Exhibit 1
5,000,000 shares
United States Steel Corporation
Mandatory Convertible Preferred Shares
Underwriting Agreement
February 4, 2003
X.X. Xxxxxx Securities Inc.
As Representative of the
several Underwriters listed
in Schedule 1 hereto
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
United States Steel Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell to the several Underwriters listed in Schedule 1
hereto (the "Underwriters"), for whom you are acting as representative (the
"Representative"), 5,000,000 shares (the "Firm Securities") of its 7.00% Series
B Mandatory Convertible Preferred Shares (MEDSSM), no par value, mandatorily
convertible into the common stock of the Company, $1.00 par value per share (the
"Common Shares") of the Company and also proposes to issue and sell to the
Underwriters, at the option of the Underwriters, an aggregate of not more than
750,000 additional shares of its 7.00% Series B Mandatory Convertible Preferred
Shares (MEDSSM), no par value, mandatorily convertible into the Common Shares of
the Company (the "Optional Securities", and together with the "Firm Securities",
the "Securities").
The Company hereby confirms its agreement with the several Underwriters
concerning the purchase and sale of the Securities, as follows:
1. Registration Statement. The Company has prepared and filed with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Securities Act"), a registration statement on Form S-3 (No.
333-84200) (the "First Registration Statement"), Post-Effective Amendment No. 1
to the First Registration Statement and a Registration Statement on Form S-3
(No. 333-99273) (the "Second Registration Statement"), which constitutes Post-
Effective Amendment No. 2 to the First Registration Statement, including a
prospectus (the "Basic Prospectus"), relating to the Securities. The Company
has also filed, or proposes to file, with the Commission pursuant to Rule 424
under the Securities Act a prospectus supplement specifically relating to the
Securities (the "Prospectus Supplement"). The registration statements, as
amended at the time they became effective are collectively referred to herein as
the "Registration Statement"; and as used herein, the term "Prospectus" means
the Basic Prospectus included in the Second Registration Statement (and any
amendments thereto) as supplemented by the prospectus supplement specifically
relating to the Securities in the form first used to confirm sales of the
Securities and the term "Preliminary Prospectus" means the preliminary
prospectus supplement specifically relating to the Securities together with the
Basic Prospectus. If the Company has filed an abbreviated registration
statement pursuant to Rule 462(b) under the Securities Act (the "Rule 462
Registration Statement"), then any reference herein to the term "Registration
Statement" shall be deemed to include such Rule 462 Registration Statement.
References herein to the Registration Statement, the Basic Prospectus, any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein. The terms "supplement,"
"amendment" and "amend" as used herein with respect to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include any documents filed by the Company under the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Commission
thereunder (the "Exchange Act") subsequent to the date of the Underwriting
Agreement which are deemed to be incorporated by reference therein.
2. Purchase of the Securities by the Underwriters. (a) The Company agrees to
issue and sell the Securities to the several Underwriters as provided in this
Agreement, and each Underwriter, on the basis of the representations, warranties
and agreements set forth herein and subject to the conditions set forth herein,
agrees, severally and not jointly, to purchase from the Company the respective
number of Firm Securities set forth opposite such Underwriter's name in Schedule
1 hereto at a price equal to $48.50 per Security. The Company will not be
obligated to deliver any of the Firm Securities except upon payment for all the
Firm Securities to be purchased as provided herein.
(b) The Company understands that the Underwriters intend to make a public
offering of the Firm Securities as soon after the effectiveness of this
Agreement as in the judgment of the Representative is advisable, and initially
to offer the Firm Securities on the terms set forth in the Prospectus. The
Company acknowledges and agrees that the Underwriters may offer and sell
Securities to or through any affiliate of an Underwriter and that any such
affiliate may offer and sell Securities purchased by it to or through any
Underwriter.
(c) Payment for and delivery of the Firm Securities will be made at the offices
of Xxxxxxx Xxxxxxx & Xxxxxxxx at 10:00 A.M., New York City time, on February 10,
2003, or at such other time or place on the same or such other date, not later
than the fifth business day thereafter, as the Representative and the Company
may agree upon in writing. The time and date of such payment and delivery is
referred to herein as the "First Closing Date".
(d) In addition, upon written notice from the Representative given to the
Company from time to time not more than 30 days subsequent to the date of the
Prospectus, the Underwriters may purchase all or less than all of the Optional
Securities at the purchase price per Security to be paid for the Firm
Securities. The Company agrees to sell to the Underwriters the number of shares
of Optional Securities specified in such notice, and the Underwriters agree,
severally and not jointly, to purchase such Optional Securities. Such Optional
Securities shall be purchased for the account of each Underwriter in the same
proportion as the number of shares of Firm Securities set forth opposite such
Underwriter's name bears to the total number of shares of Firm Securities
(subject to adjustment by the Representative to eliminate fractions) and may be
purchased by the Underwriters only for the purpose of covering over-allotments
made in connection with the sale of the Firm Securities. No Optional Securities
shall be sold or delivered unless the Firm Securities previously have been, or
simultaneously are, sold and delivered. The right to purchase the Optional
Securities or any portion thereof may be exercised from time to time and to the
extent not previously exercised may be surrendered and terminated at any time
upon notice by the Representative to the Company.
(e) Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "Optional Closing Date," which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "Closing Date"), shall be determined by the
Representative but shall be not later than five full business days after written
notice of election to purchase Optional Securities is given.
(f) Payment for the Securities shall be made by wire transfer in immediately
available funds to the account(s) specified by the Company to the Representative
against delivery to the nominee of The Depository Trust Company, for the account
of the Underwriters, of the certificate representing the Securities, with any
transfer taxes payable in connection with the sale of the Securities duly paid
by the Company. The certificate representing the Securities will be made
available for inspection by the Representative not later than 1:00 P.M., New
York City time, on the business day prior to the relevant Closing Date.
3. Representations and Warranties of the Company. The Company represents
and warrants to each Underwriter that:
(a) Registration Statement and Prospectus. The Registration Statement has
become effective under the Securities Act; no order suspending the effectiveness
of the Registration Statement has been issued by the Commission and no
proceeding for that purpose has been initiated or threatened by the Commission;
as of its applicable effective date and any amendment thereto, each of the First
Registration Statement and the Second Registration Statement complied and will
comply in all material respects with the Securities Act and did not and will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading; and as of the date of the Prospectus and any amendment
or supplement thereto and as of each Closing Date, the Prospectus will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that the Company makes no representation and warranty with
respect to any statements or omissions made in reliance upon and in conformity
with information relating to any Underwriter furnished to the Company in writing
by such Underwriter through the Representative expressly for use in the
Registration Statement and the Prospectus and any amendment or supplement
thereto.
(b) Incorporated Documents. The documents incorporated by reference in the
Registration Statement and the Prospectus, when filed with the Commission,
conformed or will conform, as the case may be, in all material respects with the
requirements of the Exchange Act and did not and will not contain any 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, in the light of the
circumstances under which they were made, not misleading.
(c) Company Organization and Good Standing. The Company has been duly
incorporated and is an existing corporation in good standing under the laws of
the State of Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus; and the
Company is duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions in which its ownership or lease of property
or the conduct of its business requires such qualification.
