Exhibit 1.1
EXECUTION COPY
J.P. MORGAN SECURITIES INC.
CITIGROUP GLOBAL MARKETS INC.
ALLEGHENY TECHNOLOGIES INCORPORATED
12,000,000 Shares of Common Stock
Underwriting Agreement
July 22, 2004
J.P. MORGAN SECURITIES INC.
CITIGROUP GLOBAL MARKETS INC.
As Representatives of the
several Underwriters listed in
Schedule 1 hereto
c/o J.P. Morgan Securities Inc.
277 Park Avenue
New York, New York 10172
Ladies and Gentlemen:
Allegheny Technologies Incorporated, 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
Representatives (the "Representatives"), an aggregate of 12,000,000 shares of
common stock, par value $ 0.10 per share, of the Company (the "Underwritten
Shares") and, at the option of the Underwriters, up to an additional 1,800,000
shares of common stock of the Company (the "Option Shares"). The Underwritten
Shares and the Option Shares are herein referred to as the "Shares". The shares
of common stock of the Company to be outstanding after giving effect to the sale
of the Shares are herein referred to as the "Stock".
The Company hereby confirms its agreement with the several Underwriters
concerning the purchase and sale of the Shares (this "Agreement"), 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 (File
No. 333-113820) including a prospectus subject to completion, relating to the
Shares. The term "Registration Statement" as used in this Agreement
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means the registration statement (including all financial schedules and
exhibits), as amended at the time it becomes effective, or, if the Registration
Statement became effective prior to the execution of this Agreement, as
supplemented or amended prior to the execution of this Agreement. If it is
contemplated, at the time this Agreement is executed, that a post-effective
amendment to the Registration Statement will be filed and must be declared
effective before the offering of the Shares may commence, the term "Registration
Statement" as used in this Agreement means the Registration Statement as amended
by said post-effective amendment. The term "Prospectus" as used in this
Agreement means the prospectus in the form included in the Registration
Statement as supplemented by the addition of Rule 430A information contained in
the prospectus filed with the Commission pursuant to Rule 424(b) under the
Securities Act. The term "Preliminary Prospectus" as used in this Agreement
means the prospectus subject to completion relating to the Shares in the form
included in the registration statement at the time of the initial filing of the
registration statement with the Commission, and as such prospectus shall have
been amended from time to time prior to the date of the Prospectus. Any
reference in this Agreement to the Registration Statement, any 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
under the Securities Act, as of the date of the Registration Statement, such
Preliminary Prospectus or the Prospectus, as the case may be, and any reference
to any amendment or supplement to the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include any
documents filed after such date under the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the "Exchange Act") which, upon filing, are incorporated by
reference therein, as required by Form S-3. Capitalized terms used but not
defined herein shall have the meanings given to such terms in the Registration
Statement and the Prospectus.
2. Purchase of the Shares by the Underwriters. (a) The Company agrees to
issue and sell the Shares 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 Underwritten Shares set forth opposite such Underwriter's name in
Schedule 1 hereto at a price per share the "Purchase Price" of $17.50.
In addition, the Company agrees to issue and sell the Option Shares to the
several Underwriters as provided in this Agreement, and the Underwriters, on the
basis of the representations, warranties and agreements set forth herein and
subject to the conditions set forth herein, shall have the option to purchase,
severally and not jointly, from the Company the Option Shares at the Purchase
Price.
If any Option Shares are to be purchased, the number of Option Shares to
be purchased by each Underwriter shall be the number of Option Shares which
bears the same ratio to the aggregate number of Option Shares being purchased as
the number of Underwritten Shares set forth opposite the name of such
Underwriter in Schedule 1 hereto (or such number increased as set forth in
Section 9 hereof) bears to the aggregate number of Underwritten Shares being
purchased from the Company by the several Underwriters, subject, however, to
such adjustments to eliminate any fractional Shares as the Representatives in
their sole discretion shall make.
