Fort ▇▇▇▇▇ Corporation
Series K $3.375 Cumulative Convertible Exchangeable Preferred Stock
Series L $14.00 Cumulative Convertible Exchangeable Preferred Stock
Series N $14.00 Cumulative Convertible Exchangeable Preferred Stock
Standby Agreement
New York, New York
March 10, 1998
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
As Representative of the several Purchasers
c/o ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Fort ▇▇▇▇▇ Corporation, a Virginia corporation (the
"Company"), intends to call for redemption on April 10, 1998 (the "Redemption
Date") (i) all of the 1,999,695 outstanding shares of its Series K $3.375
Cumulative Convertible Exchangeable Preferred Stock (the "Series K Preferred
Stock"), par value $10.00 per share, at $50.00 per share, plus accrued and
unpaid dividends thereon, in the amount of $.64688 per share of Series K
Preferred Stock to and including the Redemption Date, for a total redemption
price of $50.64688 (the "Series K Redemption Price") per share of Series K
Preferred Stock, (ii) all of the 999,765 outstanding shares of its Series L
$14.00 Cumulative Convertible Exchangeable Preferred Stock (the "Series L
Preferred Stock"), par value $10.00 per share, at $50.00 per Series L Depositary
Share (as defined below), plus accrued and unpaid dividends thereon, in the
amount of $.09722 per Series L Depositary Share to and including the Redemption
Date, for a total redemption price of $50.09722 (the "Series L Redemption
Price") per Series L Depositary Share and (iii) all of the 264,042 outstanding
shares of its Series N $14.00 Cumulative Convertible Exchangeable Preferred
Stock (the "Series N Preferred Stock"), par value $10.00 per share, at $50.00
per Series N Depositary Share (as defined below), plus accrued and unpaid
dividends thereon, in the amount of $.09722 per Series N Depositary Share to and
including the Redemption Date, for a total redemption price of $50.09722 (the
"Series N Redemption Price") per Series N Depositary Share. The Series K
Preferred Stock, the Series L Preferred Stock and the Series N Preferred Stock
are collectively referred to herein as the "Redeemable Securities." Each of the
Series K Redemption Price, the Series L Redemption Price and the Series N
Redemption Price is referred to herein as a "Redemption Price." Shares of the
Redeemable Securities are convertible into shares of the Common Stock, $.10 par
value, of the Company ("Common Stock"), at any time prior to 5:00 P.M., New York
City time, on the Redemption Date.
The Series L Preferred Stock may be represented by up to
3,998,700 depositary shares (the "Series L Depositary Shares") issued by the
Depositary (as defined herein) pursuant to the deposit agreement, dated as of
September 18, 1987 (the "Series L Deposit Agreement"), among the Company, Sovran
Bank, N.A., as depositary, or any successor depositary (the "Depositary") and
the holders from time to time of the Series L Depositary Shares, with each
Series L Depositary Share representing ownership of 1/4 of a share of Series L
Preferred Stock. The Series N Preferred Stock may be represented by up to
1,056,168 depositary shares (the "Series N Depositary Shares" and, together with
the Series L Depositary Shares, the "Depositary Shares") issued by the
Depositary pursuant to the deposit agreement, dated as of January 1, 1990 (the
"Series N Deposit Agreement" and, together with the Series L Deposit Agreement,
the "Deposit Agreements"), among the Company, the Depositary and the holders
from time to time of the Series N Depositary Shares, with each Series N
Depositary Share representing ownership of 1/4 of a share of Series L Preferred
Stock.
In order to ensure that the Company will have available
sufficient funds to redeem any Redeemable Securities not converted prior to or
on the Redemption Date, the Company desires to make arrangements pursuant to
which the purchasers named in Schedule I hereto (the "Purchasers"), for whom you
(the "Representative") are acting as Representative, will, following the
Redemption Date, purchase shares of Common Stock that would have been issuable
upon the conversion of the Redeemable Securities that have not been surrendered
for conversion prior to 5:00 P.M., New York City time, on the Redemption Date.
To the extent there are no additional Purchasers listed on Schedule I other than
you, the term Representative as used herein shall mean you, as Purchasers, and
the terms Representative and Purchasers shall mean either the singular or plural
as the context requires.
Any reference herein to the Registration Statement, a
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Exchange Act on or before the Effective Date of the
Registration Statement or the issue date of such Preliminary Prospectus or the
Prospectus, as the case may be; and any reference herein to the terms "amend,"
"amendment" or "supplement" with respect to the Registration Statement, any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
the filing of any document under the Exchange Act after the Effective Date of
the Registration Statement, or the issue date of any Preliminary Prospectus or
the Prospectus, as the case may be, deemed to be incorporated therein by
reference. Certain terms used herein are defined in Section 17 hereof.
1. Representations and Warranties. The Company
represents and warrants to, and agrees with, each Purchaser as set forth below
in this Section 1.
(a) The Company meets the requirements for use of Form
S-3 under the Act and has prepared and filed with the Commission a
registration statement (file number 333-_____) on Form S-3, including a
related preliminary prospectus, for the registration under the Act of
the issuance by the Company of the shares of Common Stock issuable upon
conversion by the Purchasers of Redeemable Securities and the sale by
the Purchasers of any shares of Common Stock that may be acquired by
them hereunder.
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The Company may have filed one or more amendments thereto, including a
related preliminary prospectus, each of which has previously been
furnished to you. The Company will next file with the Commission one of
the following: either (1) prior to the Effective Date of such
registration statement, a further amendment to such registration
statement, including the form of final prospectus, (2) after the
Effective Date of such registration statement, a final prospectus in
accordance with Rule 424(b) or (3) a final prospectus in accordance
with Rules 415 and 424(b). In the case of clause (2), the Company has
included in such registration statement, as amended at the Effective
Date, all information required by the Act and the rules thereunder to
be included in such registration statement and the Prospectus;
PROVIDED, HOWEVER, that the Company makes no representations or
warranties as to the information contained in or omitted from the
Registration Statement or the Prospectus (or any supplement thereto) in
reliance upon and in conformity with information furnished herein or in
writing to the Company by or on behalf of any Purchaser through the
Representatives specifically for inclusion in the Registration
Statement or the Prospectus (or any supplement thereto). As filed, such
amendment and form of final prospectus, or such final prospectus, shall
contain all such required material information, and, except to the
extent the Representative shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to you prior
to the Execution Time or, to the extent not completed at the Execution
Time, shall contain only such specific additional information and other
changes (beyond those contained in the latest Preliminary Prospectus)
as the Company has advised you, prior to the Execution Time, will be
included or made therein. If the Registration Statement contains the
undertaking specified by Regulation S-K Item 512(a), the Registration
Statement, at the Execution Time, meets the requirements set forth in
Rule 415(a)(1)(x).
(b) On the Effective Date, the Registration Statement
did or will, and when the Prospectus is first filed (if required) in
accordance with Rule 424(b) and, on the Redemption Date and on the
Closing Date (as defined herein), the Prospectus (and any supplements
thereto) will, comply in all material respects with the applicable
requirements of the Act and the Exchange Act and the respective rules
thereunder; on the Effective Date and at the Execution Time, the
Registration Statement did not or will not contain any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date, the Prospectus, if not filed
pursuant to Rule 424(b), did not or will not, and on the date of any
filing pursuant to Rule 424(b), on the Redemption Date and on the
Closing Date, the Prospectus (together with any supplement thereto)
will not, include any untrue statement of a material fact or omit 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; PROVIDED, HOWEVER, that the Company makes no
representations or warranties as to the information contained in or
omitted from the Registration Statement or the Prospectus (or any
supplement thereto) in reliance upon and in conformity with information
furnished herein or in writing to the Company by or on behalf of any
Purchaser through the Representative specifically for inclusion in the
Registration Statement or the Prospectus (or any supplement thereto).
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(c) Shares of Series K Preferred Stock are convertible
into Common Stock at a rate of 1.3376 shares of Common Stock per share
of Series K Preferred Stock. Series L Depositary Shares and Series N
Depositary Shares are convertible into Common Stock at a rate of 1.3626
shares of Common Stock per Series L Depositary Share or Series N
Depositary Share, as the case may be. At the Execution Time, there were
outstanding 1,999,695 shares of Series K Preferred Stock, 999,765
shares of Series L Preferred Stock represented by 3,998,700 Series L
Depositary Shares and 264,042 shares of Series N Preferred Stock
represented by 1,056,168 Series N Depositary Shares. The redemption of
all the outstanding Redeemable Securities and Depositary Shares has
been duly authorized by the Company. By the close of business on the
Business Day following the date of execution hereof, all of the
Redeemable Securities and Depositary Shares will have been duly called
for redemption in accordance with the Articles of Incorporation of the
Company, as amended (the "Articles of Incorporation"), or the terms of
the relevant Deposit Agreement, as the case may be; and the right to
convert the Redeemable Securities into shares of Common Stock will, as
a result of such call, expire at 5:00 P.M., New York City time, on the
Redemption Date. Copies of the forms of notice of redemption and the
related letters of transmittal (collectively, the "Notices of
Redemption") with respect to each series of Redeemable Securities have
been heretofore delivered to you by the Company. The Redeemable
Securities and the Depositary Shares have been duly and validly
authorized and issued and are fully paid and nonassessable.
(d) The Company has neither taken nor will take,
directly or indirectly, any action designed to cause or result in, or
that has constituted or that might be reasonably expected to cause or
result in, stabilization or manipulation of the price of any security
of the Company to facilitate the conversion of the Redeemable
Securities (provided that the Company does not make any representation
as to any actions that may be taken by any Purchaser); and the Company
has not distributed and will not distribute any prospectus or other
offering material in connection with the issue and sale of the
Securities other than the Registration Statement, any preliminary
prospectus filed with the Commission or the Prospectus or other
material permitted by the Act.
(e) The Company has neither paid or given, nor will pay
or give, directly or indirectly, any commission or other remuneration
for soliciting the conversion of Redeemable Securities into Common
Stock and cash.
(f) The Registration Statement has become effective; no
stop order suspending the effectiveness of the Registration Statement
is in effect; and no proceedings for such purpose are pending before
or, to the knowledge of the Company, threatened by the Commission.
(g) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (A) there has been no material adverse change
in the condition (financial or otherwise), earnings or business affairs
of the Company and its subsidiaries considered as one enterprise,
whether or not arising from transactions in the ordinary course of
business (a "Material Adverse
4
Effect"), and (B) there have been no transactions entered into by the
Company or any of its subsidiaries, other than those in the ordinary
course of business, which are material with respect to the Company and
its subsidiaries considered as one enterprise.
(h) This Agreement has been duly authorized, executed
and delivered by the Company.
(i) The authorized capital stock of the Company conforms
in all material respects as to legal matters to the description thereof
contained in the Prospectus.
(j) Fort ▇▇▇▇▇ Operating Company (formerly ▇▇▇▇▇ River
Paper Company, Inc.) ("FJOC"), Fort ▇▇▇▇▇ N.V. ("FJNV"), Fort ▇▇▇▇▇
Fiber Company ("FJFC" and, together with FJOC and FJNV, the
"Significant Subsidiaries") and Fort ▇▇▇▇▇ Maine, Inc. are the only
direct subsidiaries of the Company that are "significant subsidiaries"
of the Company (as such term is defined under Regulation S-X).
(k) The call of the Redeemable Securities for
redemption, the conversion or redemption thereof, the issue and sale of
the Securities (as hereinafter defined), the execution, delivery and
performance by the Company of this Agreement and the consummation by
the Company of the transactions contemplated herein and compliance by
the Company with its obligations hereunder do not and will not, whether
with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event
(as defined below) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company or pursuant to any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument to which
the Company is a party or by which it may be bound, or to which any of
the property or assets of the Company is subject (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will any such
action result in any violation of the provisions of the charter or
by-laws of the Company, or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, known to the
Company having jurisdiction over the Company or any of its assets,
properties or operations which would result in a Material Adverse
Effect. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment of all or
a portion of such indebtedness by the Company or any subsidiary.
