Road, Purchase, New York 10577; or (iii) if to you, as
Representatives of the several U.S. Underwriters, care of Smith Barney Inc., 388
Greenwich Street, New York, New York 10013, 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.
<PAGE>
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/ David Howard
........................
Name: David Howard
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/ Michael Gross
........................
Name: Michael Gross
Title: Vice President
LION ADVISORS, L.P.,
on behalf of an investment account
under management
By: Lion Capital Management, Inc.
General Partner
By /s/ Michael Gross
........................
Name: Michael Gross
Title: Vice President
<PAGE>
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.
SMITH BARNEY INC.
CS FIRST BOSTON CORPORATION
DILLON, READ & CO. INC
MERRILL LYNCH, PIERCE FENNER & SMITH INCORPORATED
WHEAT, FIRST SECURITIES, INC.
As Representatives of the Several U.S. Underwriters
By SMITH BARNEY INC.
By ..........................
Name:
Title: Director
<PAGE>
44
SCHEDULE I
FURNITURE BRANDS INTERNATIONAL, INC.
<TABLE>
<CAPTION>
U.S. Underwriter Firm Shares
---------------- -----------
<S> <C>
Smith Barney Inc...................... 1,210,000
CS First Boston Corporation........... 1,210,000
Dillon, Read & Co. Inc................ 1,210,000
Merrill Lynch, Pierce Fenner & Smith 1,210,000
Incorporated........................
Wheat, First Securities, Inc.......... 1,210,000
Advest, Inc........................... 75,000
Bear, Stearns & Co. Inc............... 125,000
BT Securities Corporation............. 125,000
The Chicago Corporation............... 75,000
Davenport & Co. of Virginia, Inc...... 75,000
D. A. Davidson & Co. Incorporated..... 75,000
Dean Witter Reynolds Inc.............. 125,000
Dominick & Dominick, Incorporated..... 75,000
A. G. Edwards & Sons, Inc............. 125,000
Goldman, Sachs & Co................... 125,000
Huntleigh Securities Corporation...... 75,000
Interstate/Johnson Lane Corporation... 75,000
Jefferies & Company, Inc.............. 75,000
Lehman Brothers Inc................... 125,000
Morgan Stanley & Co. Incorporated..... 125,000
PaineWebber Incorporated.............. 125,000
Raymond James & Associates, Inc....... 75,000
Salomon Brothers Inc.................. 125,000
Scott & Stringfellow, Inc............. 75,000
Tucker Anthony Incorporated........... 75,000
_________
Total........................... 8,000,000
=========
</TABLE>
<PAGE>
45
SCHEDULE II
FURNITURE BRANDS INTERNATIONAL, INC.
Selling Stockholders
--------------------
<TABLE>
<CAPTION>
Number of
Name Firm Shares
- ---- -----------
<S> <C>
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
=========
</TABLE>
<PAGE>
46
SCHEDULE III
FURNITURE BRANDS INTERNATIONAL, INC.
Required Stockholder Lock-Ups
-----------------------------
1. Richard B. Loynd
2. Wilbert G. Holliman, Jr.
3. Brent B. Kincaid
4. K. Scott Tyler, Jr.
5. Frederick B. Starr
6. David P. Howard
7. Lynn Chipperfield
8. Steven W. Alstadt
<PAGE>
Exhibit 99.3
Conformed Copy
2,000,000 Shares
FURNITURE BRANDS INTERNATIONAL, INC.
Common Stock
INTERNATIONAL UNDERWRITING AGREEMENT
------------------------------------
November 19, 1996
SMITH BARNEY INC.
CS FIRST BOSTON LIMITED
DILLON, READ & CO. INC.
MERRILL LYNCH INTERNATIONAL
WHEAT, FIRST SECURITIES, INC.
As Lead Managers for the Several Managers
c/o SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
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 2,000,000 shares (the "Shares") of the common stock, no
par value per share of the Company (the "Common Stock"), to the several Managers
named in Schedule I hereto (the "Managers").
It is understood that the Company and the Selling Stockholders are
currently entering into a U.S. Underwriting Agreement, dated the date hereof
(the "U.S. Underwriting Agreement"), providing for the sale of 8,000,000 shares
of the Common Stock by the Selling Stockholders (the "U.S. Shares"), through
arrangements with certain underwriters in the United States and Canada (the
"U.S. Underwriters"), for whom Smith Barney Inc., CS First Boston Corporation,
Dillon, Read & Co. Inc., Merrill Lynch, Pierce Fenner & Smith Incorporated and
Wheat, First Securities, Inc. are acting as representatives (the
"Representatives"). The Shares and the U.S. Shares, collectively, are herein
called the "Underwritten Shares".
The Company and the Selling Stockholders also understand that the Lead
Managers and the Representatives
<PAGE>
2
have entered into an agreement (the "Agreement Between U.S. Underwriters and
Managers") contemplating the coordination of certain transactions between the
Managers and the U.S. Underwriters and that, pursuant thereto and subject to the
conditions set forth therein, the Managers may purchase from the U.S.
Underwriters a portion of the U.S. Shares or sell to the U.S. Underwriters a
portion of the Shares. The Company and the Selling Stockholders understand that
any such purchases and sales between the Managers and the U.S. Underwriters
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 U.S. Underwriting
Agreement.
The Company and the Selling Stockholders wish to confirm as follows their
respective agreements with you (the "Lead Managers") and the other several
Managers on whose behalf you are acting, in connection with the several
purchases of the Shares by the Managers.
1. Registration Statement and Prospectus. The Company has prepared and
-------------------------------------
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 Statment" 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 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
<PAGE>
3
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 outside the United States (as defined
herein) or Canada (as defined herein) to persons other than U.S. or Canadian
Persons (the "International Prepricing Prospectus" and the "International
Prospectus", respectively), and a Prepricing Prospectus and a Prospectus
relating to the U.S. Shares which are to be offered and sold in the United
States and Canada to U.S. or Canadian Persons (the "U.S. Prepricing Prospectus"
and the "U.S. Prospectus", respectively). The International Prospectus and the
U.S. Prospectus are herein collectively
<PAGE>
4
called the "Prospectuses," and the International Prepricing Prospectus and the
U.S. 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
-------------------------------
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 Manager 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 Manager, 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 Shares which bears the same proportion to the number of
Shares set forth opposite the name of such Selling Stockholder in Schedule II
hereto as the number of Shares set forth opposite the name of such Manager in
Schedule I hereto (or such number of Shares increased as set forth in Section 12
hereof) bears to the aggregate number of Shares to be sold by the Selling
Stockholders.
Each Manager 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 a U.S.
or Canadian Person and (ii) it has not offered or sold, and will not offer,
sell, resell or deliver, directly or indirectly, any Shares or distribute any
International Prospectus in the United States or Canada or to a U.S. or Canadian
Person.
<PAGE>
5
3. Terms of Public Offering. The Company and the Selling Stockholders
------------------------
have been advised by you that the Managers 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 International
Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the Managers
-------------------------------------------
of and payment for the Shares shall be made at the office of Smith Barney Inc.,
388 Greenwich Street, New York, NY 10013, at 10:00 A.M., New York City time, on
November 25, 1996 (the "Closing Date"). The place of closing for the Shares and
the Closing Date may be varied by agreement among you, the Company and the
Selling Stockholders.
Certificates for the Shares 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. 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. The certificates evidencing the Shares and shall be delivered to
you on the Closing Date, against payment of the purchase price therefor in
immediately available funds.
5. Agreements of the Company. The Company agrees with the several
-------------------------
Managers 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
<PAGE>
6
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.
