4,500,000 SHARES
USX-U.S. STEEL GROUP
COMMON STOCK
OF
USX CORPORATION
UNDERWRITING AGREEMENT
January 26, 1994
January 26, 1994
Morgan Stanley & Co.
Incorporated
As Representatives for each of the several
Underwriters named in Schedule 1,
c/o Morgan Stanley & Co.
Incorporated
1251 Avenue of the Americas
New York, New York 10020
Dear Sirs:
Subject to all of the terms and conditions herein set forth, USX
Corporation, a Delaware corporation (the "Corporation"), proposes to sell to the
Underwriters named in Schedule 1 hereto (the " Underwriters") 4,500,000 shares
(the "Firm Stock") of the Corporation's USX-U.S. Steel Group Common Stock, par
value $1.00 per share (the "Steel Stock"), and to grant to the Underwriters an
option to purchase up to an additional 500,000 shares of the Steel Stock (the
"Option Stock"). The Firm Stock and the Option Stock, if purchased, are
hereinafter collectively called the "Stock." This is to confirm the agreement
concerning the purchase of the Stock from the Corporation by the Underwriters.
1. Representations, Warranties and Agreements of the Corporation.
The Corporation represents, warrants and agrees that:
(a) A registration statement on Form S-3 with respect to certain
securities of the Corporation, including a preliminary prospectus, has (i)
been prepared by the Corporation in conformity with the requirements of the
United States Securities Act of 1933 (the "Securities Act") and the rules
and regulations (the "Rule and Regulations") of the United States
Securities and Exchange Commission (the "Commission") thereunder, (ii) been
filed with the Commission under the Securities Act and (iii) become
effective under the Securities Act. If any post-effective amendment to
such registration statement has been filed with the Commission prior to the
date hereof, the most recent such amendment has been declared effective by
the Commission. Copies of such registration statement and the amendments
thereto have been delivered by the Corporation to you as the
representatives (the "Representatives") of the Underwriters. As used in
this Agreement, "Effective Time" means the date and the time as of which
such registration statement or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission; "Effective Date"
means the date of the Effective Time; "Preliminary Prospectus" means each
prospectus included in such registration statement, or amendments thereof,
before it became effective under the Securities Act; "Registration
Statement" means such registration statement, as it became effective under
the Securities Act, and as amended or supplemented as of the date hereof,
including any documents incorporated by reference therein; "Basic
Prospectus" means the prospectus included in the Registration Statement;
and "Prospectus" means the Basic Prospectus, together with any prospectus
amendment or supplement specifically relating to the Stock to be purchased
by the Underwriters pursuant to the terms herein, as filed with, the
Commission pursuant to Rule 424(b) of the Rules and Regulations. Reference
made herein to any Preliminary Prospectus or to the Prospectus shall be
deemed to refer to and include any documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Securities Act, as of the
date of such Preliminary Prospectus or the Prospectus, as the case may be,
and any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include any
document filed under the United States Securities Exchange Act of 1934 (the
"Exchange Act") after the date of such Preliminary Prospectus or the
Prospectus, as the case may be, and incorporated by reference in such
Preliminary Prospectus or the Prospectus, as the case may be; and any
reference to any amendment to the Registration Statement shall be deemed to
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include any annual report of the Corporation filed with the Commission
pursuant to Section 13(a) or 15(d) of the Exchange Act after the Effective
Time that is incorporated by reference in the Registration
Statement. The Commission has not issued any order preventing or
suspending the use of the Preliminary Prospectus.
(b) The Registration Statement and the Prospectus conform, and any
further amendments or supplements thereto will, when they become effective
or are filed with the Commission, as the case may be, conform in all
material respects to the requirements of the Securities Act and the Rules
and Regulations and do not and will not, as of the applicable effective
date (as to the Registration Statement and any amendment thereto) and as of
the applicable filing date (as to the Prospectus and any amendment or
supplement thereto), contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading; provided that no representation or
warranty is made as to information contained in or omitted from the
Registration Statement or the Prospectus in reliance upon and in conformity
with written information furnished to the Corporation through the
Representatives by or on behalf of any Underwriter specifically for
inclusion therein.
(c) The documents incorporated by reference in the Registration
Statement and 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 the rules and regulations of the Commission thereunder, and none of
such documents contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading; 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 the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(d) The Corporation and the Designated Subsidiary (as defined in
Section 14) have been duly incorporated and are validly existing as
corporations in good standing under the laws of their respective
jurisdictions of incorporation, are duly qualified to do business and are
in good standing as foreign corporations in each jurisdiction in which
their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification other than those
jurisdictions in which the failure to so qualify would not have a material
adverse effect on the Corporation, the Designated Subsidiary or the U.S.
Steel Group (as defined in the Prospectus) and have all corporate power and
authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged.
(e) The Corporation has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Corporation have been duly and validly authorized and issued, are fully
paid and non-assessable and conform to the description thereof contained in
the Prospectus; and all of the issued shares of capital stock of the
Designated Subsidiary have been duly and validly authorized and issued and
are fully paid, non-assessable and owned directly or indirectly by the
Corporation, free and clear of all liens, encumbrances, equities or claims.
(f) The shares of the Stock to be issued and sold by the Corporation
to the Underwriters hereunder have been duly and validly authorized and,
when issued and delivered against payment therefor as provided herein will
be duly and validly issued, fully paid and non-assessable and will conform
to the description of the Stock contained in the Prospectus; and there are
no preemptive or other rights to subscribe for or to purchase, nor any
restriction upon the voting or transfer of, any shares of the Stock
pursuant to the Corporation's Restated Certificate of Incorporation or by-
laws or any agreement or other instrument, other than certain rights to
subscribe for or to purchase shares of Steel Stock pursuant to the
Corporation's outstanding convertible preferred stock and convertible
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debentures, the Restated Rights Agreement (as defined in the Prospectus),
employee stock options, employee benefit plans or the USX-U.S. Steel Group
Common Stock Dividend Reinvestment and Stock Purchase Plan and certain
restrictions upon the transfer of certain shares of the Steel Stock
pursuant to the Corporation's 1990 Stock Plan;
(g) The execution, delivery and performance of this Agreement by the
Corporation and the consummation of the transactions contemplated hereby
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Corporation or the Designated Subsidiary is a party or by which
the Corporation or the Designated Subsidiary is bound or to which any of
the property or assets of the Corporation or the Designated Subsidiary is
subject, nor will such actions result in any violation of the provisions of
the charter or by-laws of the Corporation or the Designated Subsidiary or
any U.S. statute or any order, rule or regulation of any U.S. court or U.S.
governmental agency or body having jurisdiction over the Corporation or the
Designated Subsidiary or any of their properties; and except for the
registration of the Stock under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications which have
already been obtained by the Corporation or as may be required under the
Exchange Act and applicable state securities laws in connection with the
purchase and distribution of the Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration with, any
such court or governmental agency or body is required for the execution,
delivery and performance of this Agreement by the Corporation and the
consummation of the transactions contemplated hereby.
(h) Except with respect to the Corporation's outstanding convertible
debentures and unsecured senior notes due 1996 and the Restated Rights
Agreement, there are no contracts, agreements or understandings between the
Corporation and any person granting such person the right to require the
Corporation to file a registration statement under the Securities Act with
respect to any securities of the Corporation owned or to be owned by such
person or to require the Corporation 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 Corporation under the Securities Act.
(i) Neither the Corporation nor any of its subsidiaries has
sustained, since the date of the latest audited financial statements
included or incorporated by reference in the Registration Statement or the
Prospectus, any loss or interference with its business which is material to
the business of the Corporation, the Designated Subsidiary or the U.S.
Steel Group from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Registration Statement and the Prospectus; and, since such date, there has
not been any material change in the capital stock or long-term debt of the
Corporation or the Designated Subsidiary or any material adverse change, or
any development likely to involve a prospective material adverse change, in
or affecting the management, consolidated financial position, stockholders'
equity or results of operations of the Corporation and its subsidiaries or
the financial position, stockholders' equity or results of operations of
the U.S. Steel Group, otherwise than as set forth or contemplated in the
Registration Statement and the Prospectus.
(j) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or
included or incorporated by reference in the Prospectus present fairly, in
all material respects, the financial position and results of operations of
the entities purported to be shown thereby, at the dates and for the
periods indicated, and have been prepared in conformity with generally
accepted accounting principles, except as noted therein, applied on a
consistent basis throughout the periods involved.
(k) To the best knowledge of the Corporation, Price Waterhouse, who
have certified certain financial statements of the Corporation and its
subsidiaries and whose report appears in the Prospectus or is incorporated
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by reference therein, are independent public accountants as required by the
Securities Act and the Rules and Regulations and were independent
accountants as required by the Securities Act and the Rules and Regulations
during the periods covered by the financial statements on which they
reported contained or incorporated in the Prospectus.
(l) Except as described in the Registration Statement and the
Prospectus, there are no legal or governmental proceedings pending to which
the Corporation or any of its subsidiaries is a party or of which any
property of the Corporation or any of its subsidiaries is the subject
which, if determined adversely to the Corporation or any of its
subsidiaries, would, individually or collectively with any claims arising
out of similar causes of action, have a material adverse effect on the
consolidated financial position, stockholders' equity or
results of operations of the Corporation and its subsidiaries or the
financial position, stockholders' equity or results of operations of the
U.S. Steel Group; and to the best of the Corporation's knowledge, no such
proceedings are threatened by governmental authorities or others.
(m) There are no contracts or other documents which are required to
be described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations which have
not been described in the Prospectus or filed as exhibits to the
Registration Statement or incorporated therein by reference as permitted by
the Rules and Regulations.
(n) No labor disturbance by the employees of the Corporation exists
or, to the knowledge of the Corporation, is imminent which is likely to
have a material adverse effect on the consolidated financial position,
stockholders' equity or results of operations of the Corporation and its
subsidiaries or the financial position, stockholders' equity or results of
operations of the U.S. Steel Group.
(o) Neither the Corporation nor the Designated Subsidiary (i) is in
violation of its charter or by-laws, (ii) is in default in any respect
material to the business of the Corporation, the Designated Subsidiary or
the U.S. Steel Group, and no event has occurred which, 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 agreement,
indenture or instrument material to the Corporation and its subsidiaries or
to the U.S. Steel Group, (iii) is in violation in any respect material to
the business of the Corporation, the Designated Subsidiary or the U.S.
Steel Group of any law, ordinance, governmental rule, regulation or court
decree to which it or its property may be subject or has failed to obtain
any material license, permit, certificate, franchise or other governmental
authorization or permit necessary to the ownership of its property or to
the conduct of its business or (iv) is in violation of Section 517.075 of
the Florida Securities and Investor Protection Act.
(p) The Corporation is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
2. Purchase of the Stock by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Corporation agrees to sell 4,500,000 shares
of the Firm Stock to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set opposite that Underwriter's name in Schedule 1 hereto, as such number
may be increased in accordance with Section 9.
In addition, the Corporation hereby grants to the Underwriters an
option to purchase up to 500,000 shares of Option Stock. Such option is granted
solely for the purpose of covering over-allotments in the sale of Firm Stock and
is exercisable as provided in Section 4 hereof. Shares of Option Stock shall
be purchased severally for the account of the Underwriters in proportion to the
number of shares of Firm Stock set opposite the name of such Underwriters in
Schedule 1 hereto. The respective purchase obligations of each Underwriter with
respect to the Option Stock shall be adjusted by the Representatives so that no
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Underwriter shall be obligated to purchase Option Stock other than in 100 share
amounts. The price of both the Firm Stock and any Option Stock shall be $40.18
per share.
The Corporation shall not be obligated to deliver any of the Stock to
be delivered on the First Delivery Date or the Second Delivery Date (each, as
hereinafter defined), as the case may be, except upon payment for all the Stock
to be purchased on such Delivery Date as provided herein.
3. Offering of Stock by the Underwriters. Upon authorization by the
Representatives of the release of the Firm Stock, the several Underwriters
propose to offer the Firm Stock for sale upon the terms and conditions set forth
in the Prospectus.
Except with respect to the United States, no action has been taken or
will be taken in any jurisdiction by the Underwriters or the Corporation that
would permit a public offering of the Stock in any country or jurisdiction where
action for that purpose is required. Each Underwriter severally agrees with the
Corporation that it will observe all applicable laws and regulations in each
other such country or jurisdiction in which it may offer, sell or deliver Stock.
Each Underwriter severally agrees that it will not, directly or indirectly,
offer, sell or deliver Stock or distribute any offering material in relation to
the Stock except under circumstances that will to the best of its knowledge and
belief result in compliance with any applicable laws and regulations.
Each Underwriter represents and warrants to the Corporation and
covenants and agrees that (i) it has not offered or sold, and will not offer or
sell, in the United Kingdom, by means of any document, any Stock other than to
persons whose ordinary business it is to buy or sell shares or debentures,
whether as principal or agent (except in circumstances not constituting an offer
to the public within the meaning of the Companies Act 1985, (ii) it has complied
and will comply with all applicable provisions of the Financial Services Act
1986 with respect to anything done by it in relation to the Stock in, from or
otherwise involving the United Kingdom, and (iii) it has only issued or passed
on and will only issue or pass on to any person in the United Kingdom, any
document received by it in connection with the issuance of the Stock if that
person is of a kind described in Article 9(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemption) Order 1988.
4. Delivery of and Payment for the Stock. Delivery of and payment
for the Firm Stock shall be made at the office of Morgan Stanley & Co.
Incorporated, 1251 Avenue of the Americas, New York, New York at approximately
10:00 a.m., New York City time, on the fifth full business day following the
date of this Agreement or at such other date or place as shall be determined by
agreement between the Representatives and the Corporation. This date and time
are sometimes referred to as the "First Delivery Date." On the First Delivery
Date, the Corporation shall deliver or cause to be delivered certificates
representing the Firm Stock to the Representatives for the account of each
Underwriter against payment to or upon the order of the Corporation of the
purchase price by certified or official bank check or checks payable in New York
Clearing House (next-day) funds. Time shall be of the essence, and delivery of,
and payment for, the Firm Stock at the time and place specified pursuant to this
Agreement is a further condition of the obligation of each Underwriter and the
Corporation hereunder. Upon delivery, the Firm Stock shall be registered in
such names and in such denominations as the Representatives shall request in
writing not less than two full business days prior to the First Delivery Date.
For the purpose of expediting the checking and packaging of the certificates for
the Firm Stock, the Corporation shall make the certificates representing the
Firm Stock available for inspection by the Representatives in New York, New
York, not later than 2:00 p.m., New York City time, on the business day prior to
the First Delivery Date.
At any time on or before the thirtieth day after the date of this
Agreement, the option granted in Section 2 may be exercised by written notice
being given to the Corporation by the Representatives. Such notice shall set
forth the aggregate number of shares of Option Stock as to which the option is
being exercised, the names in which the shares of Option Stock are to be
registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Representatives, when the
shares of Option Stock are to be delivered; provided, however, that this date
and time shall not be earlier than the First Delivery Date nor earlier than the
third business day after the date on which the option shall have been exercised
nor later than the fifth business day after the date on which the option shall
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have been exercised. The date and time the shares of Option Stock are delivered
are sometimes referred to as the "Second Delivery Date" and the First Delivery
Date and the Second Delivery Date are sometimes each referred to as a "Delivery
Date").
Delivery of and payment for the Option Stock shall be made at the
office of Morgan Stanley & Co. Incorporated, 1251 Avenue of the Americas, New
York, New York (or at such other place as shall be determined by agreement
between the Representatives and the Corporation) at approximately 10:00 a.m.,
New York City time, on the Second Delivery Date. On the Second Delivery Date,
the Corporation shall deliver or cause to be delivered the certificates
representing the Option Stock to the Representatives for the account of each
Underwriter against payment to or upon the order of the Corporation of the
purchase price by certified or official bank check or checks payable in New York
Clearing House (next-day) funds. Time shall be of the essence, and delivery of,
and payment for the Option Stock, at the time and place specified pursuant to
this Agreement is a further condition of the obligation of each Underwriter and
the Corporation hereunder. Upon delivery, the Option Stock shall be registered
in such names and in such denominations as the Representatives shall request in
the aforesaid written notice. For the purpose of expediting the checking and
packaging of the certificates for the Option Stock, the Corporation shall make
the certificates representing the Option Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 p.m., New York City
time, on the business day prior to the Second Delivery Date.
5. Further Agreements of the Corporation. The Corporation agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Securities Act not later than the Commission's close of business on the
second business day following the execution and delivery of this Agreement;
to make no further amendment or any supplement to the Registration
Statement or to the Prospectus prior to the Second Delivery Date except as
permitted herein; to advise the Representatives, promptly after it receives
notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus relating to or covering the Stock has
been filed and to furnish the Representatives with copies thereof for so
long as delivery of a prospectus is required under the Securities Act in
connection with the offering or sale of the Stock; to file promptly all
reports and any definitive proxy or information statements required to be
filed by the Corporation with the Commission pursuant to Sections 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 Stock; to advise the
Representatives, promptly after it receives notice thereof, of the issuance
by the Commission of any stop order or of any order preventing or
suspending the use of the Prospectus or any amended or supplemented
Prospectus, of the suspension of the qualification of the Stock for
offering or sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or the
Prospectus or for additional information; and, in the event of the issuance
of any stop order or of any order preventing or suspending the use of the
Prospectus or suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal;
(b) To furnish promptly to each of the Representatives and to counsel
for the Underwriters a signed copy of the Registration Statement as
originally filed with the Commission, and each amendment thereto filed with
the Commission, including all consents and exhibits filed therewith;
(c) To deliver promptly at any time the delivery of a prospectus is
required under the Securities Act in connection with the offering or sale
of the Stock to the Representatives such number of the following documents
as the Representatives shall reasonably request: (i) conformed copies of
the Registration Statement as originally filed with the Commission and each
amendment thereto (in each case excluding exhibits other than this
Agreement), (ii) the Prospectus and any amended or supplemented Prospectus
and (iii) any document incorporated by reference in the Prospectus
(excluding exhibits thereto); and, if the delivery of a prospectus is
required at any time prior to the expiration of nine months after the date
hereof in connection with the offering or sale of the Stock and if at such
time any event shall have occurred 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 any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary during such same period to amend or
supplement the Registration Statement or Prospectus or to file under the
7
Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the Securities Act or the Exchange Act, to notify the
Representatives and upon their request to file such document and to prepare
and furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Representatives may from time to time
reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance, and in case any Underwriter is required to deliver a prospectus
in connection with sales of any of the Stock at any time nine months or
more after the date hereof, upon the request of the Representatives but at
the expense of such Underwriter, to prepare and deliver to such Underwriter
as many copies as the Representatives may request of an amended or
supplemented Prospectus complying with Section 10(a)(3) of the Securities
Act;
(d) To file promptly with the Commission, during such period
following the date hereof as a prospectus is required to be delivered in
connection with offers or sales of the Stock, any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Corporation, be required by the
Securities Act or requested by the Commission;
(e) Prior to filing with the Commission during the period referred to
in (d) above (i) any amendment to the Registration Statement, (ii) the
Prospectus or any amendment or supplement thereto or (iii) any document
incorporated by reference in any of the foregoing or any amendment or
supplement to any such incorporated document, to furnish a copy thereof to
the Representatives and counsel for the Underwriters the opportunity to
comment on any such amendment, supplement, document incorporated by
reference in the Prospectus or Prospectus;
(f) As soon as practicable after the Effective Date (it being
understood that the Corporation shall have until at least 410 days after
the end of the Corporation's current fiscal quarter) to make generally
available to the Corporation's security holders and to deliver to the
Representatives an earnings statement of the Corporation and its
subsidiaries (which need not be audited) complying with Section 11(a) of
the Securities Act and the Rules and Regulations (including, at the option
of the Corporation, Rule 158);
(g) For a period of five years following the date hereof, to furnish
to the Representatives (i) copies of all materials furnished by the
Corporation to its shareholders generally and all reports and financial
statements furnished by the Corporation to the principal national
securities exchange upon which any class of securities of the Corporation
may be listed pursuant to requirements of or agreements with such exchange
or to the Commission pursuant to the Exchange Act or any rule or regulation
of the Commission thereunder and (ii) such additional information
concerning the business and financial condition of the Corporation as the
Representatives may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Corporation and its subsidiaries are consolidated in reports furnished to
its stockholders generally or to the Commission);
(h) To make available to its stockholders as soon as practicable
after the end of each fiscal year an annual report (including a balance
sheet and statements of income, stockholders' equity and cash flow of the
Corporation and its consolidated subsidiaries and the Steel Group certified
by independent public accountants) and, as soon as practicable after the
end of each of the first three quarters of each fiscal year (beginning with
8
the fiscal quarter ending after the date hereof), consolidated summary
financial information of the Corporation and its subsidiaries for such
quarter in reasonable detail;
(i) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for offering
and sale under the securities laws of such jurisdictions in the United
States as the Representatives may request and to comply with such laws so
as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution
of the Stock; provided that in connection therewith the Corporation shall
not be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction; and
(j) For a period of 90 days from the date hereof, to not offer for
sale, sell or otherwise dispose of, directly or indirectly, any shares of
Steel Stock (other than the Stock and shares issued pursuant to the
Restated Rights Agreement, employee stock options, employee benefit plans
and the USX-U.S. Steel Group Common Stock Dividend Reinvestment and Stock
Purchase Plan or pursuant to the conversion of convertible securities
outstanding on the date of this Agreement), or sell or grant options,
rights or warrants with respect to any shares of Steel Stock (other than
the grant of options pursuant to option plans existing on the date hereof)
or offer for sale, sell or otherwise dispose of any securities convertible,
exchangeable or exercisable into Steel Stock, without the prior written
consent of the Representatives.
6. Expenses. The Corporation agrees to pay (a) the costs incurred by
it incident to (i) the authorization, issuance, sale and delivery of the Stock
and any taxes payable by it in that connection; (ii) the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto; (iii) the distribution of the Registration
Statement as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), the Prospectus and any
amendment or supplement to the Prospectus or any document incorporated by
reference therein, all as provided in this Agreement; (iv) the printing of this
Agreement, the Agreement Between Underwriters and any Selling Agreement; (v) the
distribution of the terms of agreement relating to the organization of the
underwriting syndicate and the selling group to the members thereof by mail,
telex or other means of communication; and (vi) the costs incident to the
listing of the Stock on the New York Stock Exchange; (b) the fees and expenses
(including related fees and expenses of counsel to the Underwriters not in
excess, in the aggregate, of $10,000) of qualifying the Stock under the
securities laws of the several jurisdictions as
provided in Section 5 and of preparing, printing and distributing a Blue Sky
Memorandum; and (c) all other costs and expenses incurred by the Corporation
incident to the performance of the obligations of the Corporation under this
Agreement; provided that, except as provided in this Section 6 and in Section
11, the Underwriters shall pay their own costs and expenses, including the
costs and expenses of their counsel, any transfer taxes on the Stock which they
may sell and the expenses of advertising any offering of the Stock made by the
Underwriters.
7. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the
Corporation contained herein, to the performance by the Corporation of its
obligations hereunder, and to each of the following additional terms and
conditions:
(a) The Prospectus shall have been timely filed with the Commission
in accordance with Section 5(a); no stop order suspending the effectiveness
of the Registration Statement or any part thereof shall have been issued
and no proceeding for that purpose shall have been initiated or threatened
by the Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with.
(b) No Underwriter shall have discovered and disclosed to the
Corporation on or prior to such Delivery Date that the Registration
Statement or the Prospectus or any amendment or supplement thereto contains
an untrue statement of a fact which, in the opinion of Simpson Thacher &
Bartlett, counsel for the Underwriters, is material or omits to state a
9
fact which, in the opinion of such counsel, is material and is required to
be stated therein or is necessary to make the statements therein not
misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Stock, the
Registration Statement and the Prospectus, and all other legal matters
relating to this Agreement and the transactions contemplated hereby shall
be satisfactory in all respects to counsel for the Underwriters, and the
Corporation shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass upon
such matters.
(d) Dan D. Sandman, Esq., General Counsel of the Corporation shall
have furnished to the Representatives his written opinion, addressed to the
Underwriters and dated such Delivery Date, in form and substance
satisfactory to the Representatives, to the effect that:
(i) The Corporation and the Designated Subsidiary have been duly
incorporated and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation, are
duly qualified to do business and are in good standing as foreign
corporations in each jurisdiction in which their respective ownership
or lease of property or the conduct of their respective businesses
requires such qualification (other than those jurisdictions in which
the failure to so qualify would not have a material adverse effect on
the Corporation, the Designated Subsidiary or the U.S. Steel Group),
and have all corporate power and authority necessary to own or hold
their respective properties and conduct the businesses in which they
are engaged;
(ii) The Corporation has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital stock
of the Corporation (including the shares of Stock being delivered on
such Delivery Date) have been duly and validly authorized and issued,
are fully paid and non-assessable and conform to the description
thereof contained in the Prospectus; and all of the issued shares of
capital stock of the Designated Subsidiary have been duly and validly
authorized and issued and are fully paid, non-assessable and owned
directly or indirectly by the Corporation, free and clear of all
liens, encumbrances, equities or claims;
(iii) There are no preemptive or other rights to subscribe for
or to purchase, nor any restriction upon the voting or transfer of,
any shares of the Stock pursuant to the Corporation's Restated
Certificate of Incorporation or by-laws or any agreement or other
instrument known to such counsel, other than certain rights to
subscribe for or to purchase shares of Steel Stock pursuant to the
Corporation's outstanding convertible preferred stock and convertible
debentures, the Restated Rights
Agreement, employee stock options, employee benefit plans or the USX-
U.S. Steel Group Common Stock Dividend Reinvestment and Stock Purchase
Plan and certain restrictions upon the transfer of certain shares of
the Steel Stock pursuant to the Corporation's 1990 Stock Plan;
(iv) To the best of such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Corporation or any of its
subsidiaries is a party or of which any property of the Corporation or
any of its subsidiaries is the subject which, if determined adversely
to the Corporation or any of its subsidiaries, would, individually or
collectively with any claims arising out of similar causes of action,
have a material adverse effect on the consolidated financial position,
stockholders' equity or results of operations of the Corporation and
its subsidiaries or the financial position, stockholders' equity,
results of operations, business or prospects of the U.S. Steel Group;
and, to the best of such counsel's knowledge, no such proceedings are
threatened by governmental authorities or others;
10
(v) 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) of the Rules and Regulations specified in such opinion
on the date specified therein and no stop order suspending the
effectiveness of the Registration Statement has been issued and, to
the knowledge of such counsel, no proceeding for that purpose is
pending or threatened by the Commission;
(vi) The Registration Statement and the Prospectus and any
further amendments or supplements thereto made by the Corporation
prior to such Delivery Date (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the Securities Act and the Rules and Regulations; and
the documents incorporated by reference in the Prospectus and any
further amendment or supplement to any such incorporated document made
by the Corporation prior to such Delivery Date (other than the
financial statements and related schedules therein, as to which such
counsel need express no opinion), when they became effective or were
filed with the Commission, as the case may be, complied as to form in
all material respects with the requirements of the Exchange Act and
the rules and regulations of the Commission thereunder;
(vii) To the best of such counsel's knowledge, there are no
contracts or other documents which are required to be described in the
Prospectus or filed as exhibits to the Registration Statement by the
Securities Act or by the Rules and Regulations which have not been
described or filed as exhibits to the Registration Statement or
incorporated therein by reference as permitted by the Rules and
Regulations;
(viii) This Agreement has been duly authorized, executed and
delivered by the Corporation;
(ix) The issue and sale of the shares of Stock being delivered on
such Delivery Date by the Corporation and the compliance by the
Corporation with all of the provisions of this Agreement and the
consummation of the transactions contemplated hereby will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument known
to such counsel to which the Corporation or the Designated Subsidiary
is a party or by which the Corporation or the Designated Subsidiary is
bound or to which any of the property or assets of the Corporation or
the Designated Subsidiary is subject, nor will such actions result in
any violation of the provisions of the charter or by-laws of the
Corporation or the Designated Subsidiary or any U.S. statute or any
order, rule or regulation known to such counsel of any U.S. court or
U.S. governmental agency or body having jurisdiction over the
Corporation or the Designated Subsidiary or any of their properties;
and, except for the registration of the Stock under the Securities Act
and such consents, approvals, authorizations, registrations or
qualifications which have already been obtained by the Corporation or
as may be required under the Exchange Act and applicable state
securities laws in connection with the purchase and distribution of
the Stock by the Underwriters, no consent, approval, authorization
or order of, or filing or registration with, any such court or
governmental agency or body is required for the execution, delivery
and performance of this Agreement by the Corporation and the
consummation of the transactions contemplated hereby; and
(x) To the best of such counsel's knowledge, other than with
respect to the Corporation's outstanding convertible debentures and
unsecured senior notes due 1996 and the Restated Rights Agreement,
there are no contracts, agreements or understandings between the
Corporation and any person granting such person the right to require
the Corporation to file a registration statement under the Securities
Act with respect to any securities of the Corporation owned or to be
owned by such person or to require the Corporation to include such
11
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 Corporation under the Securities
Act.
In rendering such opinion, such counsel may state that his opinion is
limited to matters governed by the Federal laws of the United States of
America, the laws of the State of Ohio and the General Corporation Law of
the State of Delaware and that such counsel is not admitted in the State of
Delaware. Such counsel shall also have furnished to the Representatives a
written statement, addressed to the Underwriters and dated such Delivery
Date, in form and substance satisfactory to the Representatives, to the
effect that (x) such counsel is General Counsel of the Corporation and
supervises attorneys in the Law Department of the Corporation who have
acted as counsel to the Corporation in connection with the preparation of
the Registration Statement, and (y) based on the foregoing, no facts have
come to the attention of such counsel or the attorneys who he supervises
which lead him or any of them to believe that (I) the Registration
Statement, as of the Effective Date, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading, or that the Prospectus contains any untrue statement of a
material fact or omits to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading or (II) any
document incorporated by reference in the Prospectus or any further
amendment or supplement to any such incorporated document made by the
Corporation prior to such Delivery Date, when they became effective or were
filed with the Commission, as the case may be, contained an untrue
statement of a material fact or omitted to state a material fact necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading (in each case, other than the
financial statements and related schedules thereto, as to which such
counsel need express no belief).
(e) J.T. Mills, Vice-President-Taxes of the Corporation, shall have
furnished to the Representatives a letter, addressed to the Underwriters
and dated such Delivery Date, in form and substance satisfactory to the
Representatives, to the effect that such counsel has reviewed the
statements in the Prospectus under the caption "Certain United States Tax
Consequences to Non-United States Holders" and, insofar as they are, or
refer to, statements of United States law or legal conclusions, such
statements are accurate in all material respects.
(f) Simpson Thacher & Bartlett, counsel to the Underwriters, shall
have furnished to the Representatives their opinion, addressed to the
Underwriters and dated such Delivery Date, in form and substance
satisfactory to the Representatives, to the effect that:
(i) The Corporation has been duly incorporated and is
validly existing and in good standing under the laws of the State of
Delaware;
(ii) The shares of Stock being delivered on such Delivery
Date have been duly authorized by the Corporation and, upon payment
and delivery in accordance with the terms hereof, will be validly
issued, fully paid and non-assessable;
(iii) The statements made in the Prospectus under the
caption "Description of Capital Stock," insofar as they purport to
constitute summaries of the terms of the Corporation's capital stock
(including the Stock), constitute accurate summaries of the terms of
the capital stock in all material respects; and
(iv) This Agreement has been duly authorized, executed and
delivered by the Corporation.
12
In rendering such opinion, such counsel may state that its opinion is
limited to matters governed by the Federal laws of the United States of
America, the laws of the State of New York and the General Corporation Law
of the State of Delaware and that such counsel is not admitted in the State
of Delaware. Such counsel shall also have furnished to the Representatives
a written statement, addressed to the Underwriters and dated such Delivery
Date, in form and substance satisfactory to the Representatives, to the
effect that (x) in the course of the preparation by the Corporation of the
Prospectus Supplement dated the date hereof relating to the Stock
(excluding the documents incorporated by reference therein), such counsel
participated in conferences with certain officers and employees of the
Corporation and with representatives of Price Waterhouse and (y) based upon
its examination of the Registration Statement, the Prospectus and the
documents incorporated by reference therein, its investigations made in
connection with the preparation of such Prospectus Supplement (excluding
the documents incorporated by reference therein) and its participation in
the conferences referred to therein, (i) it is of the opinion that the
Registration Statement, as of the Effective Date, and the Prospectus, as of
its date, complied as to form in all material respects with the
requirements of the Securities Act and the Rules and Regulations and that
the documents incorporated by reference in the Prospectus (in each case,
other than the financial statements and related schedules thereto, as to
which such counsel need express no opinion), when they became effective or
were filed with the Commission, as the case may be, complied as to form in
all material respects with the requirements of the Exchange Act and the
rules and regulations of the Commission thereunder and (ii) it has no
reason to believe that the Registration Statement (including any document
incorporated by reference therein), as of the Effective Date, contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading, or that the Prospectus (including any document
incorporated by reference therein) contains any untrue statement of a
material fact or omits to state any material fact necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading (in each case, other than the financial
statements and related schedules thereto, as to which such counsel need
express no belief).
(g) The Corporation shall have furnished to the Representatives a
letter (as used in this paragraph, the "bring-down letter") of Price
Waterhouse, addressed to the Underwriters and dated such Delivery Date,
(i) confirming that they are independent public accountants within the
meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01
of Regulation S-X of the Commission, (ii) stating, as of the date of the
bring-down letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Prospectus, as of a date not more than five
days prior to the date of the bring-down letter), the conclusions and
findings of such firm with respect to the financial information and other
matters covered by its letter (the "initial letter") delivered to the
Representatives concurrently with the execution of this Agreement, and as
to such other matters requested by the Underwriters and (iii) confirming in
all material respects the conclusions and findings set forth in the initial
letter.
(h) The Corporation shall have furnished to the Representatives a
certificate, dated such Delivery Date, of the Chairman of its Board or a
Vice President and its Executive Vice President - Accounting and Finance
and Chief Financial Officer or Vice President & Comptroller stating that:
(i) The representations, warranties and agreements of the
Corporation in Section 1 are true and correct in all material respects
as of such Delivery Date; the Corporation has complied with all its
agreements contained herein; and the conditions set forth in Sections
7(a) and 7(i) have been fulfilled; and
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of the
Effective Date, the Registration Statement and Prospectus did not
13
include any untrue statement of a material fact and did not omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and (B) since the
Effective Date, no event has occurred which has resulted in the
Registration Statement and the Prospectus including an untrue
statement of a material fact or omitting to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading.
(i) (i) Neither the Corporation nor any of its subsidiaries shall
have sustained since the date of the latest audited financial statements
included or incorporated by reference in the Registration Statement or the
Prospectus any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Registration Statement and the
Prospectus or (ii) since such date there shall not have been any change in
the capital stock or long-term debt of the Corporation or any of its
subsidiaries or any change, or any development likely to involve a
prospective change, in or affecting the management, consolidated financial
position, stockholders' equity or results of operations of the Corporation
and its subsidiaries or the financial position, stockholders' equity or
results of operations of the U.S. Steel Group, otherwise than as set forth
or contemplated in the Registration Statement and the Prospectus, the
effect of which, in any such case described in clause (i) or (ii), is, in
the judgment of the Representatives, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Stock being delivered on such Delivery Date on the terms
and in the manner contemplated in the Prospectus.
(j) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or
the over-the-counter market, or in the Steel Stock, shall have been
suspended or minimum prices shall have been established on one or more of
such exchanges or such market by the Commission, by such exchange or by any
other regulatory body or governmental authority having jurisdiction, (ii) a
banking moratorium shall have been declared by United States federal or New
York state authorities, (iii) the United States shall have become engaged
in hostilities, there shall have been an escalation in hostilities
involving the United States or there shall have been a declaration of a
national emergency or war by the United States or (iv) there shall have
occurred either (A) any outbreak of hostilities or an escalation of
hostilities or a declaration of a national emergency or war or (B) such a
material adverse change in national or international economic, political or
financial conditions, national or international equity markets or currency
exchange rates or controls as to make it, in either case, in the judgment
of a majority in interest of the several Underwriters, inadvisable or
impractical to proceed with the payment for and delivery of the Stock.
All opinions, letters, evidence and certificates 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.
8. Indemnification and Contribution.
(a) The Corporation shall indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which that
Underwriter or controlling person may become subject, under the Securities Act
or otherwise, insofar as such loss, claim, damage, liability or action arises
out of, or is based upon, (i) any untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto or
(ii) the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and shall reimburse each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by that Underwriter
or controlling person in connection with investigating or defending or
preparing to defend against any
14
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Corporation shall not be liable in any such case to
the extent that any such loss, claim, damage, liability or action arises out of,
or is based upon, any untrue statement or alleged untrue statement or omission
or alleged omission made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any such amendment or supplement in reliance
upon and in conformity with written information furnished to the Corporation
through the Representatives by or on behalf of any Underwriter specifically for
inclusion therein. The foregoing indemnity agreement is in addition to any
liability which the Corporation may otherwise have to any Underwriter or to any
controlling person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Corporation, each of its directors, each of its officers who
signed the Registration Statement and each person, if any, who controls the
Corporation within the meaning of the Securities Act, from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof,
to which the Corporation or any such director, officer or controlling person may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information furnished
to the Corporation through the Representatives by or on behalf of that
Underwriter specifically for inclusion therein, and shall reimburse the
Corporation and any such director, officer or controlling person for any legal
or other expenses reasonably incurred by the Corporation or any such director,
officer or controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action as
such expenses are incurred. The foregoing indemnity agreement is in addition to
any liability which any Underwriter may otherwise have to the Corporation or any
such director, officer or controlling person.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section 8. If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel satisfactory to the indemnified party. After
notice from the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying party shall not be
liable to the indemnified party under this Section 8 for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided, however,
any indemnified party shall have the right to employ separate counsel in any
such action and to participate in the defense thereof but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
employment thereof has been specifically authorized by the indemnifying party in
writing, (ii) the named parties to any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate due to
actual or potential differing interests between them or (iii) the indemnifying
party has failed to assume the defense of such action and employ counsel
reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, that the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys at any
time for all such indemnified parties, which firm shall be designated in writing
by the Representatives, if the indemnified parties under this Section 8 consist
15
of any Underwriter or any of their respective controlling persons, or by the
Corporation, if the indemnified parties under this Section 8 consist of the
Corporation or any of the Corporation's directors, officers or controlling
persons. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in this Section 8 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a) or 8(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Corporation on the one hand and the Underwriters on the other
from the offering of the Stock or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Corporation on the one hand and the Underwriters
on the other with respect to the statements or omissions which resulted in such
loss, claim, damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Corporation on the one hand and the Underwriters on the other with respect to
such offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Stock purchased under this agreement (before
deducting expenses) received by the Corporation bear to the total underwriting
discounts and commissions received by the Underwriters with respect to the
shares of the Stock purchased under this Agreement, in each case as set forth in
the table on the cover page of the Prospectus. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Corporation or the Underwriters, the intent of
the parties and their relative knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Corporation and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 8(d) were to be determined by pro rata allocation (even
if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 8(d) shall be deemed to include, for
purposes of this Section 8(d), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8(d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Stock underwritten by it and distributed
to the public was offered to the public exceeds the amount of any damages which
such Underwriter has otherwise paid or become liable to pay by reason of any
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 as provided in this Section 8(d) are several in proportion to
their respective underwriting obligations and not joint.
(e) The Underwriters severally confirm that the statements with respect
to the public offering of the Stock set forth on the cover page of, and under
the caption "Underwriting" in, the Prospectus are correct and constitute the
only information furnished in writing to the Corporation by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement and the
Prospectus.
(f) The agreements contained in this Section 8 and the
representations, warranties and agreements of the Corporation in Sections 1, 5
and 6 shall survive the delivery of the Stock and shall remain in full force
and effect, regardless of any termination or cancellation of this Agreement or
any investigation made by or on behalf of any indemnified party.
16
9. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the performance
of its obligations under this Agreement, the remaining non-defaulting
Underwriters shall be obligated to purchase the Stock which the defaulting
Underwriter agreed but failed to purchase on such Delivery Date in the
respective proportions which the number of shares of the Firm Stock set opposite
the name of each remaining non-defaulting Underwriter in Schedule 1 hereto bears
to the total number of shares of the Firm Stock set opposite the names of all
the remaining non-defaulting Underwriters in Schedule 1 hereto; provided,
however, that the remaining non-defaulting Underwriters shall not be obligated
to purchase any of the Stock on such Delivery Date if the total number of shares
of the Stock which the defaulting Underwriter or Underwriters agreed but failed
to purchase on such date exceeds 9.09% of the total number of shares of the
Stock to be purchased on such Delivery Date, and any remaining non-defaulting
Underwriter shall not be obligated to purchase more than 110% of the number of
shares of the Stock which it agreed to purchase on such Delivery Date pursuant
to the terms of Section 2. The respective purchase obligations of the non-
defaulting Underwriters shall be rounded among the non-defaulting Underwriters
to avoid fractional shares, as the Representatives shall determine. If the
foregoing maximums are exceeded, the remaining non-defaulting Underwriters, or
those other underwriters satisfactory to the Representatives and the Corporation
who so agree, shall have the right, but shall not be obligated, to purchase, in
such proportion as may be agreed upon among them, all the Stock to be purchased
on such Delivery Date. If the remaining Underwriters or other underwriters
satisfactory to the Representatives and the Corporation do not elect to purchase
the shares which the defaulting Underwriter or Underwriters agreed but failed
to purchase, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter or the Corporation, except that the Corporation
will continue to be liable for the payment of expenses to the extent set forth
in Sections 6 and 11.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Corporation for damages caused by its default. If
other underwriters are obligated or agree to purchase the Stock of a defaulting
or withdrawing Underwriter, either the Representatives or the Corporation may
postpone the First Delivery Date for up to seven full business days in order to
effect any changes that in the opinion of counsel for the Corporation or counsel
for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
10. Termination. The obligations of the Underwriters hereunder may
be terminated by the Representatives, in their absolute discretion, by notice
given to and received by the Corporation prior to delivery of any payment for
the Firm Stock if, prior to that time, any of the events described in Sections
7(i) or 7(j) shall have occurred.
11. Reimbursement of Underwriters' Expenses. If (a) the Corporation
shall fail to tender the Stock for delivery to the Underwriters for any reason
permitted under this Agreement or (b) the Underwriters shall decline to purchase
the Stock for any reason permitted under this Agreement (including the
termination of this Agreement pursuant to Section 10), the Corporation shall
reimburse the Underwriters for the reasonable fees and expenses of their counsel
and for such other out-of-pocket expenses as shall have been reasonably incurred
by them in connection with this Agreement and the proposed purchase of the
Stock, and upon demand the Corporation shall pay the full amount thereof to the
Representatives. If this Agreement is terminated pursuant to Section 9 by
reason of the default of one or more Underwriters, the Corporation shall not be
obligated to reimburse any defaulting Underwriter on account of those expenses.
12. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to Morgan Stanley & Co. Incorporated,
1251 Avenue of the Americas, New York, New York 10020 Attention:
Legal Department, Telephone: (212)703-4000 Facsimile: (212)703-6503;
17
(b) if to the Corporation, shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Corporation set
forth in the Registration Statement, Attention: Dan D. Sandman, Esq.,
General Counsel;
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Corporation
shall be entitled to act and rely upon any request, consent, notice or agreement
given or made on behalf of the Underwriters by Morgan Stanley & Co. Incorporated
on behalf of the Representatives.
13. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Corporation
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Corporation
contained in this Agreement shall also be deemed to be for the benefit of the
person or persons, if any, who control any Underwriter within the meaning of
Section 15 of the Securities Act who offers or sells any shares of Steel Stock
in accordance with the terms of the Agreement between Underwriters and (B) the
indemnity agreement of the Underwriters contained in Section 8(b) of this
Agreement shall be deemed to be for the benefit of directors of the Corporation,
officers of the Corporation who have signed the Registration Statement and any
person controlling the Corporation within the meaning of Section 15 of the
Securities Act. Nothing in this Agreement is intended or shall be construed to
give any person, other than the persons referred to in this Section 13, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
14. Definition of the Terms "Business Day," "Subsidiary" and
"Designated Subsidiary." For purposes of this Agreement, (a) "business day"
means any day on which the New York Stock Exchange, Inc. is open for trading,
other than a day on which banks are authorized or obligated by law or executive
order to close in New York City, (b) "subsidiary" has the meaning set forth in
Rule 405 of the Rules and Regulations and (c) "Designated Subsidiary" means
Marathon Oil Company.
15. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF NEW YORK.
16. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one or more counterparts, the
executed counterparts shall each be deemed to be an original but all such
counterparts shall together constitute one and the same instrument.
17. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
18
If the foregoing correctly sets forth the agreement between the
Corporation and the Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
USX CORPORATION
By:__________________________________
Name: G. R. Haggerty
Title: Vice President & Treasurer
Accepted:
For themselves and as
Representatives for each of
the several Underwriters
By: MORGAN STANLEY & CO.
INCORPORATED
By:_________________________________
Authorized Representative
SCHEDULE 1
Number of
Underwriters Shares
------------ -----------
Morgan Stanley & Co. Incorporated 4,500,000
---------
Total 4,500,000