(l) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency by or on behalf of the Company is
necessary or required for the performance by the Company of its
obligations hereunder, in connection with the issue and sale of the
Securities hereunder or the consummation by the Company of the
transactions
5
contemplated by this Agreement, except such as have been already
obtained, and except for such that would not reasonably be expected to
have a Material Adverse Effect or as may be required under the Act or
the applicable rules and regulations of the Commission thereunder or
state securities laws.
2. Purchase and Conversion of Redeemable Securities.
Subject to the terms and conditions and in reliance upon the representations and
warranties herein set forth:
(a) Each Purchaser, severally and not jointly, agrees to
surrender for conversion into Common Stock prior to 5:00 P.M., New York
City time, prior to or on the Redemption Date all Redeemable Securities
and Depositary Shares purchased by such Purchaser pursuant to Section 4
hereof or otherwise acquired by such Purchaser. The shares of Common
Stock issued to the Purchasers upon the conversion of Redeemable
Securities and Depositary Shares are referred to as the "Conversion
Securities."
(b) If any Redeemable Securities have not been
surrendered for conversion prior to 5:00 P.M., New York City time, on
the Redemption Date, at the option of the Company, exercisable by
giving notice in writing to the Representative not later than 8:00
P.M., New York City time, on the Redemption Date, the Company shall
sell to each Purchaser, and each Purchaser, severally and not jointly,
shall purchase from the Company, at a purchase price of $__________ per
share of Common Stock that would have been issuable upon conversion of
Series K Preferred Stock not surrendered for conversion and $__________
per share of Common Stock that would have been issuable upon conversion
of Series L Preferred Stock or Series N Preferred Stock not surrendered
for conversion, such number of shares of Common Stock as shall be
specified in such notice (but, in each case, not in excess of such
number of shares of Common Stock as would have been issuable upon the
conversion of all shares of Series K Preferred Stock, Series L
Preferred Stock or Series N Preferred Stock, as the case may be, not
surrendered for conversion) multiplied by the percentage set forth
opposite such Purchaser's name in Schedule I hereto (rounded to the
nearest whole number of shares). The shares of Common Stock to be
purchased pursuant to this Section 2(b) are referred to as the
"Purchased Securities" and, together with the Conversion Securities,
the "Securities."
(c) It is understood that the Purchasers intend to
resell the Securities from time to time at prices prevailing in the
open market. On or prior to the fifteenth day after the Redemption
Date, each Purchaser shall remit to the Company 50% of the excess, if
any, of (i) the aggregate proceeds received by such Purchaser from the
sale of Purchased Securities (net of selling concessions, transfer
taxes and other expenses of sale) over (ii) an amount equal to the
average cost to such Purchaser of purchasing the Purchased Securities
pursuant to paragraph (b) above multiplied by the number of Purchased
Securities. Upon completion of the sale of the Purchased Securities,
each Purchaser shall furnish to the Company a statement setting forth
the aggregate proceeds received on the sale thereof and the applicable
selling concessions, transfer taxes and other expenses of sale. For
purposes of the foregoing determination, any Purchased Securities not
sold by or for the account of the Purchaser prior to the close of
business on the tenth day after the
6
Redemption Date shall be deemed to have been sold on such tenth day for
an amount equal to the last reported sale price of the Common Stock on
such day. Nothing contained herein shall limit the right of the
Purchasers, in their discretion, to determine the price or prices at
which, or the time or times when, any Securities shall be sold, whether
or not prior to the Redemption Date and whether or not for long or
short account.
Delivery of and payment for the Purchased Securities
shall be made at 10:00 A.M., New York City time, on April 13, 1998,
which date and time may be postponed by agreement between the
Representative and the Company (such date and time of delivery and
payment for the Purchased Securities being herein called the "Closing
Date"). Delivery of the Purchased Securities shall be made to the
Representative for the respective accounts of the several Purchasers
against payment by the several Purchasers through the Representative of
the purchase price thereof to or upon the order of the Company by wire
transfer payable in same-day funds to an account specified by the
Company. Delivery of the Purchased Securities shall be made through the
facilities of The Depository Trust Company unless the Representative
shall otherwise instruct. The closing of the purchase and sale of the
Purchased Securities shall be made at the office of Cleary, Gottlieb,
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, New York, New York.
3. Compensation. As compensation for the commitment of
the Purchasers hereunder, the Company will pay to the Representative for the
respective accounts of the several Purchasers an amount equal to the sum of (i)
$__________ plus (ii) if the aggregate number of the Securities exceeds 478,127
shares, an additional $__________ per share for the aggregate number of the
Securities.
Such compensation shall be paid to the Representative for the
respective accounts of the several Purchasers by wire transfer payable in
same-day funds to an account specified by the Representative, on (A) if the
Purchasers are required to purchase any Purchased Securities, the Closing Date,
or (B) otherwise, as soon as practicable after the Redemption Date (but in no
event later than two Business Days thereafter).
4. Additional Purchases. The Purchasers may purchase
Redeemable Securities, in the open market or otherwise, in such amounts and at
such prices as the Purchaser may deem advisable. All Redeemable Securities so
purchased will be converted by the Purchasers into Common Stock in accordance
with Section 2(a) hereof. The Common Stock acquired by the Purchasers upon
conversion of any Redeemable Securities acquired pursuant to this Section 4 may
be sold at any time or from time to time by the Purchasers. It is understood
that, for the purpose of stabilizing the price of the Common Stock or otherwise,
the Purchasers may make purchases and sales of Common Stock, in the open market
or otherwise, for long or short account, on such terms as they may deem
advisable and they may overallot in arranging sales.
5. Agreements. The Company agrees with the several Purchasers
that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the termination of the
offering of the Securities, the Company will not file any
7
amendment of the Registration Statement or supplement to the Prospectus
unless the Company has furnished you a copy for your review prior to
filing and will not file any such proposed amendment or supplement to
which you reasonably object in writing; PROVIDED, HOWEVER, that the
preceding clause shall not apply to the filing of any document required
to be filed by the Company under the Exchange Act that upon filing is
deemed to be incorporated by reference in the Registration Statement,
except that the Company shall, to the extent practicable, furnish you a
copy of any such document a reasonable time prior to filing. Subject to
the foregoing sentence, if filing of the Prospectus is required under
Rule 424(b), the Company will cause the Prospectus, properly completed,
and any supplement thereto to be filed with the Commission pursuant to
the applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the Representative
of such timely filing. The Company will promptly advise the
Representative (1) when the Registration Statement (and any amendment
thereto), if not effective at the Execution Time, shall have become
effective, (2) when the Prospectus, and any supplement thereto, shall
have been filed (if required) with the Commission pursuant to Rule
424(b), (3) when, prior to termination of the offering of the
Securities, any amendment to the Registration Statement shall have been
filed or become effective, (4) of any request by the Commission or its
staff for any amendment of the Registration Statement or for any
supplement to the Prospectus or for any additional information, (5) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (6) of the receipt
by the Company of any notification with respect to the suspension of
the qualification of the Securities for sale in any jurisdiction or the
institution or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such
stop order or the suspension of any such qualification and, if issued,
to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Prospectus as then supplemented would include
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall
be necessary to amend the Registration Statement or supplement the
Prospectus to comply with the Act or the Exchange Act or the respective
rules thereunder, the Company promptly will (1) notify the
Representative of such event, (2) prepare and file with the Commission,
subject to the second sentence of paragraph (a) of this Section 5, an
amendment or supplement which will correct such statement or omission
or effect such compliance and (3) supply any supplemented Prospectus to
you in such quantities as you may reasonably request.
(c) As soon as practicable, the Company will make
generally available to its security holders and to the Representative
an earnings statement or statements of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
8
(d) The Company will furnish to the Representative and
counsel for the Purchasers, without charge, five signed copies of the
Registration Statement (including exhibits thereto) and to each other
Purchaser a copy of the Registration Statement (without exhibits
thereto) and, so long as delivery of a prospectus by a Purchaser or
dealer may be required by the Act, as many copies of each Preliminary
Prospectus and the Prospectus and any supplement thereto as the
Representative may reasonably request. The Company will pay the
expenses of printing or other production of all documents relating to
the transactions contemplated hereby. The Company will pay all transfer
taxes as may be imposed on the Purchasers in connection with their
purchase of Redeemable Securities pursuant hereto.
(e) The Company will use its best efforts to qualify the
Securities for sale under the laws of such jurisdictions as the
Representative may designate and will maintain such qualifications in
effect so long as required for the distribution of the Securities;
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
execute a general consent to service of process in any state or to
otherwise subject itself to taxation (other than stock transfer taxes)
in connection with any such qualification.
(f) The Company will mail or cause to be mailed not
later than the Business Day following the date of execution hereof the
Notices of Redemption by first class mail to the registered holders of
the Redeemable Securities and the Depositary Shares as of the close of
business on the date of execution hereof, which mailing will conform to
the requirements of the Articles of Incorporation. The Company will not
withdraw or revoke the Notices of Redemption or attempt to do so.
(g) The Company will advise the Representative daily of
the amount of Redeemable Securities and Depositary Shares surrendered
in the previous day for redemption or for conversion.
(h) The Company will not take any action the effect of
which would be to require an adjustment in the conversion price of the
Redeemable Securities.
(i) The Company will not, prior to the Redemption Date
(and, if the aggregate number of the Securities exceeds 478,127 shares,
for an additional period of 90 days following the Redemption Date),
without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, offer, sell
or contract to sell, or otherwise dispose of (or enter into any
transaction which is designed to, or might reasonably be expected to,
result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) by the
Company) directly or indirectly, or announce the offering of, any other
shares of Common Stock (other than the Securities) or any securities
convertible into, or exchangeable for, shares of Common Stock (other
than any such sale or disposition of such securities pursuant to the
registration of such securities on Form S-4 or Form S-8 under the Act
or any successor forms or any such sale or disposition of such
securities in connection with any merger or consolidation involving the
Company or a subsidiary of
9
the Company or the acquisition by the Company or a subsidiary of the
Company of the capital equity or substantially all of the assets of any
other person or entity); PROVIDED, HOWEVER, that the provisions of this
paragraph shall not (A) prevent the conversion or exchange pursuant to
their terms of any securities of the Company outstanding at the
Execution Time into or for other shares of Common Stock or any
securities convertible into, or exchangeable for, shares of Common
Stock or (B) apply to any issuance of securities under the Rights
Agreement (as defined in the Registration Statement).
6. Conditions to the Obligations of the Purchasers. The
obligations of the Purchasers to convert Redeemable Securities and to purchase
any Purchased Securities shall be subject to the accuracy of the representations
and warranties on the part of the Company contained herein as of the Execution
Time, each Effective Date occurring after the Execution Time, the Redemption
Date and, as to the purchase of the Purchased Securities, the Closing Date, to
the accuracy of the statements of the Company made in any certificates pursuant
to the provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) If the Registration Statement has not become
effective prior to the Execution Time, unless the Representative agrees
in writing to a later time, the Registration Statement shall have
become effective not later than 6:00 P.M., New York City time, on the
date of execution hereof; if filing of the Prospectus, or any
supplement thereto, is required pursuant to Rule 424(b), the
Prospectus, and any such supplement, shall have been filed in the
manner and within the time period required by Rule 424(b); and no stop
order suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been
instituted or threatened.
(b) On the date of this Agreement and on the Closing
Date, the Company shall have furnished to the Representative the
opinion of McGuire, Woods, Battle & ▇▇▇▇▇▇ LLP, counsel for the
Company, dated the date of this Agreement and the Closing Date,
respectively, to the effect that:
(i) the Company has been duly organized and is validly
existing and in good standing under the laws of the
Commonwealth of Virginia; each of FJOC and FJFC has been duly
organized and is validly existing and in good standing under
the laws of the jurisdiction of its incorporation; each of the
Company, FJOC and FJFC has corporate power and authority to
conduct its business as described in the Prospectus; each of
the Company, FJOC and FJFC is, if applicable, duly qualified
to do business and is, if applicable, in good standing in each
jurisdiction in which it owns or leases a material amount of
real property;
(ii) all of the outstanding shares of capital stock of
FJFC and FJOC have been duly authorized and validly issued,
are fully paid and non-assessable and are owned beneficially,
directly or indirectly (except as otherwise stated in the
Prospectus), by the Company subject to no perfected mortgage,
pledge, lien,
10
encumbrance, charge or adverse claim and, to the knowledge of
such counsel, any other mortgage, pledge, lien, encumbrance,
charge or adverse claim;
(iii) the outstanding shares of Common Stock have been
duly and validly authorized and issued and are fully paid and
nonassessable; the outstanding Redeemable Securities and the
Depositary Shares have been duly and validly authorized and
issued and are fully paid and non-assessable; assuming the
mailing of the Notices of Redemption in accordance with
Section 1(c) hereof, all the Redeemable Securities will have
been duly called for redemption by the close of business on
the Business Day following the date of execution hereof and
the right to convert the Redeemable Securities into shares of
Common Stock will expire at 5:00 P.M., New York City time, on
April 10, 1998; the shares of Common Stock issuable upon
conversion of the Redeemable Securities have been duly and
validly authorized and, when issued and delivered upon
conversion of any Redeemable Securities pursuant to this
Agreement, will be fully paid and nonassessable; the Purchased
Securities have been duly and validly authorized and, when
issued and delivered to and paid for by the Purchasers
pursuant to this Agreement, will be fully paid and
nonassessable; the Converted Securities (and, for the opinion
to be delivered on the Closing Date only, the Purchased
Securities) are duly listed, and admitted and authorized for
trading, subject to official notice of issuance, on the New
York Stock Exchange; the certificates for the Securities are
in valid and sufficient form; the holders of outstanding
shares of capital stock of the Company are not entitled to
preemptive or other rights to subscribe for the Securities or
the shares of Common Stock issuable upon conversion of the
Redeemable Securities; and, except as set forth in the
Prospectus, no options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert
any obligations into or exchange any securities for, shares of
capital stock of or ownership interests in the Company are
outstanding;
(iv) the descriptions in the Registration Statement and
the Prospectus of statutes, legal and governmental
proceedings, contracts and other documents (including in each
case the documents incorporated by reference therein) are
accurate in all material respects and fairly present the
information required to be shown; and such counsel does not
know of any statutes or legal or governmental proceedings
required to be described in the Prospectus that are not
described as required, or of any contracts or documents of a
character required to be described in the Registration
Statement or Prospectus (or required to be filed under the
Exchange Act if upon such filing they would be incorporated,
in whole or in part, by reference therein) or to be filed as
exhibits to the Registration Statement that are not described
and filed as required;
(v) such counsel has no reason to believe that on the
Effective Date or at the Execution Time the Registration
Statement contained or contains any untrue statement of a
material fact or omitted or omits to state any material fact
required to be stated therein or necessary to make the
statements therein not misleading or
11
that the Prospectus as of its date and on the Closing Date
includes any untrue statement of a material fact or omitted or
omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading (in each case, other than
the financial statements and other financial information
contained therein, as to which such counsel need express no
opinion);
(vi) the statements in the Prospectus under the caption
"Description of Capital Stock," insofar as such statements
constitute summaries of the legal matters, documents or
proceedings referred to therein, fairly present the
information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters
referred to therein;
(vii) this Agreement has been duly authorized, executed
and delivered by the Company;
(viii) the call of the Redeemable Securities for
redemption, the conversion or redemption thereof, the issue
and sale of the Securities, the execution, delivery and
performance by the Company of this Agreement and the
consummation by the Company of the transactions contemplated
herein and compliance by the Company with its obligations
hereunder will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under,
any statute, any agreement or instrument known to such counsel
to which the Company or any Significant Subsidiary is a party
or by which it is bound or to which any of the property of the
Company or any Significant Subsidiary is subject, the
Company's or any Significant Subsidiary's Articles of
Incorporation, as amended to date, or by-laws, or any order,
rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the
Company or any Significant Subsidiary or any of their
respective properties; and no consent, approval, authorization
or order of, or filing with, any court or governmental agency
or body is required for the consummation of the transactions
contemplated by this Agreement, except such as have been
obtained under the Act and such as may be required under state
securities laws in connection with the purchase and
distribution of the Shares by the Purchasers; PROVIDED that no
opinion is called for with respect to any such consent,
approval, authorization or order required to be obtained under
the Act and the applicable rules and regulations of the
Commission thereunder that have been obtained or as may be
required under state securities laws or Blue Sky Laws of the
various states;
(ix) the Company is not and, after giving effect to the
issue and sale of the Securities and the application of the
proceeds thereof as described in the Prospectus, will not be,
an "investment company" as defined in the Investment Company
Act of 1940, as amended; and
12
(x) no holders of securities of the Company have rights
to the registration of such securities under the Registration
Statement, except for rights of Leeway & Company, as nominee
of the Long-Term Incentive Trust ("Leeway"), which have been
effectively waived.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
State of Virginia or the Federal laws of the United States, to the
extent they deem proper and specified in such opinion, upon the opinion
of other counsel of good standing whom they believe to be reliable and
who are satisfactory to counsel for the Purchasers and (B) as to
matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and public officials. References to
the Prospectus in this paragraph (b) include any supplements thereto at
the Closing Date. The opinion of such counsel shall be rendered to the
Purchasers at the request of the Company and shall so state therein.
(c) On the date of this Agreement and on the Closing
Date, the Company shall have furnished to the Representative the
opinion of De Brauw Blackstone Westbroek, counsel for FJNV, dated the
date of this Agreement and the Closing Date, respectively, to the
effect that:
(i) FJNV has been duly organized and is validly existing
and, if applicable, in good standing under the laws of the
Netherlands; FJNV has corporate power and authority to conduct
its business as described in the Prospectus; and FJNV is, if
applicable, duly qualified to do business and is, if
applicable, in good standing in each jurisdiction in which it
owns or leases a material amount of real property; and
(ii) all of the outstanding shares of capital stock of
FJNV have been duly authorized and validly issued, are fully
and non-assessable and are owned beneficially, directly or
indirectly (except as otherwise stated in the Prospectus), by
the Company subject to no perfected mortgage, pledge, lien,
encumbrance, charge or adverse claim and, to the knowledge of
such counsel, any other mortgage, pledge, lien, encumbrance,
charge or adverse claim.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
Netherlands, to the extent they deem proper and specified in such
opinion, upon the opinion of other counsel of good standing whom they
believe to be reliable and who are satisfactory to counsel for the
Purchasers and (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company and
public officials. References to the Prospectus in this paragraph (c)
include any supplements thereto at the Closing Date. The opinion of
such counsel shall be rendered to the Purchasers at the request of the
Company and shall so state therein.
(d) On the date of this Agreement and on the Closing
Date, the Company shall have furnished to the Representative the
opinion of Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇,
13
counsel for the Company, dated the date of this Agreement and the
Closing Date, respectively, to the effect that:
(i) the authorized capital stock of the Company is as
set forth in the Prospectus; and the Shares conform to the
description of the Common Stock contained in the Prospectus;
(ii) the statements in the Registration Statement under
the caption "Certain Federal Income Tax Considerations" and in
the Notices of Redemption under the caption "Certain Federal
Income Tax Considerations," in each case insofar as such
statements constitute summaries of the legal matters referred
to therein, fairly present the information called for with
respect to such legal matters and fairly summarize the matters
referred to therein;
(iii) such counsel has been advised by the staff of the
Commission that the Registration Statement has become
effective under the Act on the date and at the time specified
in such opinion; the Prospectus was filed pursuant to the
subparagraph of Rule 424(b) under the Act specified in such
opinion on the date specified therein in the manner and within
the time period required by Rule 424(b); and no stop order
suspending the effectiveness of the Registration Statement
under the Act has been issued and, to such counsel's
knowledge, no proceeding has been instituted or threatened;
(iv) the Registration Statement and the Prospectus, and
any further amendments or supplements thereto (other than the
financial statements and other financial data therein, as to
which such counsel need express no opinion), comply as to form
in all material respects with the requirements of the Act and
the rules and regulations of the Commission thereunder; and
the documents from which information is incorporated by
reference in the Prospectus, when they became effective or
were filed with the Commission, as the case may be, complied
as to form in all material respects with the requirements of
the Act and of the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder (other than the
financial statements and other financial data therein, as to
which such counsel need express no opinion);
(v) such counsel has no reason to believe that on the
Effective Date or at the Execution Time (or, for the opinion
to be delivered on the Closing Date, at the latest Effective
Date) the Registration Statement contained or contains any
untrue statement of a material fact or omitted or omits to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading or
that the Prospectus as of its date (or, for the opinion to be
delivered on the Closing Date, as of the Closing Date)
includes any untrue statement of a material fact or omitted or
omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading (in
14
each case, other than the financial statements and other
financial information contained therein, as to which such
counsel need express no opinion).
In rendering such opinion, such counsel may (A) state that their
opinion is limited to matters governed by the laws of the State of New
York or the Federal laws of the United States and (B) rely, as to
matters of fact, to the extent they deem proper, on the representations
made by the Company herein or on certificates of public officials.
References to the Prospectus in this paragraph (d) include any
supplements thereto at the Closing Date. The opinion of such counsel
shall be rendered to the Purchasers at the request of the Company and
shall so state therein.
(e) On the date of this Agreement and on the Closing
Date, the Representative shall have received from Cleary, Gottlieb,
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ & Sterling, counsel for the Purchasers,
such opinion or opinions, dated the date of this Agreement and the
Closing Date, respectively, and addressed to the Representative, with
respect to the issuance and sale of the Securities, the Registration
Statement, the Prospectus (together with any supplements thereto) and
other related matters as the Representative may reasonably require, and
the Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters. The
opinion or opinions of such counsel shall be rendered to the Purchasers
at the request of the Company and shall so state therein.
(f) On the date of this Agreement, on each Effective
Date occurring after the Execution Time and on the Closing Date, the
Company shall have furnished to the Representative a certificate of the
Company, signed by the Chairman of the Board, the Chief Executive
Officer, the Executive Vice President or the Senior Vice President and
the principal financial or accounting officer of the Company, dated the
date of delivery, to the effect that the signers of such certificate
have carefully examined the Registration Statement, the Prospectus, any
supplements to the Prospectus and this Agreement and to the effect
that, to the best of their knowledge based upon reasonable
investigation:
(i) the representations and warranties of the Company in
this Agreement are true and correct in all material respects
on and as of the date of such certificate as if made on the
date of such certificate and the Company has complied with all
the agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to the date of such
certificate;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Prospectus (exclusive of any
supplement thereto), there has been no material adverse change
or development involving a prospective material adverse change
in the condition (financial or otherwise), earnings, business
or properties of the Company and its subsidiaries, considered
as one enterprise, whether or not arising
15
from transactions in the ordinary course of business, except
as set forth in or contemplated in the Prospectus (exclusive
of any supplement thereto).
(g) At the Execution Time, on each Effective Date
occurring after the Execution Time on which financial information is
included or incorporated in the Registration Statement or the
Prospectus and on the Closing Date, Coopers & ▇▇▇▇▇▇▇ L.L.P. shall have
furnished to the Representative a letter, dated respectively as of the
Execution Time, each such Effective Date and as of the Closing Date, in
form and substance satisfactory to the Representative, confirming that
they are independent accountants within the meaning of the Act and the
Exchange Act and the respective applicable published rules and
regulations thereunder and containing statements and information of the
type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain
financial information contained in or incorporated by reference in the
Registration Statement and Prospectus.
References to the Prospectus in this paragraph (g) include any
supplement thereto at the date of the letter.
(h) Subsequent to the Execution Time or, if earlier, the
dates as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been (i) any change or
decrease in certain line items of the Company's financial statements
specified in the letter or letters referred to in paragraph (g) of this
Section 6 or (ii) any change, or any development involving a
prospective change, in or affecting the condition (financial or
otherwise), earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement thereto)
the effect of which, in any case referred to in clause (i) or (ii)
above, is, in the sole judgment of the Representative, so material and
adverse as to make it impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the
Registration Statement (exclusive of any amendment thereof) and the
Prospectus (exclusive of any supplement thereto).
(i) Subsequent to the Execution Time, there shall not
have been any decrease in the rating of any of the Company's debt
securities by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act) or
any notice given of any intended or potential decrease in any such
rating or of a possible change in any such rating that does not
indicate the direction of the possible change.
(j) The Converted Securities (and, as to the purchase of
the Purchased Securities on the Closing Date, the Purchased Securities,
as well) shall have been approved for listing on the New York Stock
Exchange, subject to official notice of issuance, and satisfactory
evidence of such action shall have been provided to the Representative.
16
(k) At the Execution Time, the Company shall have
furnished to the Representative a letter substantially in the form of
Exhibit A hereto addressed to the Representative from each of the
directors and officers of the Company listed on Schedule II hereto.
(l) The Company shall have provided to the
Representative a copy of a letter from Leeway waiving certain
registration rights.
(m) The Company shall have furnished to the
Representative such further information, certificates and documents as
the Representative may reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representative and counsel for the
Purchasers, this Agreement and all obligations of the Purchasers hereunder may
be canceled at, or at any time prior to, the Closing Date by the Representative.
Notice of such cancellation shall be given to the Company in writing or by
telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall
be delivered at the office of Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for
the Purchasers, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ the due date for
delivery thereof.
7. Reimbursement of Purchasers' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Purchasers set forth in Section 6 hereof is not satisfied
other than by reason of a breach by any of Purchasers, because of any
termination pursuant to Section 10 hereof or because of any refusal, inability
or failure on the part of the Company to perform any agreement herein or comply
with any provision hereof other than by reason of a default by any of the
Purchasers, the Company will reimburse the Purchasers severally through ▇▇▇▇▇▇▇
▇▇▇▇▇ Barney on demand for all out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Purchaser, the directors, officers, employees
and agents of each Purchaser and each person who controls any Purchaser within
the meaning of either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the registration statement for the registration of the
Securities as originally filed or in any amendment thereof, or in any
Preliminary Prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
17
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Purchaser through the Representative
specifically for inclusion therein; PROVIDED, FURTHER, that with respect to any
untrue statement or omission of material fact made in any Preliminary
Prospectus, the indemnity agreement contained in this Section 8(a) shall not
inure to the benefit of any Purchaser from whom the person asserting any such
loss, claim, damage or liability purchased the securities concerned, to the
extent that any such loss, claim, damage or liability of such Purchaser occurs
under the circumstance where it shall have been determined by a court of
competent jurisdiction by final and nonappealable judgment that (w) the Company
had previously furnished copies of the Prospectus to the Purchasers, (x)
delivery of the Prospectus was required by the Act to be made to such person,
(y) the untrue statement or omission of a material fact contained in the
Preliminary Prospectus was corrected in the Prospectus and (z) there was not
sent or given to such person, at or prior to the written confirmation of the
sale of such securities to such person, a copy of the Prospectus. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have.
(b) Each Purchaser severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement and each person who controls the
Company within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company to each Purchaser, but only
to the extent that any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or omission, or alleged untrue statement or
omission or alleged omission made in the documents referred to in the foregoing
indemnity in reliance upon and in conformity with written information relating
to such Purchaser furnished to the Company by or on behalf of such Purchaser
through the Representative specifically for inclusion in the documents referred
to in the foregoing indemnity, and agrees to reimburse each such indemnified
party, as incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action. This indemnity agreement will be in addition to any
liability which any Purchaser may otherwise have. The Company acknowledges that
(i) the statements set forth in the last paragraph of the cover page regarding
delivery of the Securities, (ii) the legend in block capital letters on page 2
related to stabilization and (iii) the sentences related to concessions and the
next to last paragraph related to stabilization under the heading "Standby
Arrangements" in any Preliminary Prospectus and the Prospectus constitute the
only information furnished in writing by or on behalf of the several Purchasers
for inclusion in any Preliminary Prospectus or the Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture
18
by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
PROVIDED, HOWEVER, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. It is understood, however, that the Company shall, in
connection with any one such action or separate but substantially similar or
related actions 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 local counsel at any time for all such Purchasers and
controlling persons, which firm shall be designated in writing by ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇. An indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding and does not include a
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party. An indemnifying party shall not be liable
under this Section 8 to any indemnified party regarding any settlement or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent is consented to by such
indemnifying party, which consent shall not be unreasonably withheld.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Purchasers severally agree
to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more
19
of the Purchasers may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and by the
Purchasers on the other from the offering of the Securities; PROVIDED, HOWEVER,
that in no case shall any Purchaser (except as may be provided in any agreement
among purchasers relating to the offering of the Securities) be responsible for
any amount in excess of the fees payable by the Company to such Purchaser
pursuant to Section 3 hereof. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company and the Purchasers
severally shall contribute in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company on the
one hand and of the Purchasers on the other in connection with the statements or
omissions which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal to
the sum of (i) the aggregate Redemption Price for the Redeemable Securities
converted by the Purchasers pursuant to Section 2(a) hereof and (ii) the amount
paid by the Purchasers to the Company pursuant to Section 2(b) hereof (less the
total fees payable by the Company to the Purchasers pursuant to Section 3
hereof), and benefits received by the Purchasers shall be deemed to be equal to
the total fees payable by the Company to the Purchasers pursuant to Section 3
hereof. Relative fault shall be determined by reference to, among other things,
whether any untrue or any alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
provided by the Company on the one hand or the Purchasers on the other, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The Company
and the Purchasers agree that it would not be just and equitable if contribution
were determined by pro rata allocation or any other method of allocation which
does not take account of the equitable considerations referred to above.
Promptly after receipt by a party entitled to contribution under this Section 8
of notice of the commencement of any action, such party will, if a claim for
contribution in respect thereof is to be made against another party or parties
under this paragraph (d), notify such party or parties in writing of the
commencement thereof; but the failure so to notify such party or parties (i)
will not relieve such party or parties from liability under this paragraph (d)
unless and to the extent it or they did not otherwise learn of such action and
such failure results in the forfeiture by such party or parties of substantial
rights and defenses and (ii) will not, in any event, relieve such party or
parties from any obligations to any party entitled to contribution other than
the contribution obligation provided in this paragraph (d). Notwithstanding the
provisions of this paragraph (d), 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. For purposes of this Section 8, each person who controls a
Purchaser within the meaning of either the Act or the Exchange Act and each
director, officer, employee and agent of a Purchaser shall have the same rights
to contribution as such Purchaser, and each person who controls the Company
within the meaning of either the Act or the Exchange Act, each officer of the
Company who shall have signed the Registration Statement and each director of
the Company shall have the same rights to contribution as the Company, subject
in each case to the applicable terms and conditions of this paragraph (d).
20
9. Soliciting Conversions. The Purchasers may assist
the Company in soliciting conversion of the Redeemable Securities by the holders
thereof but shall not be entitled to compensation by the Company for any such
assistance.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representative, by notice given to
the Company at any time prior to the Closing Date, if at any time prior to such
time (i) trading in the Company's Common Stock or in the Depositary Shares shall
have been suspended by the Commission or the New York Stock Exchange, trading in
the Redeemable Securities shall have been suspended by the Commission or trading
in securities generally on the New York Stock Exchange shall have been suspended
or limited or minimum prices shall have been established on such Exchange, (ii)
a banking moratorium shall have been declared either by Federal or New York
State authorities or (iii) there shall have occurred any outbreak or escalation
of hostilities, declaration by the United States of a national emergency or war
or other calamity or crisis the effect of which on financial markets is such as
to make it, in the sole judgment of the Representative, impracticable or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers and of the Purchasers set forth in or
made pursuant to this Agreement will remain in full force and effect, regardless
of any investigation made by or on behalf of any Purchaser or the Company or any
of the officers, directors or controlling persons referred to in Section 8
hereof, and will survive the conversion of any Redeemable Securities and the
delivery of and payment for any Securities. The provisions of Sections 7 and 8
hereof shall survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in
writing and effective only on receipt, and, if sent to the Representatives, will
be mailed, delivered or telefaxed to the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney General Counsel
(fax no.: (▇▇▇) ▇▇▇-▇▇▇▇ and confirmed to the General Counsel, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General
Counsel; or, if sent to the Company, will be mailed, delivered or telefaxed to
Fort ▇▇▇▇▇ Corporation, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, telefax
number: (▇▇▇) ▇▇▇-▇▇▇▇, attention of the Senior Vice President and General
Counsel.
13. Successors. This Agreement will inure to the benefit
of and be binding upon the parties hereto and their respective successors and
the officers and directors and controlling persons referred to in Section 8
hereof, and no other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by
and construed in accordance with the laws of the State of New York.
15. Counterparts. This Agreement may be signed in one or
more counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
21
16. Headings. The section headings used herein are for
convenience only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in
this Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York
City.
"Commission" shall mean the Securities and Exchange
Commission.
"Effective Date" shall mean each date and time that the
Registration Statement and any post-effective amendment or amendments
thereto became or become effective and each date after the date hereof
on which a document incorporated by reference in the Regulation
Statement is filed.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph 1(a) above.
"Prospectus" shall mean the prospectus relating to the
Securities that is first filed pursuant to Rule 424(b) after the
Execution Time or, if no filing pursuant to Rule 424(b) is required,
shall mean the form of final prospectus relating to the Securities
included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at
the Execution Time, in the form in which it shall become effective)
and, in the event any post-effective amendment thereto becomes
effective prior to the Closing Date, shall also mean such registration
statement as so amended.
"Rule 415" and "Rule 424" refer to such rules under the Act.
"▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇" shall mean ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. or Salomon
Brothers Inc, to the extent that either such party is a signatory to
this Agreement.
22
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Purchasers.
Very truly yours,
Fort ▇▇▇▇▇ Corporation
By:___________________________________
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇
Title: Senior Vice President and
General Counsel
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
By:
------------------------
Name:
Title:
SCHEDULE I
Purchaser Percentage of Shares
to be Purchased
--------- ----------------
▇▇▇▇▇ ▇▇▇▇▇▇ Inc. ................................... 100%
SCHEDULE II
Directors and Officers
-----------------------
EXHIBIT A
Fort ▇▇▇▇▇ Corporation
Standby Underwriting of Common Stock
--------------------------------------
March 10, 1998
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
As Representative of the several Purchasers
c/o ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This letter is being delivered to you in connection with the
proposed Standby Agreement (the "Standby Agreement") between Fort ▇▇▇▇▇
Corporation, a Virginia corporation (the "Company"), and you as representative
(the "Representative") of a group of Purchasers named therein, relating to a
call for redemption by the Company of all of its outstanding Series K $3.375
Cumulative Convertible Exchangeable Preferred Stock, Series L $14.00 Cumulative
Convertible Exchangeable Preferred Stock and Series N $14.00 Cumulative
Convertible Exchangeable Preferred Stock. Shares of such Preferred Stock are
convertible into shares of the Common Stock, $.10 par value, of the Company
("Common Stock"), at any time prior to 5:00 P.M., New York City time, on the
Redemption Date (as defined in the Standby Agreement).
In order to induce you and the other Purchasers to enter into
the Standby Agreement, the undersigned hereby agrees that, without the prior
written consent of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. (which will not be unreasonably withheld),
the undersigned will not, prior to or on the Redemption Date [(and, if the
aggregate number of the Securities (as defined in the Standby Agreement) exceeds
478,127 shares, for an additional period of 90 days following the Redemption
Date)][1], offer, sell, contract to sell, pledge or otherwise dispose of, or
file (or participate in the filing of) a registration statement with the
Securities and Exchange Commission in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position within
the meaning of Section 16 of the Securities Exchange Act of 1934, as
--------
1 Bracketed language will be included only in lock-up letters signed by
officers or directors who beneficially own 50,000 or more shares of
Common Stock as of the date of the lock-up letter.
amended, and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder with respect to, any shares of capital stock of the
Company or any securities convertible into or exercisable or exchangeable for
such capital stock, or publicly announce an intention to effect any such
transaction, other than shares of Common Stock disposed of as bona fide gifts
approved by ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.[; PROVIDED, HOWEVER, that following the Redemption
Date, the undersigned may sell up to 15% of the number of shares of Common Stock
that are beneficially owned by the undersigned on the date of this
agreement.][2]
If for any reason the Standby Agreement shall be terminated
prior to the Closing Date (as defined in the Standby Agreement), the agreement
set forth above shall likewise be terminated.
Yours very truly,
-------------------------
[Name]
------------------
2 Bracketed language will be included only in lock-up letters signed by
officers or directors who beneficially own 50,000 or more shares of
Common Stock as of the date of the lock-up letter.
A-2