(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
<PAGE>
7
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 International Prepricing Prospectus. The Company
consents to the use, in accordance with the provisions of the Act and with the
securities laws of the jurisdictions in which the Shares are offered by the
several Managers and by dealers, prior to the date of the International
Prospectus, of each International 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 Managers a prospectus is required by the Act to be delivered in
connection with sales by any Manager or dealer, the Company will expeditiously
deliver to each Manager and each dealer, without charge, as many copies of the
International Prospectus (and of any amendment or supplement thereto) as you may
reasonably request. The Company consents to the use of the International
Prospectus (and of any amendment or supplement thereto) in accordance with the
provisions of the Act and with the securities laws of the jurisdictions in which
the Shares are offered by the several Managers 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 International Prospectus is required by
the Act to be delivered in connection with sales by any Manager 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 Managers is required to be set
forth in the International 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 International 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 Managers and dealers a
reasonable number of copies thereof. In the event that the
<PAGE>
8
Company and you, as Lead Managers for the several Managers, agree that the
International 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
Managers in connection with the registration or qualification of the Shares for
offering and sale by the several Managers and by dealers under the securities
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 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 Managers 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 Lead Managers for all out-of-pocket
<PAGE>
9
expenses (including reasonable fees and expenses of counsel for the Managers)
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
International Prospectus, without the prior written consent of Smith Barney 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.
(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 all conditions to the Managers' obligations to purchase
the Shares.
6. Agreements of the Selling Stockholders. Each of the Selling
--------------------------------------
Stockholders agrees with the several Managers 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
<PAGE>
10
Shares that are sold by the Selling Stockholder to the Managers.
(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 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 International Prospectus, without the prior written consent of Smith Barney
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 U.S. Underwriting
Agreement and in the Prepricing Prospectuses and the Prospectuses, such Selling
Stockholder 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
---------------------------------------------
and warrants to each Manager and Selling Stockholder that:
(a) Each International 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 International 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 Manager or U.S. Underwriter furnished to the
Company in writing by a Manager through the Lead Managers or by a U.S.
Underwriter through the Representatives or by a Selling Stockholder expressly
for use therein. The Commission has
<PAGE>
11
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
International 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 International
Prospectus made in reliance upon and in conformity with information relating to
any Selling Stockholder or to any Manager or U.S. Underwriter furnished to the
Company in writing by a Manager through the Lead Managers or by a U.S.
Underwriter through the Representatives 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.
<PAGE>
12
(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").
(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
<PAGE>
13
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 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
<PAGE>
14
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 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
<PAGE>
15
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 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
<PAGE>
16
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 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,
<PAGE>
17
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 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
<PAGE>
18
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.
(w) The Company and the Subsidiaries own or possess all patents,
trademarks, trademark registrations, service marks, service mark 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,
$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 Manager and the Company
that:
(a) Such Selling Stockholder now has, and on the 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
<PAGE>
19
provided in this Agreement, and upon delivery of and payment for such Shares
hereunder, the several Managers 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 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 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
<PAGE>
20
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 other Manager and each person,
if any, who controls any Manager 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 International Prepricing Prospectus or in the
Registration Statement or the International 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 Manager or U.S. Underwriter furnished in
writing to the Company by or on behalf of any Manager through you or by or on
behalf of any U.S. Underwriter through a Representative expressly for use in
connection therewith; provided, however, that the indemnification contained in
this paragraph (a) with respect to any International Prepricing Prospectus shall
not inure to the benefit of any Manager (or to the benefit of any person
controlling such Manager) on account of any such
<PAGE>
21
loss, claim, damage, liability or expense arising from the sale of the Shares by
such Manager to any person if a copy of the International 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
International Prepricing Prospectus was corrected in the International
Prospectus, provided that the Company has delivered the International Prospectus
to the several Managers 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 Manager and each person, if any,
who controls any Manager 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 Manager, but only with respect to
information relating to such Selling Stockholder furnished in writing by or on
behalf of such Selling Stockholder expressly for use in the Registration
Statement, the International Prospectus or any International 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 Manager
or any person controlling any Manager in respect of which indemnity may be
sought against the Company, any Selling Stockholder or both, such Manager 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 Manager 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 Manager 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
<PAGE>
22
(including any impleaded parties) include both such Manager or such controlling
person and the indemnifying parties and such Manager 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 Manager
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 Managers and controlling persons not having actual or potential
differing interests with you or among themselves, which firm shall be designated
in writing by Smith Barney 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 Manager, 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 Manager 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 Manager, but only with respect to information relating to
such Manager furnished in writing by or on behalf of such Manager through you
expressly for use in the Registration Statement, the International Prospectus or
any International Prepricing Prospectus, or any amendment or supplement
<PAGE>
23
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 International
Prospectus or any International Prepricing Prospectus, or any amendment or
supplement thereto, and in respect of which indemnity may be sought against any
Manager pursuant to this paragraph (d), such Manager 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 Manager 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 Manager'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 Managers by
paragraph (c) above. The foregoing indemnity agreement shall be in addition to
any liability which any Manager may otherwise have.
(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 Managers 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 Managers 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 Managers 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 Managers, in each
<PAGE>
24
case as set forth in the table on the cover page of the International
Prospectus. The relative fault of the Company and the Selling Stockholders on
the one hand and the Managers 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 Managers on the other hand and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
(f) The Company, the Selling Stockholders and the Managers 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 Managers 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 Manager 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 Manager 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 Managers'
obligations to contribute pursuant to this Section 9 are several in proportion
to the respective numbers of Shares set forth opposite their names in Schedule I
hereto (or such numbers of 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
<PAGE>
25
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 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 Manager or any
person controlling any Manager, 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 Manager or any person
controlling any Manager, 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 Managers' Obligations. The several obligations of the
-----------------------------------
Managers to purchase the 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 Manager, threatened
<PAGE>
26
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.
(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 Lead Managers for the several Managers, 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 Managers 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 Lead Managers for the several Managers, materially
adversely affect the market for the Shares.
(c) You shall have received on the Closing Date, an opinion of Morgan,
Lewis & Bockius LLP, counsel for the Company, dated the Closing Date and
addressed to you, as Lead Managers for the several Managers, 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);
<PAGE>
27
(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 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
<PAGE>
28
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
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
<PAGE>
29
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 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
<PAGE>
30
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 as
of the Closing Date, 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,
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, Hauer & Feld, LLP, counsel for the Selling Stockholders, dated
the Closing Date and addressed to you, as Lead Managers for the several Managers
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 Managers against payment therefor in
accordance with the provisions of this Agreement, the Managers will acquire
the Shares free of any adverse claim within the meaning of Section 8-302 of
the Uniform Commercial Code
<PAGE>
31
as in effect in the State of New York, assuming the Managers have 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 Lynn
Chipperfield, Esq., general counsel for the Company, dated the Closing Date and
addressed to you, as Lead Managers for the several Managers, 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;
<PAGE>
32
(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 mark registrations, trade names,
copyrights,
<PAGE>
33
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 & Moore, counsel for the U.S. Underwriters, dated the Closing Date and
addressed to you, as Lead Managers for the several Managers, with respect to the
matters as you may reasonably request.
(g) You shall have received letters addressed to you, as Lead Managers for
the several Managers, 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.
<PAGE>
34
(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
<PAGE>
35
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 U.S. 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 Lead Managers for the Managers, or
to counsel for the Managers, shall be deemed a representation and warranty by
the Company or such Selling Stockholder to each Manager as to the statements
made therein.
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 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 International Prepricing Prospectus,
the International 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
<PAGE>
36
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 Managers and U.S. Underwriters 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; 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 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 Lead Managers for
the several Managers, by notifying the Company and the Selling Stockholders.
If any one or more of the Managers 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 Manager or Managers are
obligated but fail or refuse to purchase is not more
<PAGE>
37
than one-tenth of the aggregate number of Shares which the Managers are
obligated to purchase on the Closing Date, each non-defaulting Manager shall be
obligated, severally, in the proportion which the number of Shares set forth
opposite its name in Schedule I hereto bears to the aggregate number of Shares
set forth opposite the names of all non-defaulting Managers or in such other
proportion as you may specify in accordance with Section 20 of the Master
Agreement Among Underwriters of Smith Barney Inc., to purchase the Shares which
such defaulting Manager or Managers are obligated, but fail or refuse, to
purchase. If any one or more of the Managers 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 Managers 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 Managers 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 Manager, 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 Manager from
liability in respect of any such default of any such Manager under this
Agreement. The term "Manager" 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 Manager 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
Manager to the Company or any Selling Stockholder by notice to the Company, if
prior to the Closing Date (i) trading in securities generally on the New York
Stock Exchange, the American Stock Exchange or the
<PAGE>
38
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 International Prospectus or to enforce contracts
for the resale of the Shares by the Managers. 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 Managers. 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
International Prepricing Prospectus and in the International Prospectus,
constitute the only information furnished by or on behalf of the Managers
through you as such information is referred to in Sections 7(b) and 9 hereof.
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., 101 South Hanley Road, St.
Louis, Missouri 63105, Attention: Lynn Chipperfield, Esq., General Counsel; (ii)
if to the Selling Stockholders, at Apollo Investment Fund, L.P., care of CICB
Bank and Trust Company (Cayman) Limited, Edward Street, Georgetown, Grand
Cayman, Cayman Islands, British West Indies and Lion Advisors, L.P., Two
Manhattanville Road, Purchase, New York 10577; or (iii) if to you, as Lead
Managers for the several Managers, care of Smith Barney Inc., 388 Greenwich
Street, New York, New York 10013, Attention: Manager, Investment Banking
Division.
This Agreement has been and is made solely for the benefit of the several
Managers, the Company, its directors and officers, and the other controlling
persons referred to in Section 9 hereof and the Selling Stockholders and their
<PAGE>
39
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 Manager 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.
<PAGE>
40
Please confirm that the foregoing correctly sets forth the agreement among
the Company, the Selling Stockholders and the several Managers.
Very truly yours,
FURNITURE BRANDS INTERNATIONAL, INC.
By /s/ David P. Howard
-------------------------
Name: David P. Howard
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/ Michael Gross
-------------------------
Name: Michael Gross
Title: Vice President
LION ADVISORS, L.P.,
on behalf of an investment account
under management
By: Lion Capital Management, Inc.
General Partner
By /s/ Michael Gross
-------------------------
Name: Michael Gross
Title: Vice President
<PAGE>
41
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
Managers named in Schedule I
hereto.
SMITH BARNEY INC.
CS FIRST BOSTON LIMITED
DILLON, READ & CO. INC
MERRILL LYNCH INTERNATIONAL
WHEAT, FIRST SECURITIES, INC.
As Lead Managers for the Several Managers
By SMITH BARNEY INC.
By /s/ J. Andrew Sanford
-------------------------
Name: /s/ J. Andrew Sanford
Title: Director
<PAGE>
42
SCHEDULE I
FURNITURE BRANDS INTERNATIONAL, INC.
<TABLE>
<CAPTION>
Number of
Manager Shares
------- ---------
<S> <C>
Smith Barney Inc......................... 330,000
CS First Boston Limited.................. 330,000
Dillon, Read & Co. Inc................... 330,000
Merrill Lynch International.............. 330,000
Wheat, First Securities, Inc............. 330,000
Barclays de Zoete Wedd Limited........... 50,000
CDC Marches.............................. 50,000
Credit Lyonnais Securities............... 50,000
ING Bank N.V............................. 50,000
Kleinwort Benson Limited................. 50,000
VEREINS-UND WESTBANK Aktiengesellschaft.. 50,000
Yamaichi International (Europe) Limited.. 50,000
---------
Total............................. 2,000,000
=========
</TABLE>
<PAGE>
43
SCHEDULE II
FURNITURE BRANDS INTERNATIONAL, INC.
Selling Stockholders
--------------------
<TABLE>
<CAPTION>
Number of
Name Shares
- ---- ---------
<S> <C>
Apollo Investment Fund, L.P........ 1,000,000
Lion Advisors, L.P., on behalf of 1,000,000
an investment account under
management.........................
_________
Total 2,000,000
=========
</TABLE>
<PAGE>
44
SCHEDULE III
FURNITURE BRANDS INTERNATIONAL, INC.
Required Stockholder Lock-Ups
-----------------------------
1. Richard B. Loynd
2. Wilbert G. Holliman, Jr.
3. Brent B. Kincaid
4. K. Scott Tyler, Jr.
5. Frederick B. Starr
6. David P. Howard
7. Lynn Chipperfield
8. Steven W. Alstadt