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The Underwriters may exercise the option to purchase the Option Shares at
any time in whole, or from time to time in part, on or before the thirtieth day
following the date of this Agreement, by written notice from the Representatives
to the Company. Such notice shall set forth the aggregate number of Option
Shares as to which the option is being exercised and the date and time when the
Option Shares are to be delivered and paid for which may be the same date and
time as the Closing Date (as hereinafter defined) but shall not be earlier than
the Closing Date nor later than the tenth full business day (as hereinafter
defined) after the date of such notice (unless such time and date are postponed
in accordance with the provisions of Section 9 hereof). Any such notice shall be
given at least two Business Days prior to the date and time of delivery
specified therein.
(b) The Company understands that the Underwriters intend to make a public
offering of the Shares as soon after the effectiveness of this Agreement as in
the judgment of the Representatives is advisable, and initially to offer the
Shares on the terms set forth in the Prospectus. The Company acknowledges and
agrees that the Underwriters may offer and sell Shares to or through any
affiliate of an Underwriter and that any such affiliate may offer and sell
Shares purchased by it to or through any Underwriter.
(c) Payment for the Shares shall be made by wire transfer in immediately
available funds to the account specified by the Company to the Representatives
in the case of the Underwritten Shares, at the offices of Cravath, Swaine &
Moore LLP at 10:00 A.M. New York City time on July 28, 2004, or at such other
time or place on the same or such other date, not later than the fifth business
day thereafter, as the Representatives and the Company may agree upon in writing
or, in the case of the Option Shares, on the date and at the time and place
specified by the Representatives in the written notice of the Underwriters'
election to purchase such Option Shares. The time and date of such payment for
the Underwritten Shares are referred to herein as the "Closing Date" and the
time and date for such payment for the Option Shares, if other than the Closing
Date, are herein referred to as the "Additional Closing Date".
Payment for the Shares to be purchased on the Closing Date or the
Additional Closing Date, as the case may be, shall be made against delivery to
the Representatives for the respective accounts of the several Underwriters of
the Shares to be purchased on such date in definitive form registered in such
names and in such denominations as the Representatives shall request in writing
not later than two full business days prior to the Closing Date or the
Additional Closing Date, as the case may be, with any transfer taxes payable in
connection with the sale of the Shares duly paid by the Company. The
certificates for the Shares will be made available for inspection and packaging
by the Representatives at the office of J.P. Morgan Securities Inc. set forth
above not later than 1:00 P.M., New York City time, on the business day prior to
the Closing Date or the Additional Closing Date, as the case may be.
3. Representations and Warranties of the Company. The Company represents
and warrants to each Underwriter that:
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(a) Preliminary Prospectus. No order preventing or suspending the use of
any Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, complied in all material
respects with the Securities Act and did 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 Representatives expressly for use in any Preliminary Prospectus.
(b) Registration Statement and Prospectus. The Company meets the
requirements for using Form S-3 under the Securities Act. The Registration
Statement has been declared effective by the Commission. 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, to the best knowledge
of the Company, threatened by the Commission; as of the applicable effective
date of the Registration Statement and any amendment thereto, the 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 applicable
filing date of the Prospectus and any amendment or supplement thereto and as of
the Closing Date and as of the Additional Closing Date, as the case may be, 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 Representatives expressly for
use in the Registration Statement and the Prospectus and any amendment or
supplement thereto.
(c) Incorporated Documents. The documents incorporated by reference in the
Prospectus, when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and none of such documents
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,
in the light of the circumstances under which they were made, not misleading;
and any further documents so filed and incorporated by reference in the
Prospectus, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable, 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.
(d) Financial Statements. The historical financial statements and the
related notes thereto of the Company and its consolidated subsidiaries included
or incorporated by reference in
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the Registration Statement and the Prospectus comply in all material respects
with the applicable requirements of the Securities Act and the Exchange Act, as
applicable, present fairly the financial position of the Company and its
consolidated subsidiaries as of the dates indicated and the results of their
operations and the changes in their consolidated cash flows for the periods
specified; such historical financial statements have been prepared in conformity
with U.S. generally accepted accounting principles applied on a consistent basis
throughout the periods covered thereby, and the supporting schedules included or
incorporated by reference in the Registration Statement present fairly the
information required to be stated therein; and the other historical financial
information relating to the Company and its subsidiaries that is included or
incorporated by reference 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; and the pro forma financial
information and the related notes thereto included or incorporated by reference
in the Registration Statement and the Prospectus has been prepared in accordance
with the applicable requirements of the Securities Act and the Exchange Act, as
applicable, and the assumptions underlying such pro forma financial information
are reasonable and are, in all material respects, set forth in the Registration
Statement and the Prospectus.
(e) No Material Adverse Change. Since the date of the most recent
financial statements of the Company included or incorporated by reference in the
Registration Statement and the Prospectus, (i) there has not been any material
change in the capital stock or long-term debt of the Company or any of its
subsidiaries, or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
business, prospects, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries taken as a whole; and
(ii) except in the ordinary course of business or as disclosed in the Company's
public filings, 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 as otherwise
disclosed in the Registration Statement and the Prospectus.
(f) Organization and Good Standing. (i) The Company has been duly
incorporated and is validly existing and in good standing under the laws of its
jurisdiction of incorporation, is duly qualified as a foreign corporation for
the transaction of business and is in good standing in each jurisdiction in
which it owns or leases property or conducts business, so as to require such
qualification, and has all power and authority necessary to own or hold its
properties and to conduct the business in which it is engaged, except where the
failure to be so qualified or in good standing would not have a material adverse
effect on the general affairs, business, prospects, management, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole (a "Material Adverse Effect") and (ii) each of the
Company's "significant subsidiaries" (within the meaning of Rule 1-02 of
Regulation S-X) has been duly incorporated and is validly existing and in good
standing under the laws of its jurisdiction of incorporation, is duly
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qualified as a foreign corporation for the transaction of business and is in
good standing in each jurisdiction in which it owns or leases property or
conducts business, so as to require such qualification, and has all power and
authority necessary to own or hold its properties and to conduct the business in
which it is engaged, except where the failure to be so qualified or in good
standing would not have a Material Adverse Effect; and all outstanding shares of
capital stock of each "significant subsidiaries" (within the meaning of Rule
1-02 of Regulation S-X) of the Company have been duly authorized and validly
issued, are fully-paid and non-assessable, and (except for any directors'
qualifying shares and minority interests) are owned by the Company, directly or
indirectly, free and clear of all liens, encumbrances, security interests and
claims.
(g) Capitalization. The Company has an authorized capitalization as set
forth in the Prospectus under the heading "Capitalization"; all the outstanding
shares of capital stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable and are not subject to any
pre-emptive or similar rights; except as described in or expressly contemplated
by the Prospectus, there are no outstanding rights (including, without
limitation, pre-emptive rights), warrants or options to acquire, or instruments
convertible into or exchangeable for, any shares of capital stock or other
equity interest in the Company or any of its subsidiaries, or any contract,
commitment, agreement, understanding or arrangement of any kind relating to the
issuance of any capital stock of the Company or any such subsidiary, any such
convertible or exchangeable securities or any such rights, warrants or options;
the capital stock of the Company conforms in all material respects to the
description thereof contained in the Registration Statement and the Prospectus.
(h) Underwriting Agreement. The Company has all requisite corporate right,
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder. This Agreement has been duly authorized, executed and
delivered by the Company and constitutes the valid and binding agreement of the
Company.
(i) The Shares. The Shares to be issued and sold by the Company hereunder
have been duly authorized by the Company and, when issued and delivered and paid
for as provided herein, will be duly and validly issued and will be fully paid
and nonassessable and will conform to the descriptions thereof in the
Prospectus; and the issuance of the Shares is not subject to any preemptive or
similar rights. The Shares are listed on the New York Stock Exchange.
(j) No Violation or Default. Neither the Company nor any of its
subsidiaries is (i) in violation of its charter or by-laws or similar
organizational documents; (ii) in default, and no event has occurred that, with
notice or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject; 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, in the case of clauses (ii) and (iii) above, for any such default or
violation that would not, individually or in the aggregate, have a Material
Adverse Effect.
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(k) No Conflicts. The execution, delivery and performance by the Company
of this Agreement, the issuance and sale of the Shares and the consummation of
the transactions contemplated hereby will not (i) conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its subsidiaries is
subject, (ii) result in any violation of the provisions of the charter or
by-laws or similar organizational documents of the Company or any of its
subsidiaries or (iii) result in the violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or governmental
or regulatory authority, except, in the case of clauses (i) and (iii) above, for
any such conflict, breach or violation that would not, individually or in the
aggregate, have a Material Adverse Effect.
(l) No Consents Required. No consent, approval, authorization, order,
license, registration or qualification of or with any court or arbitrator or
governmental or regulatory authority is required for the execution, delivery and
performance by the Company of this Agreement, the issuance and sale of the
Shares and the consummation of the transactions contemplated by this Agreement,
except for such consents, approvals, authorizations, orders and registrations or
qualifications as may be required under applicable state securities laws in
connection with the purchase and distribution of the Shares by the Underwriters.
(m) Legal Proceedings. Except as described in the Prospectus, there are no
legal, governmental or regulatory investigations, actions, suits or proceedings
pending to which the Company or any of its subsidiaries is or may be a party or
to which any property of the Company or any of its subsidiaries is or may be the
subject that, individually or in the aggregate, if determined adversely to the
Company or any of its subsidiaries, could have or reasonably be expected to have
a Material Adverse Effect; and to the best knowledge of the Company, no such
investigations, actions, suits or proceedings are threatened by any governmental
or regulatory authority or threatened by others; and (i) there are no current or
pending legal, governmental or regulatory actions, suits or proceedings that are
required under the Securities Act to be described in the Prospectus that are not
so described and (ii) there are no statutes, regulations or contracts or other
documents that are required under the Securities Act to be filed as exhibits to
the Registration Statement or described in the Registration Statement or the
Prospectus that are not so filed or described.
(n) Independent Accountants. Ernst & Young 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.
(o) Title to Real and Personal Property. (i) The Company and its
subsidiaries have good and marketable title in fee simple to all items of real
and personal property owned by them, in each case free and clear of all liens,
encumbrances, claims and defects and imperfections of
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title except those that (x) are described or referred to in the Prospectus, (y)
do not materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company and its
subsidiaries or (z) would not have a Material Adverse Effect, and (ii) any real
property and buildings held under lease by the Company and its subsidiaries are
held by them under valid, existing and enforceable leases with such exceptions
(x) as are not material and do not interfere with the use made or proposed to be
made of such real property and buildings by the Company or its subsidiaries or
(y) which would not have a Material Adverse Effect.
(p) Title to Intellectual Property. Except as would not, singly or in the
aggregate, have a Material Adverse Effect, the Company and its subsidiaries own,
possess or can acquire on reasonable terms, adequate rights to use all patents,
patent applications, trademarks, service marks, trade names, trademark
registrations, service mark registrations, copyrights, licenses and know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) (collectively, "Intellectual
Property Rights") necessary for the conduct of their respective businesses now
conducted by them or presently employed by them; and the Company and its
subsidiaries have not received any written notice of any claim of infringement
or conflict with any asserted rights of others with respect to any Intellectual
Property Rights that, if determined adversely to the Company or any of its
subsidiaries, would, individually or in the aggregate, have a Material Adverse
Effect.
(q) 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.
(r) Investment Company Act. The Company is not and, after giving effect to
the offering and sale of the Shares and the application of the proceeds thereof
as described in the Prospectus, will not be required to register as an
"investment company" or an entity "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder (collectively, "Investment Company
Act").
(s) Public Utility Holding Company Act. Neither the Company nor any of its
subsidiaries is a "holding company" or a "subsidiary company" of a holding
company or an "affiliate" thereof within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
(t) Taxes. The Company and its subsidiaries have paid all federal, state,
local and foreign taxes 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 and filed all tax returns required to be paid or filed through the date
hereof; and except as otherwise disclosed in the Prospectus, there is no tax
deficiency that has been, or could reasonably be expected to be, asserted
against the Company or any of its subsidiaries or any of their respective
properties or assets that would have
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a Material Adverse Effect and the Company and its subsidiaries have complied in
all respects with the rulings received from the Internal Revenue Service in
connection with the Company's 1999 restructuring and spin off.
(u) Licenses and Permits. The Company and its subsidiaries possess all
licenses, certificates, permits and other authorizations issued by, and have
made all declarations and filings with, the appropriate federal, state, local or
foreign governmental or regulatory authorities that are necessary for the
ownership or lease of their respective properties or the conduct of their
respective businesses as described in the Registration Statement and the
Prospectus; and neither the Company nor any of its subsidiaries has received
actual notice of any proceeding relating to revocation or modification of any
such license, certificate, permit or authorization, except as described in the
Registration Statement and the Prospectus; and each of the Company and its
subsidiaries is in compliance with all laws and regulations relating to the
conduct of its business as conducted as of the date hereof, except where the
failure to possess such licenses, certificates, permits and other
authorizations, to make such declarations and filings, to be party to any such
proceedings, or to comply with such laws and regulations would not, singly or in
the aggregate, have a Material Adverse Effect.
(v) No Labor Disputes. No material labor disturbance by or dispute with
employees of the Company or any of its subsidiaries exists or, to the best
knowledge of the Company, is threatened.
(w) Compliance With Environmental Laws. (i) The Company and its
subsidiaries (x) are in compliance with any and all applicable federal, state,
local and foreign laws, rules and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants (collectively, "Environmental Laws"), (y)
have received and are in compliance with all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses, and (z) have not received notice of any actual or
potential liability for the investigation or remediation of any disposal or
release of hazardous or toxic substances or wastes, pollutants or contaminants,
except in any such case for any such failure to comply, or failure to receive
required permits, licenses or approvals, or liability as (i) is disclosed in the
Registration Statement and Prospectus or (ii) would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(ii) In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities would not, singly or
in the aggregate, have a Material Adverse Effect.
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(x) 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.
(y) 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.
(z) Insurance. The Company and its subsidiaries have insurance covering
their respective properties, operations, personnel and businesses, including
business interruption insurance, which insurance is in amounts and insures
against such losses and risks as are adequate to protect the Company and its
subsidiaries and their respective businesses; and neither the Company nor any of
its subsidiaries has (i) received notice from any insurer or agent of such
insurer that capital improvements or other expenditures are required or
necessary to be made in order to continue such insurance or (ii) any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage at reasonable cost from
similar insurers as may be necessary to continue its business.
(aa) 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.
(bb) No Restrictions on Subsidiaries. No subsidiary of the Company is
currently prohibited, directly or indirectly, under any agreement or other
instrument to which it is a party or
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is subject, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the Company
any loans or advances to such subsidiary from the Company or from transferring
any of such subsidiary's properties or assets to the Company or any other
subsidiary of the Company.
(cc) No Broker's Fees. Neither the Company nor any of its subsidiaries is
a party to any contract, agreement or understanding with any person (other than
this Agreement) that would give rise to a valid claim against the Company or any
of its subsidiaries or any Underwriter for a brokerage commission, finder's fee
or like payment in connection with the offering and sale of the Shares.
(dd) No Registration Rights. No person has the right to require the
Company or any of its subsidiaries to register any securities for sale under the
Securities Act by reason of the filing of the Registration Statement with the
Commission or the issuance and sale of the Shares.
(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 Shares.
(ff) Business With Cuba. The Company has complied with all provisions of
Section 517.075, Florida Statutes (Chapter 92-198, Laws of Florida) relating to
doing business with the Government of Cuba or with any person or affiliate
located in Cuba.
(gg) Margin Rules. Neither the issuance, sale and delivery of the Shares
nor the application of the proceeds thereof by the Company as described in the
Registration Statement and 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.
(hh) Forward-Looking Statements. No forward-looking statement (within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) contained in the Registration Statement and the Prospectus has been made or
reaffirmed without a reasonable basis or has been disclosed other than in good
faith.
(ii) Statistical and Market Data. Nothing has come to the attention of the
Company that has caused the Company to believe that the statistical and
market-related data included in the Registration Statement and the Prospectus is
not based on or derived from sources that are reliable and accurate in all
material respects.
(jj) Sarbanes-Oxley Act. There is and has been no failure on the part of
the Company or any of the Company's directors or officers, in their capacities
as such, to comply with any provision of the Sarbanes-Oxley Act of 2002 and the
rules and regulations promulgated in connection therewith (the "Sarbanes-Oxley
Act"), including Section 402 related to loans and Sections 302 and 906 related
to certifications.
12
4. Further Agreements of the Company. The Company covenants and agrees
with each Underwriter that:
(a) Effectiveness of the Registration Statement. The Company will file the
final Prospectus with the Commission within the time periods specified by Rule
424(b) and Rule 430A under the Securities Act and will file promptly all reports
and any definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering or sale of
the Shares; 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 Representatives may reasonably request.
(b) Delivery of Copies. The Company will deliver, without charge, (i) to
the Representatives, three signed copies of the Registration Statement as
originally filed and each amendment thereto, in each case including all exhibits
and consents filed therewith and documents incorporated by reference therein;
and (ii) to each Underwriter (A) a conformed copy of the Registration Statement
as originally filed and each amendment thereto (without exhibits) and (B) during
the Prospectus Delivery Period, as many copies of the Prospectus (including all
amendments and supplements thereto and documents incorporated by reference
therein) as the Representatives 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 Shares as in the opinion of counsel for the
Underwriters a prospectus relating to the Shares is required by law to be
delivered in connection with sales of the Shares by any Underwriter or dealer.
(c) Amendments or Supplements. Before filing any amendment or supplement
to the Registration Statement or the Prospectus during the Prospectus Delivery
Period, the Company will furnish to the Representatives 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 Representatives
reasonably objects.
(d) Notice to the Representatives. The Company will advise the
Representatives 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 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
13
any notice with respect to any suspension of the qualification of the Shares 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 Shares and, if any such order is issued, will use its reasonable best
efforts to 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 an 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 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 Representatives 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 Shares for offer and
sale under the securities or Blue Sky laws of such jurisdictions as the
Representatives shall reasonably request and will continue such qualifications
in effect so long as required for distribution of the Shares; 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 Representatives 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) Clear Market. For a period of 90 days after the date of the initial
public offering of the Shares, the Company will not (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 Stock or any securities convertible into or exercisable or
exchangeable for Stock or (ii) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of ownership of
the Stock, whether any such transaction described in clause (i) or (ii) above is
to be settled by delivery of Stock or such other securities, in cash or
otherwise, without the prior written consent of the Representatives, other than
the Shares to be sold
14
hereunder and any shares of Stock of the Company issued under existing employee
or director stock compensation plans.
(i) Use of Proceeds. The Company will apply the net proceeds from the sale
of the Shares as described in the Prospectus under the heading "Use of
Proceeds".
(j) 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 Shares.
(k) Reports. So long as the Shares are outstanding, the Company will
furnish to the Representatives, as soon as they are available, copies of all
reports or other communications (financial or other) furnished to holders of the
Shares, and copies of any reports and financial statements furnished to or filed
with the Commission or any national securities exchange or automatic quotation
system; provided, however, in no event shall the Company be required to furnish
copies of any such documents which are filed and publicly accessible via the
EDGAR database.
5. Conditions of Underwriters' Obligations. The obligation of each
Underwriter to purchase the Underwritten Shares on the Closing Date or the
Option Shares on the Additional Closing Date, as the case may be, 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. The Registration Statement (or
if a post-effective amendment thereto is required to be filed under the
Securities Act, such post-effective amendment) shall have become effective, and
the Representatives 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 Representatives.
(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 the Closing Date or the Additional Closing Date, as the case may be;
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 the
Closing Date or the Additional Closing Date, as the case may be.
(c) No Downgrade. Subsequent to the execution and delivery of this
Agreement, (i) no downgrading shall have occurred in the rating accorded any
securities or preferred stock of 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)
15
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 or preferred stock of 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(e)
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 judgment of the Representatives makes it
impracticable or inadvisable to proceed with the offering, sale or delivery of
the Shares on the Closing Date or the Additional Closing Date, as the case may
be, on the terms and in the manner contemplated by this Agreement and the
Prospectus.
(e) Officer's Certificate. The Representatives shall have received on and
as of the Closing Date or the Additional Closing Date, as the case may be, a
certificate of the chief financial officer or chief accounting officer of the
Company and one additional senior executive officer of the Company who is
satisfactory to the Representatives (i) confirming that such officers have
carefully reviewed the Registration Statement and the Prospectus and, to the
best knowledge of such officers, the representation set forth in Section 3(b)
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. On the date of this Agreement and on the Closing Date
or the Additional Closing Date, as the case may be, Ernst & Young LLP shall have
furnished to the Representatives, 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 Representatives, containing
statements and information of the type customarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial information contained or incorporated by reference in the
Registration Statement and the Prospectus; provided, that the letter delivered
on the Closing Date or the Additional Closing Date, as the case may be, shall
use a "cut-off" date no more than three business days prior to such Closing Date
or such Additional Closing Date, as the case may be.
(g) Opinion of Counsel for the Company. (i) Jon D. Walton, Executive Vice
President, Chief Legal and Compliance Officer, General Counsel and Corporate
Secretary of the Company, shall have furnished to the Representatives, at the
request of the Company, his written opinion, dated the Closing Date or the
Additional Closing Date, as the case may be, and addressed to the Underwriters,
in form and substance reasonably satisfactory to the Representatives, to the
effect set forth in Annex A hereto and (ii) Kirkpatrick & Lockhart LLP, counsel
for the Company, shall have furnished to the Representatives, at the request of
the Company, their written opinion, dated the Closing Date or the Additional
Closing Date, as the case may be, and addressed to the Underwriters, in form and
substance reasonably satisfactory to the Representatives, to the effect set
forth in Annex B hereto.
16
(h) Opinion of Counsel for the Underwriters. The Representatives shall
have received on and as of the Closing Date or the Additional Closing Date, as
the case may be, an opinion of Cravath, Swaine & Moore LLP, counsel for the
Underwriters, with respect to such matters as the Representatives 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.
(i) 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 the Closing Date or the Additional Closing Date, as the case may
be, prevent the issuance or sale of the Shares; and no injunction or order of
any federal, state or foreign court shall have been issued that would, as of the
Closing Date or the Additional Closing Date, as the case may be, prevent the
issuance or sale of the Shares.
(j) Good Standing. The Representatives shall have received on and as of
the Closing Date or the Additional Closing Date, as the case may be,
satisfactory evidence of the good standing of the Company and its Significant
Subsidiaries in their respective jurisdictions of organization and their good
standing as foreign entities in such other jurisdictions as the Representatives
may reasonably request, in each case in writing or any standard form of
telecommunication from the appropriate Governmental Authorities of such
jurisdictions.
(k) Lock-up Agreements. The "lock-up" agreements, each substantially in
the form of Exhibit A hereto, between you and certain shareholders, officers and
directors of the Company relating to sales and certain other dispositions of
shares of Stock or certain other securities, delivered to you on or before the
date hereof, shall be full force and effect on the Closing Date or Additional
Closing Date, as the case may be.
(l) Additional Documents. On or prior to the Closing Date or the
Additional Closing Date, as the case may be, the Company shall have furnished to
the Representatives such further certificates and documents as the
Representatives may reasonably request.
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
17
material fact contained in the Registration Statement or the Prospectus (or any
amendment or supplement thereto) or any Preliminary Prospectus, or caused by 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 Representatives expressly for use therein, it being understood and
agreed that the only such information furnished by any Underwriter consists of
the information described as such in subsection (b) below.
(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 Representatives 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 upon that the only such information furnished by any Underwriter consists
of the following information in the Prospectus furnished on behalf of each
Underwriter: the concession and reallowance figures appearing in the third
paragraph under the caption "Underwriting" and the information contained in the
11th and 12th paragraphs under the caption "Underwriting" relating to
stabilizing transactions.
(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
18
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 paid or 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 the Representatives 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 Shares 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
19
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 Shares 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 Shares. 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 underwriting discounts and commissions received by
such Underwriter with respect to the offering of the Shares 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 Representatives 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 Representatives, by notice to the Company, if after the
execution and delivery of this Agreement and prior to the Closing Date or, in
the case of the Option Shares, prior to the Additional Closing Date(i) trading
generally shall have been suspended or materially limited on or by the New York
Stock Exchange; (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;
20
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 Representatives, is
material and adverse and makes it impracticable or inadvisable to proceed with
the offering, sale or delivery of the Shares on the Closing Date or the
Additional Closing Date, as the case may be, on the terms and in the manner
contemplated by this Agreement and the Prospectus.
9. Defaulting Underwriter. (a) If, on the Closing Date or the Additional
Closing Date, as the case may be, any Underwriter defaults on its obligation to
purchase the Shares that it has agreed to purchase hereunder on such date, the
non-defaulting Underwriters may in their discretion arrange for the purchase of
such Shares 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 Shares, 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 Shares on such terms. If other persons become
obligated or agree to purchase the Shares of a defaulting Underwriter, either
the non-defaulting Underwriters or the Company may postpone the Closing Date or
the Additional Closing Date, as the case may be, 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 Shares that a
defaulting Underwriter agreed but failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by the non-defaulting
Underwriters and the Company as provided in paragraph (a) above, the aggregate
number of Shares that remain unpurchased on the Closing Date or the Additional
Closing Date, as the case may be does not exceed one-eleventh of the aggregate
number of Shares to be purchased on such date, then the Company shall have the
right to require each non-defaulting Underwriter to purchase the number of
Shares that such Underwriter agreed to purchase hereunder on such date plus such
Underwriter's pro rata share (based on the number of Shares that such
Underwriter agreed to purchase on such date) of the Shares 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
Shares of a defaulting Underwriter or Underwriters by the non-defaulting
Underwriters and the Company as provided in paragraph (a) above, the aggregate
number of Shares that remain unpurchased on the Closing Date or the Additional
Closing Date, as the case may be, exceeds one-eleventh of the aggregate amount
of Shares to be purchased on such date, or if the Company shall not exercise the
right described in paragraph (b) above, then this Agreement or, with respect to
any Additional Closing Date, the obligation of the Underwriters to purchase
Shares on the Additional Closing Date, as the case may be, shall terminate
without liability on the part of the non-defaulting
21
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
Shares 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 this Agreement; (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 Shares under the laws of such
jurisdictions as the Representatives 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) the cost of preparing stock
certificates; (vii) the costs and charges of any transfer agent and any
registrar; (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 Shares on the New
York Stock Exchange.
(b) If (i) this Agreement is terminated pursuant to Section 8, (ii) the
Company for any reason fails to tender the Shares for delivery to the
Underwriters or (iii) the Underwriters decline to purchase the Shares 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 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 Shares 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
22
certificate delivered pursuant hereto shall survive the delivery of and payment
for the Shares 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 Representatives. Any action by the
Underwriters hereunder may be taken by the Representatives on behalf of the
Underwriters, and any such action taken by the Representatives 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 Representatives c/o J.P. Morgan Securities Inc., 277 Park
Avenue, New York, New York 10172 (fax: (212) 622-8358); Attention: Henry K.
Wilson. Notices to the Company shall be given to it at 1000 Six PPG Place,
Pittsburgh, Pennsylvania 15222, (fax: (412) 394-2837); Attention: Jon D. Walton.
(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.
23
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,
ALLEGHENY TECHNOLOGIES
INCORPORATED
by
/s/ Jon D. Walton
-------------------------------------
Name: Jon D. Walton
Title: Executive Vice President,
Human Resources,
Chief Legal and Compliance
Officer, General Counsel and
Corporate Secretary
Accepted: July 22, 2004
J.P. MORGAN SECURITIES INC.
By /s/ Juan Vogeler
--------------------------
Authorized Signatory
CITIGROUP GLOBAL MARKETS INC.
By /s/ Darin Baur
--------------------------
Authorized Signatory
Each for itself and on behalf
of the several Underwriters
listed in Schedule 1 hereto.
24
Schedule 1
Underwriter Number of Shares
J.P. Morgan Securities Inc. 4,410,000
Citigroup Global Markets Inc. 4,410,000
Banc of America Securities LLC 1,440,000
Merrill Lynch & Co. 1,440,000
Lazard Freres & Co. LLC 300,000
----------
Total 12,000,000