(d) Subsidiary Organization and Good Standing. Each subsidiary listed on Annex
A (each, a "Designated Subsidiary") of the Company has been duly incorporated or
otherwise organized and is an existing corporation, limited liability company or
other business entity in good standing under the laws of the jurisdiction of its
incorporation or organization, with power and authority (corporate, limited
liability company and other) to own its properties and conduct its business as
described in the Prospectus; and each Designated Subsidiary of the Company is
duly qualified to do business as a foreign corporation or other business entity
in good standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification, except
where the failure to so qualify would not have a material adverse effect upon
the financial condition, business, properties or results of operations of the
Company and its subsidiaries, taken as a whole (a "Material Adverse Effect");
all of the issued and outstanding capital stock or other equity securities of
each Designated Subsidiary of the Company have been duly authorized and validly
issued and are fully paid and nonassessable; and the capital stock or other
equity securities of each Designated Subsidiary owned by the Company, directly
or through subsidiaries, are owned free from liens, encumbrances and defects,
except such liens, encumbrances and defects that would not, individually or in
the aggregate, have a Material Adverse Effect. The entities listed on Annex A
hereto include every subsidiary of the Company that is a "significant
subsidiary" (as such term is defined in Rule 1-02 of Regulation S-X,
substituting 5% thresholds for the 10% thresholds throughout such definition) of
the Company.
(e) Capitalization. The Securities and all other outstanding shares of capital
stock of the Company have been duly authorized; all outstanding shares of
capital stock of the Company are, and, when the Securities have been delivered
and paid for in accordance with this Agreement on each Closing Date, such
Securities will have been, validly issued, fully paid and nonassessable and will
conform to the description thereof contained in the Prospectus. The Company has
an authorized capitalization as set forth in the Prospectus.
(f) Capitalization upon Conversion. The Common Shares initially issuable upon
conversion of the Securities have been duly authorized and reserved for issuance
out of the Company's authorized and unissued shares of Common Shares and when
issued in accordance with the provisions of the Securities and the Company's
Restated Certificate of Incorporation will be duly and validly issued, fully
paid and non-assessable; and the holders of the outstanding shares of capital
stock of the Company are not entitled to preemptive or other rights to subscribe
for the Securities or the Common Shares issuable upon conversion thereof.
(g) No Broker's Fees. Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any person that
would give rise to a valid claim against the Company or any Underwriter for a
brokerage commission, finder's fee or other like payment in connection with this
offering.
(h) No Registration Rights. There are no contracts, agreements or
understandings between the Company and any person granting such person the right
to require the Company to file a registration statement under the Securities Act
with respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the Company
under the Securities Act.
(i) Stock Exchange Listing. The outstanding Common Shares are listed on The
New York Stock Exchange (the "Stock Exchange") and the Company has applied to
have the Securities and the Common Shares initially issuable upon conversion of
the Securities approved for listing on the Stock Exchange.
(j) No Consents Required. No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement in connection
with the issuance and sale of the Securities by the Company, except such as have
been obtained and made under the Securities Act and such as may be required
under state securities laws.
(k) No Conflicts. The execution, delivery and performance of this Agreement,
the Securities, the certificate of designations relating to the Securities (the
"Certificate of Designations") (collectively, the "Transaction Documents"), the
issuance and sale of the Securities and the issuance of Common Shares upon
conversion thereof will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any statute, any rule,
regulation or order of any governmental agency or body or any court, domestic or
foreign, having jurisdiction over the Company or any Designated Subsidiary of
the Company or any of their properties, or any agreement or instrument to which
the Company or any such Designated Subsidiary is a party or by which the Company
or any such Designated Subsidiary is bound or to which any of the properties of
the Company or any such Designated Subsidiary is subject, or the charter or by-
laws of the Company or any such Designated Subsidiary, and the Company has full
power and authority to authorize, issue and sell the Securities and the Common
Shares issuable upon conversion thereof as contemplated by this Agreement.
(l) Underwriting Agreement. This Agreement has been duly authorized, executed
and delivered by the Company.
(m) Certificate of Designations. The Certificate of Designation has been duly
authorized by the Company and, when executed and delivered in accordance with
its terms by each of the parties thereto will constitute a valid and legally
binding agreement of the Company enforceable against the Company in accordance
with its terms, except as enforceability may be limited by (i) the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, (ii)
general equitable principles (whether considered in a proceeding in equity or at
law) and (iii) an implied covenant of good faith and fair dealing (collectively,
the "Enforceability Exceptions").
(n) No Violation or Default. Neither the Company nor any of the Designated
Subsidiaries is (i) in violation of its respective charter or by-laws or other
organizational documents, (ii) in default in the performance of any obligation,
agreement, covenant or condition contained in any indenture, loan agreement,
mortgage, lease or other agreement or instrument that is material to the Company
and its subsidiaries, taken as a whole, to which the Company or any Designated
Subsidiaries is a party or by which the Company or any Designated Subsidiaries
or their respective property is bound, or (iii) in violation of any law or
statute or any judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority, except for such violations in the case of
this clause (iii) that would not, individually or in the aggregate, have a
Material Adverse Effect.
(o) Title to Real and Personal Property. Except as disclosed in the
Prospectus, the Company and the Designated Subsidiaries have good and marketable
title to all real properties and all other properties and assets owned by them,
in each case free from liens, encumbrances and defects, except such liens,
encumbrances and defects that would not, individually or in the aggregate, have
a Material Adverse Effect; and except as disclosed in the Prospectus, the
Company and its subsidiaries hold any leased real or personal property under
valid and enforceable leases with no exceptions that would materially interfere
with the business of the Company and its subsidiaries, taken as a whole. The
Company and its subsidiaries own or lease all properties and assets necessary to
conduct its business as described in the Prospectus.
(p) Licenses and Permits. The Company and the Designated Subsidiaries possess
adequate certificates, authorities or permits issued by appropriate governmental
agencies or bodies necessary to conduct their business as described in the
Prospectus and have not received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit that, if
determined adversely to the Company or any Designated Subsidiary, could
reasonably be expected to have a Material Adverse Effect.
(q) Descriptions of the Transaction Documents. The Transaction Documents
conform in all material respects to the descriptions thereof contained in the
Preliminary Prospectus and the Prospectus.
(r) No Labor Disputes. No labor dispute with the employees of the Company or
any of its subsidiaries exists or, to the knowledge of the Company, is imminent
that could reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
(s) Title to Intellectual Property. The Company and the Designated
Subsidiaries own, possess or can acquire on reasonable terms, adequate
trademarks, trade names and other rights to inventions, know-how, patents,
copyrights, confidential information and other intellectual property
(collectively, "intellectual property rights") necessary to conduct its business
as described in the Prospectus, or presently employed by them, and have not
received any notice of infringement of or conflict with asserted rights of
others with respect to any intellectual property rights that, if determined
adversely to the Company or any of its Designated Subsidiaries, could reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect.
(t) Compliance With Environmental Laws. Except as disclosed in the Prospectus,
neither the Company nor any of its subsidiaries is in violation of any statute,
any rule, regulation, decision or order of any governmental agency or body or
any court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or restoration of
the environment or human exposure to hazardous or toxic substances
(collectively, "environmental laws"), owns or operates any real property
contaminated with any substance that is subject to any environmental laws, is
liable for any off-site disposal or contamination pursuant to any environmental
laws, or is subject to any claim relating to any environmental laws, which
violation, contamination, liability or claim could reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect; and the
Company is not aware of any pending investigation which might lead to such a
claim.
(u) Legal Proceedings. Except as disclosed in the Prospectus, there are no
pending actions, suits or proceedings against or affecting the Company, any of
its subsidiaries or any of their respective properties that, if determined
adversely to the Company or any of its subsidiaries, would individually or in
the aggregate have a Material Adverse Effect, or would materially and adversely
affect the ability of the Company to perform its obligations under this
Agreement, or which are otherwise material in the context of the sale of the
Securities; and, to the Company's knowledge, no such actions, suits or
proceedings are threatened.
(v) Financial Statements of the Company. The financial statements of the
Company and the related notes thereto included or incorporated by reference in
the Registration Statement and the Prospectus present fairly the financial
position of the Company and its consolidated subsidiaries as of the dates shown
and their results of operations and cash flows for the periods shown, and,
except as otherwise disclosed in the Prospectus, such financial statements have
been prepared in conformity with the generally accepted accounting principles in
the United States applied on a consistent basis throughout the periods covered
thereby, and the supporting schedules included in the Registration Statement
present fairly the information required to be stated therein; and the other
financial information of the Company included in the Registration Statement and
the Prospectus has been derived from the accounting records of the Company and
its subsidiaries and presents fairly the information shown thereby.
(w) Taxes. The Company and its Designated Subsidiaries have timely filed all
material federal, state, local and foreign income tax returns that have been
required to be filed and have paid all taxes indicated by said returns and all
assessments received by them or any of them to the extent that such taxes have
become due and are not being contested in good faith in appropriate proceedings.
All material tax liabilities have been adequately provided for in the financial
statements of the Company.
(x) No Material Adverse Change. Since the date of the most recent financial
statements of the Company included in the Registration Statement and the
Prospectus, (i) there has not been any change in the capital stock or long term
debt of the Company or any of its subsidiaries, or any dividend or distribution
of any kind declared, set aside for payment, paid or made by the Company on any
class of capital stock, or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the business,
properties, management, financial position, results of operations or prospects
of the Company and its subsidiaries taken as a whole; (ii) neither the Company
nor any of its subsidiaries has entered into any transaction or agreement that
is material to the Company and its subsidiaries taken as a whole or incurred any
liability or obligation, direct or contingent, that is material to the Company
and its subsidiaries taken as a whole; and (iii) neither the Company nor any of
its subsidiaries has sustained any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor disturbance or dispute or any action, order or
decree of any court or arbitrator or governmental or regulatory authority,
except in each case of (i), (ii) and (iii) above as otherwise disclosed in the
Registration Statement and the Prospectus.
(y) Reporting Requirements. The Company is subject to the reporting
requirements of either Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 and files reports with the Commission on the Electronic Data
Gathering, Analysis, and Retrieval (XXXXX) system.
(z) Independent Accountants. PricewaterhouseCoopers LLP, who have certified
certain financial statements of the Company and its subsidiaries are independent
public accountants with respect to the Company and its subsidiaries as required
by the Securities Act.
(aa) No Undisclosed Relationships. No relationship, direct or indirect, exists
between or among the Company or any of its subsidiaries, on the one hand, and
the directors, officers, stockholders, customers or suppliers of the Company or
any of its subsidiaries, on the other, that is required by the Securities Act to
be described in the Registration Statement and the Prospectus and that is not so
described.
(bb) Compliance With ERISA. Each employee benefit plan, within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), that is maintained, administered or contributed to by the Company or
any of its affiliates for employees or former employees of the Company and its
affiliates has been maintained in compliance with its terms and the requirements
of any applicable statutes, orders, rules and regulations, including but not
limited to ERISA and the Internal Revenue Code of 1986, as amended (the "Code");
no prohibited transaction, within the meaning of Section 406 of ERISA or Section
4975 of the Code, has occurred with respect to any such plan excluding
transactions effected pursuant to a statutory or administrative exemption; and
for each such plan that is subject to the funding rules of Section 412 of the
Code or Section 302 of ERISA, no "accumulated funding deficiency" as defined in
Section 412 of the Code has been incurred, whether or not waived, and the fair
market value of the assets of each such plan (excluding for these purposes
accrued but unpaid contributions) exceeds the present value of all benefits
accrued under such plan determined using reasonable actuarial assumptions.
(cc) Accounting Controls. The Company and its subsidiaries maintain systems of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (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
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(dd) No Unlawful Payments. Neither the Company nor any of its subsidiaries nor,
to the best knowledge of the Company, any director, officer, agent, employee or
other person associated with or acting on behalf of the Company or any of its
subsidiaries has (i) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political activity;
(ii) made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii) violated or is in
violation of any provision of the Foreign Corrupt Practices Act of 1977; or (iv)
made any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.
(ee) No Stabilization. The Company has not taken, directly or indirectly, any
action designed to or that could reasonably be expected to cause or result in
any stabilization or manipulation of the price of the Securities.
(ff) Investment Company Act. The Company is not and, after giving effect to the
offering and sale of the Securities and the issuance of the Common Shares upon
conversion thereof 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.
4. Further Agreements of the Company. The Company covenants and agrees
with each Underwriter that:
(a) Filings with the Commission. The Company will (i) prepare the Rule 462(b)
Registration Statement, if necessary, in a form approved by the Underwriters and
file such Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) under the Securities Act by 10:00 a.m. New York City time on
the business day immediately following the date of determination of the public
offering price of the Securities and, at the time of filing, either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the Securities Act and (ii) file the Prospectus in a form approved by the
Underwriters with the Commission pursuant to Rule 424 under the Securities Act
not later than the close of business on the second business day following the
date of determination of the public offering price of the Securities or, if
applicable, such earlier time as may be required by Rule 424(b) under the
Securities Act; and the Company will furnish copies of the Prospectus to the
Underwriters in New York City prior to 10:00 A.M., New York City time, on the
business day next succeeding the date of this Agreement in such quantities as
the Representative may reasonably request.
(b) Delivery of Copies. The Company will deliver, without charge, (i) to the
Representative, two signed copies of the Registration Statement as originally
filed and each amendment thereto, in each case including all exhibits and
consents filed therewith; and (ii) to each Underwriter (A) a conformed copy of
the Registration Statement as originally filed and each amendment thereto, in
each case including all exhibits and consents filed therewith and (B) during the
Prospectus Delivery Period, as many copies of the Prospectus (including all
amendments and supplements thereto) as the Representative may reasonably
request. As used herein, the term "Prospectus Delivery Period" means such
period of time after the first date of the public offering of the Securities as
in the opinion of counsel for the Underwriters a prospectus relating to the
Securities is required by law to be delivered in connection with sales of the
Securities by any Underwriter or dealer.
(c) Amendments or Supplements. Before filing any amendment or supplement to
the Registration Statement or the Prospectus, the Company will furnish to the
Representative and counsel for the Underwriters a copy of the proposed amendment
or supplement for review and will not file any such proposed amendment or
supplement to which the Representative reasonably objects.
(d) Notice to the Representative. The Company will advise the Representative
promptly, and confirm such advice in writing, (i) when any amendment to the
Registration Statement has been filed or becomes effective; (ii) when any
supplement to the Prospectus or any amendment to the Prospectus has been filed;
(iii) of any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or the receipt of any
comments from the Commission relating to the Registration Statement or any other
request by the Commission for any additional information; (iv) of the issuance
by the Commission of any order suspending the effectiveness of the Registration
Statement or preventing or suspending the use of any Preliminary Prospectus or
the Prospectus or the initiation or threatening of any proceeding for that
purpose; (v) of the occurrence of any event within the Prospectus Delivery
Period as a result of which the Prospectus as then amended or supplemented would
include any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances existing when the Prospectus is
delivered to a purchaser, not misleading; and (vi) of the receipt by the Company
of any notice with respect to any suspension of the qualification of the
Securities for offer and sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and the Company will use its
reasonable best efforts to prevent the issuance of any such order suspending the
effectiveness of the Registration Statement, preventing or suspending the use of
any Preliminary Prospectus or the Prospectus or suspending any such
qualification of the Securities and, if any such order is issued, will obtain as
soon as possible the withdrawal thereof.
(e) Ongoing Compliance of the Prospectus. If during the Prospectus Delivery
Period (i) any event shall occur or condition shall exist as a result of which
the Prospectus as then amended or supplemented would include 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, in the
light of the circumstances existing when the Prospectus is delivered to a
purchaser, not misleading or (ii) it is necessary to amend or supplement the
Prospectus to comply with law, the Company will immediately notify the
Underwriters thereof and forthwith prepare and, subject to paragraph (c) above,
file with the Commission and furnish to the Underwriters and to such dealers as
the Representative may designate, such amendments or supplements to the
Prospectus as may be necessary so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances existing
when the Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus will comply with law.
(f) Blue Sky Compliance. The Company will qualify the Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions as the
Representative shall reasonably request and will continue such qualifications in
effect so long as required for distribution of the Securities; provided that the
Company shall not be required to (i) qualify as a foreign corporation or other
entity or as a dealer in securities in any such jurisdiction where it would not
otherwise be required to so qualify, (ii) file any general consent to service of
process in any such jurisdiction or (iii) subject itself to taxation in any such
jurisdiction if it is not otherwise so subject.
(g) Earning Statement. The Company will make generally available to its
security holders and the Representative as soon as practicable an earning
statement that satisfies the provisions of Section 11(a) of the Securities Act
and Rule 158 of the Commission promulgated thereunder covering a period of at
least twelve months beginning with the first fiscal quarter of the Company
occurring after the "effective date" (as defined in Rule 158) of the
Registration Statement.
(h) Available Common Shares. The Company will reserve and keep available at
all times, free of preemptive rights, the full number of Common Shares issuable
upon conversion of the Securities.
(i) No Transactions. The Company will not, without the prior written consent
of the Representative, offer, sell, contract to sell, pledge, 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 or any affiliate of the Company), directly or
indirectly, including the filing (or participation in the filing) of a
registration statement with the 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 Exchange Act with respect to,
any Common Shares or any securities convertible into, or exercisable, or
exchangeable for, Common Shares, or publicly announce an intention to effect any
such transaction, until 90 days after the date of the Underwriting Agreement,
provided, however, that the Company may issue and sell Common Shares (i)
pursuant to any employee stock option plan, stock ownership plan or dividend
reinvestment plan of the Company in effect on the date hereof and the Company
may issue Common Shares issuable upon the conversion of securities or the
exercise of warrants outstanding on the date hereof and (ii) upon conversion of
the Securities.
(j) Use of Proceeds. The Company will apply the net proceeds from the sale of
the Securities as described in the Prospectus under the heading "Use of
Proceeds".
(k) No Stabilization. The Company will not take, directly or indirectly, any
action designed to or that could reasonably be expected to cause or result in
any stabilization or manipulation of the price of the Securities.
(l) Exchange Listing. The Company will use all reasonable efforts to list,
subject to notice of issuance, the Securities and the Common Shares issuable on
conversion of the Securities on the Stock Exchange.
5. Conditions of Underwriters' Obligations. The obligation of each
Underwriter to purchase the Firm Securities on the First Closing Date and the
Optional Securities to be purchased on each Optional Closing Date as provided
herein is subject to the performance by the Company of its covenants and other
obligations hereunder and to the following additional conditions:
(a) Registration Compliance; No Stop Order. If a post-effective amendment to
the Registration Statement is required to be filed under the Securities Act,
such post-effective amendment shall have become effective, and the
Representative shall have received notice thereof, not later than 5:00 P.M., New
York City time, on the date hereof; no order suspending the effectiveness of the
Registration Statement shall be in effect, and no proceeding for such purpose
shall be pending before or threatened by the Commission; the Prospectus shall
have been timely filed with the Commission under the Securities Act and in
accordance with Section 4(a) hereof; and all requests by the Commission for
additional information shall have been complied with to the reasonable
satisfaction of the Representative.
(b) Representations and Warranties. The representations and warranties of the
Company contained herein shall be true and correct on the date hereof and on and
as of each Closing Date; and the statements of the Company and its officers made
in any certificates delivered pursuant to this Agreement shall be true and
correct on and as of such Closing Date.
(c) No Downgrade. Subsequent to the execution and delivery of this Agreement,
(i) no downgrading shall have occurred in the rating accorded any securities
issued or guaranteed by the Company or any of its subsidiaries by any
"nationally recognized statistical rating organization", as such term is defined
by the Commission for purposes of Rule 436(g)(2) under the Securities Act and
(ii) no such organization shall have publicly announced that it has under
surveillance or review, or has changed its outlook with respect to, its rating
of any securities issued or guaranteed by the Company or any of its subsidiaries
(other than an announcement with positive implications of a possible upgrading).
(d) No Material Adverse Change. Subsequent to the execution and delivery of
this Agreement, no event or condition of a type described in Section 3(x) hereof
shall have occurred or shall exist, which event or condition is not described in
the Prospectus (excluding any amendment or supplement thereto) and the effect of
which in the reasonable judgment of the Representative makes it impracticable or
inadvisable to proceed with the offering, sale or delivery of the Securities on
the terms and in the manner contemplated by this Agreement and the Prospectus.
(e) Officer's Certificate. The Representative shall have received on and as of
each Closing Date a certificate of an executive officer of the Company who has
specific knowledge of the Company's financial matters and is reasonably
satisfactory to the Representative (i) confirming that such officer has
carefully reviewed the Registration Statement and the Prospectus and, to the
best knowledge of such officer, the representation set forth in Section 3(a)
hereof is true and correct, (ii) confirming that the other representations and
warranties of the Company in this Agreement are true and correct and that the
Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or prior to such Closing Date and
(iii) to the effect set forth in paragraphs (a), (c) and (d) above.
(f) Comfort Letters for the Company. On the date of this Agreement and on each
Closing Date, PricewaterhouseCoopers LLP shall have furnished to the
Representative, at the request of the Company, letters, dated the respective
dates of delivery thereof and addressed to the Underwriters, in form and
substance reasonably satisfactory to the Representative, containing statements
and information of the type customarily included in accountants' "comfort
letters" to underwriters with respect to the Company's financial statements and
certain financial information contained in the Registration Statement and the
Prospectus; provided that the letter delivered on such Closing Date shall use a
"cut-off" date no more than three business days prior to such Closing Date.
(g) Opinion of Counsel for the Company. Xxxxxx X. Xxxxxxx, Assistant General
Counsel of the Company, shall have furnished to the Representative, at the
request of the Company, his written opinion, dated such Closing Date and
addressed to the Underwriters, in form and substance reasonably satisfactory to
the Representative, to the effect set forth in Annex B hereto.
(h) Opinion of Special Slovakian Counsel of the Company. Xxxxx Csekes of
Csekes, Vilagi, Drgonec & Partners, special Slovakian counsel for the Company,
shall have furnished to the Representative, at the request of the Company, her
written opinion, dated such Closing Date and addressed to the Underwriters, in
form and substance reasonably satisfactory to the Representative, to the effect
set forth in Annex C hereto.
(i) Opinion of Outside Counsel of the Company. Xxxxxx, Xxxxx and Xxxxxxx LLP,
counsel for the Company, shall have furnished to the Representative, at the
request of the Company, their written opinion, dated such Closing Date and
addressed to the Underwriters, in form and substance reasonably satisfactory to
the Representative, to the effect set forth in Annex D hereto.
(j) Opinion of Counsel for the Underwriters. The Representative shall have
received on and as of such Closing Date an opinion of Xxxxxxx Xxxxxxx &
Xxxxxxxx, counsel for the Underwriters, with respect to such matters as the
Representative may reasonably request, and such counsel shall have received such
documents and information as they may reasonably request to enable them to pass
upon such matters.
(k) No Legal Impediment to Issuance. No action shall have been taken and no
statute, rule, regulation or order shall have been enacted, adopted or issued by
any federal, state or foreign governmental or regulatory authority that would,
as of such Closing Date, prevent the issuance or sale of the Securities; and no
injunction or order of any federal, state or foreign court shall have been
issued that would, as of the Closing Date, prevent the issuance or sale of the
Securities.
(l) Good Standing. The Representative shall have received on and as of each
Closing Date satisfactory evidence of the good standing of the Company and its
Designated Subsidiaries in their respective jurisdictions of organization and
their good standing in such other jurisdictions as the Representative may
reasonably request, in each case in writing or any standard form of
telecommunication from the appropriate governmental authorities of such
jurisdictions.
(m) Additional Documents. On or prior to each Closing Date, the Company shall
have furnished to the Representative such further certificates and documents as
the Representative may reasonably request.
(n) Exchange Listing. The Securities and the Common Shares issuable on
conversion of the Securities shall have been approved for listing on the
Exchange, subject to official notice of issuance.
(o) Lock-Up Letters. As of the execution and delivery hereof by the parties
hereto (the "Execution Time"), the Company shall have furnished to the
Representative lockup letters substantially in the form of Exhibit A hereto from
each officer and director of the Company listed on Annex E hereto addressed to
the Representative.
(p) Certificate of Designation. The Company shall have filed with the
Secretary of State of the State of Delaware the Certificate of Designation
setting forth the designation, rights, relative preferences, limitations and
terms of the Securities.
All opinions, letters, certificates and evidence mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
6. Indemnification and Contribution.
(a) Indemnification of the Underwriters. The Company agrees to indemnify and
hold harmless each Underwriter, its affiliates, directors and officers and each
person, if any, who controls such Underwriter within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages and liabilities (including, without limitation,
legal fees and other expenses incurred in connection with any suit, action or
proceeding or any claim asserted, as such fees and expenses are incurred), joint
or several, that arise out of, or are based upon, any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (or any amendment or supplement thereto) or any
Preliminary Prospectus, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except insofar as such losses, claims, damages or
liabilities arise out of, or are based upon, any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with any information relating to any Underwriter furnished to the Company in
writing by such Underwriter through the Representative expressly for use
therein; provided, that with respect to any such untrue statement in or omission
from any Preliminary Prospectus, the indemnity agreement contained in this
paragraph (a) shall not inure to the benefit of any Underwriter to the extent
that the sale to the person asserting any such loss, claim, damage or liability
was an initial resale by such Underwriter and any such loss, claim, damage or
liability of or with respect to such Underwriter results from the fact that both
(i) to the extent required by applicable law, a copy of the Prospectus was not
sent or given to such person at or prior to the written confirmation of the sale
of such Securities to such person and (ii) the untrue statement in or omission
from such Preliminary Prospectus was corrected in the Prospectus unless, in
either case, such failure to deliver the Prospectus was a result of non-
compliance by the Company with the provisions of Section 4 hereof.
(b) Indemnification of the Company. Each Underwriter agrees, severally and not
jointly, to indemnify and hold harmless the Company, its directors, its officers
who signed the Registration Statement and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the indemnity set forth in paragraph (a)
above, but only with respect to any losses, claims, damages or liabilities that
arise out of, or are based upon, any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with any
information relating to such Underwriter furnished to the Company in writing by
such Underwriter through the Representative expressly for use in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto) or any Preliminary Prospectus, it being understood and agreed that the
only such information consists of the following: the statements concerning the
Underwriters contained in the third, sixth (the second sentence of such
paragraph) and tenth paragraphs under the heading "Underwriting".
(c) Notice and Procedures. If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any person in respect of which indemnification may be sought
pursuant to either paragraph (a) or (b) above, such person (the "Indemnified
Person") shall promptly notify the person against whom such indemnification may
be sought (the "Indemnifying Person") in writing; provided that the failure to
notify the Indemnifying Person shall not relieve it from any liability that it
may have under this Section 6 except to the extent that it has been materially
prejudiced (through the forfeiture of substantive rights or defenses) by such
failure; and provided, further, that the failure to notify the Indemnifying
Person shall not relieve it from any liability that it may have to an
Indemnified Person otherwise than under this Section 6. If any such proceeding
shall be brought or asserted against an Indemnified Person and it shall have
notified the Indemnifying Person thereof, the Indemnifying Person shall retain
counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others entitled to indemnification pursuant to this
Section 6 that the Indemnifying Person may designate in such proceeding and
shall pay the fees and expenses of such counsel related to such proceeding, as
incurred. In any such proceeding, any Indemnified Person shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Person unless (i) the Indemnifying Person and
the Indemnified Person shall have mutually agreed to the contrary; (ii) the
Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person
shall have reasonably concluded that there may be legal defenses available to it
that are different from or in addition to those available to the Indemnifying
Person; or (iv) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood and agreed that the Indemnifying Person shall not, in connection
with any proceeding or related proceeding in the same jurisdiction, be liable
for the fees and expenses of more than one separate firm (in addition to any
local counsel) for all Indemnified Persons, and that all such fees and expenses
shall be reimbursed as they are incurred. Any such separate firm for any
Underwriter, its affiliates, directors and officers and any control persons of
such Underwriter shall be designated in writing by X.X. Xxxxxx Securities Inc.
and any such separate firm for the Company, its directors, its officers who
signed the Registration Statement and any control persons of the Company shall
be designated in writing by the Company. The Indemnifying Person shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested that an Indemnifying Person reimburse the
Indemnified Person for fees and expenses of counsel as contemplated by this
paragraph, the Indemnifying Person shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by the Indemnifying Person of such
request and (ii) the Indemnifying Person shall not have reimbursed the
Indemnified Person in accordance with such request prior to the date of such
settlement. No Indemnifying Person shall, without the written consent of the
Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnification could have been sought hereunder by such Indemnified
Person, unless such settlement (x) includes an unconditional release of such
Indemnified Person, in form and substance reasonably satisfactory to such
Indemnified Person, from all liability on claims that are the subject matter of
such proceeding and (y) does not include any statement as to or any admission of
fault, culpability or a failure to act by or on behalf of any Indemnified
Person.
(d) Contribution. If the indemnification provided for in paragraphs (a) and
(b) above is unavailable to an Indemnified Person or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other from the offering of the Securities or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
but also the relative fault of the Company on the one hand and the Underwriters
on the other in connection with the statements or omissions that resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other shall be deemed to be in the same
respective proportions as the net proceeds (before deducting expenses) received
by the Company from the sale of the Securities and the total underwriting
discounts and commissions received by the Underwriters in connection therewith,
in each case as set forth in the table on the cover of the Prospectus, bear to
the aggregate offering price of the Securities. The relative fault of the
Company on the one hand and the Underwriters on the other 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 or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) Limitation on Liability. The Company and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 6 were
determined by pro rata allocation (even if the 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 (d) above. The
amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in paragraph (d) above shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses incurred by such Indemnified Person in connection with any such
action or claim. Notwithstanding the provisions of this Section 6, in no event
shall an Underwriter be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by such
Underwriter were offered to the public exceeds the amount of any damages that
such 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
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 6 are several in proportion to their
respective purchase obligations hereunder and not joint.
(f) Non-Exclusive Remedies. The remedies provided for in this Section 6 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any Indemnified Person at law or in equity.
7. Effectiveness of Agreement. This Agreement shall become effective
upon the later of (i) the execution and delivery hereof by the parties hereto
and (ii) receipt by the Company and the Representative of notice of the
effectiveness of the Registration Statement (or, if applicable, any post-
effective amendment thereto).
8. Termination. This Agreement may be terminated in the absolute
discretion of the Representative, by notice to the Company, if after the
execution and delivery of this Agreement and prior to the First or any Optional
Closing Date (i) trading generally shall have been suspended or materially
limited on or by any of the New York Stock Exchange, the American Stock
Exchange, the NASDAQ, the Chicago Board Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade; (ii) trading of any
securities issued or guaranteed by the Company shall have been suspended on any
exchange or in any over-the-counter market; (iii) a general moratorium on
commercial banking activities shall have been declared by federal or New York
State authorities; or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis,
either within or outside the United States, that, in the judgment of the
Representative, is material and adverse and makes it impracticable or
inadvisable to proceed with the offering, sale or delivery of the Securities
on the terms and in the manner contemplated by this Agreement and the
Prospectus.
9. Defaulting Underwriter. (a) If, on either the First or any Optional
Closing Date, any Underwriter defaults on its obligation to purchase the
Securities that it has agreed to purchase hereunder, the non-defaulting
Underwriters may in their discretion arrange for the purchase of such Securities
by other persons satisfactory to the Company on the terms contained in this
Agreement. If, within 36 hours after any such default by any Underwriter, the
non-defaulting Underwriters do not arrange for the purchase of such Securities,
then the Company shall be entitled to a further period of 36 hours within which
to procure other persons satisfactory to the non-defaulting Underwriters to
purchase such Securities on such terms. If other persons become obligated or
agree to purchase the Securities of a defaulting Underwriter, either the
non-defaulting Underwriters or the Company may postpone such Closing Date for up
to five full business days in order to effect any changes that in the opinion of
counsel for the Company or counsel for the Underwriters may be necessary in the
Registration Statement and the Prospectus or in any other document or
arrangement, and the Company agrees to promptly prepare any amendment or
supplement to the Registration Statement and the Prospectus that effects any
such changes. As used in this Agreement, the term "Underwriter" includes, for
all purposes of this Agreement unless the context otherwise requires, any person
not listed in Schedule 1 hereto that, pursuant to this Section 9, purchases
Securities that a defaulting Underwriter agreed but failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by the non-defaulting
Underwriters and the Company as provided in paragraph (a) above, the aggregate
principal amount of such Securities that remains unpurchased does not exceed
one-eleventh of the aggregate principal amount of all the Securities, then the
Company shall have the right to require each non-defaulting Underwriter to
purchase the principal amount of Securities that such Underwriter agreed to
purchase hereunder plus such Underwriter's pro rata share (based on the
principal amount of Securities that such Underwriter agreed to purchase
hereunder) of the Securities of such defaulting Underwriter or Underwriters for
which such arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by the non-defaulting
Underwriters and the Company as provided in paragraph (a) above, the aggregate
principal amount of such Securities that remains unpurchased exceeds one-
eleventh of the aggregate principal amount of all the Securities, or if the
Company shall not exercise the right described in paragraph (b) above, then this
Agreement shall terminate without liability on the part of the non-defaulting
Underwriters. Any termination of this Agreement pursuant to this Section 9
shall be without liability on the part of the Company, except that the Company
will continue to be liable for the payment of expenses as set forth in Section
10 hereof and except that the provisions of Section 6 hereof shall not terminate
and shall remain in effect.
(d) Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company or any non-defaulting Underwriter for
damages caused by its default.
10. Payment of Expenses. (a) Whether or not the transactions
contemplated by this Agreement are consummated or this Agreement is terminated,
the Company will pay or cause to be paid all costs and expenses incident to the
performance of its obligations hereunder, including without limitation, (i) the
costs incident to the authorization, issuance, sale, preparation and delivery
of the Securities and any taxes payable in that connection; (ii) the costs
incident to the preparation, printing and filing under the Securities Act of
the Registration Statement, the Preliminary Prospectus and the Prospectus
(including all exhibits, amendments and supplements thereto) and the
distribution thereof; (iii) the costs of reproducing and distributing each of
the Transaction Documents; (iv) the fees and expenses of the Company's counsel
and independent accountants; (v) the fees and expenses incurred in connection
with the registration or qualification and determination of eligibility for
investment of the Securities under the laws of such jurisdictions as the
Representative may designate and the preparation, printing and distribution of
a Blue Sky Memorandum (including the related fees and expenses of counsel for
the Underwriters); (vi) any fees charged by rating agencies for rating the
Securities; (vii) the fees and expenses of the Trustee and any paying agent
(including related fees and expenses of any counsel to such parties); (viii) all
expenses and application fees incurred in connection with any filing with, and
clearance of the offering by, the National Association of Securities Dealers,
Inc.; (ix) all expenses incurred by the Company in connection with any "road
show" presentation to potential investors; and (x) all expenses and application
fees related to the listing of the Securities and the Common Shares on the
Exchange.
(b) If (i) this Agreement is terminated pursuant to Section 8, (ii) the Company
for any reason fails to tender the Securities for delivery to the Underwriters
or (iii) the Underwriters decline to purchase the Securities for any reason
permitted under this Agreement, the Company agrees to reimburse the Underwriters
for all out-of-pocket costs and expenses (including the fees and expenses of
their counsel) reasonably incurred by the Underwriters in connection with this
Agreement and the offering contemplated hereby.
11. Persons Entitled to Benefit of Agreement. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors and the officers and directors and any controlling persons referred
to herein, and the affiliates of each Underwriter referred to in Section 6
hereof. Nothing in this Agreement is intended or shall be construed to give any
other person any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision contained herein. No purchaser of Securities
from any Underwriter shall be deemed to be a successor merely by reason of such
purchase.
12. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company and the Underwriters
contained in this Agreement or made by or on behalf of the Company or the
Underwriters pursuant to this Agreement or any certificate delivered pursuant
hereto shall survive the delivery of and payment for the Securities and shall
remain in full force and effect, regardless of any termination of this Agreement
or any investigation made by or on behalf of the Company or the Underwriters.
13. Certain Defined Terms. For purposes of this Agreement, (a) except
where otherwise expressly provided, the term "affiliate" has the meaning set
forth in Rule 405 under the Securities Act; (b) the term "business day" means
any day other than a day on which banks are permitted or required to be closed
in New York City; (c) the term "subsidiary" has the meaning set forth in Rule
405 under the Securities Act; and (d) the term "significant subsidiary" has the
meaning set forth in Rule 1-02 of Regulation S-X under the Exchange Act.
14. Miscellaneous. (a) Authority of the Representative. Any action by
the Underwriters hereunder may be taken by X.X. Xxxxxx Securities Inc. on behalf
of the Underwriters, and any such action taken by X.X. Xxxxxx Securities Inc.
shall be binding upon the Underwriters.
(b) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted and
confirmed by any standard form of telecommunication. Notices to the
Underwriters shall be given to the Representative c/o X.X. Xxxxxx Securities
Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (fax: 000-000-0000); Attention:
Xxxxx Xxxxxxx. Notices to the Company shall be given to it at 000 Xxxxx Xxxxxx,
Xxxxxxxxxx, XX 00000-0000, (fax: 000-000-0000); Attention: Xxxxxx X. Xxxxxxx,
Assistant General Counsel.
(c) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
(d) Counterparts. This Agreement may be signed in counterparts (which may
include counterparts delivered by any standard form of telecommunication), each
of which shall be an original and all of which together shall constitute one and
the same instrument.
(e) Amendments or Waivers. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.
(f) Headings. The headings herein are included for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
If the foregoing is in accordance with your understanding, please indicate
your acceptance of this Agreement by signing in the space provided below.
Very truly yours,
UNITED STATES STEEL CORPORATION
By_______________________
Title:
Accepted: February 4, 2003
X.X. XXXXXX SECURITIES INC.
For itself and on behalf of the
several Underwriters listed
in Schedule 1 hereto.
By___________________________
Authorized Signatory
Schedule 1
Underwriter Number of
MEDS to be Purchased
X.X. Xxxxxx Securities Inc. 2,750,000
Xxxxxxx, Sachs & Co. 750,000
Xxxxxx Brothers Inc. 750,000
Xxxxxxx Xxxxx Barney Inc. 250,000
Scotia Capital (USA) Inc. 250,000
PNC Capital Markets, Inc. 83,334
BNY Capital Markets, Inc. 83,333
NatCity Investments, Inc. 83,333
Total 5,000,000
Annex A
Designated Subsidiaries of the Company
U.S. Steel Kosice, s.r.o
U.S. Steel Mining Company, LLC
Annex B
Form of Opinion of Counsel for the Company
(i) The Company has been duly incorporated and is an existing corporation in
good standing under the laws of the State of Delaware;
(ii) U.S. Steel Mining Company, LLC has been duly formed and is an existing
limited liability company in good standing under the laws of the State of
Delaware;
(iii) The Company has an authorized capitalization as set forth in the
Prospectus under the heading "Capitalization" and all the outstanding shares of
capital stock or other equity interests of each subsidiary of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable;
(iv) Each of the Company and its Designated Subsidiaries (other than U. S. Steel
Kosice, s.r.o. ("USSK")) has power and authority (corporate and other) to own
its properties and conduct its business as described in the Prospectus; is duly
qualified to do business as a foreign entity in good standing in all other
jurisdictions in which its ownership or lease of property or the conduct of its
business requires such qualification; all of the issued and outstanding equity
interests of U.S. Steel Mining Company, LLC have been duly authorized and
validly issued and are fully paid and nonassessable; and the equity interests of
U.S. Steel Mining Company, LLC owned by the Company, directly or through
subsidiaries, are owned free from liens, encumbrances and defects;
(v) The Company has full right, power and authority to execute and deliver each
of the Transaction Documents and to perform its obligations thereunder; and all
action required to be taken for the due and proper authorization, execution and
delivery of each of the Transaction Documents and the consummation of the
transactions contemplated thereby has been duly and validly taken;
(vi) No consent, approval, authorization or order of, or filing with, any
governmental agency or body or any court having jurisdiction over the Company,
its U.S. subsidiaries or their respective properties is required for the
consummation of the transactions contemplated by this Agreement in connection
with the issuance and sale of the Securities and the issuance of Common Shares
upon conversion thereof by the Company, except for (i) the order of the
Commission declaring the Registration Statement effective, which has been
obtained and is in full force and effect, and (ii) any consent, approval,
authorization, or order, or filing required pursuant to state "blue sky" laws or
foreign securities laws;
(vii) Except as described in the Prospectus, there are no pending actions,
suits or proceedings against or affecting the Company, any Designated Subsidiary
or any of their respective properties that, if determined adversely to the
Company or any Designated Subsidiary could reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect or would materially and
adversely affect the ability of the Company to perform its obligations under
this Agreement; and no such actions, suits or proceedings are threatened;
(viii) The execution, delivery and performance of the Transaction Documents,
the issuance and sale of the Securities and the issuance of Common Shares upon
conversion thereof by the Company will not result in a breach or violation of
any of the terms and provisions of, or constitute a default under, (A) the
Delaware General Corporation Law or those laws, rules and regulations of the
State of Pennsylvania and the federal laws of the United States (excluding, with
respect to federal securities law, the antifraud provisions thereof), in each
case, which, in my experience, are normally applicable to transactions of the
type contemplated by this Agreement ("Applicable Law") or (B) the respective
charters or limited liability company agreements or by-laws of the Company and
the Designated Subsidiaries (other than USSK), (C) to my knowledge after due
inquiry, orders of any court, regulatory tribunal, administrative agency or
other governmental body with jurisdiction over the Company, any Designated
Subsidiary or any of their respective properties or (D) to my knowledge after
due inquiry, any agreement or instrument to which the Company or any Designated
Subsidiary is a party or by which the Company or any Designated Subsidiary is
bound or to which any of the properties of the Company or any Designated
Subsidiary is subject; the Company has full power and authority to authorize,
issue and sell the Offered Securities as contemplated by this Agreement;
(ix) The Registration Statement was declared effective under the Securities Act
as of the date and time specified in such opinion, the Prospectus was filed with
the Commission pursuant to the subparagraph of Rule 424(b) specified in such
opinion on the date specified therein, and, to the best of my knowledge, no stop
order suspending the effectiveness of the Registration Statement or any part
thereof has been issued and no proceedings for that purpose have been instituted
or are pending or contemplated under the Securities Act, the Registration
Statement and the Prospectus, and each amendment or supplement thereto, as of
their respective effective or issue dates, complied as to form in all material
respects with the requirements of the Securities Act and the documents
incorporated by reference in the Registration Statement and the Prospectus, when
filed with the Commission, conformed in all material respects with the
requirements of the Exchange Act;
(x) The descriptions in the Registration Statement and Prospectus of statutes,
legal and governmental proceedings and contracts and other documents are
accurate and fairly present the information required to be shown; and such
counsel does not know of any legal or governmental proceedings required to be
described in the Registration Statement or the Prospectus which are not
described as required or of any contracts or documents of a character required
to be described in the Registration Statement or the Prospectus or to be filed
as exhibits to the Registration Statement which are not described and filed as
required;
(xi) Each of the other Transaction Documents has been duly authorized by the
Company and, when executed and delivered in accordance with its terms by each of
the parties thereto, will constitute a valid and legally binding agreement of
the Company enforceable against the Company in accordance with its terms subject
to the Enforceability Exceptions;
(xii) Each Transaction Document conforms in all material respects to the
description thereof contained in the Registration Statement and the Prospectus;
(xiii) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the Company to
file a registration statement under the Securities Act with respect to any
securities of the Company or to require the Company to include such securities
with the Securities registered pursuant to the Registration Statement or with
any securities being registered pursuant to any other registration statement
filed by the Company under the Securities Act;
(xiv) The Company is not and, after giving effect to the offering and sale
of the Securities and the application of the proceeds thereof as described in
the Prospectus, will not be an "investment company" or an entity "controlled" by
an "investment company" within the meaning of the Investment Company Act; and
(xv) Neither the issuance, sale and delivery of the Securities nor the
application of the proceeds thereof by the Company as described in the
Prospectus will violate Regulation T, U or X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board of Governors.
Such counsel shall also state that he has participated in conferences with
representatives of the Company and with representatives of its independent
accountants and counsel at which conferences the contents of the Registration
Statement and the Prospectus and any amendment and supplement thereto and
related matters were discussed and, although such counsel assumes no
responsibility for the accuracy, completeness or fairness of the Registration
Statement, the Prospectus and any amendment or supplement thereto (except as
expressly provided above), nothing has come to the attention of such counsel to
cause such counsel to believe that the Second Registration Statement, at the
time of its effective date, contained any 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 the Prospectus or any
amendment or supplement thereto as of its date and the Closing Date contains any
untrue statement of a material fact 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 (other than the financial statements and other
financial information contained therein, as to which such counsel need express
no belief).
In rendering such opinion, such counsel may rely as to matters of fact on
certificates of responsible officers of the Company and public officials that
are furnished to the Underwriters.
The opinion described above shall be rendered to the Underwriters at the
request of the Company and shall so state therein.
Annex C
[Form of Opinion of Slovakian Counsel for the Company]
(i) USSK has been duly organized and is an existing limited liability
company in good standing under the laws of the Slovak Republic, with power and
authority (corporate and other) to own its properties and conduct its business
as described in the Prospectus; and USSK is duly qualified to do business as a
foreign limited liability company in good standing in all other jurisdictions in
which its ownership or lease of property or the conduct of its business requires
such qualification;
(ii) Each of the Significant Slovak Subsidiaries (as defined below) has
been duly organized and is an existing limited liability company in good
standing under the laws of the Slovak Republic, with power and authority
(corporate and other) to own its properties and conduct its business as
described in the Prospectus; and each Significant Slovak Subsidiary is in good
standing in all other jurisdictions in which its ownership or lease of property
or the conduct of its business requires such qualification; all of the issued
and outstanding equity interests of each Significant Slovak Subsidiary have been
duly authorized and validly issued and are fully paid and nonassessable; and the
equity interests of each Significant Slovak Subsidiary owned by USSK, directly
or through subsidiaries, are owned free from liens, encumbrances and defects. A
"Significant Slovak Subsidiary" is any subsidiary of USSK that is a "significant
subsidiary" (as such term is defined in Rule 1-02 of Regulation S-X,
substituting 5% thresholds for the 10% thresholds throughout such definition) of
USSK.
(iii) All outstanding equity interests of USSK have been duly authorized and
validly issued, are fully paid and nonassessable;
(iv) No consent, approval, authorization or order of, or filing with, any
governmental agency or body or any court having jurisdiction over USSK, its
subsidiaries or their respective properties in the Slovak Republic or any
political subdivision thereof is required for the consummation of the
transactions contemplated by this Agreement in connection with the issuance and
sale of the Securities or the issuance of Common Shares upon conversion thereof,
by the Company;
(v) The execution, delivery and performance of the Transaction Documents, the
issuance and sale of the Securities and the issuance of Common Shares upon
conversion thereof, by the Company will not result in a breach or violation of
any of the terms and provisions of, or constitute a default under, (A) any
statute or any rule or regulation in the Slovak Republic or any political
subdivision thereof, (B) the respective organizational documents of USSK and the
Significant Slovak Subsidiaries; (C) orders of any court, regulatory tribunal,
administrative agency or other governmental body with jurisdiction over USSK,
any Significant Slovak Subsidiary or any of their respective properties or (D)
any agreement or instrument to which USSK or any Significant Slovak Subsidiary
is a party or by which USSK or any Significant Slovak Subsidiary is bound or to
which any of the properties of USSK or any Significant Slovak Subsidiary is
subject; and
(vi) The descriptions in the Registration Statement and Prospectus of
statutes, legal and governmental proceedings in the Slovak Republic or any
political subdivision thereof and contracts and other documents relating to USSK
are accurate and fairly present the information required to be shown; and such
counsel do not know of any legal or governmental proceedings in the Slovak
Republic or any political subdivision thereof required to be described in the
Registration Statement or the Prospectus which are not described as required or
of any contracts or documents relating to USSK of a character required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement which are not described and filed as
required.
In rendering such opinion, such counsel may rely as to matters of fact on
certificates of responsible officers of the Company and public officials that
are furnished to the Underwriters.
The opinion described above shall be rendered to the Underwriters at the
request of the Company and shall so state therein.
Annex D
[Form of Opinion of Outside Counsel for the Company]
(i) The Securities delivered on such Closing Date have been duly
authorized and validly issued, are fully paid and nonassessable and the
stockholders of the Company have no preemptive rights with respect to the
Securities;
(ii) The Common Shares initially issuable upon conversion of the Securities
have been duly authorized and reserved for issuance and when issued and
delivered upon conversion in accordance with the provisions of the Securities,
will have been validly issued and will be fully paid and nonassessable, and the
issuance of such Common Shares is not subject to any preemptive or similar
rights;
(iii) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company; and
(iv) The statements made in the Prospectus under the captions "Description
of MEDS" and "Description of Common Stock" insofar as they purport to constitute
summaries of the terms of the Securities and the Common Shares, respectively,
constitute accurate summaries of the terms of the Securities and the Common
Shares in all material respects and the statements in the Prospectus under the
heading "Certain Federal Income Tax Considerations", to the extent that they
constitute summaries of matters of law or regulation or legal conclusions,
fairly summarize the matters described therein in all material respects;
In rendering such opinion, such counsel may rely as to matters of fact on
certificates of responsible officers of the Company and public officials that
are furnished to the Underwriters.
The opinion described above shall be rendered to the Underwriters at the
request of the Company and shall so state therein.
Annex E
Names of Directors and Officers Subject to the Lock-Up Provision
Xxxxxx, X. Xxxx Director
Xxxxxxx, Xxxxxx X. Director
Xxxxxxxx, Xxx X. Vice Chairman & Chief Operating Officer
Xxxxxxx, Xxxxx X. Vice President - Employee Relations
Xxxxxx, Xxxxxxx X. Executive Vice President - Raw
Materials & Diversified Businesses
Goodish, Xxxx X. President - U.S. Steel Kosice, s.r.o.
Xxxxxxxx, Xxxxxxxx X. Senior Vice President & Treasurer
Xxxxxxx, Xxxxxxx Xxx Director
Kadlic, X. Xxxx Executive Vice President - Sheet Products
Xxx, Xxxxxxx X. Director
Xxxxxxxx, Xxxxx Director
XxXxxxxxxxxx, Xxxx X. Director
Xxxxxxx, Xxx X. Vice Chairman and Chief Legal & Administrative
Officer, General Counsel and Secretary
Xxxxxxxxx, Xxxx X. Director
Xxxxxxx, Xxxxx X. Vice President & Controller
Xxxxxx, Xxxxxxxx X. Vice President - Governmental Affairs
Xxxxx, Xxxx X., Xx. Vice Chairman & Chief Financial Officer
Xxxx, Xxxxxxx X. Vice President - Law
Xxxxx, Xxxxxx X. Chairman, Chief Executive Officer and President
Xxxxxxx, Xxxxxxx X. Director
Exhibit A
FORM OF LOCK-UP AGREEMENT
________ __ , 2003
X.X. XXXXXX SECURITIES INC.
[ADDITIONAL CO-MANAGERS]
As Representative of the
several Underwriters listed in
Schedule I to the Underwriting
Agreement referred to below
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: United States Steel Corporation-Public Offering
Ladies and Gentlemen:
The undersigned understands that you, as Representative of the several
Underwriters, propose to enter into an Underwriting Agreement (the "Underwriting
Agreement") with United States Steel Corporation, a Delaware corporation (the
"Company"), providing for the public offering (the "Public Offering") by the
several Underwriters named in Schedule I to the Underwriting Agreement (the
"Underwriters"), of Mandatory Convertible Preferred Shares (MEDSSM), no par
value, of the Company (the "Securities"). Capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Underwriting
Agreement.
In consideration of the Underwriters' agreement to purchase and make the
Public Offering of the Securities, and for other good and valuable consideration
receipt of which is hereby acknowledged, the undersigned hereby agrees that,
without the prior written consent of X.X. Xxxxxx Securities Inc. on behalf of
the Underwriters, the undersigned will not, during the period ending 90 days
after the date of the prospectus relating to the Public Offering (the
"Prospectus"), (i) offer, pledge, announce the intention to sell, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock,
$1.00 per share par value, of the Company (the "Common Stock") or any securities
convertible into or exercisable or exchangeable for Common Stock (including
without limitation, Common Stock which may be deemed to be beneficially owned by
the undersigned in accordance with the rules and regulations of the Securities
and Exchange Commission and securities which may be issued upon exercise of a
stock option or warrant) or (2) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (1) or (2)
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. In addition, the undersigned agrees that, without the prior
written consent of X.X. Xxxxxx Securities Inc., it will not, during the period
ending 90 days after the date of the Prospectus, make any demand for or exercise
any right with respect to, the registration of any shares of Common Stock or any
security convertible into or exercisable or exchangeable for Common Stock.
In furtherance of the foregoing, the Company, and any duly appointed
transfer agent for the registration or transfer of the securities described
herein, are hereby authorized to decline to make any transfer of securities if
such transfer would constitute a violation or breach of this Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Letter Agreement. All authority
herein conferred or agreed to be conferred and any obligations of the
undersigned shall be binding upon the successors, assigns, heirs or personal
representatives of the undersigned.
The undersigned understands that, if the Underwriting Agreement does not
become effective, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Common Stock to be sold thereunder, the
undersigned shall be released from all obligations under this Letter Agreement.
The undersigned understands that the Underwriters are entering into the
Underwriting Agreement and proceeding with the Public Offering in reliance upon
this Letter Agreement.
This lock-up agreement shall be governed by and construed in accordance
with the laws of the State of New York, without regard to the conflict of laws
principles thereof.
Very truly yours,
[NAME OF STOCKHOLDER]
By:
Name:
Title:
Accepted as of the date
first set forth above:
X.X. XXXXXX SECURITIES INC.
ADDITIONAL CO-MANAGERS
Acting severally on behalf of themselves
and the several Underwriters named in
Schedule I to the Underwriting Agreement
By: X.X. XXXXXX SECURITIES INC.
By:
Name:
Title:
