Exhibit 1.1
DEALER MANAGER AGREEMENT
March 31, 1997
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
250 Vesey Street
New York, New York 10281
Ladies and Gentlemen:
1. USX Corporation, a Delaware corporation (the "Company"), proposes
to exchange 6.75% Convertible Quarterly Income Preferred Securities (the "Trust
Convertible Preferred Securities") of USX Capital Trust I (the "Trust"), a
statutory business trust organized under the Business Trust Act (the "Delaware
Act") of the State of Delaware (chapter 38, Title 12, of the Delaware Code, 12
Del. C. Sec 3801 et seq.) for up to 6,700,000 shares of 6.50% Cumulative
Convertible Preferred Stock (liquidation preference $50.00 per share) (the
"6.50% Convertible Preferred Stock") of the Company on the basis of one Trust
Preferred Convertible Security for each share of 6.50% Convertible Preferred
Stock validly tendered and accepted for exchange. The Trust Convertible
Preferred Securities will be guaranteed (the "Guarantee") by the Company to the
extent described in the Prospectus (as hereinafter defined). The exchange
offer, as it may be amended and supplemented, described above is herein referred
to as the "Exchange Offer."
In connection with the Exchange Offer, the Company will deposit in the
Trust as trust assets its 6.75% Convertible Junior Subordinated Debentures (the
"Debentures") and the Trust will transfer to the Company the Trust Convertible
Preferred Securities and its common securities (the "Trust Common Securities")
as set forth in the Prospectus. The Trust Convertible Preferred Securities will
be issued under the Trust's Amended and Restated Declaration of Trust (the
"Declaration") and the Debentures will be issued under an Indenture between the
Company and The Bank of New York, as trustee (including the related supplemental
indenture governing the Debentures to be deposited in the Trust, the
"Indenture"). The Bank of New York will act as institutional trustee under the
Declaration (the "Institutional Trustee"), trustee under the Indenture (the
"Indenture Trustee") and trustee under the Guarantee (the "Guarantee Trustee").
2. Engagement as Dealer Managers. By this Dealer Manager Agreement
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(the "Agreement"), each of the Company and the Trust hereby engages and appoints
you as the exclusive Dealer Managers for the Exchange Offer and authorizes you
to act as such in connection with the Exchange Offer.
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As Dealer Managers, you severally agree, in accordance with your
customary practice, to perform in connection with the Exchange Offer those
services as are customarily performed by investment banking concerns in
connection with similar offers, including, without limitation, soliciting from
individuals and institutions the tender of 6.50% Convertible Preferred Stock
pursuant to and in accordance with the terms and conditions of the Exchange
Offer. You shall act as independent contractors in connection with the Exchange
Offer with duties solely to the Company and the Trust and nothing herein
contained shall constitute you as agents of the Company or the Trust in
connection with the solicitation of such 6.50% Convertible Preferred Stock
pursuant to and in accordance with the terms and conditions of the Exchange
Offer; provided, however, that the Company hereby authorizes the Dealer
Managers, and/or one or more registered brokers or dealers chosen by the Dealer
Managers, to act as the Company's agents in making the Exchange Offer to
residents of any jurisdiction in which such agents designation may be necessary
to comply with applicable law. Nothing in this Agreement shall constitute the
Dealer Managers as partners or joint venturers with the Company, the Trust, any
of their subsidiaries or with each other. On the basis of the representations
and warranties and agreements of the Company and the Trust contained herein and
subject to and in accordance with the terms and conditions hereof and of the
Exchange Offer, the Dealer Managers severally agree to act in such capacity.
3. Registration Statement, Prospectus and Offering Materials. (a)
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The Company and the Trust have 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 promulgated thereunder
(collectively, the "Securities Act"), a registration statement on Form S-4
covering the registration of the Trust Convertible Preferred Securities, the
Guarantee, the Debentures, and shares of USX--U.S. Steel Group Common Stock,
$1.00 par value per share (the "Steel Stock"), of the Company issuable upon
conversion of the Trust Convertible Preferred Securities and the Debentures.
Such registration statement, including the exhibits thereto and any documents
incorporated by reference therein, as amended at the time it becomes effective
or as thereafter amended or supplemented from time to time, is herein called the
"Registration Statement." The final prospectus included in the Registration
Statement (including any documents incorporated in the prospectus by reference)
is herein called the "Prospectus," except that if the final prospectus furnished
to the Dealer Managers for use in connection with the Exchange Offer differs
from the prospectus set forth in the Registration Statement (whether or not such
prospectus is required to be filed pursuant to Rule 424(b)), the term
"Prospectus" shall refer to the final prospectus furnished to the Dealer
Managers for such use. The terms "supplement" and "amendment" or "supplemented"
and "amended" as used herein with respect to the Prospectus shall include all
documents deemed to be incorporated by reference in the Prospectus that are
filed subsequent to the date of the Prospectus and prior to the termination of
the Exchange Offer by the Company with the Commission pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
(b) The Company and the Trust have prepared and filed, or agree that prior
to or on the date of commencement of the Exchange Offer (the "Commencement
Date") they will file, with the Commission under the Exchange Act and the rules
and regulations promulgated thereunder a Statement on Schedule 13E-4 with
respect to the Exchange Offer (including the exhibits thereto and any documents
incorporated by reference therein, the "Schedule 13E-4").
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(c) The Registration Statement, Prospectus and the related letters from
the Dealer Managers to registered holders and participants in The Depository
Trust Company, securities brokers, dealers, commercial banks, trust companies
and other nominees, letters to beneficial owners of 6.50% Convertible Preferred
Stock, letters of transmittal (the "Letters of Transmittal"), notice of
guaranteed delivery (the "Notice of Guaranteed Delivery") and any newspaper
announcements, press releases and other offering materials and information the
Company may use or prepare, approve or authorize for use in connection with the
Exchange Offer, including the Schedule 13E-4 as amended or supplemented from
time to time, are herein collectively referred to as the "Exchange Offer
Materials."
4. Use of Exchange Offer Materials. (a) The Exchange Offer
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Materials have been or will be prepared and approved by, and are the sole
responsibility of, the Company and the Trust. The Company shall, to the extent
permitted by law, use its best efforts to disseminate the Exchange Offer
Materials to each registered holder of any 6.50% Convertible Preferred Stock, as
soon as practicable after the Commencement Date, pursuant to Rule 13e-4 under
the Exchange Act and comply with its obligations thereunder. Thereafter, to the
extent practicable until three days prior to the Expiration Date of the Exchange
Offer, the Company shall use its best efforts to cause copies of such Exchange
Offer Materials and a return envelope to be mailed to each person who becomes a
holder of record of any 6.50% Convertible Preferred Stock. The Company and the
Trust acknowledge and agree that you may use the Exchange Offer Materials as
specified herein without assuming any responsibility for independent
verification on your part and the Company and the Trust represent and warrant to
you that you may rely on the accuracy and completeness of any information
delivered to you by or on behalf of the Company or the Trust without assuming
any responsibility for independent verification of such information or without
performing or receiving any appraisal or evaluation of the assets or liabilities
of the Company or the Trust.
(b) The Company and the Trust agree to provide you as many copies as you
may reasonably request of the Exchange Offer Materials. The Company and the
Trust agree that within a reasonable time prior to using or filing with any
federal, state or other governmental agency or instrumentality of the United
States of any Exchange Offer Materials, it will submit copies of such materials
to you and will give reasonable consideration to your and your counsel's
comments, if any, thereon. The Company and the Trust agree prior to the
termination of the Exchange Offer, before amending or supplementing the
Registration Statement or the Prospectus, to furnish copies of drafts to, and
consult with, the Dealer Managers and their counsel within a reasonable time in
advance of filing with the Commission of any amendment or supplement to the
Registration Statement, the Prospectus or the other Exchange Offer Materials.
Neither the Company nor the Trust shall file any such amendment or supplement to
which the Dealer Managers shall reasonably object; provided, however that the
foregoing requirement shall not apply to any of the Company's filings with the
Commission required to be filed pursuant to Section 13(a), 13(c), 14, or 15(d)
of the Exchange Act, copies of which filings the Company will cause to be
delivered to the Dealer Managers promptly after being transmitted for filing
with the Commission.
(c) The Company has furnished or shall use its best efforts to furnish to
you, or cause the transfer agents or registrars for the 6.50% Convertible
Preferred Stock to furnish to you, as soon as practicable after the date hereof
(to the extent not previously furnished), cards or
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lists in reasonable quantities or copies thereof showing the names of persons
who were the holders of record or, to the extent available, the beneficial
owners of the 6.50% Convertible Preferred Stock as of a recent date, together
with their addresses and the number of shares of 6.50% Convertible Preferred
Stock held by them. Additionally, the Company and the Trust shall update, or
cause the transfer agents or registrars referred to above to update, such
information from time to time during the term of this Agreement as may be
reasonably requested by you. Except as otherwise provided herein, you agree to
use such information only in connection with the Exchange Offer.
(d) The Company and the Trust authorize the Dealer Managers to use the
Exchange Offer Materials in connection with the Exchange Offer and for such
period of time as any such materials are required by law to be delivered in
connection therewith. The Dealer Managers shall not have any obligation to
cause any Exchange Offer Materials to be transmitted generally to the holders of
6.50% Convertible Preferred Stock.
(e) Each of the Company and the Trust authorizes the Dealer Managers to
communicate with any information agent (the "Information Agent") or exchange
agent (the "Exchange Agent") appointed by the Company or the Trust to act in
such capacity in connection with the Exchange Offer. The Company and the Trust
will arrange for the Exchange Agent to advise you daily, as necessary, as to
such matters relating to the Exchange Offer as you may reasonably request.
(f) The Company and the Trust agree that any reference to the Dealer
Managers in any Exchange Offer Materials or in any newspaper announcement or
press release or other document or communication is subject to the Dealer
Managers' prior consent, which consent shall not be unreasonably withheld.
5. Withdrawal. In the event that either the Company or the Trust (i)
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uses or permits the use of, or files with the Commission, any amendment or
supplement to the Registration Statement and any such document has not been
previously submitted to you for your comment if prior submission is required in
accordance with the provisions of Section 4(b) hereof; or (ii) shall have
breached any of its representations, warranties, agreements or covenants herein,
then you shall be entitled upon written notice to the Company and the Trust to
withdraw as Dealer Managers in connection with the Exchange Offer without any
liability or penalty to you or any other indemnified person (as defined in
Section 11 below) and without loss of any right to indemnification or
contribution provided in Section 11 or to the payment of (x) all fees payable
pursuant to Section 6 with respect to the 6.50% Convertible Preferred Stock
tendered prior to the date of withdrawal and (y) all reasonable expenses payable
hereunder which have accrued through the date of such withdrawal.
6. Fees. (a) The Company shall pay the Dealer Managers a fee of
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$0.3125 for each share of 6.50% Convertible Preferred Stock validly tendered and
accepted for exchange pursuant to the Exchange Offer.
(b) The Company agrees to pay, or cause to be paid to, each Soliciting
Dealer (including a Dealer Manager) whose name has been inserted in the space
provided in the Letter of Transmittal for that purpose a fee (the "Soliciting
Dealer Fee") equal to $1.00 per
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share of 6.50% Convertible Preferred Stock validly tendered and accepted for
exchange pursuant to the Exchange Offer, to the extent that the tender of such
shares was solicited by such Soliciting Dealer from beneficial owners of 5,000
or few shares of 6.50% Convertible Preferred Stock. No Soliciting Dealer Fee
shall be payable to any Soliciting Dealer with respect to the tender of shares
of 6.50% Convertible Preferred Stock by the holder of record, for the benefit of
the beneficial owner, unless the beneficial owner has designated such Soliciting
Dealer. No Soliciting Dealer Fee shall be payable in respect to shares of 6.50%
Convertible Preferred Stock beneficially owned by a Soliciting Dealer or
registered in the name of a Soliciting Dealer, unless such shares are held by
such Soliciting Dealer as nominee and are being tendered for the benefit of such
a beneficial owner. No Soliciting Dealer Fee shall be payable to a Soliciting
Dealer if such Soliciting Dealer is required for any reason to transfer any
portion of such fee to a tendering holder (other than itself). The Soliciting
Dealer Fee shall be paid to the Soliciting Dealers within one week of the
consummation of the Exchange Offer.
7. Expenses and Reimbursement of Expenses. The Company and the
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Trust, jointly and severally, agree to pay the costs and expenses incident to
the performance of the obligations hereunder, including, without limitation, all
costs and expenses (i) incurred by dealers and brokers (including yourselves),
commercial banks, trust companies and nominees for their customary mailing and
handling expenses incurred in forwarding the Exchange Offer Materials to their
customers, (ii) incident to the preparation, issuance, execution and delivery of
the Trust Convertible Preferred Securities, (iii) incident to the preparation,
printing and filing under the Securities Act of the Registration Statement, the
Prospectus (including, without limitation, in each case all exhibits, amendments
and supplements thereto), (iv) incurred in connection with the registration or
qualification of the Trust Convertible Preferred Securities under the laws of
such jurisdictions as the Dealer Managers may designate (including, without
limitation, reasonable fees of counsel for the Dealer Managers and its
reasonable disbursements), (v) in connection with the printing (including word
processing and duplication costs) and delivery of all Exchange Offer Materials
(including, without limitation, any preliminary and supplemental blue sky
memoranda) including, without limitation, mailing and shipping; (vi) the fees of
the New York Stock Exchange, Inc. (the "NYSE") in connection with the listing of
the Trust Convertible Preferred Securities; (vii) all advertising expenses
related to the Exchange Offer and the fees and expenses of the Exchange Agent
and the Information Agent; (viii) the fees and disbursements of Morris, Nichols,
Arsht & Tunnell, Delaware counsel to the Company and the Trust, Miller &
Chevalier, Chartered, special tax counsel to the Company and the Trust, and
Price Waterhouse, LLP, auditors to the Company; and (ix) the fees and expenses
of the trustees of the Trust (the "Trustees of the Trust"), including the
Institutional Trustee, and the Indenture Trustee and the Guarantee Trustee. In
addition, the Company and the Trust, jointly and severally, agree to reimburse
the reasonable out-of-pocket expenses of the Dealer Managers in connection with
the Exchange Offer (including, without limitation, the reasonable legal fees and
expenses of counsel to the Dealer Managers in connection with the Exchange
Offer).
8. Representations, Warranties and Certain Agreements of the Company
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and the Trust. Each of the Company and the Trust jointly and severally
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represents and warrants to you, and agrees with you (other than with respect to
Sections 8(d), (k) through (m), (o) through (u), (w), (y), (aa), Subsection
8(c)(i) and Section 8(j) (with respect to the Guarantee),
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as to which only the Company represents and warrants to you and agrees with
you), that as of the Commencement Date and at all times on or prior to the date
when the Exchange Offer is consummated (the "Closing Date"):
(a) the Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission;
(b) (i) the Exchange Offer Materials, including the Registration
Statement and Prospectus, comply and, as amended or supplemented, if
applicable, will comply in all material respects with the Securities Act
and the Exchange Act and the applicable rules and regulations of the
Commission thereunder; (ii) the Registration Statement, when it became
effective, did not contain and as amended or supplemented, if applicable,
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 not misleading; and (iii) none of the Prospectus or
other Exchange Offer Materials contains, and, as amended or supplemented,
if applicable, will contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
except that the representations and warranties set forth in this Section
8(b) do not apply (A) to statements or omissions in the Exchange Offer
Materials, the Registration Statement or the Prospectus based upon
information relating to the Dealer Managers furnished to the Company in
writing by the Dealer Managers expressly for use therein or (B) to that
part of the Registration Statement that constitutes the Statements of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), of the Institutional Trustee,
the Indenture Trustee or the Guarantee Trustee;
(c) (i) the Company has the corporate power and authority to execute,
deliver and perform its obligations under this Agreement, the Declaration,
the Indenture and the Guarantee; and (ii) the Trust has the business trust
power and authority to execute, deliver and perform its obligations under
this Agreement;
(d) this Agreement has been duly and validly authorized, executed and
delivered by the Company and is a valid and binding obligation of the
Company;
(e) this Agreement has been duly and validly authorized, executed and
delivered by the Trust and is a valid and binding obligation of the Trust;
(f) the Prospectus as amended or supplemented in relation to the
Exchange Offer shall have been filed with the Commission pursuant to Rule
424(b), if required, within the applicable time period prescribed for such
filing by the rules and regulations under the Securities Act;
(g) on or prior to the Commencement Date, an agreement with the
Exchange Agent relating to the Exchange Offer (the "Exchange Agency
Agreement") shall be in full force and effect;
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(h) on or prior to the Commencement Date, an agreement with the
Information Agent relating to the Exchange Offer shall be in full force and
effect;
(i) the Trust Convertible Preferred Securities to be issued pursuant
to the Exchange Offer will be duly authorized by the Declaration upon
execution and delivery of the Declaration in the form filed as an exhibit
to the Registration Statement, and, when issued and delivered in accordance
with the terms of this Agreement in exchange for 6.50% Convertible
Preferred Stock pursuant to the Exchange Offer, will be validly issued and
(subject to the terms of the Declaration) fully paid and nonassessable
undivided beneficial ownership interests in the assets of the Trust, not
subject to any preemptive or similar rights, and will conform in all
material respects to all statements relating thereto contained in the
Prospectus. Holders of Trust Convertible Preferred Securities will be
entitled, subject to the terms of the Declaration, to the same limitation
of personal liability extended to stockholders of private corporations for
profit;
(j) the Declaration and the Guarantee have been duly authorized by
the Company and, as of the Closing Date, will have been duly executed and
delivered by the Company; assuming due authorization, execution and
delivery of the Declaration by the Trustees of the Trust, the Declaration
will, as of the Closing Date, be valid and binding on, and enforceable
against, the Trust in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization and other similar
laws relating to or affecting creditors' rights generally, by general
equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and an implied covenant of
good faith and fair dealing; the Guarantee, as of the Closing Date, will be
valid and binding on, and enforceable against, the Company in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization and other similar laws relating to or affecting
creditors' rights generally, by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing; the
Declaration and the Guarantee have been duly qualified under the Trust
Indenture Act and will conform in all material respects to all statements
relating thereto contained in the Prospectus;
(k) the Indenture has been duly qualified under the Trust Indenture
Act and, assuming due authorization, execution and delivery of the
Indenture by the Indenture Trustee, when executed and delivered by the
Company, will be valid and binding on, and enforceable against, the Company
in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization and other similar laws relating to
or affecting creditors' rights generally, by general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing;
(l) the Debentures to be deposited in the Trust as trust assets in
connection with the Exchange Offer have been duly authorized, and, assuming
due authorization, execution and delivery of the Indenture by the Indenture
Trustee, when executed and delivered by the Company to the Indenture
Trustee, and when executed and
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authenticated in accordance with the provisions of the Indenture and
delivered to the Trust pursuant to the terms of the Exchange Offer, will be
entitled to the benefits of the Indenture and will be valid and binding on,
and enforceable against, the Company in accordance with their terms, except
as enforceability may be limited by bankruptcy, insolvency, reorganization
and other similar laws relating to or affecting creditors' rights
generally, by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing;
(m) the Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware,
with corporate power and authority to own its properties and conduct its
business as described in the Prospectus, and has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such qualification,
or is subject to no material liability or disability by reason of the
failure to be so qualified in any such jurisdiction; and each of its
subsidiaries has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation; and Marathon Oil Company ("Marathon") has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the State of Ohio;
(n) the Trust has been duly created and is validly existing as a
business trust in good standing under the Delaware Act, is and will be
treated as a grantor trust for Federal income tax purposes under existing
law, has the business trust power and authority to conduct its business as
presently conducted and as described in the Prospectus, and is not required
to be authorized to do business in any other jurisdiction;
(o) the Company and its subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all
personal property owned by them which is material to the business of the
Company or the U.S. Steel Group (as defined in the Prospectus), in each
case free and clear of all liens, encumbrances and defects except such as
are described in the Prospectus or such as 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; and any
real property and buildings held under lease by the Company and its
subsidiaries which are material to the business of the Company or the U.S.
Steel Group are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use
made and proposed to be made of such property and buildings by the Company
and its subsidiaries;
(p) the Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
nonassessable and conform in all material respects to the description
thereof contained in the Prospectus; and all of the issued shares of
capital stock of Marathon have been duly and validly
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authorized and issued, are fully paid and nonassessable and are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims;
(q) the Debentures are convertible into shares of Steel Stock in
accordance with the terms of the Indenture; all shares of Steel Stock
issuable upon conversion of the Debentures have been duly and validly
authorized, and on or prior to the Closing Date will be reserved for
issuance upon such conversion and, when issued and delivered in accordance
with the terms of the Indenture, will be duly and validly issued, fully
paid and nonassessable and will conform to the description thereof
contained in the Prospectus; and the holders of outstanding capital stock
of the Company are not entitled to preemptive or other rights afforded by
the Company to subscribe for the shares of Steel Stock issuable upon
conversion of the Debentures;
(r) neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements incorporated by
reference in the Prospectus any loss or interference with its business
which is material to the business of the Company 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 Prospectus;
and, since such date, there has not been any material change in the capital
stock or long-term debt of the Company or Marathon 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 Company 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 Prospectus;
(s) other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate
have a material adverse effect on the consolidated financial position,
stockholders' equity or results of operations of the Company 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 Company's
knowledge, no such proceedings are threatened by governmental authorities
or others;
(t) the financial statements (including the related notes and
supporting schedules) 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 applied, except as noted therein,
on a consistent basis throughout the periods involved;
(u) to the best knowledge of the Company, Price Waterhouse, who have
certified certain financial statements of the Company and its subsidiaries,
are
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independent public accountants as required by the Securities Act and the
rules and regulations of the Commission thereunder and were independent
public accountants as required by the Securities Act and the rules and
regulations of the Commission thereunder during the periods covered by the
financial statements on which they reported incorporated by reference in
the Prospectus;
(v) the Company and the Trust are not, and after giving effect to the
consummation of the Exchange Offer will not be, 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.
(w) except with respect to the Company's Restated Rights Agreement
(as defined in the Prospectus), there are no contracts, agreements or
understandings between the Company and any person granting such person the
right to require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company owned or to be
owned by such person or to require the Company to include such securities
in the securities registered pursuant to the Registration Statement or in
any securities being registered pursuant to any other registration
statement filed by the Company under the Securities Act;
(x) 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 of the
Commission thereunder 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 of the Commission
thereunder;
(y) no labor disturbance by the employees of the Company exists or,
to the knowledge of the Company, is imminent which is likely to have a
material adverse effect on the consolidated financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries or the financial position, stockholders' equity or results of
operations of the U.S. Steel Group;
(z) the execution and delivery by the Company and the Trust of, and
the performance by the Company and the Trust of their obligations under,
this Agreement, the execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Declaration, the
Indenture and the Guarantee, the issuance and delivery by the Trust of the
Trust Convertible Preferred Securities and the consummation of the Exchange
Offer and the fulfillment of the terms herein and therein contemplated 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
Trust, the Company or Marathon is a party or by which the Trust, the
Company or Marathon is bound or to which any of the property or assets of
the Trust, the Company or Marathon is subject, nor will such action result
in any violation of the provisions of the charter or by-laws of the Company
or Marathon or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the
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Trust or the Company or Marathon or any of their properties; and no
consent, approval, authorization, order, registration or qualification of
or with any such court or governmental agency or body is required for the
performance by the Company and the Trust of their obligations under this
Agreement and the issue and exchange of the Trust Convertible Preferred
Securities by the Company pursuant to the Exchange Offer, the issuance of
the Debentures by the Company pursuant to the Indenture, the performance by
the Company under the Guarantee and the issuance of the shares of Steel
Stock issuable upon the conversion of the Trust Convertible Preferred
Securities or the consummation by the Company of the transactions
contemplated by this Agreement, except for the (i) the listing of the Trust
Convertible Preferred Securities and shares of Steel Stock issuable upon
conversion of the Trust Convertible Preferred Securities on the NYSE, (ii)
the registration under the Securities Act of the Trust Convertible
Preferred Securities, the Debentures, the Guarantee and the shares of Steel
Stock issuable upon conversion of the Debentures, (iii) the registration of
the Trust Convertible Preferred Securities under the Exchange Act and (iv)
such consents, approvals, authorizations, registrations or qualifications
as may be required under state securities or Blue Sky laws or the
securities laws of non-U.S. jurisdictions in connection with the issue and
exchange of the Trust Convertible Preferred Securities and the issuance of
the shares of Steel Stock issuable upon conversion of the Trust Convertible
Preferred Securities;
(aa) neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default in any material
respect, 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 material agreement,
indenture or instrument, (iii) is in violation in any respect material to
the business of the Company, Marathon 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.
9. Conditions to Dealer Managers' Obligations. The several
------------------------------------------
obligations of the Dealer Managers hereunder are subject, as of the Commencement
Date and at all times on or prior to the Closing Date, to the accuracy of the
representations and warranties on the part of the Company and the Trust herein,
to the accuracy of the statements of officers of the Company and of the Trust
made pursuant to the provisions hereof, to the performance by
the Company and the Trust of their respective obligations hereunder and to the
following additional conditions:
(a) on each of the Commencement Date and the Closing Date, you shall
have received:
(i) a certificate, dated such date and signed by an authorized
officer of the Trust acceptable to you, to the effect that the
representations and warranties of the Trust contained in this
Agreement are true and correct as of such date
12
and that the Trust has performed all of its obligations to be
performed hereunder on or prior to such date; and
(ii) a certificate, dated such date and signed by an authorized
officer of the Company to the effect that no event described in
subsections 9(i)(i) or (ii) or subsection 9(l) has occurred as of such
date, and to the effect that the representations and warranties of the
Company contained in the Agreement are true and correct as of such
date and that the Company has performed all of its obligations to be
performed hereunder on or prior to such date.
The officers signing and delivering such certificate on behalf of the
Company and the Trust may rely upon the best of their knowledge as to
proceedings threatened;
(b) each of the Company and the Trust shall have furnished to you on
each of the Commencement Date and the Closing Date, such additional
certificates or other documents as are typically delivered in connection
with a transaction of this type and which you may reasonably request;
(c) on the Closing Date (except as to clauses (xiii), (xv), (xvii),
(xix) and (xxii) which will be delivered only on the Commencement Date) and
on the Commencement Date (except as to clauses (xiv), (xvi), (xviii), (xx),
(xxiii) and (xxvi) which will be delivered only on the Closing Date), the
Dealer Managers shall have received a signed opinion of Dan D. Sandman,
Esq., General Counsel of the Company or John A. Hammerschmidt, Assistant
General Counsel and Assistant Secretary of the Company, to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with corporate power and authority to own its properties
and conduct its business as described in the Prospectus;
(ii) the Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification, or is subject to no material liability or disability by
reason of failure to be so qualified in any such jurisdiction;
(iii) Marathon has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Ohio; and all of the issued shares of capital stock of Marathon
have been duly and validly authorized and issued, are fully paid and
non-assessable, and are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims;
(iv) the Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital stock
of the Company have been duly and validly authorized and issued and
are fully paid and
13
nonassessable; and all shares of Steel Stock issuable upon conversion
of the Trust Convertible Preferred Securities have been duly and
validly authorized (and for purposes of the opinion to be delivered on
the Closing Date only, reserved) for issuance upon such conversion
and, when issued and delivered in accordance with the terms of the
Indenture, will be duly and validly issued, fully paid and
nonassessable and will conform in all material respects to the
description thereof contained in the Prospectus;
(v) there are no preemptive or other rights to subscribe
for or to purchase, nor any restriction upon the voting or transfer
of, the Steel Stock issuable upon conversion of the Debentures
pursuant to the Company'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 Restated Rights Agreement, employee stock option
plans or employee benefit plans and certain restrictions upon the
transfer of the Steel Stock pursuant to the Company's 1990 Stock Plan;
(vi) 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 Company or any of its
subsidiaries is a party or of which any property of the Company or any
of its subsidiaries is the subject which, if determined adversely to
the Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the consolidated financial
position, stockholders' equity or results of operations of the Company
and its subsidiaries or the financial position, stockholders' equity
or results of operations of the U.S. Steel Group; and, to the best of
such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(vii) 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 of the
Commission 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;
(viii) the documents incorporated by reference in the
Prospectus, and, in the case of such opinion delivered on the Closing
Date, any further amendment or supplement thereto made by the Company
prior to the Closing 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 Securities Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder; and such counsel has no reason to believe that any of such
documents, when
14
such documents became effective or were so filed, 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
the light of the circumstances under which they were made when such
documents were so filed, not misleading;
(ix) the Registration Statement and the Prospectus, and,
in the case of such opinion delivered on the Closing Date, any further
amendments and supplements thereto made by the Company prior to such
Closing 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 thereunder; persons
subject to his supervision have participated on behalf of the Company
in connection with the preparation of the Registration Statement and
in conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company
and representatives of the Dealer Managers and counsel for the Dealer
Managers, at which conferences the contents of the Registration
Statement and the Prospectus and related matters were discussed; he
does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or
the Prospectus and makes no representation that he has independently
verified the accuracy, completeness or fairness of such statements,
except as set forth in paragraphs (iv) above and (xxii) below;
however, in the course of the preparation and review of the
Registration Statement and the Prospectus, he has no reason to believe
that, as of its effective date, the Registration Statement, or, in the
case of such opinion delivered on the Closing Date, any further
amendment thereto made by the Company prior to such Closing Date
(other than the financial statements and related statements and
related schedules therein, as to which such counsel need express no
opinion), contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that, as of its date and
the date of such opinion, the Prospectus, or, in the case of such
opinion delivered on the Closing Date, any further amendment or
supplement thereto made by the Company prior to such Closing Date
(other than the financial statements and related schedules therein, as
to which such counsel need express no opinion), contained an untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (such counsel
may base such belief on the fact that he is General Counsel of the
Company and supervises attorneys in the Law Department of the Company
who have acted as counsel to the Company in connection with the
preparation of the Registration Statement); and he does not know of
any amendment to the Registration Statement required to be filed or of
any contracts or other documents of a character required to be filed
as an exhibit to the Registration Statement or required to be
incorporated by reference into the Prospectus or required to be
described in the Registration
15
Statement or the Prospectus which are not filed or incorporated by
reference or described as required;
(x) this Agreement has been duly authorized, executed and
delivered by the Company;
(xi) the Exchange Agency Agreement has been duly
authorized, executed and delivered by the Company;
(xii) the execution and delivery by the Company and the
Trust of, and the performance by the Company and the Trust of their
obligations under, this Agreement, the execution and delivery by the
Company of, and the performance by the Company of its obligations
under, the Declaration, the Indenture and the Guarantee, the issuance
and delivery by the Trust of the Trust Convertible Preferred
Securities and the consummation of the Exchange Offer and the
fulfillment of the terms herein contemplated 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 Trust,
the Company or Marathon is a party or by which the Trust, the Company
or Marathon is bound or to which any of the property or assets of the
Trust, the Company or Marathon is subject, nor will such action result
in any violation of the provisions of the charter or by-laws of the
Company or Marathon or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Trust or the Company or Marathon or any of their properties;
(xiii) the Guarantee has been duly authorized by the
Company and duly qualified under the Trust Indenture Act and, when
duly executed and delivered by the Company and duly authorized,
executed and delivered by the Guarantee Trustee and upon issuance and
delivery of the Trust Convertible Preferred Securities pursuant to the
Exchange Offer, will be a valid and legally binding agreement of the
Company, enforceable in accordance with its terms except as
enforceability may be limited by bankruptcy, insolvency,
reorganization and other similar laws relating to or affecting
creditors' rights generally, by general equitable principles
(regardless of whether such enforceability is considered in a
proceeding in equity or at law) and an implied covenant of good faith
and fair dealing;
(xiv) the Guarantee has been duly authorized, executed
and delivered by the Company and has been duly qualified under the
Trust Indenture Act and is a valid and binding agreement of the
Company, enforceable in accordance with its terms except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws
relating to or affecting the enforcement of creditors' rights
generally, general principles of equity (regardless of whether
enforceability is considered in a
16
proceeding at law or in equity) and any implied covenant of good faith
and fair dealing;
(xv) the Declaration has been duly authorized by the
Company and duly qualified under the Trust Indenture Act;
(xvi) the Declaration has been duly authorized, executed
and delivered by the Company and has been duly qualified under the
Trust Indenture Act;
(xvii) the Indenture has been duly authorized by the
Company and has been duly qualified under the Trust Indenture Act and,
when duly executed and delivered by the Company and duly authorized,
executed and delivered by the Indenture Trustee, will constitute a
valid and legally binding agreement of the Company enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization and other similar laws relating
to or affecting creditors' rights generally, by general equitable
principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing;
(xviii) the Indenture has been duly qualified under the
Trust Indenture Act, has been duly authorized, executed and delivered
by the Company and, assuming due authorization, execution and delivery
of the Indenture by the Indenture Trustee, constitutes a valid and
legally binding agreement of the Company enforceable in accordance
with its terms except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws relating to or affecting the
enforcement of creditors' rights generally, general principles of
equity (regardless of whether enforceability is considered in a
proceeding at law or in equity) and an implied covenant of good faith
and fair dealing;
(xix) the Debentures have been duly authorized by the
Company and, when the Indenture has been duly executed and delivered
by the Company and the Indenture Trustee, when the Debentures have
been duly executed and delivered by the Company and duly authenticated
by the Indenture Trustee and delivered pursuant to the terms of the
Exchange Offer, will be valid and binding obligations of the Company
enforceable in accordance with their terms except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws relating to or
affecting the enforcement of creditors' rights generally, general
principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity) and an implied
covenant of good faith and fair dealing;
(xx) the Debentures have been duly authorized, executed
and delivered by the Company and, assuming due authentication by the
Indenture Trustee and upon delivery pursuant to the terms of the
Exchange Offer, will be valid and binding obligations of the Company
enforceable in accordance with
17
their terms except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws relating to or affecting the
enforcement of creditors' rights generally, general principles of
equity (regardless of whether enforceability is considered in a
proceeding at law or in equity) and an implied covenant of good faith
and fair dealing;
(xxi) the Steel Stock issuable upon conversion of the
Debentures has been duly authorized (and, for purposes of the opinion
to be delivered on the Closing Date only, reserved) by the Company for
issuance upon such conversion and, when issued and delivered in
accordance with the Indenture, will be duly and validly issued, fully
paid and nonassessable;
(xxii) the statements made in the Prospectus under the
captions "Description of Trust Convertible Preferred Securities",
"Description of the Guarantee" and "Description of the Convertible
Debentures", insofar as such statements constitute a summary of the
legal matters, documents or proceedings referred to therein, fairly
present the information called for with respect to such legal matters,
documents and proceedings and constitute accurate summaries, in all
material respects, of the terms of each of the Trust Convertible
Preferred Securities, the Guarantee and the Convertible Debentures as
set forth in the form of exhibits to the Registration Statement. The
statements made in the Prospectus under the captions "Description of
Capital Stock and Amended and Restated Rights Plan" and "Description
of the 6.50% Convertible Preferred Stock", insofar as such statements
constitute a summary of the legal matters, documents or proceedings
referred to therein, fairly present the information called for with
respect to such legal matters, documents and proceedings and are
accurate in all material respects;
(xxiii) the statements made in the Prospectus under the
captions, "Description of the Trust Convertible Preferred Securities,"
"Description of the 6.50% Convertible Preferred Stock," "Description
of the Convertible Debentures," "Description of the Guarantee," and
"Description of Capital Stock and Amended and Restated Rights Plan"
insofar as such statements constitute a summary of the legal matters,
documents or proceedings referred to therein, fairly present the
information called for with respect to such legal matters, documents
and proceedings and are accurate in all material respects;
(xxiv) neither the Company nor the Trust is, or after
giving effect to the consummation of the Exchange Offer, will be, an
"investment company" as such terms are defined in the Investment
Company Act of 1940, as amended;
(xxv) no consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the performance by the
Company and the Trust of their obligations under this Agreement and
the issue and exchange of the Trust Convertible Preferred Securities
by the Company pursuant to the Exchange Offer, the
18
issuance of the Debentures by the Company pursuant to the Indenture,
the performance by the Company under the Guarantee and the issuance of
the shares of Steel Stock issuable upon the conversion of the
Debentures or the consummation by the Company of the transactions
contemplated by this Agreement, except for such consents, approvals,
authorizations, registrations or qualifications which have been
obtained by the Company or as may be required under state securities
or Blue Sky laws or the securities laws of non-U.S. jurisdictions in
connection with the issue and exchange of the Trust Convertible
Preferred Securities and the shares of Steel Stock issuable upon
conversion of the Trust Convertible Preferred Securities;
(xxvi) to the best of such counsel's knowledge, other
than with respect to the Restated Rights Agreement, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement filed by
the Company under the Securities Act;
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 Commonwealth of Pennsylvania and the General
Corporation Law of the State of Delaware and that such counsel is not
admitted in the State of Delaware. To the extent such opinion relates to
the law of the State of New York (which law the Indenture, this Agreement
and the Guarantee state to be the governing law thereof), such counsel may
state that he assumes that the laws of the Commonwealth of Pennsylvania are
the same as those of the State of New York. As to matters of fact, to the
extent deemed proper, such counsel may rely on certificates of responsible
officers of the Company and public officials.
(d) on the Commencement Date (except with respect to paragraphs (iii)
and (vi) which will be given only on the Closing Date) and the Closing Date
(except with respect to paragraphs (ii) and (v) which will be given only on
the Commencement Date), the Dealer Managers shall have received a signed
opinion of Morris, Nichols, Arsht & Tunnell, Delaware counsel for the
Company and the Trust, dated as of such date, to the effect that:
(i) the Trust has been duly created and is validly
existing in good standing as a business trust under the Delaware Act,
and has the business trust power and authority to conduct its business
as described in the Prospectus;
(ii) when duly authorized, executed and delivered by the
Company and the Trustees, the Declaration will be a valid and binding
agreement of the Company and the Trustees, enforceable in accordance
with its terms except as the enforcement thereof may be limited by (i)
bankruptcy, insolvency,
19
reorganization, moratorium, fraudulent transfer or other similar laws
relating to or affecting the enforcement of creditors' rights
generally, (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity) and
(iii) considerations of public policy or the effect of applicable law
relating to fiduciary duties;
(iii) assuming due authorization, execution and delivery
of the Declaration by the Company and the Trustees, the Declaration is
a valid and binding agreement of the Company and the Trustees,
enforceable in accordance with its terms except as the enforcement
thereof may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws relating to or
affecting the enforcement of creditors' rights generally, (ii) general
principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity) and (iii)
considerations of public policy or the effect of applicable law
relating to fiduciary duties;
(iv) assuming due authorization, execution and delivery of
the Declaration by the Company and the Trustees, the execution and
delivery of this Agreement by the Trust, and the performance by the
Trust of its obligations hereunder, will have been duly authorized by
all requisite business trust action on the part of the Trust;
(v) assuming due authorization, execution and delivery of
the Declaration by the Company and the Trustees, the Trust Convertible
Preferred Securities and the Trust Common Securities will be duly
authorized by the Declaration for issuance and, when issued and
delivered in accordance with the Declaration and the Dealer Manager
Agreement, will be validly issued, and, subject to the terms of the
Declaration, fully paid and nonassessable beneficial ownership
interests in the assets of the Trust. The Holders of Trust
Convertible Preferred Securities and Trust Common Securities will be,
subject to the terms of the Declaration, entitled to the same
limitation of personal liability under Delaware law extended to
stockholders of private corporations for profit formed under the
General Corporation Law of the State of Delaware; provided that such
counsel expresses no opinion as to any Holder of Trust Convertible
Preferred Securities or Trust Common Securities that is, was or
becomes a named Trustee of the Trust and may note that Holders of
Trust Convertible Preferred Securities and Trust Common Securities
will be subject to the withholding provisions of Section 11.4 of the
Declaration and will be required to make payment or provide indemnity
or security as set forth in the Declaration and that Holders of Trust
Common Securities will be liable for the debts and obligations of the
Trust to the extent provided in Section 10.1(b) of the Declaration.
(vi) the Trust Convertible Preferred Securities and the
Trust Common Securities have been duly authorized by the Declaration
for issuance and are duly and validly issued and, subject to the terms
of the Declaration, fully paid and nonassessable beneficial ownership
interests in the assets of the Trust. The
20
Holders of Trust Convertible Preferred Securities and the Trust Common
Securities will be, subject to the terms of the Declaration, entitled
to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General
Corporation Law of the State of Delaware; provided that such counsel
expresses no opinion as to any Holder of Trust Convertible Preferred
Securities or Trust Common Securities that is, was or becomes a named
Trustee of the Trust and may note that Holders of Trust Convertible
Preferred Securities and Trust Common Securities will be subject to
the withholding provisions of Section 11.4 of the Declaration and will
be required to make payment or provide indemnity or security as set
forth in the Declaration and that Holders of Trust Common Securities
will be liable for the debts and obligations of the Trust to the
extent provided in Section 10.1(b) of the Declaration; and
(vii) under the Declaration and the Delaware Act, the
issuance of the Trust Convertible Preferred Securities and the Trust
Common Securities is not subject to preemptive rights.
(e) The Dealer Managers shall have received a signed opinion of
Miller & Chevalier, Chartered, tax counsel for the Company and the Trust,
dated as of the Commencement Date and the Closing Date to the effect that
the Trust will be treated as a grantor trust for Federal income tax
purposes under existing law and covering the statements made in the
Prospectus under "Certain Federal Income Tax Considerations";
(f) The Dealer Managers shall have received the opinion of Simpson
Thacher & Bartlett, counsel for the Dealer Managers, dated as of the
Commencement Date and the Closing Date, covering the incorporation and
legal existence of the Company, the issuance and delivery of the Trust
Convertible Preferred Securities, this Agreement, the Registration
Statement, the Prospectus and such other related matters as the Dealer
Managers may require. In giving such opinion such counsel may rely, as to
all matters governed by the laws of jurisdictions other than the law of the
State of New York, and the Federal law of the United States and the General
Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Dealer Managers;
(g) the Company and the Trust will also furnish to you from time to
time (including on the Closing Date), up to the last acceptance of 6.50%
Convertible Preferred Stock pursuant to the Exchange Offer, any further
opinion of counsel, satisfactory to your counsel, as you may reasonably
request;
(h) you shall have received, on the Commencement Date and the Closing
Date, letters, dated the Commencement Date and the Closing Date, as the
case may be, reasonably satisfactory to you of Price Waterhouse, LLP,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" with respect to the consolidated financial
statements of the Company and certain financial information contained in
the Registration Statement and the Prospectus;
21
(i) (i) neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
incorporated by reference in 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
Prospectus, and (ii) since such date there shall not have been any change
in the capital stock or long-term debt of the Company 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 Company 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 Prospectus, the effect of which, in any such case
described in clause (i) or (ii), is in your judgment so material and
adverse as to make it impracticable or inadvisable to proceed with the
Exchange Offer on the terms and in the manner contemplated in the
Prospectus;
(j) there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the
NYSE; (ii) a suspension or material limitation in trading of the Company's
securities on the NYSE; (iii) a general moratorium on commercial banking
activities in New York declared by either Federal or New York State
authorities; (iv) the engagement by the United States in hostilities, the
escalation in hostilities involving the United States or the declaration of
a national emergency or war by the United States; or (v) the outbreak of
hostilities or the escalation of hostilities or the declaration of a
national emergency or war or a material adverse change in national or
international economic, political or financial conditions, national or
international equity markets or currency exchange rates or controls which,
in your judgment, makes it impracticable or inadvisable to proceed with the
Exchange Offer on the terms and in the manner contemplated in the
Prospectus;
(k) at the Closing Date, the Trust Convertible Preferred Securities
shall have been duly listed, subject to official notice of issuance, on the
NYSE; and
(l) on or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's senior unsecured debt
securities or preferred stock by Standard & Poor's Ratings Group or Moody's
Investors Services, Inc. and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, the rating of any of the Company's senior unsecured debt
securities or preferred stock.
The Company and the Trust will furnish you with such executed or
conformed copies of such opinions, certificates, letters and documents as you
may reasonably request.
10. Covenants of the Company and the Trust. Each of the Company and
--------------------------------------
the Trust covenants with the Dealer Managers:
(a) To use its best efforts to cause the Registration Statement,
including any post-effective amendment thereto, to become effective
promptly and will notify the
22
Dealer Managers immediately, (i) when any post-effective amendment to the
Registration Statement shall have become effective, or any supplement to
the Prospectus or any amended Prospectus or any amended or additional
Exchange Offer Materials shall have been filed, (ii) of the receipt of any
comments or inquiries from the Commission relating to the Exchange Offer,
(iii) of any request by the Commission to amend the Registration Statement
or amend or supplement the Prospectus or the other Exchange Offer Materials
or for additional information relating to the Exchange Offer and (iv) of
(A) the issuance by the Commission of any stop order suspending the use of
any Exchange Offer Materials or any qualification of the Trust Convertible
Preferred Securities for offering or sale in connection with the Exchange
Offer in any jurisdiction, (B) the institution or threatening of any
proceedings for any of such purposes or (C) the occurrence of any event
which could cause the Company or the Trust to withdraw, rescind, terminate
or modify the Exchange Offer or would permit the Company or the Trust to
exercise any right not to accept 6.50% Convertible Preferred Stock tendered
pursuant to the Exchange Offer. Each of the Company and the Trust will use
its best efforts to prevent the issuance of any such stop order, the
issuance of any order preventing or suspending such use and the suspension
of any such qualification and, if any such order is issued or qualification
suspended, to obtain the lifting of such order or suspension at the
earliest practicable time;
(b) to comply in all material respects with the Securities Act, the
Exchange Act and the Trust Indenture Act in connection with the Exchange
Offer Materials, the Exchange Offer and the transactions contemplated
hereby and thereby, as applicable. If at any time when the Prospectus is
required by the Securities Act or Exchange Act to be delivered in
connection with the Exchange Offer, any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of counsel
for the Dealer Managers or counsel for the Company or the Trust, to amend
the Registration Statement or amend or supplement the Prospectus or any
other Exchange Offer Materials in order that the Prospectus or such other
Exchange Offer Materials will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements in the Prospectus or such other Exchange Offer Materials, in the
light of the circumstances under which they were made, not misleading or
if, in the opinion of either such counsel, it shall be necessary to amend
the Registration Statement or amend or supplement the Prospectus or any
other Exchange Offer Materials to comply with the requirements of the
Securities Act or Exchange Act, the Company and the Trust will promptly
prepare, file with the Commission, subject to Section 4(b) hereof, and
furnish, at its own expense to the Dealer Managers and to the dealers
(whose names and addresses will be furnished to the Company and the Trust
by the Dealer Managers) to which 6.50% Convertible Preferred Stock may have
been exchanged, such amendment or supplement as may be necessary to correct
such untrue statement or omission or to make the Registration Statement or
the Prospectus or such other Exchange Offer Materials comply with such
requirements;
(c) to endeavor, in cooperation with the Dealer Managers, to qualify
the Trust Convertible Preferred Securities for offering and sale in
connection with the Exchange
23
Offer under the applicable securities or Blue Sky laws of such
jurisdictions as the Dealer Managers may reasonably request and to maintain
such qualifications in effect for such time as may be required for the
consummation of the Exchange Offer. In each jurisdiction in which the
Trust Convertible Preferred Securities have been so qualified, the Trust
will file such statements and reports as may be required by the laws of
such jurisdiction to continue such qualification in effect for a period of
not less than one year from the effective date of the Registration
Statement;
(d) to make generally available to its security holders and to the
Dealer Managers as soon as practicable an earnings statement covering a
twelve-month period beginning not later than the first day of the Trust's
fiscal quarter next following the effective date of the Registration
Statement that satisfies the provisions of Section 11(a) of the Securities
Act and the rules and regulations of the Commission thereunder; and
(e) to use its best efforts to advise or cause the Exchange Agent to
advise the Dealer Managers at 5:00 P.M., New York City time, or promptly
thereafter, daily (or more frequently if requested), by telephone or
facsimile transmission, with respect to 6.50% Convertible Preferred Stock
tendered as follows: (i) the aggregate number of 6.50% Convertible
Preferred Stock validly tendered and represented by certificates physically
held by the Exchange Agent or confirmations of receipt of book-entry
transfer of 6.50% Convertible Preferred Stock pursuant to the procedures
set forth in the Exchange Offer on such day; (ii) the aggregate number of
6.50% Convertible Preferred Stock represented by Notices of Guaranteed
Delivery on such day; (iii) any 6.50% Convertible Preferred Stock properly
withdrawn on such day; and (v) the cumulative totals of the number of 6.50%
Convertible Preferred Stock in categories (i) through (iii), inclusive,
above.
11. Indemnification and Contribution; Settlement of Litigation;
-----------------------------------------------------------
Release. (a) Each of the Company and the Trust jointly and severally agrees
- -------
to indemnify and hold harmless each of the Dealer Managers, the respective
partners, the directors and officers of each of the Dealer Managers and each
person, if any, who controls each of the Dealer Managers ("Indemnified Persons")
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act (i) from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred by each of the Dealer Managers or any such controlling
person in connection with defending or investigating any such action or claim)
(A) caused by any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or any amendment thereof, any
related preliminary prospectus, the Prospectus, the Schedule 13E-4 or any other
Exchange Offer Materials (as amended or supplemented if the Company or the Trust
shall have furnished any amendments or supplements thereto), or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading
(except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon and in conformity with information relating to the Dealer Managers
furnished to the Company and the Trust in writing by the Dealer Managers
expressly for use therein); or (B) which arises out of or is based upon a
withdrawal,
24
rescission or modification of or a failure to make or consummate the Exchange
Offer; and (ii) against any other loss, claim, damage or liability which is
related to, otherwise arises out of or is based upon or asserted against such
Dealer Manager in connection with its acting as Dealer Manager in connection
with the Exchange Offer, rendering financial advisory services to the Company or
the Trust in connection with the Exchange Offer or which arises in connection
with any other matter referred to in this Agreement, except to the extent any
such losses, damages, liabilities or claims referred to in this clause (ii) are
finally judicially determined to have resulted from such Dealer Manager's gross
negligence or bad faith in performing the services that are the subject of this
Agreement. The Company or the Trust also agree that neither of the Dealer
Managers nor any of such Dealer Manager's affiliates, nor any of the partners,
officers, directors, agents, employees or controlling persons (if any), as the
case may be, of such Dealer Manager or any such affiliates, shall have any
liability to the Company or the Trust or any person asserting claims on behalf
of or in right of the Company or the Trust for or in connection with any matter
referred to in this Agreement except to the extent that any loss, damage,
liability or claim incurred by the Company or the Trust results from such Dealer
Manager's gross negligence or bad faith in performing the services that are the
subject of this Agreement.
(b) Each of the Dealer Managers agrees to indemnify and hold harmless each
of the Company and the Trust, their respective directors, trustees and officers
who sign the Registration Statement or the Schedule 13E-4, and each person, if
any, who controls the Company or the Trust within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Trust and the Company to the Dealer Managers
contained in clause (i)(A) of Section 11(a) above, but only with reference to
information relating to such Dealer Manager furnished to the Company or the
Trust in writing by the Dealer Managers expressly for use in the Registration
Statement, any preliminary prospectus, the Prospectus, the Schedule 13E-4, any
other Exchange Offer Material or any amendment or supplement thereto;
(c) Promptly after receipt by an Indemnified Person under Section 11 (a)
or (b) of notice of the commencement of any action, such Indemnified Person
shall, if a claim in respect thereof is to be made against the indemnifying
party under such Section (the "Indemnifying Party"), notify the Indemnifying
Party in writing of the commencement thereof; but the omission so to notify the
Indemnifying Party shall not relieve it from any liability which it may have to
any Indemnified Person otherwise than under such Section. In case any such
action shall be brought against any Indemnified Person and it shall notify the
Indemnifying Party of the commencement thereof, the Indemnifying Party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other Indemnifying Party similarly notified, to assume the defense
thereof, with counsel satisfactory to such Indemnified Person (who shall not,
except with the consent of the Indemnified Person, be counsel to the
Indemnifying Party), and, after notice from the Indemnifying Party to such
Indemnified Person of its election so to assume the defense thereof, the
Indemnifying Party shall not be liable to such Indemnified Person under such
Section for any legal expenses or other counsel of any other expenses, in each
case subsequently incurred by such Indemnified Person, in connection with the
defense thereof other than reasonable costs of investigation. No Indemnifying
Party shall, without the written consent of the Indemnified Persons, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any
25
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the Indemnified Persons are
actual or potential parties to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the Indemnified
Persons from all liability arising out of such action or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any Indemnified Person;
(d) If the indemnification provided for above is unavailable to an
Indemnified Party or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Party under such
paragraph, in lieu of indemnifying such Indemnified Party thereunder, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages or liabilities (A) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Trust, on the one hand, and the Dealer Managers, on the other hand, from the
Exchange Offer or (B) if the allocation provided by clause (A) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (A) above but also the relative
fault of the Company and the Trust, on the one hand, and of the Dealer Managers,
on the other hand, in connection with the statements or omissions or any other
matter that resulted in such losses, claims, damages or liabilities, as well as
any other relevant equitable considerations. The relative benefits received by
the Company and the Trust, on the one hand, and the Dealer Managers, on the
other hand, in connection with the Exchange Offer shall be deemed to be in the
same respective proportions as the maximum aggregate liquidation amount of the
Trust Convertible Preferred Securities issuable pursuant to the Exchange Offer
bears to the total Dealer Managers' fee under this Agreement attributable to the
Exchange Offer payable to the Dealer Managers pursuant to this Agreement. The
relative fault of the Company and the Trust, on the one hand, and the Dealer
Managers, on the other hand, (A) in the case of any untrue statement of a
material fact or omission or alleged omission to state a material fact, 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 the Trust, on
the one hand, or by the Dealer Managers, on the other hand, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission and (B) in the case of any other action or
omission, shall be determined by reference to, among other things, whether such
action or omission was taken or omitted to be taken by or at the direction of or
in reliance upon, the Company or the Trust or their affiliates or by the Dealer
Managers, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such action or omission;
(e) The Company, the Trust and the Dealer Managers agree that it would not
be just and equitable if contribution pursuant to Section 11(d) above were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in Section 11(d)
above. The amount paid or payable by an Indemnified Party as a result of the
losses, claims, damages and liabilities referred to in Section 11(d) above shall
be deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Agreement, no Dealer Manager shall be required to contribute
any amount in excess of the
26
fee paid to such Dealer Manager in connection with the Exchange Offer as
provided in this Agreement. 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;
(f) The remedies provided for in this Agreement are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
Indemnified Party at law or in equity; and
(g) the indemnity and contribution provisions contained in this Agreement
and the representations and warranties of the Company and the Trust contained in
this Agreement shall remain operative and in full force and effect regardless of
(A) any termination of this Agreement, (B) any investigation made by or on
behalf of the Dealer Managers or their respective officers, directors, partners
or any person controlling any Dealer Manager, or by or on behalf of the Company
or the Trust, any of their respective officers, directors, trustees or any
person controlling the Company or any Trust or (C) consummation of the Exchange
Offer.
12. Termination. (a) This Agreement shall terminate upon the
-----------
earliest to occur of (i) thirty days after the Expiration Date, (ii) any of the
conditions specified in Section 9 has not been fulfilled as of any date such
condition is required to be fulfilled pursuant to Section 9 (and the Dealer
Managers shall have notified the Company and the Trust thereof) or (iii) the
date on which the Company and the Trust terminate or withdraw the Exchange Offer
for any reason.
(b) Notwithstanding termination of this Agreement pursuant to subsection
(a) above, the obligations of the parties pursuant to Sections 6, 7 and 11 shall
survive any termination of this Agreement.
13. Severability. If any term or other provision of this Agreement
------------
is invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic and legal substance of the agreements
contained herein is not affected in any manner adverse to any party.
14. Counterparts. This Agreement may be executed by the different
------------
parties hereto in one or more separate counterparts, each of which when executed
shall be deemed an original, but all of which together shall constitute one and
the same agreement.
15. Binding Effect. This Agreement shall be binding upon and inure
--------------
solely to the benefit of each party hereto and the Indemnified Persons, and
nothing in this Agreement, express or implied, is intended to or shall confer
upon any other person any right, benefit or remedy.
16. Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of New York.
27
17. Consent to Jurisdiction. (a) Each of the Company and the Trust
-----------------------
(I) agrees that any legal suit, action or proceeding brought by the Dealer
Managers arising out of or relating to this Agreement, the Indenture, the Trust
Convertible Preferred Securities, the Exchange Offer Materials or the
transactions contemplated hereby or thereby may be instituted in any federal or
state court in New York City, (ii) irrevocably waives, to the fullest extent it
may effectively do so, any objection (x) which it may now or hereafter have to
the laying of the venue of any such suit, action or proceeding in any federal or
state court in New York City or (y) that any such suit, action or proceeding has
been brought in an inconvenient forum, and (iii) irrevocably submits to the non-
exclusive jurisdiction of any such court in any such suit, action or proceeding.
(b) Each of the Company and the Trust irrevocably designates and appoints
Dan D. Sandman, Esq., as its authorized agent upon which process may be served
in any legal suit, action or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby which may be instituted in any
federal or state court in New York City, and agrees that service of process upon
such agent, and written notice of said service to the Company or the Trust, as
the case may be, by the person serving the same, shall be deemed in every
respect effective service of process upon the Company or the Trust, as the case
may be, in any such suit or proceeding. Each of the Company and the Trust
further agrees to take any and all actions as may be necessary to maintain such
designation and appointment of such agent in full force and effect.
(c) Each of the Company and the Trust agree that a final judgment in any
such legal suit, action or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
18. Entire Agreement. This Agreement constitutes the entire
----------------
agreement among the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both written and oral, among
the parties, or any of them, with respect to the subject matter hereof.
19. Amendment. This Agreement may not be amended except in a writing
---------
signed by each party to be bound thereby.
20. Notices. All notices and other communications required or
-------
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given if delivered in person, by cable, fax, telegram
or telex or by registered or certified mail (postage prepaid, return receipt
requested) to the parties hereto as follows (or, as to each party, at such other
address as shall be designated by such party in a written notice complying as to
delivery with the terms of this paragraph):
28
(a) If to you:
Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Fax No.: (212) 357-5505
Attention: Registration Department
and
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
World Financial Center
North Tower - Fifth Floor
250 Vesey Street
New York, New York 10281
Fax No.: (212) 449-8668
Attention: Registration Department
With a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Fax No.: (212) 455-2502
Attention: Raymond Wagner, Esq.
(b) If to the Company or the Trust,
USX Corporation
600 Grant Street
Pittsburgh, PA 15219
Fax No.: (412) 433-2015
Attention: General Counsel
21. Subheadings. The descriptive headings contained in this
-----------
Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
29
Please indicate your willingness to act as Dealer Managers on the
terms set forth herein and your acceptance of the foregoing provisions by
signing in the space provided below for that purpose and returning to us a
copy of this letter, whereupon this letter and your acceptance shall
constitute a binding agreement among us.
Very truly yours,
USX CORPORATION
By:/s/ Robert M. Hernandez
-----------------------
Title: Vice Chairman &
Chief Financial Officer
USX CAPITAL TRUST I
By USX Corporation, as Sponsor
By:/s/ Robert M. Hernandez
-----------------------
Title: Vice Chairman &
Chief Financial Officer
Accepted and agreed as of the date first above written:
/s/ Goldman, Sachs & Co.
- ------------------------
By:/s/ Kevin Singer
----------------
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated