<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 15, 1994
REGISTRATION NO. 33-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------
USX CAPITAL LLC
(Exact name of Registrant
as specified in its charter)
TURKS AND CAICOS ISLANDS
(State or other jurisdiction of
incorporation or organization)
98-0137882
(I.R.S. Employer Identification No.)
WILLIAM F. SCHWIND, JR.
SECRETARY OF USX CAPITAL
MANAGEMENT COMPANY
5555 SAN FELIPE ROAD
HOUSTON, TEXAS 77056
(713) 629-6600
(Address, including zip code,
and telephone number, including area code,
of Registrant's principal executive offices
and agent for service)
USX CORPORATION
(Exact name of Registrant
as specified in its charter)
DELAWARE
(State or other jurisdiction of
incorporation or organization)
25-0996816
(I.R.S. Employer Identification No.)
DAN D. SANDMAN
GENERAL COUNSEL AND SECRETARY
600 GRANT STREET
PITTSBURGH, PA 15219
(412) 433-1121
(Address, including zip code,
and telephone number, including area code,
of Registrant's principal executive offices
and agent for service)
------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement as determined by
market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) REGISTRATION FEE
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------
Cumulative Monthly Income
Preferred Shares........... 10,000,000 Shares $25 $250,000,000 $86,208
- ----------------------------------------------------------------------------------------------------------
Backup Undertakings by USX
Corporation(3)............. (3) (3) (3) None
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(1) The number of Preferred Shares being registered hereby is such number of
Preferred Shares, not to exceed 10,000,000, as may from time to time be
issued by USX Capital LLC.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457.
(3) The consideration for the Backup Undertakings is included in the "Proposed
maximum aggregate offering price".
------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES
AND EXCHANGE COMMISSION BUT HAS NOT YET BECOME EFFECTIVE. THESE SECURITIES
MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE
REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR
SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH
OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED FEBRUARY 15, 1994
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED FEBRUARY , 1994
SHARES
USX CAPITAL LLC
% CUMULATIVE MONTHLY INCOME PREFERRED SHARES ("MIPS"*), SERIES A
(LIQUIDATION PREFERENCE $25 PER SHARE)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
USX CORPORATION
------------------
The % Cumulative Monthly Income Preferred Shares, Series A (the "Series A
Preferred Shares"), offered hereby are being issued by USX Capital LLC, a
limited life company organized under the laws of the Turks and Caicos Islands
(the "Company"). The Company is a wholly owned subsidiary of USX Corporation, a
Delaware corporation ("USX").
The payment of dividends, if and to the extent declared out of moneys held
by the Company and legally available therefor, and payments on liquidation or
redemption with respect to the Series A Preferred Shares are guaranteed by USX
to the extent described in the accompanying Prospectus. The Series A Preferred
Shares will entitle holders to receive cumulative preferential cash dividends,
at an annual rate of % of the liquidation preference of $25 per share,
accruing from the date of original issuance and payable, in United States
dollars, monthly in arrears on the last day of each calendar month of each year,
commencing February 28, 1994.
The Series A Preferred Shares are redeemable, at the option of the Company
(with USX's consent), in whole or in part, from time to time, on or after
February , 1999, at $25 per share plus accumulated and unpaid dividends
(whether or not declared) (the "Redemption Price") to the date fixed for
redemption (the "Redemption Date"), and will be redeemed at such price from the
proceeds of any repayment of the loan of the proceeds hereof to USX. In
addition, if at any time the Company or USX is or would be required to pay
certain additional amounts or to withhold or deduct certain amounts, the Series
A Preferred Shares are redeemable at the Redemption Price at the option of the
Company with USX's consent, from time to time. See "Description of Preferred
Shares--Redemption" and "Description of the Guarantees--Additional Amounts" in
the Prospectus.
In the event of the liquidation of the Company, holders of Series A
Preferred Shares will be entitled to receive for each Series A Preferred Share a
liquidation preference of $25 plus accumulated and unpaid dividends to the date
of payment, subject to certain limitations. See "Certain Terms of the Series A
Preferred Shares--Liquidation Preference" herein and "Description of Preferred
Shares--Liquidation Distribution" in the Prospectus.
For a description of the various contractual backup undertakings of USX
relating to the Series A Preferred Shares, see "Description of Preferred
Shares--Miscellaneous", "Description of the Guarantee" and "Description of the
Loans" in the accompanying Prospectus.
The Series A Preferred Shares have been approved for listing on the New York
Stock Exchange, subject to official notice of issuance, under the symbol .
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO THE
OFFERING PRICE(1) COMMISSION(2) COMPANY(1)(3)(4)
----------------- ------------- ----------------
<S> <C> <C> <C>
Per Series A Preferred Share.......................... $ 25.00 (3) $25.00
Total(4)(5)........................................... $ (3) $
</TABLE>
- ---------
(1) Plus accrued dividends, if any, from the date of original issuance.
(2) USX and the Company have agreed to indemnify the several Underwriters
against certain liabilities, including liabilities under the Securities Act
of 1933, as amended. See "Underwriting" herein.
(3) In view of the fact that the proceeds of the sale of the Series A Preferred
Shares will be loaned to USX, under the Underwriting Agreement USX has
agreed to pay to the Underwriters as compensation ("Underwriters
Compensation") for their services $ per Series A Preferred Share (or
$ in the aggregate). See "Underwriting" herein.
(4) Expenses of the offering, which are payable by USX, are estimated to be
$ .
(5) The Company has granted to the Underwriters a 30-day option to purchase, on
the same terms set forth above, up to additional Series A Preferred
Shares at the Initial Public Offering Price (with an additional
Underwriters' Compensation) solely to cover overallotments, if any. If the
option is exercised in full, the total initial Public Offering Price and
Proceeds to the Company will be $ .
------------------
The Series A Preferred Shares offered hereby are offered by the several
Underwriters, as specified herein, subject to receipt and acceptance by them and
subject to their right to reject any order in whole or in part. It is expected
that delivery of certificate for the Series A Preferred Shares will be made only
in book-entry form through the facilities of The Depository Trust Company on or
about February , 1994.
- ---------
* An application has been filed by Goldman, Sachs & Co. with the United States
Patent and Trademark Office for the registration of the MIPS servicemark.
GOLDMAN, SACHS & CO.
--------------------
The date of this Prospectus Supplement is February , 1994.
<PAGE> 3
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES A
PREFERRED SHARES OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE
PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK
STOCK EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING,
IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
------------------
USX CORPORATION
The following discussion is a brief description of USX Corporation ("USX")
and is qualified in its entirety by reference to the documents incorporated by
reference herein. See "Incorporation of Certain Documents by Reference" in the
accompanying Prospectus. Readers of this Prospectus Supplement are encouraged to
refer to such incorporated documents for a more complete description of USX.
USX is a diversified company engaged in the energy business through its
Marathon Group, in the steel business through its U.S. Steel Group and in the
gas gathering and processing business through its Delhi Group.
- The Marathon Group includes the operations of Marathon Oil Company, a
wholly owned subsidiary of USX ("Marathon"), which is engaged in worldwide
exploration, production, transportation and marketing of crude oil and
natural gas; and domestic refining, marketing and transportation of
petroleum products. Marathon Group sales (excluding sales from operations
now included in the Delhi Group) as a percentage of total USX consolidated
sales were 66% in 1993, 69% in 1992 and 72% in 1991.
- The U.S. Steel Group includes U.S. Steel, one of the largest integrated
steel producers in the United States, which is primarily engaged in the
production and sale of a wide range of steel mill products, coke and
taconite pellets. The U.S. Steel Group also includes the management of
mineral resources, domestic coal mining, engineering and consulting
services and technology licensing. Other businesses that are part of the
U.S. Steel Group include real estate development and management, fencing
products, leasing and financing activities and a majority interest in a
titanium metal products company. U.S. Steel Group sales as a percentage of
total USX consolidated sales were 31% in 1993, 28% in 1992 and 26% in
1991.
- The Delhi Group includes Delhi Gas Pipeline Corporation and certain
related companies which are engaged in the purchasing, gathering,
processing, transporting and marketing of natural gas. Prior to creation
of the Delhi Group on October 2, 1992, these businesses were included in
the Marathon Group. Sales from the businesses included in the Delhi Group
as a percentage of total USX consolidated sales were 3% in each of 1993
and 1992 and 2% in 1991.
USX has three classes of common stock: USX-Marathon Group Common Stock
("Marathon Stock"), USX-U.S. Steel Group Common Stock ("Steel Stock") and
USX-Delhi Group Stock ("Delhi Stock"). Each class of stock is intended to
provide the stockholders of such class with a separate equity security
reflecting the performance of the related group.
A portion of USX's corporate assets and liabilities are attributed to each
of the Marathon Group, the U.S. Steel Group and the Delhi Group. Although the
financial statements of the Marathon Group, the U.S. Steel Group and the Delhi
Group separately report the assets, liabilities (including contingent
liabilities) and stockholders' equity of USX attributed to each such group, such
attribution does not affect legal title to such assets or responsibility for
such liabilities. Holders of Marathon Stock, Steel Stock and Delhi Stock are
stockholders of USX and continue to be subject to all of the risks associated
with an investment in USX and all of its businesses and liabilities.
S-2
<PAGE> 4
The Guarantee (as defined in the accompanying Prospectus) will be an
obligation of USX and not of any segment, group or subsidiary of USX.
FINANCIAL HIGHLIGHTS
The following is a three-year summary of financial highlights for the
groups.
<TABLE>
<CAPTION>
OPERATING
INCOME ASSETS
SALES (LOSS)(A) (AT YEAR-END)
------- ---------- -------------
(MILLIONS)
<S> <C> <C> <C>
Marathon Group (b)
1993................................................ $11,962 $ 169 $10,806
1992................................................ 12,782 304 11,141
1991................................................ 13,975 358 11,644
U.S. Steel Group
1993................................................ 5,612 (149) 6,616
1992................................................ 4,919 (241) 6,251
1991................................................ 4,864 (617) 5,627
Delhi Group (c)
1993................................................ 535 36 580
1992................................................ 458 33 565
1991................................................ 423 31 584
Eliminations
1993................................................ (45) -- (628)
1992................................................ (346) (26) (705)
1991................................................ (437) (31) (816)
Total USX Corporation
1993................................................ $18,064 $ 56 $17,374
1992................................................ 17,813 70 17,252
1991................................................ 18,825 (259) 17,039
</TABLE>
- ---------
(a) Operating income (loss) included the following: a $342 million charge
related to the B&LE litigation for the U.S. Steel Group in 1993;
restructuring charges of $42 million, $10 million and $402 million for the
U.S. Steel Group in 1993, 1992, and 1991, respectively; restructuring
charges of $115 million and $24 million for the Marathon Group in 1992 and
1991, respectively; and inventory market valuation charges (credits) for the
Marathon Group of $241 million, $(62) million and $260 million in 1993, 1992
and 1991, respectively.
(b) Includes sales and operating income for the businesses comprising the Delhi
Group for periods prior to October 2, 1992, and assets related to the
businesses comprising the Delhi Group for year-end 1991.
(c) Includes historic sales, operating income and assets for the businesses
included in the Delhi Group which, prior to October 2, 1992, were included
in the Marathon Group.
USX CAPITAL LLC
USX Capital LLC, a wholly owned subsidiary of USX, is a limited life
company organized in December 1993 under the laws of the Turks and Caicos
Islands. The Company's registered offices are located at MacLaw House, P.O. Box
103, Duke Street, Grand Turk, Turks and Caicos Islands, British West Indies,
telephone: (809) 946-2476. The principal executive offices of the Manager are
located at 5555 San Felipe Road, Houston, Texas 77056, telephone (713) 629-6600.
USX will own directly or indirectly all of the common shares of the Company,
which shares are nontransferable. The Company exists solely for the purpose of
issuing preferred and common shares and lending the net proceeds thereof to USX.
S-3
<PAGE> 5
CERTAIN INVESTMENT CONSIDERATIONS
Prospective purchasers of Series A Preferred Shares should carefully review
the information contained elsewhere in this Prospectus Supplement and in the
Prospectus and should particularly consider the following matters:
USX's obligations under the Guarantee are subordinate and junior in
right of payment to all other liabilities of USX and its obligations under
the Loan Agreement are subordinate and junior in right of payment to Senior
Indebtedness of USX. See "Description of the Guarantee--Status of the
Guarantee" and Description of Loans--Subordination" in the Prospectus.
The Company is a newly formed, limited life subsidiary of USX
organized under the laws of the Turks and Caicos Islands with no physical
assets located in the United States. As a result, it may not be possible
for purchasers to effect service of process within the United States upon
the Company or to enforce civil judgments against the Company in United
States courts based upon federal securities laws of the United States. In
addition, there may be doubt as to the enforceability of actions based upon
the federal securities laws of the United States in the Turks and Caicos
Islands courts.
USX has the right under the Loan Agreement to extend interest payment
periods for up to 18 months, and, as a consequence, monthly dividends on
the Series A Preferred Shares can be deferred (but will continue to
accumulate) by the Company during any such extended interest payment
period. In the event that USX exercises this right, USX may not declare
dividends on any share of its preferred or common stock, and therefore, the
extension of a payment period is, in the view of the Company and USX,
remote. See "Description of the Loans--Interest" in the Prospectus.
Should an extended interest payment period occur, the Company will
continue to accrue income for U.S. federal income tax purposes which will
be allocated, but not distributed, to record holders of Series A Preferred
Shares. As a result, such holders will include such interest in gross
income for U.S. federal income tax purposes in advance of the receipt of
cash, and any such holders who dispose of Series A Preferred Shares prior
to the record date for payment of dividends following such period will also
include such interest in gross income but will not receive cash related
thereto. See "Taxation--United States--Potential Extension of Interest
Payment Period" in the Prospectus.
S-4
<PAGE> 6
USE OF PROCEEDS
Based on the offering price of $25.00 per share, the proceeds from the
offering (prior to deducting Underwriters' Compensation and estimated expenses)
will be $ ($ if the overallotment option is exercised in full). The
proceeds from the sale of the Series A Preferred Shares will be loaned to USX to
be used for general corporate purposes, including the refunding of outstanding
indebtedness and other financial obligations. In view of this loan, USX has
agreed under the Underwriting Agreement to pay Underwriters' Compensation to the
Underwriters, as set forth in Note (3) on the cover page of this Prospectus
Supplement.
CAPITALIZATION
The following table sets forth the total consolidated capitalization of USX
at December 31, 1993 and as adjusted to give effect to the sale of the Series A
Preferred Shares offered hereby and the application of the proceeds therefrom as
described under "Use of Proceeds" herein. The table should be read in
conjunction with USX's consolidated financial statements and notes thereto and
other financial data incorporated herein by reference. See "Incorporation of
Certain Documents by Reference" in the accompanying Prospectus.
<TABLE>
<CAPTION>
DECEMBER 31, 1993
---------------------
ACTUAL AS ADJUSTED
------ -----------
(IN MILLIONS)
<S> <C> <C>
SHORT-TERM OBLIGATIONS (including notes payable and current
maturities of long-term debt)............................... $ 36 $ 36
LONG-TERM DEBT DUE AFTER ONE YEAR(A).......................... 5,888 5,888
MINORITY INTEREST............................................. 5 5
PREFERRED STOCK OF CONSOLIDATED SUBSIDIARY(B)................. --
STOCKHOLDERS' EQUITY(C)....................................... 3,864 3,864
------ -----------
TOTAL CAPITALIZATION..................................... $9,793
------ -----------
------ -----------
</TABLE>
- ---------
(a) At December 31, 1993, $699 million of Marathon 9 1/2% Guaranteed Notes due
March 1, 1994 was included in long-term debt of USX since unused long-term
credit agreements of $1,500 million were available for refinancing if
needed. In February 1994, USX sold $300 million principal amount of 7.20%
Notes Due 2004 and $150 million principal amount of medium-term LIBOR-based
Floating Rate Notes due 1996.
(b) If the over-allotment option is exercised in full, preferred stock of
consolidated subsidiary, as adjusted, would be $ million.
(c) In February 1994, USX sold 5,000,000 shares of USX-U.S. Steel Group Common
Stock for net proceeds of $201 million.
S-5
<PAGE> 7
USX CORPORATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION
The following selected consolidated financial information has been derived
from the consolidated financial statements of USX for each of the five years in
the period ended December 31, 1993. The information set forth below should be
read in connection with the USX consolidated financial statements and notes
thereto and accompanying "Management's Discussion and Analysis" contained in the
USX Form 8-K dated February 14, 1994, incorporated herein by reference.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------
1993 1992 1991 1990 1989
------- ------- ------- ------- -------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Sales............................................ $18,064 $17,813 $18,825 $20,659 $18,717
Operating income (loss).......................... 56 70 (259) 1,556 1,570
Operating costs include:
Depreciation, depletion and amortization..... 1,077 1,091 1,128 1,304 1,336
Inventory market valuation charges
(credits)................................. 241 (62) 260 (140) (145)
Restructuring charges........................ 42 125 426 -- --
B&LE litigation charge....................... 342 -- -- -- --
Other income (loss).............................. 257 (2) 39 37 406
Other income (loss) includes:
Gain on disposal of assets................... 253 24 30 7 370
Total income (loss) before income taxes and
cumulative effect of changes in accounting
principles..................................... (239) (189) (691) 1,216 1,358
Total income (loss) before cumulative effect of
changes in accounting principles............... (167) (160) (578) 818 965
Net income (loss)................................ $ (259) $(1,826) $ (578) $ 818 $ 965
BALANCE SHEET DATA (AT YEAR END):
Cash and cash equivalents........................ $ 268 $ 57 $ 279 $ 263 $ 786
Working capital.................................. (154) (370) (215) 351 273
Capital expenditures--for year................... 1,151 1,505 1,392 1,391 1,429
Property, plant and equipment--net............... 11,603 11,759 11,593 11,584 11,995
Total assets..................................... 17,374 17,252 17,039 17,268 17,500
Capitalization:
Notes payable.................................. $ 1 $ 47 $ 79 $ 138 $ 16
Total long-term debt........................... 5,923 6,302 6,438 5,527 5,875
Total proceeds from production agreements...... -- -- 17 142 327
Minority interest.............................. 5 16 37 67 --
Stockholders' equity........................... 3,864 3,709 4,987 5,869 5,737
------- ------- ------- ------- -------
Total capitalization.................... $ 9,793 $10,074 $11,558 $11,743 $11,955
------- ------- ------- ------- -------
------- ------- ------- ------- -------
</TABLE>
S-6
<PAGE> 8
CERTAIN TERMS OF THE SERIES A PREFERRED SHARES
GENERAL
The following summary of certain terms and provisions of the Series A
Preferred Shares supplements the description of certain terms and provisions of
the Preferred Shares of any series set forth in the accompanying Prospectus
under the heading "Description of Preferred Shares," to which description
reference is hereby made. Capitalized terms used and not defined in this
Prospectus Supplement shall have the meanings ascribed to them in the Prospectus
unless otherwise defined in this Prospectus Supplement. The Series A Preferred
Shares constitute a series of Preferred Shares of the Company, which Preferred
Shares may be issued from time to time in one or more series with such
designations, dividend rights, liquidation value per share, redemption
provisions, voting rights and other rights, preferences, privileges, limitations
and restrictions as are established by the Memorandum of Association of the
Company (the "Memorandum"), the Articles of Association of the Company (the
"Articles") and resolutions (the "Resolutions") adopted, or to be adopted, by
USX Capital Management Company (the "Manager") prior to the closing of the sale
of the Series A Preferred Shares offered hereby. The Resolutions will provide
that so long as any Series A Preferred Shares are outstanding, the Company may
not issue any shares of capital stock ranking, as to participation in the
profits or assets of the Company, senior to the Series A Preferred Shares. The
summary of certain terms and provisions of the Series A Preferred Shares set
forth below does not purport to be complete and is subject to, and qualified in
its entirety by reference to, the Memorandum, the Articles and the Resolutions
adopted by the Manager establishing the rights, preferences, privileges,
limitations and restrictions relating to the Series A Preferred Shares. A copy
of the Resolutions will be included as an exhibit to a Current Report on Form
8-K to be filed by USX at or prior to the closing of the sale of the Series A
Preferred Shares offered hereby.
DIVIDENDS
Dividends on the Series A Preferred Shares will be cumulative, will accrue
from the date of the original issuance thereof and will be payable in United
States dollars monthly in arrears on the last day of each calendar month of each
year, commencing February 28, 1994, when, as and if declared by the Company,
except as otherwise described under "Description of Preferred Shares--Dividends"
in the accompanying Prospectus.
The dividend payable on each Series A Preferred Share will be fixed at a
rate per annum of % of the stated liquidation preference thereof.
LIQUIDATION PREFERENCE
The liquidation preference of the Series A Preferred Shares is $25 per
share.
REDEMPTION
The Series A Preferred Shares are redeemable as described in the
accompanying Prospectus. Additionally, the Series A Preferred Shares are
redeemable, at the option of the Company and subject to the prior consent of
USX, in whole or part, from time to time, on or after February , 1999, upon
not less than 30 nor more than 60 days' notice, at the redemption price of $25
per share, plus accumulated and unpaid dividends (whether or not declared) to
the date fixed for redemption (the "Redemption Price").
S-7
<PAGE> 9
CERTAIN TERMS OF THE LOANS
Pursuant to the Loan Agreement, the Company will agree to make loans to USX
in an aggregate principal amount equal to $ , such amount being the
aggregate stated liquidation preference of $25 per Series A Preferred Share
issued and sold by the Company and the proceeds from the issuance of the
Company's Common Shares and related capital contributions (the "Common Share
Payments"). In the event that the Underwriters' over-allotment option is
exercised, the Company will agree to make additional Loans to USX pursuant to
the Loan Agreement equal to the aggregate stated liquidation preference of the
Series A Preferred Shares so sold plus the related Common Share Payments. If the
over allotment option is exercised in full, such additional Loans will equal
$ .
The entire principal amount of the Loans will become due and payable,
together with any accrued and unpaid interest thereon, including Additional
Interest, if any, on the earliest of the date that is the 50th anniversary of
the issuance of the Series A Preferred Shares or the date upon which USX, the
Manager or the Company is dissolved, wound-up or liquidated.
INTEREST
The Loans will bear interest at an annual rate equal to % from the date
they are made until maturity. Such interest will be payable on the last day of
each calendar month of each year, commencing February 28, 1994.
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, the
Company has agreed to sell to each of the Underwriters named below, and each of
the Underwriters, for whom Goldman, Sachs & Co. are acting as Representatives,
has severally agreed to purchase from the Company the respective number of
Series A Preferred Shares set forth opposite its name below:
<TABLE>
<CAPTION>
NUMBER OF
SERIES A
UNDERWRITERS PREFERRED SHARES
- ------------------------------------------------------------------------ ----------------
<S> <C>
Goldman, Sachs & Co.....................................................
----------------
Total..............................................................
----------------
----------------
</TABLE>
S-8
<PAGE> 10
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all such Series A Preferred
Shares offered hereby, if any are taken.
The Underwriters propose to offer the Series A Preferred Shares in part
directly to the public at the initial public offering price set forth on the
cover page of this Prospectus Supplement, and in part to certain securities
dealers at such price less a concession of $. per Series A Preferred Share.
The Underwriters may allow, and such dealers may reallow, a concession not in
excess of $. per Series A Preferred Share to certain brokers and dealers.
After the Series A Preferred Shares are released for sale to the public, the
offering price and other selling terms may from time to time be varied by the
Representatives.
In view of the fact that the proceeds of the sale of the Series A Preferred
Shares will be loaned to USX, under the Underwriting Agreement USX has agreed to
pay as compensation ("Underwriters' Compensation") for the Underwriters'
Services, an amount in New York Clearing House (next day) funds of $ per
Series A Preferred Share for the accounts of the several Underwriters.
The Company has granted the Underwriters an option exercisable for 30 days
after the date of this Prospectus Supplement to purchase up to additional
Series A Preferred Shares to cover over-allotments, if any, at the initial
public offering price (with additional Underwriters' Compensation), as set forth
on the cover page of this Prospectus Supplement. If the Underwriters exercise
their over-allotment option, the Underwriters have severally agreed, subject to
certain conditions, to purchase approximately the same percentage thereof that
the number of Series A Preferred Shares to be purchased by each of them, as
shown in the foregoing table, bears to the Series A Preferred Shares
offered hereby.
Certain of the Underwriters are customers of, or engage in transactions
with, and from time to time have performed services for, USX and its
subsidiaries and associated companies in the ordinary course of business.
Prior to this offering, there has been no public market for the Series A
Preferred Shares. In order to meet one of the requirements for listing the
Series A Preferred Shares on the New York Stock Exchange, the Underwriters will
undertake to sell lots of 100 or more Series A Preferred Shares to a minimum of
400 beneficial holders.
The Company and USX have agreed to indemnify the Underwriters against
certain liabilities, including liabilities under the United States Securities
Act of 1933, as amended.
VALIDITY OF SECURITIES
The validity of the Series A Preferred Shares is being passed upon by
Misick and Stanbrook, Turks and Caicos Islands counsel to the Company. The
validity of the Backup Undertakings relating to the Series A Preferred Shares,
consisting of the Guarantee, the Loan Agreement, the Expense Agreement and the
Keep Well Agreement, will be passed upon on behalf of the Company and USX by Dan
D. Sandman, General Counsel of USX. The validity of such Backup Undertakings of
USX relating to the Series A Preferred Shares will be passed upon on behalf of
the Underwriters by Sullivan & Cromwell, United States counsel to the
Underwriters. As to all matters of Turks and Caicos Islands law, Mr. Sandman
will rely on the opinion of Misick and Stanbrook and as to all matters of New
York law, he will rely on the opinion of Sullivan & Cromwell.
S-9
<PAGE> 11
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES
AND EXCHANGE COMMISSION BUT HAS NOT YET BECOME EFFECTIVE. THESE SECURITIES
MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE
REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR
SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH
OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED FEBRUARY 15, 1994
USX CAPITAL LLC
CUMULATIVE MONTHLY INCOME PREFERRED SHARES ("MIPS*")
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
USX CORPORATION
------------------
USX Capital LLC (the "Company"), a limited life company organized under the
laws of the Turks and Caicos Islands, may offer from time to time, in one or
more series, its authorized but unissued shares of Cumulative Monthly Income
Preferred Shares (the "MIPS*" or "Preferred Shares"). The Company is a wholly
owned subsidiary of USX Corporation ("USX"), a Delaware corporation. The payment
of dividends, if and to the extent declared out of moneys held by the Company
and legally available therefor, and payments on liquidation or redemption with
respect to the Preferred Shares are guaranteed (the "Guarantee") by USX to the
extent set forth herein. No portion of the dividends received by a holder of the
Preferred Shares will be eligible for the dividends received deduction for
federal income tax purposes. The Guarantee will rank subordinate and junior in
right of payment to all other liabilities of USX and senior to the most senior
preferred or preference stock issued by USX. See "USX Capital LLC", "Description
of Preferred Shares--Miscellaneous," "Description of the Guarantee" and
"Description of the Loans" for a description of the various contractual backup
obligations of USX Corporation relating to the Preferred Shares. The total
number of Preferred Shares of all series to be issued under the registration
statement of which this Prospectus forms a part will not exceed 10,000,000.
The terms of the Preferred Shares of a particular series will be determined
at the time of sale. The specific designation, liquidation value per share,
initial public offering price, dividend rate (or method of calculation thereof),
dates on which dividends will be payable, voting rights, any redemption
provisions and the other rights, preferences, privileges, limitations and
restrictions relating to the Preferred Shares of the particular series in
respect of which this Prospectus is being delivered will be set forth in the
Prospectus Supplement pertaining to such series (the "Prospectus Supplement").
The Preferred Shares may be sold for public offering to or through
underwriters, including Goldman, Sachs & Co., or dealers or may be sold through
agents designated from time to time or directly by the Company. See "Plan of
Distribution". The names of any such underwriters, dealers or agents involved in
the sale of the Preferred Shares of the particular series in respect of which
this Prospectus is being delivered, the number of Preferred Shares to be
purchased by any such underwriters and any applicable commissions or discounts
will be set forth in the Prospectus Supplement. The net proceeds to the Company
will also be set forth in the Prospectus Supplement.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------
No person has been authorized to give any information or to make any
representations, other than as contained herein or incorporated by reference in
this Prospectus, in connection with the offer contained in this Prospectus, and,
if given or made, such information or representations must not be relied upon.
Neither the delivery of this Prospectus nor any sale hereunder shall under any
circumstances create an implication that there has been no change in the affairs
of the Company or the Guarantor since the date hereof.
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any of the securities offered hereby in any jurisdiction to any
person to whom it is unlawful to make such offer in such jurisdiction.
This Prospectus may not be used to consummate sales of Preferred Shares
unless accompanied by a Prospectus Supplement.
- ---------
* An application has been filed by Goldman, Sachs & Co. with the United States
Patent and Trademark Office for the registration of the MIPS servicemark.
GOLDMAN, SACHS & CO.
--------------------
The date of this Prospectus is February , 1994.
<PAGE> 12
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Available Information ................................................................ 2
Incorporation of Certain Documents by Reference ...................................... 3
USX Corporation ...................................................................... 3
USX Corporation Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends ...................................................... 4
USX Capital LLC ...................................................................... 4
Use of Proceeds ...................................................................... 5
Description of Preferred Shares ...................................................... 5
Description of the Guarantee ......................................................... 13
Description of the Loans ............................................................. 15
Taxation ............................................................................. 20
Plan of Distribution ................................................................. 23
Validity of Securities ............................................................... 24
Experts .............................................................................. 24
</TABLE>
AVAILABLE INFORMATION
USX Corporation ("USX" or the "Guarantor") is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and, in accordance therewith, files reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information filed by USX can be inspected
and copied at prescribed rates at the Public Reference Room of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
public reference facilities maintained by the Commission at 7 World Trade
Center, New York, New York 10048, and Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Documents filed by USX can
also be inspected at the offices of the New York Stock Exchange, Inc. (the "New
York Stock Exchange"), the Chicago Stock Exchange and the Pacific Stock
Exchange.
USX and USX Capital LLC (the "Company") have filed a Registration Statement
on Form S-3 (the "Registration Statement") with the Commission pursuant to the
Securities Act of 1933, as amended (the "Securities Act"), covering the
Preferred Shares. This Prospectus does not contain all the information set forth
in the Registration Statement and the exhibits thereto, to which reference is
hereby made.
No separate financial statements of the Company have been included herein.
The Company and USX Corporation do not consider that such financial statements
would be material to holders of the Preferred Shares because the Company is a
newly organized special purpose entity, has no operating history and no
independent operations and is not engaged in, and does not propose to engage in,
any activity other than the issuance of the Preferred Shares and its common
shares, and the lending of the net proceeds thereof to USX Corporation. See "USX
Capital LLC". The Company is a limited life company organized under the laws of
the Turks and Caicos Islands and will be managed by USX Capital Management
Company (the "Manager"), an indirect wholly owned subsidiary of USX. USX owns,
directly or indirectly, all of the Company's common stock, which is
nontransferable. All or a substantial portion of the Company's assets will be
located outside the United States. The Company has been advised by its Turks and
Caicos Islands legal counsel, Misick and Stanbrook, that there is doubt as to
the enforceability, in the Turks and Caicos Islands in original actions or in
actions for enforcement of judgments of United States courts, of liabilities
predicated solely upon the federal securities laws of the United States.
2
<PAGE> 13
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by USX with the Commission (file no. 1-5153)
are incorporated herein by reference:
(a) Annual Report on Form 10-K for the year ended December 31, 1992.
(b) Quarterly Reports on Form 10-Q for the quarters ended March 31,
June 30, and September 30, 1993.
(c) Current Reports on Form 8-K dated January 26, February 11,
February 24, May 27, June 11, June 29, and July 27, 1993, January 21,
January 24, and February 14, 1994.
All reports and other documents filed by USX pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the offering described herein shall be deemed to
be incorporated by reference herein. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus and any Prospectus
Supplement to the extent that a statement contained herein or in any other
subsequently filed document which also is incorporated or deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus or any Prospectus
Supplement.
USX undertakes to provide without charge to each person to whom a
Prospectus or any Prospectus Supplement is delivered, on the written or oral
request of such person, a copy of any or all of the information incorporated by
reference in this Prospectus or any Prospectus Supplement other than exhibits to
such information (unless such exhibits are specifically incorporated by
reference into the information that this Prospectus or any Prospectus Supplement
incorporates). Requests for such copies should be directed to the Office of the
Corporate Secretary, USX Corporation, 600 Grant Street, Pittsburgh, Pennsylvania
15219-4776 (telephone: 412-433-2885).
USX CORPORATION
USX, a Delaware corporation organized in 1901, is a diversified company
engaged in the energy business through its Marathon Group, in the steel business
through its U.S. Steel Group and in the gas gathering and processing business
through its Delhi Group.
USX has three classes of common stock, USX--Marathon Group Common Stock
("Marathon Stock"), USX--U.S. Steel Group Common Stock ("Steel Stock") and
USX--Delhi Group Common Stock ("Delhi Stock"). Each class of common stock is
intended to provide the stockholders of such class with a separate security
reflecting the performance of the related group.
The Marathon Group includes the operations of Marathon Oil Company
("Marathon"), a wholly owned subsidiary of USX, which is engaged in worldwide
exploration, production, transportation and marketing of crude oil and natural
gas; and domestic refining, marketing and transportation of petroleum products.
The U.S. Steel Group includes U.S. Steel, one of the largest integrated
steel producers in the United States, which is primarily engaged in the
production and sale of a wide range of steel mill products, coke and taconite
pellets. The U.S. Steel Group also includes the management of mineral resources,
domestic coal mining, engineering and consulting services and technology
licensing. Other businesses that are part of the U.S. Steel Group include real
estate development and management, fencing products, leasing and financing
activities, and a majority interest in a titanium metal products company.
The Delhi Group includes Delhi Gas Pipeline Corporation and certain related
companies which are engaged in the purchasing, gathering, processing,
transporting and marketing of natural gas.
3
<PAGE> 14
Prior to October 2, 1992, the businesses which are now included in the Delhi
Group were included in the Marathon Group and data regarding the Delhi Group for
periods prior to that date reflect the combined historical financial data of the
businesses comprising the Delhi Group.
USX continues to include consolidated financial information in its periodic
reports required by the Exchange Act, in its annual shareholder reports and in
other financial communications. The consolidated financial statements are
supplemented with separate financial statements of the Marathon Group, the U.S.
Steel Group and the Delhi Group, together with the related Management's
Discussion and Analyses, descriptions of business and other financial and
business information to the extent such information is required to be presented
in the report being filed. The financial information of the Marathon Group, the
U.S. Steel Group and the Delhi Group, taken together, includes all accounts
which comprise the corresponding consolidated financial information of USX.
For consolidated financial reporting purposes, USX's reportable industry
segments correspond with its three groups. The attribution of assets,
liabilities (including contingent liabilities) and stockholders' equity among
the Marathon Group, the U.S. Steel Group and the Delhi Group for the purpose of
preparing their respective financial statements does not affect legal title to
such assets and responsibility for such liabilities. Accordingly, USX is
responsible for its liabilities (including those pursuant to the Guarantee (as
defined under "Description of the Guarantee") and the Loan Agreement (as defined
under "Description of the Loans")) without regard to the attribution of
shareholders' equity among the three Groups.
Marathon Stock stockholders, Steel Stock stockholders and Delhi Stock
stockholders are holders of common stock of USX and continue to be subject to
all of the risks associated with an investment in USX and all of its businesses
and liabilities. Financial impacts arising from any of the Marathon Group, the
U.S. Steel Group or the Delhi Group which affect the overall cost of USX's
capital could affect the results of operations and financial condition of all
groups. Accordingly, the USX consolidated financial information should be read
in connection with the Marathon Group, the U.S. Steel Group and the Delhi Group
financial information.
The executive offices of USX are located at 600 Grant Street, Pittsburgh,
PA 15219-4776 (tel: (412) 433-1121). The term "USX" when used herein refers to
USX Corporation and its subsidiaries, as required by the context.
USX CORPORATION RATIO OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(UNAUDITED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------------------
1993 1992 1991 1990 1989
----- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of earnings to combined fixed charges and preferred
stock dividends........................................ (a) (a) (a) 2.69 2.33
----- ---- ---- ---- ----
----- ---- ---- ---- ----
</TABLE>
- ---------
(a) Earnings did not cover combined fixed charges and preferred stock dividends
by $325 million for 1993, by $211 million for 1992 and by $696 million for
1991.
USX CAPITAL LLC
USX Capital LLC, a wholly owned subsidiary of USX, is a limited life
company organized in December 1993 under the laws of the Turks and Caicos
Islands. The Company's registered offices are located at MacLaw House, P.O. Box
103, Duke Street, Grand Turk, Turks and Caicos Islands, British West Indies,
telephone: (809) 946-2476. The principal executive offices of the Manager are
located at 5555 San Felipe Road, Houston, Texas 77056, telephone (713) 629-6600.
USX will own directly or indirectly all of the common shares of the Company,
which shares are nontransferable.
4
<PAGE> 15
The Company exists solely for the purpose of issuing preferred and common shares
and lending the net proceeds thereof to USX.
USE OF PROCEEDS
The proceeds from the sale of the Preferred Shares will be loaned to USX to
be used for general corporate purposes, including the refunding of outstanding
indebtedness and other financial obligations.
As of December 31, 1993, USX had long-term debt obligations maturing within
one year of $734 million, including $699 million of Marathon 9 1/2% Guaranteed
Notes Due March 1, 1994.
DESCRIPTION OF PREFERRED SHARES
The following is a summary of certain terms and provisions of the Preferred
Shares of any series (collectively referred to as the "Preferred Shares").
Certain terms and provisions of the Preferred Shares of a particular series will
be summarized in the Prospectus Supplement relating to the Preferred Shares of
such series. If so indicated in the Prospectus Supplement, the terms and
provisions of the Preferred Shares of a particular series may differ from the
terms set forth below. The summaries set forth below and in the applicable
Prospectus Supplement address the material terms of the Preferred Shares of any
particular series but do not purport to be complete and are subject to, and
qualified in their entirety by reference to, the Memorandum of Association of
the Company (the "Memorandum"), the Articles of Association of the Company (the
"Articles") and the resolutions adopted, or to be adopted, as the case may be,
by the Manager establishing the rights, preferences, privileges, limitations and
restrictions relating to the Preferred Shares of any series or of a particular
series. Copies of the Memorandum and the Articles have been filed as exhibits to
the Registration Statement of which this Prospectus forms a part.
GENERAL
The Company's authorized capital is US $5,000, divided into 5,000 ordinary
shares of US $1.00 each (the "Common Shares"), of which 4,998 are issued and
outstanding and owned directly or indirectly by USX. The Company is currently
authorized to issue up to 10,000,000 Preferred Shares, in one or more series or
classes, with such dividend rights, liquidation preference per share, redemption
provisions, voting rights and other rights, preferences, privileges, limitations
and restrictions as shall be set forth in the Articles and the resolutions
providing for the issuance thereof to be adopted by the Manager. The Manager by
resolution may increase the number of authorized Preferred Shares and establish
other classes of shares having such preferred, deferred or other special rights
or such restrictions, whether in regard to dividends, voting, return of capital
or otherwise, as the Manager may determine. All of the Preferred Shares, to be
issued in one or more series or classes, will rank pari passu with each other
with respect to participation in profits and assets. The resolutions providing
for the issuance of Preferred Shares of any particular series will not permit
the issuance of any preference shares ranking, as to participation in the
profits or the assets of the Company, senior to the Preferred Shares of any
particular series. The initial offering price of the Preferred Shares of any
particular series will be reasonably related to the liquidation preference
thereof.
The Preferred Shares of any series will be issued in registered form only
without dividend coupons. Registration of, and registration of transfers of, the
Preferred Shares of any series will be by book-entry only. The Preferred Shares
of any series will have the dividend rights, rights upon liquidation, redemption
provisions and voting rights set forth below, unless otherwise provided in the
Prospectus Supplement relating to the Preferred Shares of a particular series.
Reference is made to the Prospectus Supplement relating to the Preferred Shares
of a particular series for specific terms including (i) the designation of the
Preferred Shares of such series, (ii) the liquidation value,
5
<PAGE> 16
(iii) the price at which the Preferred Shares of such series will be issued,
(iv) the dividend rate (or method of calculation thereof) and the dates on which
dividends will be payable, (v) the voting rights of the Preferred Shares of such
series, (vi) any redemption provisions, (vii) any other rights, preferences,
privileges, limitations and restrictions relating to the Preferred Shares of
such series and (viii) the terms upon which the proceeds from the sale of the
Preferred Shares of such series will be loaned to USX.
DIVIDENDS
Dividends on the Preferred Shares will be cumulative. Cumulative dividends
on the Preferred Shares of a series will accrue from the date of original issue
thereof and will be payable in United States dollars monthly in arrears on the
last day of each calendar month of each year, commencing on the dates specified
in the Prospectus Supplement relating to such series.
The dividend payable on Preferred Shares of a particular series will be
fixed at the rate per annum specified in the Prospectus Supplement relating to
such series. The amount of dividends payable for any period will be computed on
the basis of twelve 30-day months and a 360-day year and, for any period shorter
than a full monthly dividend period, will be computed on the basis of the actual
number of days elapsed in such period. Payment of dividends is limited in
relation to the amount of funds held by the Company and legally available
therefor. See "Description of the Loans--Interest" and "Description of the
Guarantee--General" below.
Dividends on the Preferred Shares of any series must be declared by the
Manager of the Company in any calendar year or portion thereof to the extent
that the Manager reasonably anticipates that at the time of payment the Company
will have, and must be paid by the Company to the extent that at the time of
proposed payment it has, (x) funds legally available for the payment of such
dividends and (y) cash on hand sufficient to permit such payments. It is
anticipated that the Company's earnings will be limited to payments under the
Loans of the proceeds from the issuance and sale of the Preferred Shares and the
Company's common shares. See "Description of the Loans".
Dividends declared on the Preferred Shares of any series will be payable to
the record holders thereof as they appear on the register for the Preferred
Shares of such series on the relevant record dates which will be, unless
otherwise specified in the Prospectus Supplement relating to each such series,
one Business Day (as hereinafter defined) prior to the relevant payment dates.
Subject to any applicable fiscal or other laws and regulations, each such
payment will be made as described under "Book-Entry-Only Issuance; The
Depository Trust Company" below. In the event that any date on which dividends
are payable on the Preferred Shares of any series is not a Business Day, then
payment of the dividend payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or other payment in
respect of any such delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date. A "Business Day" shall mean any day other than a day on which
banking institutions in The City of New York are authorized or required by law
to close.
CERTAIN RESTRICTIONS ON THE COMPANY
If dividends have not been paid in full on the Preferred Shares of a
particular series, the Company shall not:
(i) pay, or declare and set aside for payment, any dividends on the
Preferred Shares of any other series or any other preferred or preference
stock of the Company ranking pari passu with the Preferred Shares of such
series as regards participation in profits of the Company ("Company
Dividend Parity Shares"), unless the amount of any dividends declared on
any Company Dividend Parity Shares is paid on the Company Dividend Parity
Shares and the
6
<PAGE> 17
Preferred Shares of such series on a pro rata basis on the date such
dividends are paid on such Company Dividend Parity Shares, so that:
(x) (A) the aggregate amount of dividends paid on the Preferred
Shares of such series bears to (B) the aggregate amount of dividends
paid on such Company Dividend Parity Shares the same ratio as
(y) (A) the aggregate of all accumulated arrears of unpaid
dividends in respect of the Preferred Shares of such series bears to (B)
the aggregate of all accumulated arrears of unpaid dividends in respect
of such Company Dividend Parity Shares;
(ii) pay, or declare and set aside for payment, any dividends on any
shares of the Company ranking junior to the Preferred Shares of such series
as to dividends ("Company Dividend Junior Shares"); or
(iii) redeem, purchase or otherwise acquire any Company Dividend
Parity Shares or Company Dividend Junior Shares;
until, in each case, such time as all accumulated arrears of unpaid dividends on
the Preferred Shares of such series shall have been paid in full for all
dividend periods terminating on or prior to, in the case of clauses (i) and
(ii), such payment, and in the case of clause (iii), the date of such
redemption, purchase or acquisition. As of the date of this Prospectus, there
are no Company Dividend Parity Shares outstanding.
REDEMPTION
The Preferred Shares of a series will be redeemable at the option of the
Company and subject to the prior consent of USX, in whole or in part from time
to time, on or after the date specified in the Prospectus Supplement relating to
such series, at the stated liquidation preference per share for such series,
plus accumulated and unpaid dividends (whether or not declared) (the "Redemption
Price") to the date fixed for redemption (the "Redemption Date").
In the event that fewer than all of the outstanding Preferred Shares of a
particular series are to be redeemed, except as described below, the Preferred
Shares of such series to be redeemed may be selected as described under
"Book-Entry-Only Issuance; The Depository Trust Company" below.
If at any time USX repays the Loans when due or prepays the Loans as
described under "Description of the Loans--Optional Prepayment", the proceeds
from such repayment of principal on the Loans to USX will be applied, subject to
the provisions in clause (iii) under "Certain Restrictions on the Company"
above, to redeem the Preferred Shares of such series at the Redemption Price;
provided that any such amounts may be reloaned to USX and not used for such
redemption, if at the time of each such loan, and as determined in the judgment
of the Manager, and its financial advisor, (a) USX is not in bankruptcy, (b) USX
is not in default on any loan pertaining to Preferred Shares of any series, (c)
USX has made timely payments on the repaid loan for the immediately preceding 18
months, (d) the Company is not in arrears on payments of dividends on the
Preferred Shares of such series, (e) USX is expected to be able to make timely
payment of principal and interest on such loan, (f) such loan is being made on
terms, and under circumstances, that are consistent with those which a lender
would require for a loan to an unrelated party, (g) such loan is being made at a
rate sufficient to provide payments equal to or greater than the amount of
dividend payments required under the Preferred Shares of such series, (h) the
senior unsecured long-term debt of USX is rated BBB- or better by Standard &
Poor's Corporation or Baa3 or better by Moody's Investors Service, Inc. or the
equivalent by any other nationally recognized statistical rating organization,
(i) such loan is being made for a term that is consistent with market
circumstances and USX's financial condition, and (j) the final maturity of such
loan is not later than the 100th anniversary of the issuance of the Preferred
Shares of the first series issued.
7
<PAGE> 18
If at any time after the issuance of Preferred Shares of a series, the
Company is or would be required to pay any Additional Amounts (as defined
herein) with respect to the Preferred Shares of such series or USX is or would
be required to withhold or deduct certain amounts as described under
"Description of the Guarantee--Additional Amounts" with respect to the Preferred
Shares of such series, then, subject to the prior consent of USX, the Company
may, at its option but subject to the provisions of clause (iii) under "Certain
Restrictions on the Company" above, upon not less than 30 nor more than 60 days'
notice to the holders of the Preferred Shares of such series, redeem the
Preferred Shares of such series in whole, or if such requirement relates to only
certain of the Preferred Shares of such series, only the Preferred Shares of
such series subject to the requirement may be redeemed at the Redemption Price
for such series, provided that, in the case of such a redemption of Preferred
Shares in part, the Company may (i) cause the global certificate representing
all of the Preferred Shares of such series to be withdrawn from The Depository
Trust Company or its successor securities depository (see "Book-Entry-Only
Issuance; The Depository Trust Company"), (ii) issue share certificates in
definitive form representing Preferred Shares of such series and (iii) redeem
the Preferred Shares subject to such requirement to withhold or deduct
Additional Amounts; and provided further that, if a partial redemption would
result in a delisting of the Preferred Shares of such series from any national
securities exchange on which they are then listed, the Company may only redeem
the Preferred Shares of such series in whole.
The Company may not redeem any Preferred Shares of any series unless all
accumulated arrears of unpaid dividends have been paid on all Preferred Shares
of all series for all monthly dividend periods terminating on or prior to the
date of redemption.
If the Company gives a notice of redemption in respect of Preferred Shares
of a particular series, then, by 12:00 noon, New York time, on the Redemption
Date, the Company will irrevocably deposit with The Depository Trust Company
funds sufficient to pay the applicable Redemption Price, and will give The
Depository Trust Company irrevocable instructions and authority to pay the
Redemption Price to the holders thereof. If notice of redemption shall have been
given and funds deposited as required, then upon the date of such deposit, all
rights of holders of such Preferred Shares of a series so called for redemption
will cease, except the right of the holders of such shares to receive the
Redemption Price, but without interest. In the event that any date on which any
payment in respect of the redemption of Preferred Shares of any series is not a
Business Day, then payment of the Redemption Price payable on such date will be
made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day. In the event that payment of the Redemption
Price in respect of Preferred Shares of any series is improperly withheld or
refused and not paid either by the Company or by USX pursuant to the Guarantee,
dividends on such shares will continue to accrue, at the then applicable rate,
from the original Redemption Date to the date that the Redemption Price is
actually paid, in which case the actual payment date will be the date fixed for
redemption for purposes of calculating the Redemption Price.
Subject to the foregoing and applicable law (including, without limitation,
U.S. federal securities laws) USX or its subsidiaries may at any time and from
time to time purchase outstanding Preferred Shares of any series by tender, in
the open market or by private agreement.
LIQUIDATION DISTRIBUTION
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company, the holders of Preferred Shares of each series at the
time outstanding will be entitled to receive out of the assets of the Company
legally available for distribution to shareholders, before any distribution of
assets is made to holders of Common Shares of the Company or any other class of
shares of the Company ranking junior to the Preferred Shares of such series as
regards participation in assets of the Company, but together with the holders of
outstanding Preferred Shares of every other series and the holders of every
other series of preferred or preference stock
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of the Company outstanding, if any, ranking pari passu with the Preferred Shares
of such series as regards participation in the assets of the Company ("Company
Liquidation Parity Shares"), an amount equal, in the case of the holders of the
Preferred Shares of such series, to the aggregate of the stated liquidation
preference for Preferred Shares of such series as set forth in the Prospectus
Supplement and all accumulated and unpaid dividends (whether or not declared) to
the date of payment (the "Liquidation Distribution"). If, upon any such
liquidation, the Liquidation Distributions can be paid only in part because the
Company has insufficient assets available to pay in full the aggregate
Liquidation Distributions and the aggregate maximum liquidation distributions on
the Company Liquidation Parity Shares, then the amounts payable directly by the
Company on the Preferred Shares of such series and on such Company Liquidation
Parity Shares shall be paid on a pro rata basis, so that
(i) (x) the aggregate amount paid as the Liquidation Distribution on
the Preferred Shares of such series bears to (y) the aggregate amount paid
as Liquidation Distributions on the Company Liquidation Parity Shares the
same ratio as
(ii) (x) the aggregate Liquidation Distribution bears to (y) the
aggregate maximum Liquidation Distributions on the Company Liquidation
Parity Shares.
Pursuant to the Articles, the Company will automatically dissolve and be
liquidated (i) when the period fixed for the duration of the Company expires,
(ii) if the Manager by resolution requires the Company to be wound up and
dissolved, (iii) upon the bankruptcy, resignation, withdrawal, expulsion,
termination, cessation or dissolution of the Manager, or (iv) upon the
bankruptcy, insolvency or liquidation of USX.
VOTING RIGHTS
If (i) the Company fails to pay dividends in full on the Preferred Shares
of any series for 18 consecutive monthly dividend periods; (ii) an Event of
Default (as defined in the Loan Agreement relating to the Loans) occurs and is
continuing on the Loans; or (iii) USX is in default on any of its payment or
other obligations under the Guarantee (as described under "Description of the
Guarantee--Certain Covenants of USX"), then the holders of a majority in
liquidation preference of the outstanding Preferred Shares of such series,
together with the holders of any other Preferred Shares of the Company having
the right to vote for the appointment of a trustee in such event, acting as a
single class, will be entitled to appoint and authorize a trustee to enforce the
Company's rights under the Loans, against USX and to enforce the obligations
undertaken by USX under the Guarantee (as defined below) and declare and pay
dividends on the Preferred Shares of all series. For purposes of determining
whether the Company has failed to pay dividends in full for 18 consecutive
monthly dividend periods, dividends shall be deemed to remain in arrears,
notwithstanding any payments in respect thereof, until full cumulative dividends
have been or contemporaneously are declared and paid with respect to all monthly
dividend periods terminating on or prior to the date of payment of such full
cumulative dividends. Not later than 30 days after such right to appoint a
trustee arises, the Manager will convene a general meeting for the above
purpose. If the Manager fails to convene such meeting within such 30-day period,
the holders of 10% in liquidation preference of the outstanding Preferred Shares
of such series and such other Preferred Shares will be entitled to convene such
meeting. The provisions of the Articles relating to the convening and conduct of
the general meetings of shareholders will apply with respect to any such
meeting. Any trustee so appointed shall vacate office immediately, subject to
the terms of such other Preferred Shares, if the Company (or USX pursuant to the
Guarantee) shall have paid in full all accumulated and unpaid dividends on the
Preferred Shares of all series or such default or breach by USX, as the case may
be, shall have been cured.
If any resolution is proposed for adoption by the shareholders of the
Company providing for, or the Manager otherwise proposes to effect, (x) any
variation or abrogation of the rights, preferences and privileges of the
Preferred Shares of any series, whether by way of amendment to the
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<PAGE> 20
Company's Articles, the Resolutions or otherwise (including, without limitation,
the authorization or issuance of any shares of the Company ranking, as to
participation in the profits or assets of the Company, senior to the Preferred
Shares), or (y) the liquidation, dissolution or winding up of the Company, then
the holders of outstanding Preferred Shares of all series (and, in the case of a
resolution described in clause (x) above which would adversely affect the
rights, preferences or privileges of any Company Dividend Parity Shares or any
Company Liquidation Parity Shares, such Company Dividend Parity Shares or such
Company Liquidation Parity Shares, as the case may be, or, in the case of any
resolution described in clause (y) above, all Company Liquidation Parity Shares)
will be entitled to vote on such resolution or action of the Manager (but not on
any other resolution or action), and such resolution or action shall not be
effective except with the approval of the holders of 66 2/3% in liquidation
preference of such outstanding shares; provided, however, that no such approval
shall be required under clauses (x) and (y) if the liquidation, dissolution or
winding up of the Company is proposed or initiated upon the initiation of
proceedings, or after proceedings have been initiated, for the liquidation,
dissolution or winding up of USX.
The rights attached to the Preferred Shares of any series will be deemed
not to be varied by the creation or issue of, and no vote will be required for
the creation of any further shares of the Company ranking junior to or pari
passu with the Preferred Shares of any series with regard to participation in
the profits or assets of the Company. Holders of Preferred Shares of any series
have no preemptive rights.
Any required approval of holders of Preferred Shares may be given at a
separate meeting of such holders convened for such purpose, at a general meeting
of shareholders of the Company or pursuant to written consent. The Company will
cause a notice of any meeting at which holders of the Preferred Shares of a
series are entitled to vote, or of any matter upon which action by written
consent of such holders is to be taken, to be mailed to each holder of record of
Preferred Shares of such series. Each such notice will include a statement
setting forth (i) the date of such meeting or the date by which such action is
to be taken, (ii) a description of any resolution proposed for adoption at such
meeting on which such holders are entitled to vote or of such matter upon which
written consent is sought and (iii) instructions for the delivery of proxies or
consents.
No vote or consent of the holders of the Preferred Shares of any series
will be required for the Company to redeem and cancel Preferred Shares of any
series in accordance with the Articles and the Resolutions.
Notwithstanding that holders of Preferred Shares of any series are entitled
to vote or consent under any of the circumstances described above, any of the
Preferred Shares of any series that are owned by USX or any entity owned more
than 50% by USX, either directly or indirectly, shall not be entitled to vote or
consent and shall, for the purposes of such vote or consent, be treated as if
they were not outstanding.
ADDITIONAL AMOUNTS
All payments in respect of the Preferred Shares of all series by the
Company will be made without withholding or deduction for or on account of any
present or future taxes, duties, assessments or governmental charges of whatever
nature imposed or levied upon or as a result of such payment by or on behalf of
the Turks and Caicos Islands or any authority therein or thereof having power to
tax, unless the withholding or deduction of such taxes, duties, assessments or
governmental charges is required by law. In that event, the Company will pay as
a dividend such additional amounts as may be necessary in order that the net
amounts received by the holders of the Preferred Shares after such withholding
or deduction will equal the amount which would have been receivable in respect
of such Preferred Shares in the absence of such withholding or deduction
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<PAGE> 21
("Additional Amounts"), except that no such Additional Amounts will be payable
to a holder of Preferred Shares (or a third party on his behalf) with respect to
Preferred Shares:
(a) if such holder is liable for such taxes, duties, assessments or
governmental charges in respect of such Preferred Shares by reason of such
holder's having some connection with the Turks and Caicos Islands other
than being a holder of such Preferred Shares; or
(b) if the Company has notified such holder of the obligation to
withhold taxes and requested but not received from such holder a
declaration of non-residence or other claim for exemption, and such
withholding or deduction would not have been required had such declaration
or claim been received.
BOOK-ENTRY-ONLY ISSUANCE; THE DEPOSITORY TRUST COMPANY
The Depository Trust Company ("DTC") will act as securities depository for
the Preferred Shares. The Preferred Shares will be issued only as
fully-registered securities registered in the name of Cede & Co. (DTC's
nominee). One or more fully-registered global Preferred Share certificates will
be issued for each series of Preferred Shares, in the aggregate liquidation
preference of such issue, and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities that its participants ("Participants") deposit
with DTC. DTC also facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct
Participants include securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations ("Direct Participants").
DTC is owned by a number of its Direct Participants and by the New York Stock
Exchange, Inc., the American Stock Exchange and the National Association of
Securities Dealers, Inc. Access to the DTC system is also available to others
such as securities brokers and dealers, banks, and trust companies that clear
through or maintain a custodial relationship with a Direct Participant, either
directly or indirectly ("Indirect Participants"). The Rules applicable to DTC
and its Participants are on file with the Securities and Exchange Commission.
Purchases of Preferred Shares under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Preferred
Shares on DTC's records. The ownership interest of each actual purchaser of each
Preferred Share ("Beneficial Owner") is in turn recorded on the Direct and
Indirect Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchase, but Beneficial Owners are expected to
receive written confirmations providing details of their transactions, as well
as periodic statements of their holdings, from the Direct or Indirect
Participants through which the Beneficial Owners purchased Preferred Shares.
Transfers of ownership interests in the Preferred Shares are to be accomplished
by entries made on the books of Participants acting on behalf of Beneficial
Owners. Beneficial Owners will not receive certificates representing their
ownership interests in Preferred Shares, except in the event that use of the
book-entry system for the Preferred Shares is discontinued.
To facilitate subsequent transfers, all Preferred Shares deposited by
Participants with DTC are registered in the name of Cede & Co. The deposit of
Preferred Shares with DTC and their registration in the name of Cede & Co.
effect no change in beneficial ownership. DTC has no knowledge of the actual
Beneficial Owners of the Preferred Shares; DTC's records reflect only the
identity of the Direct Participants to whose accounts such Preferred Shares are
credited, which may or may not be the Beneficial Owners. The Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
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<PAGE> 22
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of the
Preferred Shares of any series are being redeemed, DTC's practice is to
determine by lot the amount of the interest of each Direct Participant in such
series to be redeemed.
Although voting with respect to the Preferred Shares is limited, in those
cases where a vote is required, neither DTC nor Cede & Co. will consent or vote
with respect to Preferred Shares. Under its usual procedures, DTC mails an
Omnibus Proxy to the Company as soon as possible after the record date. The
Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Preferred Shares are credited on the record
date (identified in a listing attached to the Omnibus Proxy).
Dividend payments on the Preferred Shares will be made to DTC. DTC's
practice is to credit Direct Participants' accounts on the relevant payable date
in accordance with their respective holdings shown on DTC's records unless DTC
has reason to believe that it will not receive payments on such payable date.
Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices and will be the responsibility of such
Participant and not of DTC, the Company or USX, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of
dividends to DTC is the responsibility of the Company, disbursement of such
payments to Direct Participants shall be the responsibility of DTC, and
disbursement of such payments to the Beneficial Owners shall be the
responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with
respect to the Preferred Shares of any series at any time by giving reasonable
notice to the Company. Under such circumstances, in the event that a successor
securities depository is not obtained, Preferred Share certificates for such
series are required to be printed and delivered. Additionally, in the event that
the Company were to redeem only a portion of the Preferred Shares of any series
because the Company or USX is or would be required to withhold or deduct
Additional Amounts in regard to such Preferred Shares to be redeemed, the
Company may cause the global certificate or certificates representing all of the
Preferred Shares of such series to be withdrawn from DTC (or its successor
securities depository) and may issue share certificates in definitive form
representing the Preferred Shares. Thereafter, the Preferred Shares subject to
such requirement to withhold or deduct Additional Amounts would be redeemed.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company believes to be reliable, but the
Company takes no responsibility for the accuracy thereof.
REGISTRAR, TRANSFER AGENT AND PAYING AGENT
Mellon Bank will act as registrar, transfer agent and paying agent for the
Preferred Shares.
Registration of transfers of Preferred Shares of any series will be
effected without charge by or on behalf of the Company, but upon payment (with
the giving of such indemnity as the Company or USX may require) in respect of
any tax or other governmental charges which may be imposed in relation to it.
The Company will not be required to register or cause to be registered the
transfer of Preferred Shares of a particular series after such Preferred Shares
have been called for redemption.
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<PAGE> 23
MISCELLANEOUS
The Company is not subject to any mandatory redemption or sinking fund
provisions with respect to the Preferred Shares of any series.
USX and the Company will enter into an agreement (the "Expense Agreement")
pursuant to which USX will agree to guarantee the payment of any liabilities
incurred by the Company (other than obligations to holders of Preferred Shares,
which will be separately guaranteed to the extent set forth in the Guarantee;
see "Description of the Guarantee"). The Expense Agreement will expressly
provide that it is for the benefit of, and is enforceable by, third parties to
whom the Company owes such obligations. A copy of the form of Expense Agreement
has been filed as an exhibit to the Registration Statement of which this
Prospectus forms a part.
USX and the Manager will enter into an agreement (the "Keep Well
Agreement") pursuant to which USX will agree to cause the Manager to at all
times have at least $1.00 more than its cash obligations. The Keep Well
Agreement will expressly provide that it is for the benefit of, and is
enforceable by, holders of Preferred Shares. A copy of the form of Keep Well
Agreement has been filed as an exhibit to the Registration Statement of which
this Prospectus forms a part.
DESCRIPTION OF THE GUARANTEE
Set forth below is condensed information concerning the guarantee (the
"Guarantee") which will be executed and delivered by USX for the benefit of the
holders from time to time of Preferred Shares. This summary contains all
material information concerning the Guarantee but does not purport to be
complete. References to provisions of the Guarantee are qualified in their
entirety by reference to the text of the Guarantee, a form of which has been
filed as an exhibit to the Registration Statement of which this Prospectus forms
a part.
GENERAL
The Guarantor will irrevocably and unconditionally agree, to the extent set
forth herein, to pay in full, to the holders of the Preferred Shares of any
series, the Guarantee Payments (as defined below) (except to the extent paid by
the Company), as and when due, regardless of any defense, right of set-off or
counterclaim which the Company may have or assert. The following payments to the
extent not paid by the Company (the "Guarantee Payments") will be subject to the
Guarantee (without duplication): (i) any accumulated and unpaid dividends which
have been theretofore declared on the Preferred Shares of such series out of
moneys legally available therefor, (ii) the redemption price (including all
accumulated and unpaid dividends) payable out of funds legally available
therefor with respect to Preferred Shares of such series called for redemption
by the Company, (iii) upon a liquidation of the Company, the lesser of (a) the
aggregate of the liquidation preference and all accumulated and unpaid dividends
(whether or not declared) to the date of payment and (b) the amount of assets of
the Company available for distribution to Preferred Shareholders of such series
in liquidation of the Company and (iv) any Additional Amounts payable by the
Company in respect of the Preferred Shares of such series. USX's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by USX to the holders of Preferred Shares of any series or by causing
the Company to pay such amounts to such holders.
CERTAIN COVENANTS OF USX
In the Guarantee, USX will covenant that, so long as any Preferred Shares
of any series remain outstanding, it shall not declare or pay any dividend on,
or redeem, purchase, acquire or make a liquidation payment with respect to, any
of USX's capital stock or make any guarantee payments with respect to the
foregoing (other than payments under the Guarantee), if at such time USX shall
be in default with respect to its payment or other obligations under the
Guarantee, the Expense
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<PAGE> 24
Agreement or the Keep Well Agreement or there shall have occurred any event
that, with the giving of notice or the lapse of time or both, would constitute
an Event of Default under the Loan Agreement.
In the Guarantee, USX will also covenant that, so long as Preferred Shares
of any series remain outstanding, it will (i) maintain direct or indirect 100%
ownership of the Common Shares and any other shares of the Company other than
the Preferred Shares of any series, (ii) cause at least 21% of the total value
of the Company and at least 21% of all interests in the capital, income, gain,
loss, deduction and credit of the Company to be represented by Common Shares,
(iii) not voluntarily dissolve, wind-up or liquidate the Company or the Manager,
(iv) cause USX Capital Management Company to remain the Manager of the Company
and timely perform all of its duties as Manager of the Company (including the
duty to declare and pay dividends on the Preferred Shares as described under
"Description of Preferred Shares--Dividends"), (v) use reasonable efforts to
cause the Company to remain a limited life company and otherwise continue to be
treated as a partnership for United States federal income tax purposes, and (vi)
to at all times own directly or indirectly all of the capital stock of the
Manager.
ADDITIONAL AMOUNTS
All Guarantee Payments will be made without withholding or deduction for or
on account of any present or future taxes, duties, assessments or governmental
charges of whatever nature imposed or levied upon or as a result of such payment
by or on behalf of the United States, any State thereof or any other
jurisdiction through which or from which such payment is made, or any authority
therein or thereof having power to tax, unless the withholding or deduction of
such taxes, duties, assessments or governmental charges is required by law. In
that event, USX will pay such additional amounts as may be necessary in order
that the net amounts received by the holders of the Preferred Shares after such
withholding or deduction will equal the amount which would have been receivable
in respect of the Preferred Shares in the absence of such withholding or
deduction (the "Additional Amounts"), except that no such Additional Amounts
will be payable to a holder of the Preferred Shares (or a third party on his
behalf) with respect to any of the Preferred Shares:
(a) if such holder is liable for such taxes, duties, assessments or
governmental charges in respect of the Preferred Shares by reason of such
holder's having some connection with the United States, any State thereof
or any other jurisdiction through which or from which such payment is made,
other than being a holder of the Preferred Shares, or
(b) if the Company or USX has notified such holder of the obligation
to withhold taxes and requested but not received from such holder a
declaration of non-residence or other similar claim for exemption, and such
withholding or deduction would not have been required had such declaration
or similar claim been received.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not adversely affect the rights
of holders (in which case no vote will be required), the Guarantee may be
amended only with the prior approval of the holders of not less than 66 2/3% in
liquidation preference of all Preferred Shares of all series then outstanding.
The manner of obtaining any such approval of holders of the Preferred Shares
will be as set forth under "Description of Preferred Shares--Voting Rights." All
guarantees and agreements contained in the Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the holders of the Preferred Shares.
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<PAGE> 25
TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price of such Preferred Shares of all series or
upon full payment of the amounts payable upon liquidation of the Company. The
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any holder of Preferred Shares of any series must restore
payment of any sums paid under the Preferred Shares of such series or the
Guarantee.
STATUS OF THE GUARANTEE
The Guarantee will constitute an unsecured obligation of the Guarantor and
will rank (i) subordinate and junior in right of payment to all other
liabilities of the Guarantor and (ii) senior to the most senior preferred or
preference stock of any series now or hereafter issued by the Guarantor and
senior to any guarantee now or hereafter entered into by the Guarantor in
respect of any preferred or preference stock of any affiliate of the Guarantor.
The Guarantee will constitute a guarantee of payment and not of collection.
A holder of Preferred Shares may enforce the Guarantee directly against the
Guarantor, and the Guarantor will waive any right or remedy to require that any
action be brought against the Company or any other person or entity before
proceeding against the Guarantor. The Guarantee will not be discharged except by
payment of the Guarantee Payments in full to the extent not paid by the Company
and by complete performance of all obligations under the Guarantee.
GOVERNING LAW
The Guarantee will be governed and construed in accordance with the laws of
the State of New York.
DESCRIPTION OF THE LOANS
Set forth below is condensed information concerning the loans (the "Loans")
which will be made by the Company to USX of the proceeds of the issuance of (i)
the Preferred Shares of each series and (ii) the Company's Common Shares and
related capital contributions ("Common Share Payments"). This summary contains
all material information concerning the loan agreement (the "Loan Agreement")
but does not purport to be complete. References to provisions of the Loan
Agreement are qualified in their entirety by reference to the text of the Loan
Agreement, a form of which has been filed as an exhibit to the Registration
Statement of which this Prospectus forms a part. USX's obligation under the Loan
Agreement will also be for the benefit of the holders from time to time of the
Preferred Shares, and such holders will be entitled to enforce the Loan
Agreement directly against USX. All Loans will be made pursuant to a single Loan
Agreement.
GENERAL
The aggregate dollar amount of the Loans will be set forth in the
Prospectus Supplement and will be equal to the aggregate liquidation preference
of the Preferred Shares of each series, together with the related Common Share
Payments.
The entire principal amount of all Loans will become due and payable,
together with any accrued and unpaid interest thereon, including Additional
Interest (as herein defined), if any, on the earliest of (i) the date that is
the 50th anniversary of the issuance of the Preferred Shares of the first series
issued or (ii) the date upon which the Company, USX or the Manager is dissolved,
wound up or liquidated.
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MANDATORY PREPAYMENT
If the Company redeems Preferred Shares of any series in accordance with
the terms thereof, the Loans pertaining to such shares will become due and
payable in a principal amount equal to the aggregate stated liquidation
preference of the Preferred Shares of such series so redeemed. Any payment
pursuant to this provision shall be made prior to 12:00 noon, New York time, on
the Redemption Date or at such other time on such earlier date as the Company
and USX shall agree.
OPTIONAL PREPAYMENT
USX shall have the right to prepay the Loans relating to Preferred Shares
of a series, without premium or penalty,
(i) in whole or in part (together with any accrued but unpaid
interest, including Additional Interest, if any, on the portion being
prepaid) at any time following the date, if any, set forth in the
Prospectus Supplement for such series; and
(ii) in whole (together with all accrued and unpaid interest,
including Additional Interest, if any, thereon) at any time if USX is or
would be required to pay Additional Interest on the entire amount of such
Loans or in part (together with all accrued and unpaid interest, including
Additional Interest on the portion being prepaid) at any time if USX is or
would be required to pay Additional Interest with respect to only a portion
of such Loans, provided that if a partial prepayment would, through the
corresponding partial redemption required under the terms of the Preferred
Shares of such series, result in a delisting of the Preferred Shares of
such series, USX may, and may only, prepay such Loans in whole. In no
event, however, shall USX have the right to prepay such Loans, or a portion
thereof, under this clause (ii) based on (a) a technical obligation to pay
Additional Interest because of a withholding obligation to the extent USX
would not incur any significant penalties, interest or tax under the
Internal Revenue Code or other applicable law if USX did not withhold, or
(b) a de minimis obligation to pay Additional Interest. For purposes of the
foregoing, in the event that USX is advised by independent legal counsel
that more than an insubstantial risk exists that USX will incur penalties,
interest or tax under the Internal Revenue Code or other applicable law if
it does not withhold, USX shall have the right to repay such Loans, or a
portion thereof, under this clause (ii) unless the obligation to pay
Additional Interest if USX does so withhold is a de minimis obligation.
INTEREST
The Loans relating to the Preferred Shares of a series shall bear interest
at the annual rate set forth in the Prospectus Supplement for such series,
accruing from the date they are made until maturity. Such interest shall be
payable on the last day of each calendar month of each year, commencing on the
dates set forth in the Prospectus Supplement relating to such series. In the
event that any date on which interest is payable on such Loans is not a Business
Day, then payment of the interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date; provided that USX shall have the right at any time or times during
the term of such Loans, so long as USX is not in default in the payment of
interest on any Loans, to extend the interest payment period to up to 18 months,
at the end of which period USX shall pay all interest which has accrued and not
been paid (together with interest thereon at the rate specified for the Loans to
the extent permitted by applicable law); provided further that, during any such
extended interest period neither USX, nor any majority-owned subsidiary of USX,
shall declare or pay any dividend on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock or make any
guarantee payments with respect to the foregoing (other than (i) payments under
the Guarantee or (ii) dividends or guarantee payments to USX); and provided
further that any such
16
<PAGE> 27
extended interest period may only be selected with respect to a Loan if an
extended interest period of identical length is simultaneously selected for all
Loans. Prior to the termination of any such extended interest payment period USX
may further extend the interest payment period, provided that such extended
interest payment period, together with all such further extensions thereof, may
not exceed 18 months. USX shall give the Company notice of its selection of such
extended interest payment period one Business Day prior to the earlier of (i)
the date the Company declares the related dividend or (ii) the date the Company
is required to give notice of the record or payment date of such related
dividend to the New York Stock Exchange or other applicable self-regulatory
organization or to holders of the Preferred Shares, but in any event not less
than two Business Days prior to such record date. USX shall cause the Company to
give such notice of USX's selection of such extended interest payment period to
the holders of the Preferred Shares.
ADDITIONAL INTEREST
In addition, if at any time following the date of the Loan Agreement (a)
the Company shall be required to pay any Additional Amounts in respect of the
Preferred Shares of any series, pursuant to the terms thereof, (b) USX shall be
required to withhold or deduct any amounts, for or on account of any taxes,
duties or governmental charges of whatever nature imposed by the United States
of America (or any political subdivision thereof or therein), from the interest
payments to be made by USX on the Loans relating to such series or (c) the
Company shall be required to pay, with respect to its income derived from the
interest payments on such Loans, any amounts, for or on account of any taxes,
duties or governmental charges of whatever nature imposed by the Turks and
Caicos Islands (or any political subdivision thereof or therein), or any other
taxing authority, then, in any such case, USX will pay as interest such
additional amounts ("Additional Interest") as may be necessary in order that the
net amounts received and retained by the Company after paying such Additional
Amounts, or after such withholding or deduction or the payment of such taxes,
duties, assessments or governmental charges, as the case may be, shall result in
the Company's having such funds as it would have had in the absence of the
obligation to pay such Additional Amounts, or such withholding or deduction or
the payment of such taxes, duties, assessments or governmental charges, as the
case may be. The obligation to pay Additional Interest under (b) above shall be
reduced proportionately to the extent that (x) USX or the Company has notified
holders of Preferred Shares of such series of the obligation to withhold taxes
and requested but not received from such holders declarations of nonresidence or
other similar claim for exemption and (y) such withholding or deduction would
not have been required had such declaration or similar claim been received.
METHOD AND DATE OF PAYMENT
Each payment by USX of principal and interest (including Additional
Interest, if any) on the Loans shall be made to the Company in lawful money of
the United States, at such place and to such account as may be designated by the
Company.
SET-OFF
Notwithstanding anything to the contrary in the Loan Agreement, USX shall
have the right to set-off any payment it is otherwise required to make
thereunder with and to the extent USX has theretofore made, or is concurrently
on the date of such payment making, a payment under the Guarantee.
SUBORDINATION
The Loan Agreement will provide that USX and the Company covenant and agree
(and each holder of Preferred Shares by acceptance thereof agrees) that each of
the Loans is subordinate and junior in right of payment to all Senior
Indebtedness as provided in the Loan Agreement. The term "Senior Indebtedness"
shall mean the principal, premium, if any, and interest on (i) all indebted-
17
<PAGE> 28
ness of USX, whether outstanding on the date of the Loan Agreement or thereafter
created, incurred or assumed, which is for money borrowed, or evidenced by a
note or similar instrument given in connection with the acquisition of any
business, properties or assets, including securities, (ii) any indebtedness of
others of the kinds described in the preceding clause (i) for the payment of
which USX is responsible or liable (directly or indirectly, contingently or
otherwise) as guarantor or otherwise and (iii) amendments, renewals, extensions
and refundings of any such indebtedness, unless in any instrument or instruments
evidencing or securing such indebtedness or pursuant to which the same is
outstanding, or in any such amendment, renewal, extension or refunding, it is
expressly provided that such indebtedness is not superior in right of payment to
the Loans. The Senior Indebtedness shall continue to be Senior Indebtedness and
entitled to the benefits of the subordination provisions irrespective of any
amendment, modification or waiver of any term of the Senior Indebtedness or
extension or renewal of the Senior Indebtedness.
In the event that (i) USX shall default in the payment of any principal, or
premium, if any, or interest on any Senior Indebtedness when the same becomes
due and payable, whether at maturity or at a date fixed for prepayment or
declaration or otherwise or (ii) an event of default occurs with respect to any
Senior Indebtedness permitting the holders thereof to accelerate the maturity
thereof and written notice describing such event of default and requesting
commencement of payment blockage on transactions as hereinafter described is
given to USX by the holders of Senior Indebtedness, then unless and until such
default in payment and event of default shall have been cured or waived or shall
have ceased to exist, no direct or indirect payment (in cash, property,
securities, by set-off or otherwise) shall be made or agreed to be made on
account of the Loans or interest thereon or in respect of any repayment,
redemption, retirement, purchase or other acquisition of the Loans.
In the event of (i) any insolvency, bankruptcy, receivership, liquidation,
reorganization, read-justment, composition or other similar proceeding relating
to USX, its creditors or its property, (ii) any proceeding for the liquidation,
dissolution or other winding up of USX, voluntary or involuntary, whether or not
involving insolvency or bankruptcy proceedings, (iii) any assignment by USX for
the benefit of its creditors, or (iv) any other marshalling of the assets of
USX, all Senior Indebtedness shall first be paid in full before any payment or
distribution, whether in cash, securities or other property, shall be made by
USX on account of the Loans. Any payment or distribution, whether in cash,
securities or other property (other than securities of USX or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinate, at least to the extent provided in the
subordination provisions of the Loan Agreement with respect to the indebtedness
evidenced by the Loans, to the payment of all Senior Indebtedness at the time
outstanding and to any securities issued in respect thereof under any such plan
of reorganization or readjustment), which would otherwise (but for the
subordination provisions) be payable or deliverable in respect of the Loans
shall be paid or delivered directly to the holders of Senior Indebtedness in
accordance with the priorities then existing among such holders until all Senior
Indebtedness shall have been paid in full. No present or future holder of any
Senior Indebtedness shall be prejudiced in the right to enforce subordination of
the indebtedness constituting the Loans by any act or failure to act on the part
of USX.
Senior Indebtedness shall not be deemed to have been paid in full unless
the holders thereof shall have received cash, securities or other property equal
to the amount of such Senior Indebtedness then outstanding. Upon the payment in
full of all Senior Indebtedness, the Company shall be subrogated to all the
rights of any holders of Senior Indebtedness to receive any further payments or
distributions applicable to the Senior Indebtedness until the Loans shall have
been paid in full, and such payments or distributions received by the Company,
by reason of such subrogation, of cash, securities or other property which
otherwise would be paid or distributed to the holders of Senior Indebtedness,
shall, as between USX and its creditors other than the holders of Senior
Indebtedness, on the one hand, and the Company, on the other, be deemed to be a
payment by USX on account of Senior Indebtedness, and not on an account of the
Loans.
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<PAGE> 29
CERTAIN COVENANTS OF USX
USX will covenant that it will not declare or pay any dividend on, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
its capital stock, or make any guarantee payments with respect to the foregoing
(other than payments under the Guarantee) if at such time (i) there shall have
occurred any event that, with the giving of notice or the lapse of time or both,
would constitute an Event of Default under the Loan Agreement or (ii) USX shall
be in default with respect to its payment or other obligations under the
Guarantee, the Expense Agreement or the Keep Well Agreement. USX will also
covenant (i) to maintain direct or indirect 100% ownership of the Common Shares
and any other shares of the Company other than any series of the Preferred
Shares, (ii) to cause at least 21% of the total value of the Company and at
least 21% of all interests in the capital, income, gain, loss, deduction and
credit of the Company to be represented by Common Shares, (iii) not to
voluntarily dissolve, wind-up, or liquidate the Company or the Manager, (iv) to
cause USX Capital Management Company to remain the Manager of the Company and to
timely perform all of its duties as Manager of the Company (including the duty
to declare and pay dividends on the Preferred Shares as described under
"Description of Preferred Shares--Dividends"), (v) to use its reasonable efforts
to cause the Company to remain a limited life company and otherwise continue to
be treated as a partnership for United States federal income tax purposes, and
(vi) to at all times own directly or indirectly all of the capital stock of the
Manager.
The Company may not waive compliance or waive any default in compliance by
USX of any covenant or other term in the Loan Agreement without the approval of
the same percentage of Preferred Shareholders, obtained in the same manner, as
would be required for an amendment of the Loan Agreement to the same effect.
EVENTS OF DEFAULT
If one or more of the following events (each an "Event of Default") shall
occur and be continuing:
(a) default in the payment of any interest under the Loan Agreement,
including any Additional Interest, when due for 10 days (whether by virtue
of the provisions described above under "Subordination" or otherwise);
provided that a valid extension of the interest payment period by USX shall
not constitute a default in the payment of interest for this purpose; or
(b) default in the payment of any principal under the Loan Agreement
when due (whether by virtue of the provisions described above under
"Subordination" or otherwise); or
(c) the dissolution, winding up or liquidation of the Company; or
(d) the bankruptcy, insolvency or liquidation of USX; or
(e) the bankruptcy, insolvency or liquidation of the Manager; or
(f) breach of any covenants contained in the Loan Agreement continued
for 30 days after notice to USX from any Preferred Shareholder;
then provided that the holders of a majority in liquidation preference of the
outstanding Preferred Shares of such series are entitled to appoint a trustee
(as described under "Description of Preferred Shares--Voting Rights"), the
Company will have the right to declare the principal of and the interest on the
Loans (including any Additional Interest and any interest subject to an
extension election) and any other amounts payable under the Loan Agreement to be
forthwith due and payable and to enforce its other rights as a creditor with
respect to the Loans. No Loans may be so accelerated by the Company unless all
Loans are so accelerated. Under the terms of the Preferred Shares, the holders
of outstanding Preferred Shares will have the rights referred to under
"Description of Preferred Shares--Voting Rights", including the right to appoint
a trustee, which trustee shall be authorized to exercise the Company's right to
accelerate the principal amount of the Loans and to enforce the Company's other
creditor rights under the Loans.
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<PAGE> 30
MISCELLANEOUS
USX will have the right at all times to assign any of its rights or
obligations under the Loan Agreement to a direct or indirect wholly owned
subsidiary of USX; provided that, in the event of any such assignment, USX will
remain jointly and severally liable for all such obligations. The Company may
not assign any of its rights under the Loan Agreement without the prior written
consent of USX. Subject to the foregoing, the Loan Agreement will be binding
upon and inure to the benefit of USX and the Company and their respective
successors and assigns. The Loan Agreement provides that it may not otherwise be
assigned by USX or the Company.
The Loan Agreement will provide that USX may merge with or into another
entity, may permit another entity to merge with or into USX and may sell,
transfer or lease all or substantially all of its assets to another entity only
if (i) at such time no Event of Default has occurred and is continuing, or would
occur as a result of such merger, sale, transfer or lease, and (ii) USX is the
survivor of such merger or the survivor of such merger or entity to which USX's
assets are sold, transferred or leased is an entity organized under the laws of
the United States or any state thereof and assumes all of USX's obligations
under the Loan Agreement.
Except as to matters relating to the authorization, execution and delivery
of the Loan Agreement by the Company, which will be governed by the laws of the
Turks and Caicos Islands, the Loan Agreement will be governed by and construed
in accordance with the laws of the State of New York.
The Loan Agreement may be amended by mutual consent of the parties in the
manner the parties shall agree; provided that, so long as any of the Preferred
Shares remain outstanding, no such amendment shall be made, and no termination
of the Loan Agreement shall occur, without the prior approval of the holders of
at least 66 2/3% of the outstanding Preferred Shares unless and until the Loans
and all accrued and unpaid interest thereon (including Additional Interest, if
any) shall have been paid in full.
TAXATION
The following discussion is a summary of certain Turks and Caicos Islands
and United States federal income tax consequences of the purchase, ownership and
disposition of Preferred Shares and is based upon the advice of Misick and
Stanbrook with respect to Turks and Caicos Islands taxes, and Miller &
Chevalier, Chartered, United States tax counsel to USX, with respect to United
States federal income taxes. It deals only with Preferred Shares held as capital
assets by initial purchasers, and not with special classes of holders, such as
dealers in securities or currencies, life insurance companies, persons holding
Preferred Shares as a hedge or hedged against currency risks or as part of a
straddle, or persons whose functional currency is not the U.S. dollar. The
summary deals only with holders who purchase Preferred Shares of a series, and
is subject to additional discussion of material Turks and Caicos Islands and
United States federal income tax consequences that may appear in a Prospectus
Supplement delivered in connection with a particular series of Preferred Shares.
This summary is based on tax laws in effect in the United States and the Turks
and Caicos Islands, and administrative and judicial interpretations thereof, as
of the date hereof, all of which are subject to change (possibly on a
retroactive basis).
PROSPECTIVE PURCHASERS OF PREFERRED SHARES ARE ADVISED TO CONSULT THEIR OWN
TAX ADVISORS AS TO THE TURKS AND CAICOS ISLANDS, UNITED STATES OR OTHER TAX
CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF PREFERRED SHARES,
INCLUDING THE EFFECT OF ANY STATE, LOCAL AND FOREIGN TAX LAWS.
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<PAGE> 31
UNITED STATES
INCOME FROM PREFERRED SHARES
In the opinion of Miller & Chevalier, Chartered, the Company will be
treated as a partnership for federal income tax purposes. Each holder of
Preferred Shares (a "Shareholder") will be required to include in gross income
his distributive share of the Company's net income. Such income will not exceed
dividends received on a Preferred Share, except in limited circumstances as
described below under "Potential Extension of Interest Payment Period". No
portion of such income will be eligible for the dividends received deduction.
DISPOSITION OF PREFERRED SHARES
Gain or loss will be recognized on a sale of Preferred Shares equal to the
difference between the amount realized and the Shareholder's tax basis for the
Preferred Shares sold. Gain or loss recognized by a Shareholder on the sale or
exchange of a Preferred Share held for more than one year will be taxable as
long-term capital gain or loss.
COMPANY INFORMATION RETURNS
USX Capital Management Company, as Manager of the Company, will furnish
each Shareholder with a Schedule K-1 setting forth each Shareholder's allocable
share of income within 90 days after the close of the Company's taxable year.
Any person who holds Preferred Shares as a nominee for another person is
required to furnish to the Company (a) the name, address and taxpayer
identification number of the beneficial owners and the nominee; (b) whether the
beneficial owner is (i) a person that is not a United States person, (ii) a
foreign government, an international organization or any wholly owned agency or
instrumentality of either of the foregoing, or (iii) a tax-exempt entity; (c)
the amount and description of Preferred Shares held, acquired or transferred for
the beneficial owners; and (d) certain information including the dates of
acquisitions and transfers, means of acquisitions and transfers, and acquisition
cost for purchases, as well as the amount of net proceeds from sales. Brokers
and financial institutions are required to furnish additional information,
including whether they are a United States person, and certain information on
Preferred Shares they acquire, hold or transfer for their own account. A penalty
of $50 per occurrence (up to a maximum of $100,000 per calendar year) is imposed
under the Internal Revenue Code for failure to report such information to the
Company. The nominee is required to supply the beneficial owner of the Preferred
Shares with the information furnished to the Company.
POTENTIAL EXTENSION OF INTEREST PAYMENT PERIOD
Under the terms of any Loan which may be made from the proceeds of issuance
of Preferred Shares, USX may be permitted to extend the interest payment period
on all Loans up to 18 months. In the event that USX exercises this right, USX
may not, among other things, declare dividends on any share of its capital
stock, and therefore, the extension of a payment period is, in the view of the
Company, remote. In the event that the payment period is extended, the Company
will continue to accrue income, equal to the amount of the interest payment due
at the end of the extended payment period, over the length of the extended
payment period.
Accrued income will be allocated, but not distributed, to holders of record
on the last day of each calendar month. As a result, holders of record during an
extended interest payment period will include interest in gross income in
advance of the receipt of cash, and any such holders who dispose of Preferred
Shares prior to the record date for the payment of dividends following such
extended interest payment period will include interest in gross income but will
not receive any cash related thereto. The tax basis of a Preferred Share will be
increased by the amount of any interest
21
<PAGE> 32
that is included in income without a receipt of cash, and will be decreased
again when and if such cash is subsequently received from the Company.
UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
holder who or which is (i) a nonresident alien individual or (ii) a foreign
corporation, partnership or estate or trust, in either case not subject to
United States federal income tax on a net income basis in respect of a Preferred
Share.
Under present United States federal income tax law:
(i) payments by the Company or any of its paying agents to any holder
of a Preferred Share who or which is a United States Alien Holder will not
be subject to United States federal withholding tax; provided that (a) the
beneficial owner of the Preferred Share does not actually or constructively
own 10% or more of the total combined voting power of all classes of stock
of USX entitled to vote, (b) the beneficial owner of the Preferred Share is
not a controlled foreign corporation that is related to USX through stock
ownership, and (c) either (A) the beneficial owner of the Preferred Share
certifies to the Company or its agent, under penalties of perjury, that it
is not a United States Holder and provides its name and address or (B) a
securities clearing organization, bank or other financial institution that
holds customers' securities in the ordinary course of its trade or business
(a "financial institution") and holds the Preferred Share certifies to the
Company or its agent under penalties of perjury that such statement has
been received from the beneficial owner by it or by a financial institution
between it and the beneficial owner and furnishes the payor with a copy
thereof; and
(ii) A United States Alien Holder of a Preferred Share will not be
subject to United States federal withholding tax on any gain realized on
the sale or exchange of a Preferred Share.
BACKUP WITHHOLDING AND INFORMATION REPORTING
In general, information reporting requirements will apply to payments of
the proceeds of the sale of Preferred Shares within the United States to
noncorporate U.S. holders, and "backup withholding" at a rate of 31% will apply
to such payments if the United States holder fails to provide an accurate
taxpayer identification number.
Payments of the proceeds from the sale by a United States Alien Holder of
Preferred Shares made to or through a foreign office of a broker will not be
subject to information reporting or backup withholding, except that, if the
broker is a United States person, a controlled foreign corporation for United
States tax purposes or a foreign person 50% or more of whose gross income is
effectively connected with a United States trade or business for a specified
three-year period, information reporting may apply to such payments. Payments of
the proceeds from the sale of Preferred Shares to or through the United States
office of a broker is subject to information reporting and backup withholding
unless the holder or beneficial owner certifies as to its non-United States
status or otherwise establishes an exemption from information reporting and
backup withholding.
TURKS AND CAICOS ISLANDS
The following discussion represents the opinion of Misick and Stanbrook
insofar as it relates to matters of law and legal conclusions.
Payment of dividends on the Preferred Shares will not be subject to any
withholding under the tax laws of the Turks and Caicos Islands.
There are no taxes in the Turks and Caicos Islands on income, profits,
capital gains or turnover, nor are there any inheritance, estate, or gift taxes
or duties in the Turks and Caicos Islands. The Company is exempted from the
payment of stamp duty on the issuance of any shares, debentures
22
<PAGE> 33
or other obligations of the Company. No stamp duty is payable on the transfer or
redemption of shares in the Company. The Company has been issued a certificate
by the Governor of the Turks and Caicos Islands stating that the Company is
exempt, for a period of twenty years from the date of its organization, December
20, 1993, from the payment of any taxes or duties which may be imposed in the
future on profits, income, capital gains, assets or appreciations and any such
tax or duty or tax in the nature of estate duty or inheritance tax payable on
the shares, debentures or other obligations of the Company.
PLAN OF DISTRIBUTION
The Company may sell Preferred Shares (i) through underwriters, including
Goldman, Sachs & Co., (ii) through dealers, (iii) through agents or (iv)
directly to purchasers. The Prospectus Supplement relating to the Preferred
Shares of a particular series will set forth the terms of such offering,
including the names of any underwriters, dealers or agents involved in the sale
of such Preferred Shares, the number of Preferred Shares of such series to be
purchased by any underwriters and any applicable commissions or discounts. The
net estimated proceeds to the Company from such series of Preferred Shares will
also be set forth in the Prospectus Supplement.
If underwriters are used in the sale, the Preferred Shares being sold will
be acquired by the underwriters for their own account and may be resold from
time to time in one or more transactions, including negotiated transactions, at
a fixed public offering price or at varying prices determined at the time of
sale. Unless otherwise set forth in the Prospectus Supplement relating to the
Preferred Shares of a particular series, the obligations of the underwriters to
purchase such Preferred Shares will be subject to certain conditions precedent
and the underwriters will be obliged to purchase all of such Preferred Shares if
any of such Preferred Shares are purchased. Any initial public offering price
and any discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
If dealers are used in the sale, unless otherwise indicated in the
Prospectus Supplement relating to the Preferred Shares of a particular series,
the Company will sell such Preferred Shares to such dealers as principals. Such
dealers may then resell such Preferred Shares to the public at varying prices to
be determined by them at the time of resale.
Preferred Shares of a particular series may also be sold through agents
designated by the Company from time to time or directly by the Company. Any
agent involved in the offering and sale of any such Preferred Shares will be
named, and any commissions payable by the Company to such agent will be set
forth, in the Prospectus Supplement relating to the Preferred Shares of such
series. Unless otherwise indicated in such Prospectus Supplement, any such Agent
will act on a best efforts basis for the period of its appointment.
Underwriters, dealers and agents may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which the underwriters, dealers or agents may be
required to make in respect thereof. Underwriters, dealers and agents may be
customers of, engage in transactions with, or perform services for, the Company
in the ordinary course of business.
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<PAGE> 34
VALIDITY OF SECURITIES
The validity of the Preferred Shares of each series will be passed upon by
Misick and Stanbrook, Turks and Caicos Islands counsel to the Company. The
validity of the Backup Undertakings relating to the Preferred Shares of such
series, consisting of the Guarantee, the Loan Agreement, the Expense Agreement
and the Keep Well Agreement, will be passed upon on behalf of the Company and
USX by Dan D. Sandman, Esq., General Counsel and Secretary of USX. The validity
of such Backup Undertakings of USX relating to such Preferred Shares will be
passed upon on behalf of the Underwriters by Sullivan & Cromwell, United States
counsel to the Underwriters. Mr. Sandman, in his capacity as General Counsel and
Secretary of USX, is paid a salary by USX and participates in various employee
benefit plans offered to officers of USX generally. As to all matters of Turks
and Caicos Islands law, Mr. Sandman will rely upon the opinion of Misick and
Stanbrook, and as to all matters of New York law, he will rely upon the opinion
of Sullivan & Cromwell.
EXPERTS
The consolidated financial statements of USX, the financial statements of
the Marathon Group, the financial statements of the U.S. Steel Group and the
financial statements of the Delhi Group as of December 31, 1993 and 1992 and for
each of the three years in the period ended December 31, 1993, incorporated in
this Prospectus by reference to USX's Form 8-K dated February 14, 1994, have
been so incorporated in reliance on the reports (the report pertaining to the
U.S. Steel Group financial statements contains an explanatory paragraph
referring to the U.S. Steel Group's involvement in certain contingencies) of
Price Waterhouse, independent accountants, given on the authority of said firm
as experts in auditing and accounting.
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<PAGE> 35
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- ------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO BUY ANY SECURITIES OTHER THAN THE
SECURITIES DESCRIBED IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS OR AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY
CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE
HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
USX Corporation...................... S-2
USX Capital LLC...................... S-3
Certain Investment Considerations.... S-4
Use of Proceeds...................... S-5
Capitalization....................... S-5
USX Corporation Selected Consoli-
dated Financial Information........ S-6
Certain Terms of the Series A
Preferred Shares................... S-7
Certain Terms of the Loans........... S-8
Underwriting......................... S-8
Validity of Securities............... S-9
PROSPECTUS
Available Information................ 2
Incorporation of Certain Documents by
Reference.......................... 3
USX Corporation...................... 3
USX Corporation Ratio of Earnings to
Combined Fixed Charges and
Preferred Stock Dividends.......... 4
USX Capital LLC...................... 4
Use of Proceeds...................... 5
Description of Preferred Shares...... 5
Description of the Guarantee......... 13
Description of the Loans............. 15
Taxation............................. 20
Plan of Distribution................. 23
Validity of Securities............... 24
Experts.............................. 24
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
[ ] SHARES
USX CAPITAL LLC
GUARANTEED TO THE EXTENT SET FORTH
HEREIN BY
USX CORPORATION
% CUMULATIVE
MONTHLY INCOME PREFERRED SHARES,
SERIES A
------------------
PROSPECTUS SUPPLEMENT
------------------
GOLDMAN, SACHS & CO.
February , 1994
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 36
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the
Securities being registered, other than underwriting compensation, are:
<TABLE>
<S> <C>
Registration Fee for Registration Statement...................... $ 86,208
Accounting Fees and Expenses..................................... 50,000
Blue Sky Fees and Expenses....................................... *
Legal Fees and Expenses.......................................... *
Printing and Engraving Fees...................................... *
Rating Agency Fees............................................... 112,500
Stock Exchange Listing Fees...................................... *
Miscellaneous.................................................... *
--------
Total.................................................. $ *
--------
--------
</TABLE>
- ---------
* To be filed by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article V of USX's By-Laws provides that USX shall indemnify to the fullest
extent permitted by law any person who is made or is threatened to be made a
party or is involved in any action, suit, or proceeding whether civil, criminal,
administrative or investigative by reason of the fact that he is or was a
director, officer, employee or agent of USX or was serving at the request of USX
as an officer, director, employee or agent of another corporation, partnership,
joint venture, enterprise, or nonprofit entity.
USX is empowered by Section 145 of the Delaware General Corporation Law,
subject to the procedures and limitations stated therein, to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of USX) by reason of the fact that such person is or was an officer,
employee, agent or director of USX, or is or was serving at the request of USX
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of USX, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. USX
may indemnify any such person against expenses (including attorneys' fees) in an
action by or in the right of USX under the same conditions, except that no
indemnification is permitted without judicial approval if such person is
adjudged to be liable to USX. To the extent such person is successful on the
merits or otherwise in the defense of any action referred to above, USX must
indemnify him against the expenses which he actually and reasonably incurred in
connection therewith.
Policies of insurance are maintained by USX under which directors and
officers of USX are insured, within the limits and subject to the limitations of
the policies, against certain expenses in connection with the defense of
actions, suits or proceedings, and certain liabilities which might be imposed as
a result of such actions, suits or proceedings, to which they are parties by
reason of being or having been such directors or officers.
USX's Certificate of Incorporation provides that no director shall be
personally liable to USX or its stockholders for monetary damages for any breach
of fiduciary duty by such director as a director, except (i) for breach of the
director's duty of loyalty to USX or its stockholders, (ii) for
II-1
<PAGE> 37
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) pursuant to Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived an
improper personal benefit.
ITEM 16. LIST OF EXHIBITS.
See Index to Exhibits.
ITEM 17. UNDERTAKINGS.
Each of the Registrants hereby undertakes:
(1) To file, during any period in which offers or sales are being made
of the Securities registered hereby, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration
Statement;
provided, however, that the undertakings set forth in paragraphs (1)(i) and
(1)(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with the Registrant or the Guarantor pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the Securities offered
therein, and the offering of such Securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the Securities being registered which remain unsold at the
termination of the offering.
(4) That, for the purposes of determining any liability under the
Securities Act of 1933, each filing of USX's Annual Report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the Registration Statement shall be deemed to
be a new Registration Statement relating to the Securities offered therein,
and the offering of such Securities at that time shall be deemed to be the
initial bona fide offering thereof.
(5) That (a) for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant and the Guarantor
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall
be deemed to be part of this Registration Statement as of the time it was
declared effective.
(b) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new Registration Statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-2
<PAGE> 38
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant or the Guarantor pursuant to the provisions specified in the first
paragraph of Item 15 of this Registration Statement or otherwise, the
Registrants have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in said
Act and is therefore unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrants of expenses incurred or paid by a director, officer or controlling
person of the Registrants in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the Securities being registered, the Registrants will, unless in
the opinion of their counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against policy as expressed in the Act, and will
be governed by the final adjudication of such issue.
II-3
<PAGE> 39
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, USX CORPORATION
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF PITTSBURGH, COMMONWEALTH OF PENNSYLVANIA, ON FEBRUARY
, 1994.
USX CORPORATION
(Registrant)
/S/ LEWIS B. JONES
By....................................................
Lewis B. Jones, Vice President & Comptroller
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, USX CAPITAL LLC
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF HOUSTON, STATE OF TEXAS, ON THE DAY OF FEBRUARY,
1994.
USX CAPITAL LLC
(Registrant)
By USX CAPITAL MANAGEMENT COMPANY
as Manager
/S/ JERRY HOWARD
By................................................
Jerry Howard, Treasurer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES WITH USX
CORPORATION AND THE MANAGER INDICATED ON FEBRUARY , 1994.
USX CORPORATION
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ---------------------------------------------
<S> <C>
* Chairman of the Board of Directors,
........................................... Chief Executive Officer and Director
C. A. CORRY (Principal Executive Officer)
* Executive Vice President--
........................................... Accounting & Finance
R. M. HERNANDEZ & Chief Financial Officer
and Director
(Principal Financial Officer)
/S/ LEWIS B. JONES Vice President & Comptroller
........................................... (Principal Accounting Officer)
LEWIS B. JONES
* Director
...........................................
NEIL A. ARMSTRONG
* Director
...........................................
VICTOR G. BEGHINI
</TABLE>
II-4
<PAGE> 40
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ---------------------------------------------
<S> <C>
* Director
...........................................
JEANETTE GRASSELLI BROWN
* Director
...........................................
JOHN H. FILER
* Director
...........................................
JAMES A. D. GEIER
* Director
...........................................
CHARLES R. LEE
* Director
...........................................
PAUL E. LEGO
* Director
...........................................
JOHN F. MCGILLICUDDY
* Director
...........................................
JOHN M. RICHMAN
Director
...........................................
DAVID M. RODERICK
* Director
...........................................
THOMAS J. USHER
* Director
...........................................
DAVID R. WHITWAM
* Director
...........................................
DOUGLAS C. YEARLEY
/S/ LEWIS B. JONES
*By ......................................
LEWIS B. JONES, ATTORNEY-IN-FACT
</TABLE>
USX CAPITAL MANAGEMENT COMPANY
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ---------------------------------------------
<S> <C>
* President
...........................................
J. D. LOW
* Vice President
...........................................
K. L. MATHENY
* Secretary
...........................................
W. F. SCHWIND, JR.
* Treasurer
...........................................
JERRY HOWARD
/S/ LEWIS B. JONES
*By ......................................
LEWIS B. JONES, ATTORNEY-IN-FACT
</TABLE>
II-5
<PAGE> 41
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBITS PAGE
- --------- -----------
<C> <C> <S> <C>
1 -- Form of Underwriting Agreement....................................
3.1 -- Memorandum of Association of USX Capital LLC......................
3.2 -- Articles of Association of USX Capital LLC........................
4.1 -- Form of Payment and Guarantee Agreement by USX Corporation........
4.2 -- Form of Loan Agreement between USX Capital LLC and USX
Corporation.......................................................
4.3 -- Form of Agreement as to Expenses and Liabilities between USX
Corporation and USX Capital LLC...................................
4.4 -- Form of Keep Well Agreement between USX Corporation and USX
Capital Management Company........................................
5.1 -- Opinion of Misick and Stanbrook, Turks and Caicos Islands
counsel...........................................................
5.2 -- Opinion of Dan D. Sandman, Esq., General Counsel and Secretary of
USX Corporation...................................................
8.1 -- Opinion of Misick and Stanbrook, Turks and Caicos Islands counsel
to the Company and USX Corporation, as to tax matters (included in
Exhibit 5.1)......................................................
8.2 -- Opinion of Miller & Chevalier, Chartered, United States tax
counsel to USX, as to tax matters.................................
12 -- Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends.........................................
23.1 -- Consent of Price Waterhouse.......................................
23.2 -- Consent of Misick and Stanbrook (included in Exhibit 5.1).........
23.3 -- Consent of Dan D. Sandman, Esq., General Counsel and Secretary of
USX Corporation (included in Exhibit 5.2).........................
23.4 -- Consent of Miller & Chevalier, Chartered, United States tax
counsel to USX (included in Exhibit 8.2)..........................
24.1 -- Powers of Attorney................................................
</TABLE>
<PAGE> 1
Exhibit 1
250_LAN01/66157.01
USX CAPITAL LLC
[ ]% CUMULATIVE MONTHLY
INCOME PREFERRED SHARES, SERIES ___
(LIQUIDATION PREFERENCE $25 PER SHARE)
GUARANTEED BY
USX CORPORATION
Underwriting Agreement
----------------------
[ ], 1994
Goldman, Sachs & Co.,
As representatives of the several Underwriters
named in Schedule II hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Dear Sirs:
USX Capital LLC, a limited life company organized under the laws of
the Turks and Caicos Islands (the "Company"), managed by USX Capital Management
Company, a Delaware corporation (the "Manager"), and USX Corporation, a Delaware
corporation, as guarantor and provider of certain backup undertakings (the
"Guarantor" or "USX"), propose, subject to the terms and conditions stated
herein, that the Company issue and sell to the Underwriters named in
Schedule II hereto (the "Underwriters") an aggregate of [ ] shares
(the "Firm Shares") and, at the election of the Underwriters, up to [ ]
additional shares (the "Optional Shares") of [ ]% Cumulative Monthly
Income Preferred Shares, Series ____ (liquidation preference $[ ] per
share) of the Company guaranteed (the "Guarantee") by the Guarantor as to the
payment of dividends, as, if, and when declared and as to payments on
liquidation or redemption and entitled to the benefits of certain backup
undertakings described in the Final Supplemented Prospectus (as defined in
Section 1(a) hereof) (the "Undertakings") provided by the Guarantor (the
Undertakings together with the Guarantee being referred to collectively as the
"Backup Undertakings") (the Firm Shares and the Optional Shares which the
Underwriters elect to purchase pursuant to Section 2 hereof being referred to
collectively as the "Shares" and, together with the related Backup
Undertakings, being referred to collectively as the "Securities").
1. Each of the Company and the Guarantor jointly and severally
represents and warrants to, and agrees with, each of the Underwriters that:
<PAGE> 2
(a) A registration statement on Form S-3 (File No. 33- )
in respect of the Securities (collectively, the "Registered
Securities") has been filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Act"), and delivered to you; such registration statement
and any post-effective amendment thereto, each in the form heretofore
delivered to you and, excluding exhibits thereto but including all
documents incorporated by reference in the prospectus contained
therein, to you for each of the other Underwriters, have been declared
effective by the Commission in such form; no other document with
respect to such registration statement or document incorporated by
reference therein has heretofore been filed, or transmitted for
filing, with the Commission other than the [Guarantor's Current Report
on Form 8-K, dated ________________, and the] Preliminary Supplemented
Prospectus (as hereinafter defined); and no stop order suspending the
effectiveness of such registration statement has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in such registration
statement or filed with the Commission pursuant to Rule 424(a) of the
rules and regulations of the Commission under the Act, being
hereinafter called a "Preliminary Prospectus;" the various parts of
such registration statement, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained in the
registration statement at the time such part of the registration
statement became effective, each as amended at the time such part of
the registration statement became effective, being hereinafter called
the "Registration Statement;" the prospectus relating to the
Registered Securities, in the form in which it was included in the
Registration Statement at the time it became effective, being
hereinafter called the "Prospectus;" any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the Act, as of the date of such
Preliminary Prospectus or 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
documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by reference
in such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment to the Registration Statement shall be
deemed to refer to and include any annual report of the Guarantor
filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the
effective date of the Registration Statement that is incorporated by
reference in the Registration Statement; and the Prospectus as
amended or supplemented in final form in relation to the
Securities in the form in which it is filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 5(a)
hereof, including any documents incorporated by reference therein as
of the date of such filing, being hereinafter called the "Final
Supplemented Prospectus");
(b) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the 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 or any further
amendment or supplement thereto, 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 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; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company or the Guarantor by an
Underwriter through you expressly for use in the Final Supplemented
Prospectus;
<PAGE> 3
(c) The Registration Statement, the Prospectus and the Final
Supplemented Prospectus and any further amendments or supplements to
the Registration Statement or the Prospectus will conform, in all
material respects to the applicable requirements of the Act and the
rules and regulations of the Commission thereunder and do not and
will not, (i) as of the applicable effective date as to the
Registration Statement and any amendment thereto, and (ii) as of
the filing date as to the Final Supplemented Prospectus and any
Prospectus as further amended or supplemented, 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, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company
or the Guarantor by an Underwriter through you expressly for use
therein;
(d) Neither the Company nor the Manager have any
subsidiaries. Neither the Company, the Manager, the
Guarantor nor any of the Guarantor's subsidiaries listed on Schedule I
hereto ("Designated Subsidiaries") has sustained since the date of the
latest audited financial statements included or incorporated by
reference in the Prospectus any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, there has not been any material change in the capital
stock or long-term debt of the Company or the Manager or in the
capital stock or long-term debt of the Guarantor or any of its
subsidiaries or any material adverse change, or any development
likely to involve a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company, the
Manager or the Guarantor and its subsidiaries, otherwise than as
set forth in or contemplated by the Prospectus;
(e) Each of the Company and the Manager has been duly
organized and is validly existing as a corporation in good standing
under the laws of the Turks and Caicos Islands, in the case of the
Company, and under the laws of the State of Delaware, in the case
of the Manager, with power and authority (corporate and other) 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;
(f) The Guarantor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with all 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 Designated Subsidiary of
the Guarantor has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, with all corporate power and authority to own its
properties and conduct its business as described in the Final
Supplemented 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 qualification,
or is subject to no material liability or disability by reason of the
failure to be so qualified in any such jurisdiction; and all of the
issued shares of capital stock of each Designated Subsidiary have been
duly and validly authorized and issued, are fully paid and
non-assessable, and are owned directly or indirectly by the Guarantor,
free and clear of all liens, encumbrances, equities or claims;
3
<PAGE> 4
(g) Each of the Company, the Manager and the Guarantor had,
as of the date indicated in the Final Supplemented Prospectus, an
authorized capitalization as set forth in the Final Supplemented
Prospectus; since such date there has been no change in the
capitalization of the Company and the Manager and no change in
the consolidated capitalization of the Guarantor and its subsidiaries;
and all of the issued shares of capital stock of the Company, the
Manager and of the Guarantor have been duly and validly authorized
and issued, are fully paid and non-assessable and conform to the
descriptions thereof contained in the Final Supplemented Prospectus;
(h) The Firm Shares and the Optional Shares have been duly and
validly authorized by the Company, and, when issued and delivered
against payment therefor as provided herein, will be duly and validly
issued and fully paid and non-assessable and will conform to the
descriptions thereof contained in the Final Supplemented Prospectus;
(i) The Guarantee, the loan agreement, to be dated as of ,
1994 (the "Loan Agreement"), between the Company and the Guarantor
relating to the loans to the Guarantor by the Company of the proceeds
of the issuance of the Company's common shares, the Firm Shares and
the Optional Shares, the expense reimbursement agreement, to be
dated as of , 1994 between the Company and the Guarantor
(the "Expense Agreement") and the keep well agreement, to be dated
as of , 1994 between the Guarantor and the Manager
(the "Keep Well Agreement"); the Guarantee, Loan Agreement, Expense
Agreement and Keep Well Agreement (being collectively referred to as
the "Guarantor Agreements") have each been duly authorized and when
validly executed and delivered by the Guarantor and, to the extent
relevant, by the Company or the Manager, will constitute legal, valid
and binding obligations of the Guarantor, and also of the Manager in
the case of the Keep Well Agreement, enforceable in accordance with
their respective terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to
general equity principles; the Guarantor Agreements conform to
the descriptions thereof in the Prospectus and will conform to the
descriptions thereof in the Final Supplemented Prospectus; and the
Guarantor Agreements will be the only instruments comprising the
Backup Undertakings relating to the Shares;
(j) All of the issued common shares of the Company and all
of the capital stock of the Manager are owned directly or indirectly
by the Guarantor, free and clear of all liens, encumbrances, equities
or claims; neither the Company nor the Manager is a party to or
otherwise bound by any agreement other than those described in the
Final Supplemented Prospectus;
(k) The issue and sale of the Shares by the Company, the
compliance by the Company with all of the provisions of this
Agreement, the execution, delivery and performance by the Company of
the Loan Agreement and Expense Agreement and the consummation of the
transactions 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 Company
or the Manager is a party or by which the Company or the Manager is
bound or to which any of the property or assets of the Company or the
Manager is subject, nor will such action result in any violation of
the provisions of the Memorandum of Association, Articles of
Association or the Special Resolutions of the Company or the
Certificate of Incorporation or by-laws of the Manager or any statute
or any order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company or the Manager 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 issue and sale
of the Securities or the consummation by the Company or the
Manager of the transactions contemplated by this Agreement, except
the registration under the Act of the Securities, authorizations
of the Permanent Secretary, Finance, Turks and Caicos Islands
and the Registrar of Companies of the Turks and Caicos Islands,
which authorizations have been obtained, and such consents,
approvals, authorizations, registrations or qualifications
as may be required under state securities or Blue Sky laws in
connection with the purchase of the Shares and the distribution of
the Securities by the Underwriters;
4
<PAGE> 5
(l) The issue and sale of the Shares by the Company, the
compliance by the Company and the Guarantor with all of the provisions
of this Agreement, the execution, delivery and performance by the
Manager of the Keep Well Agreement, the execution, delivery and
performance by the Guarantor of the Guarantor Agreements, and the
consummation of the transactions 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 Guarantor or the Manager is a party or
by which it is bound or to which any of its property or assets
is subject or any indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which any
the Guarantor's subsidiaries is a party or by which any of its
subsidiaries is bound or to which any of the property or assets
of its subsidiaries is subject, nor will such action result in
any violation of the provisions of the Certificate of Incorporation
or by-laws of the Guarantor or the Manager or the charter or
by-laws of any of the Guarantor's subsidiaries or any statute or any
order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Guarantor or the Manager
or any of the Guarantor's subsidiaries 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 issue of the Backup
Undertakings or the consummation by the Guarantor or the Manager
of the transactions contemplated by this Agreement, except the
registration under the Act of the Securities and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with
the purchase of the Shares and distribution of the Securities by the
Underwriters;
(m) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company, the
Manager, the Guarantor or any of the Guarantor's subsidiaries is a
party or of which any property of the Company, the Manager, the
Guarantor or any of the Guarantor's subsidiaries is the subject
which, if determined adversely to the Company, the Manager, the
Guarantor or any of the Guarantor's 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, the Manager or the Guarantor and its
subsidiaries; and, to the best of the Company's, the Manager's or
the Guarantor's knowledge, as the case may be, no such proceedings
are threatened or contemplated by governmental authorities or
threatened by others;
(n) To the best knowledge of the Guarantor, Price Waterhouse,
who have certified certain financial statements of the Guarantor and
its subsidiaries, are independent public accountants as required by
the Act and the rules and regulations of the Commission thereunder and
were independent public accountants as required by the Act and the
rules and regulations of the Commission thereunder during the periods
covered by the financial statements on which they reported, contained
in the Prospectus;
(o) No labor disturbance by the employees of the Guarantor
exists or, to the knowledge of the Guarantor, is imminent which is
likely to have a material adverse effect on the consolidated financial
position, stockholders' equity or results of operations of the
Guarantor and its subsidiaries or the financial position,
stockholders' equity or results of operations of the U.S. Steel Group;
and
(p) Except with respect to the Amended and Restated Rights
Agreement dated as of October 1, 1992 between the Guarantor and
Mellon Bank, N.A., there are no contracts, agreements or understandings
between the Company or the Guarantor and any person granting such
person the right to require the Company or the Guarantor to file a
registration statement under the Act with respect to any preferred
stock of the Company or the Guarantor owned or to be owned by such
person or to require the Company or the Guarantor to include such
securities in the securities registered pursuant to
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<PAGE> 6
the Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the Company or
the Guarantor under the Act.
2. Subject to the terms and conditions herein set forth, (a) the
Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company,
at a purchase price per share of $[ ] , the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule II hereto and (b) in the
event and to the extent that the Underwriters shall exercise the election to
purchase Optional Shares as provided below, the Company agrees to issue and
sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company at the purchase price
per Share set forth in clause (a) of this Section 2, that portion of the number
of Optional Shares as to which such election shall have been exercised (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
such number of Optional Shares by a fraction the numerator of which is the
maximum number of Optional Shares which such Underwriter is entitled to
purchase as set forth opposite the name of such Underwriter in Schedule II
hereto and the denominator of which is the maximum number of the Optional
Shares which all of the Underwriters are entitled to purchase hereunder. The
Guarantor agrees to issue the Backup Undertakings concurrently with the issue
and sale of Shares as contemplated herein.
The Company hereby grants to the Underwriters the right to purchase at
their election up to [ ] Optional Shares, at the purchase price per
Share set forth in the paragraph above, for the sole purpose of covering
overallotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised only by written notice from you to the
Company, given within a period of 30 calendar days after the date of this
Agreement, setting forth the aggregate number of Optional Shares to be
purchased and the date on which such Optional Shares are to be delivered, as
determined by you but in no event earlier than the First Time of Delivery (as
defined in Section 4 hereof) or, unless you and the Company otherwise agree in
writing, earlier than two or later than ten business days after the date of
such notice.
The Guarantor hereby guarantees the timely performance by the Company
of its obligations under this Section 2. As compensation to the Underwriters
for their commitments hereunder, and in view of the fact that the proceeds of
the sale of the Shares will be loaned by the Company to the Guarantor, the
Guarantor hereby agrees to pay at each Time of Delivery (as defined in Section
4 hereof) to Goldman, Sachs & Co., for the accounts of the several
Underwriters, an amount equal to $[ ] per share for the Shares to be
delivered by the Company hereunder at such Time of Delivery.
3. Upon the authorization by you of the release of the Firm Shares,
the several Underwriters propose to offer the Firm Shares for sale upon the
terms and conditions set forth in the Final Supplemented Prospectus.
4. A certificate or certificates in definitive form for the Shares to
be purchased by each Underwriter hereunder, and in such denominations and
registered in such names as Goldman, Sachs & Co. may request upon at least
forty-eight hours' prior notice to the Company, shall be delivered by or on
behalf of the Company to you for the account of such Underwriter, against
payment by such Underwriter or on its behalf of the purchase price therefor by
check in New York Clearing House (next day) funds. The time, date and
location of such delivery and payment shall be, with respect to the Firm
Shares, 9:00 a.m. New York time, on [ ], 1994, or at such other time
and date as you and the Company may agree upon in writing at the office of
Sullivan & Cromwell, 250 Park Avenue, New York, New York and, with respect to
the Optional Shares, 9:00 a.m., New York time, on the date specified by you in
the written notice given by you of the Underwriters' election to purchase such
Optional Shares, or at such other time and date as you and the Company may
agree upon in writing at the above office of Sullivan & Cromwell. Such time
and date for delivery of the Firm Shares is herein called the "First Time of
Delivery," such time and date for delivery of the Optional Shares, if not the
First Time of Delivery, is herein called the "Second
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<PAGE> 7
Time of Delivery," and each such time and date for delivery is herein called a
"Time of Delivery." Such certificates will be made available for checking and
packaging at least twenty-four hours prior to each Time of Delivery at the
office of [The Depository Trust Company, 55 Water Street, New York, New York
10004].
At each Time of Delivery, the Guarantor will pay, or cause to be paid,
the compensation payable at such Time of Delivery to the Underwriters under
Section 2 hereof by check in New York Clearing House (next day) funds.
5. Each of the Company and the Guarantor jointly and severally agrees
with each of the Underwriters:
(a) To prepare the Final Supplemented Prospectus in a form
approved by you and to file the Final Supplemented Prospectus pursuant
to Rule 424(b) under the Act not later than the Commission's close of
business on the second business day following the execution and
delivery of this Agreement, or, if applicable, such earlier time as
may be required by Rule 424(b); to make no further amendment or any
supplement to the Registration Statement or Final Supplemented
Prospectus prior to the last Time of Delivery which shall be
reasonably disapproved by you promptly after reasonable notice
thereof; to advise you promptly of any such amendment or supplement
after the last Time of Delivery and furnish you with copies thereof;
in the case of the Guarantor, to file promptly all reports and any
definitive proxy or information statements required to be filed with
the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act for so long as the delivery of a prospectus is required
in connection with the offering or sale of the Securities; and during
such same period to advise you, 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 has been filed with the
Commission, of the issuance by the Commission of any stop order or of
any order preventing or suspending the use of any prospectus relating
to the Securities, of the suspension of the qualification of the
Securities 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 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 any prospectus relating to the
Securities or suspending any such qualification, to use promptly its
best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and sale
under the securities laws of such jurisdictions as you 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 Securities, provided that in
connection therewith neither the Company nor the Guarantor shall be
required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Final
Supplemented Prospectus in such quantities as you may from time to
time reasonably request, and, if the delivery of a prospectus is
required at any time prior to the expiration of nine months after the
date of this Agreement in connection with the offering or sale of the
Securities 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 period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated
by
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<PAGE> 8
reference in the Prospectus in order to comply with the Act or the
Exchange Act, to notify you and upon your 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 you 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 the distribution of any of the
Securities at any time nine months or more after the date of this
Agreement, upon your request but at the expense of such Underwriter,
to prepare and deliver to such Underwriter as many copies as you may
request of an amended or supplemented Prospectus complying with
Section 10(a) (3) of the Act;
(d) In the case of the Guarantor, to make generally available
to its securityholders as soon as practicable, but in any event not
later than eighteen months after the effective date of the
Registration Statement (as defined in Rule 158(c)), an earning
statement of the Guarantor and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and
regulations thereunder (including at the option of the Guarantor Rule
158 under the Act);
(e) During the period beginning from the date hereof and
continuing to and including the earlier of (i) the date, after the
last Time of Delivery, on which the distribution of the Securities
ceases, as determined by Goldman, Sachs & Co., or (ii) the date which
is 90 days after the last Time of Delivery, not to offer, sell,
contract to sell or otherwise dispose of any Securities, any preferred
stock or any other securities (including any backup undertakings) of
the Company or the Guarantor which are substantially similar to the
Shares or related Backup Undertakings, or any securities convertible
into or exchangeable for Shares, related Backup Undertakings,
preferred stock or such substantially similar securities of either the
Company or the Guarantor without your prior written consent;
(f) To furnish to the holders of Shares 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 Guarantor and its consolidated subsidiaries 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 the first such fiscal quarter ending after the effective date of
the Registration Statement), consolidated summary financial
information of the Guarantor and its subsidiaries for such quarter in
reasonable detail;
(g) During a period of five years from the date of this
Agreement to furnish to you copies of all reports or other
communications (financial or other) furnished to holders of common
stock of the Guarantor, and deliver to you (i) as soon as they are
available, copies of any reports and financial statements furnished to
or filed with the Commission or any national securities exchange on
which any class of securities of the Company or the Guarantor are
listed; and (ii) such additional information concerning the business
and financial condition of the Guarantor as you may from time to time
reasonably request (such financial statements to be on a consolidated
basis to the extent the accounts of the Guarantor and its subsidiaries
are consolidated in reports furnished to its stockholders generally or
to the Commission); and
(h) To use its best efforts to list, subject to notice of
issuance, the Shares on the New York Stock Exchange.
6. The Company and the Guarantor jointly and severally covenant and
agree with the several Underwriters that the Company and the Guarantor will pay
or cause to be paid the following: (i) the fees, disbursements and expenses of
the Company's, the Manager's and the Guarantor's counsel and accountants
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<PAGE> 9
in connection with the registration of the Securities under the Act and all
other expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus, the Prospectus, the Final
Supplemented Prospectus and any amendments and supplements thereto and the
mailing and delivering of copies thereof to the Underwriters and dealers; (ii)
the cost of printing or producing any Agreement among Underwriters, this
Agreement, the Blue Sky and Legal Investment Memoranda and any other documents
in connection with the offering, purchase, sale and delivery of the Securities;
(iii) all expenses in connection with the qualification of the Securities for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky and legal
investment surveys; (iv) any fees charged by securities rating services for
rating the Securities; (v) the cost of preparing stock certificates; (vi) the
cost and charges of any transfer agent or registrar; (vii) the cost of
qualifying the Securities with The Depository Trust Company; (viii) the cost of
listing the Shares on the New York Stock Exchange and the cost of registering
the Shares under Section 12 of the Exchange Act; and (ix) all other costs and
expenses incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section. It is understood, however,
that, except as provided in this Section, Section 8 and Section 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, transfer taxes on resale of any of the Shares by them, and any
advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the Shares to
be delivered at each Time of Delivery, shall be subject, in their discretion,
to the condition that all representations and warranties and other statements
of the Company and the Guarantor herein and those statements pertaining to the
Manager herein are, at and as of such Time of Delivery, true and correct,
the condition that the Company and the Guarantor shall have performed
all of their obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Final Supplemented Prospectus shall have been filed
with the Commission pursuant to Rule 424(b) within the applicable time
period prescribed for such filing by the rules and regulations under
the Act and in accordance with Section 5(a) hereof; 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 all
requests for additional information on the part of the Commission
shall have been complied with to your reasonable satisfaction;
(b) Sullivan & Cromwell, counsel for the Underwriters, shall
have furnished to you such opinion or opinions, dated such Time of
Delivery, with respect to: the incorporation of the Guarantor; insofar
as the Federal laws of the United States, the laws of the State of New
York or the Delaware General Corporation Law are concerned, the
validity of the Backup Undertakings related to the Shares being
delivered at such Time of Delivery; the Registration Statement and the
Final Supplemented Prospectus; and other related matters as you may
reasonably request; and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass
upon such matters;
(c) Dan D. Sandman Esq., General Counsel of the Guarantor,
shall have furnished to you his written opinion, dated such Time of
Delivery, in form and substance satisfactory to you, to the effect
that:
(i) Each of the Guarantor and the Manager has been
duly incorporated and is validly existing as a corporation
in good standing under the laws of the State of Delaware,
with all corporate power and authority to own its properties
and conduct its business as described in the Final
Supplemented Prospectus;
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<PAGE> 10
(ii) The Guarantor has an authorized capitalization as set
forth in the Final Supplemented Prospectus, and all of the
issued shares of capital stock of the Guarantor have been duly
and validly authorized and issued and are fully paid and non-
assessable and conform to the descriptions thereof contained
in the Prospectus; and all of the issued common shares of the
Company and all of the capital stock of the Manager are
owned directly or indirectly by the Guarantor, and, except
as disclosed in the Final Supplemented Prospectus, are so
owned free of all liens and, to the knowledge of such
counsel, encumbrances, equities or claims;
(iii) The Guarantor Agreements have each been duly
authorized, executed and delivered by the Guarantor,
the Keep Well Agreement has been duly authorized, executed
and delivered by the Manager and such Agreements
constitute legal, valid and binding obligations of the
Guarantor, and in the case of the Keep Well Agreement,
the Manager, enforceable in accordance with their respective
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and
to general equity principles; the Guarantor Agreements conform
to the descriptions thereof in the Final Supplemented
Prospectus; and the Guarantor Agreements are the only
instruments comprising the Backup Undertakings relating to the
Shares;
(iv) Each of the Company, the Manager and the Guarantor
has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the
laws of each other United States 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 (such counsel being
entitled to rely in respect of the opinion in this clause (iv)
upon opinions of local counsel and in respect of matters of
fact upon certificates of public officials or officers of
the Guarantor, provided that such counsel shall state that
he believes that both you and he are justified in so relying
upon such opinions and certificates);
(v) The Manager has no subsidiaries. Each Designated
Subsidiary of the Guarantor has been duly incorporated and
is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation 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 liability or disability by reason
of the failure to be so qualified in any such jurisdiction
that would be material to the Guarantor and its subsidiaries
taken as a whole; and all of the issued shares of capital
stock of each Designated Subsidiary have been duly and
validly authorized and issued, are fully paid and
non-assessable, and (except for directors' qualifying shares)
to the best of such counsel's knowledge are owned directly or
indirectly by the Guarantor, free and clear of all liens,
encumbrances, equities or claims (such counsel being entitled
to rely in respect of the opinion in this clause upon opinions
of local counsel and in respect of matters of fact upon
certificates of public officials or officers of the Guarantor
or its subsidiaries, provided that such counsel shall state
that he believes that both you and he are justified in so
relying upon such opinions and certificates);
(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, the
Manager, the Guarantor or any of the Guarantor's subsidiaries
is a party or of which any property of the Company, the
Manager, the Guarantor or any of the Guarantor's subsidiaries
is the subject which, if determined adversely to the Company,
the Manager, the Guarantor or any
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<PAGE> 11
of the Guarantor's subsidiaries, as the case may be, 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, the Manager
or the Guarantor and its subsidiaries; and to the best of such
counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened
by others;
(vii) This Agreement has been duly authorized, executed
and delivered by each of the Company and the Guarantor;
(viii) The issue and sale by the Company of the Shares being
delivered at such Time of Delivery, the compliance by the
Company and the Guarantor with all of the provisions of this
Agreement, the execution, delivery and performance by the
Guarantor of the Guarantor Agreements, and by the Manager of
the Keep Well Agreement and the consummation of the
transactions 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 known to such
counsel to which the Manager, the Guarantor or any of the
Guarantor's subsidiaries is a party or by which the Manager,
the Guarantor or any of the Guarantor's subsidiaries is bound
or to which any of the property or assets of the Manager,
the Guarantor or any of the Guarantor's subsidiaries
is subject, nor will such action result in any violation
of the provisions of the Certificate of Incorporation
or by-laws of the Manager or of the Guarantor or any
statute or any order, rule or regulation known to such
counsel of any court or governmental agency or body having
jurisdiction over the Manager or the Guarantor or any of
the Guarantor's subsidiaries or any of their properties;
(ix) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale
of the Shares, the issuance and performance of the Backup
Undertakings (including the execution, delivery and
performance of the Guarantor Agreements), or the consummation
by the Company, the Manager and the Guarantor of the
transactions contemplated herein and therein, except
the registration under the Act of the Securities, and
such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities
or Blue Sky laws in connection with the purchase of the
Shares and distribution of the Securities by the Underwriters;
(x) The documents incorporated by reference in the Final
Supplemented Prospectus (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 Act or
the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder; and nothing has come to the
attention of such counsel that has caused such counsel to
believe that any of such documents, when such documents became
effective or were so filed, as the case may be, contained, in
the case of a registration statement which became effective
under the Act, 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, in the case of other documents which were filed under the
Exchange Act with the Commission, 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; and
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<PAGE> 12
(xi) The Registration Statement, the Final Supplemented
Prospectus and any further amendments and supplements thereto
made by the Company or the Guarantor prior to such Time of
Delivery (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 Act and the rules and regulations
thereunder; such counsel has no reason to believe that, as of
its effective date, the Registration Statement or any further
amendment thereto made by the Company or the Guarantor prior
to such Time of Delivery (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 required to
be stated therein or necessary to make the statements therein
not misleading or that, as of their respective dates, the
Final Supplemented Prospectus or any further amendment or
supplement thereto made by the Company or the Guarantor prior
to such Time of Delivery (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 light of the circumstances in which
they were made, not misleading or that, as of such Time of
Delivery, either the Registration Statement or the Final
Supplemented Prospectus or any further amendment or supplement
thereto made by the Company or the Guarantor prior to such
Time of Delivery (other than the financial statements and
related schedules therein, as to which such counsel need
express no opinion) contains an untrue statement of a material
fact or omits to state a material fact necessary to make the
statements therein, in light of the circumstances in which
they were made, not misleading; and they do 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 Final
Supplemented Prospectus or required to be described in the
Registration Statement or the Final Supplemented Prospectus
which are not filed or incorporated by reference or described
as required.
In rendering the opinion expressed in paragraphs (iii) and
(vii) hereof, such counsel may rely, as to all matters of New
York law, upon the opinion of Sullivan & Cromwell, dated such
Time of Delivery and delivered pursuant to subsection (b)
hereof.
In rendering his opinion, such counsel may rely, as to all
matters of Turks and Caicos Islands law, upon the opinion of
Misick and Stanbrook, dated such Time of Delivery and delivered
pursuant to such section (d) hereof;
(d) Misick and Stanbrook, Turks and Caicos Islands counsel for
the Company, the Manager and the Guarantor, shall have furnished
to you their written opinion, limited to the laws of the Turks and
Caicos Islands and dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) The Company has been duly organized and is validly
existing as a limited life company and in good standing under
the laws of the Turks and Caicos Islands, with all necessary
corporate power and authority to own its properties and
conduct its business as described in the Final Supplemented
Prospectus;
(ii) The Company's authorized capitalization, as set
forth in the Final Supplemented Prospectus, consists of common
shares, of US$1.00 per share, and
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<PAGE> 13
the Shares; all of the issued common shares of the Company have
been duly and validly authorized and issued, are fully paid and
non-assessable, conform to the description thereof contained in
the Final Supplemented Prospectus, and are owned directly or
indirectly by the Guarantor; no Shares have been previously issued
other than, in the case of the Second Time of Delivery, the Firm
Shares sold pursuant to this Agreement;
(iii) The Firm Shares or Optional Shares being
delivered at such Time of Delivery have been duly and validly
authorized and issued and are fully paid and non-assessable; and
such Shares conform to the description of the Shares contained in
the Final Supplemented Prospectus;
(iv) The provisions of the Company's Memorandum of
Association, Articles of Association and Special Resolutions of
the Company are valid and will be given effect in accordance with
their terms;
(v) The Company has no subsidiaries;
(vi) The Loan Agreement and the Expense Agreement have
been duly authorized, executed and delivered by the Manager on
behalf of the Company, and such agreements and the other Guarantor
Agreements constitute legal, valid and binding obligations of the
Guarantor, enforceable in accordance with their respective terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium, and similar laws of general
applicability relating to or affecting creditors' rights and to
general equity principles; and the Guarantor Agreements conform to
the descriptions thereof in the Final Supplemented Prospectus;
(vii) This Agreement has been duly authorized, executed
and delivered by the Manager on behalf of the Company;
(viii) The issue and sale by the Company of the Shares
being delivered at such Time of Delivery, the compliance by the
Company and the Guarantor with all of the provisions of this
Agreement, the execution, delivery and performance by the
Guarantor of the Guarantor Agreements, the execution, delivery
and performance by the Company of the Loan Agreement and
the Expense Agreement, and the consummation of the transactions
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 known to
such counsel to which the Company is a party or by which the
Company is bound or subject, nor will such action result in any
violation of the provisions of the Memorandum of Association,
Articles of Association and Special Resolutions of the Company or
any statute or any order, rule or regulation known to such counsel
of any court or governmental agency or body having jurisdiction
over the Company;
(ix) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of
the Shares, the execution, delivery and performance by the
Guarantor of the Guarantor Agreements, the execution, delivery
and performance by the Company of the Loan Agreement and
the Expense Agreement, or the consummation by the Company and the
Guarantor of the transactions contemplated herein or therein,
except the authorizations, which have been obtained, from the
Permanent Secretary, Finance,
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<PAGE> 14
Turks and Caicos Islands and the Registrar of Companies of the
Turks and Caicos Islands; and
(x) Such counsel confirms its opinion as set forth
under "Taxation -- Turks and Caicos Islands" in the Final
Supplemented Prospectus;
(e) Miller & Chevalier, Chartered, United States tax counsel for
the Company and the Guarantor, shall have furnished at each Time of
Delivery their opinion confirming their opinion as to tax matters set
forth in the Final Supplemented Prospectus;
(f) On the date of this Agreement and also at each Time of
Delivery, Price Waterhouse shall have furnished to you a letter or
letters, dated the respective date of delivery thereof, in form and
substance satisfactory to you, to the effect set forth in Annex I
hereto;
(g) (i) None of the Company, the Guarantor or any of the
Guarantor's subsidiaries shall have sustained since the date of the
latest audited financial statements included or incorporated by
reference in the Final Supplemented 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 Final Supplemented
Prospectus, and (ii) since the respective dates as of which
information is given in the Final Supplemented Prospectus there shall
not have been any change in the capital stock or long-term debt of the
Company, the Guarantor or any of the Guarantor's subsidiaries or any
change, or any development likely to involve a prospective change, in
or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company, the
Guarantor or the Guarantor's subsidiaries, otherwise than as set forth
or contemplated in the Final Supplemented 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 public offering of the Securities or
the delivery of the Shares being delivered at such Time of Delivery on
the terms and in the manner contemplated in the Final Supplemented
Prospectus;
(h) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Shares or any of the Guarantor's
debt securities or preferred stock (including the Guarantee or any
other Backup Undertakings in respect of the Shares) by any "nationally
recognized statistical rating organization," as that term is defined
by the Commission for purposes of Rule 436(g)(2) under the Act, and
(ii) no such organization shall have publicly announced that it has
under surveillance or review, with possible negative implications, its
rating of the Securities or any of the Guarantor's debt securities or
preferred stock (including the Guarantee or any other Backup
Undertakings in respect of the Shares);
(i) On or after the date hereof there shall not have occurred any
of the following: (i) a suspension or material limitation in trading
in securities generally on the New York Stock Exchange; (ii) a general
moratorium on commercial banking activities in New York declared by
either Federal or New York State authorities; or (iii) the outbreak or
escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war if the
effect of any such event specified in this Clause (iii) in your
judgment makes it impracticable or inadvisable to proceed with the
public offering of the Securities or the delivery of the Shares being
delivered at such Time of Delivery on the terms and in the manner
contemplated by the Final Supplemented Prospectus;
(j) The Shares to be sold by the Company at such Time of Delivery
shall have been duly listed, subject to notice of issuance, on the New
York Stock Exchange; and
14
<PAGE> 15
(k) The Guarantor shall have furnished or caused to be furnished
to you at such Time of Delivery certificates of officers of the
Guarantor satisfactory to you, as to the accuracy of the
representations and warranties of the Company and the Guarantor herein
at and as of such Time of Delivery, as to the performance by the
Company and the Guarantor of all of their obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set
forth in subsections (a) and (g) of this Section and as to such other
matters as you may reasonably request.
8. (a) The Company and the Guarantor will jointly and severally
indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus, the Registration Statement, the Prospectus, the
Final Supplemented Prospectus or any other prospectus relating to the
Securities, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that neither the Company nor the Guarantor shall be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration
Statement, the Prospectus, the Final Supplemented Prospectus or any other
prospectus relating to the Securities, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company or the Guarantor by any Underwriter through you expressly for use
therein.
(b) Each Underwriter will indemnify and hold harmless the Company and
the Guarantor against any losses, claims, damages or liabilities to which the
Company or the Guarantor may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement, the Prospectus, the Final Supplemented Prospectus and
any other prospectus relating to the Securities, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in any Preliminary Prospectus, the
Registration Statement, the Prospectus, the Final Supplemented Prospectus and
any other prospectus relating to the Securities, or any such amendment or
supplement in reliance upon and in conformity with written information
furnished to the Company or the Guarantor by such Underwriter through you
expressly for use therein; and will reimburse the Company and the Guarantor for
any legal or other expenses reasonably incurred by the Company or the Guarantor
in connection with investigating or defending any such action or claim as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, 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 party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party 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
15
<PAGE> 16
similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, in connection with any one 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 (plus one local firm of attorneys) at any time for all indemnified
parties, which firm shall be designated in writing by you, if the indemnified
parties under this Section 8 consist of any Underwriter or any of their
respective controlling persons, or by the Company or the Guarantor, if the
indemnified parties under this Section 8 consist of the Company or the
Guarantor or any of the Company's or the Guarantor'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 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company and the Guarantor on the one hand
and the Underwriters on the other from the offering of the Securities. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (c) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company and the Guarantor on the one hand and
the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Guarantor on the one hand and
the Underwriters on the other shall be deemed to be in the same proportion as
(i) the total proceeds from the offering (before deducting expenses) received
by the Company less the total underwriting compensation paid by the Guarantor
bears to (ii) the total underwriting compensation received by the Underwriters,
in each case as set forth in, or in footnotes to, the table on the cover page
of the Final Supplemented Prospectus. The relative fault 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 and the Guarantor
on the one hand or the Underwriters on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company, the Guarantor and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
subsection (d) were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this subsection (d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be deemed to
include 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 subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the
16
<PAGE> 17
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company and the Guarantor under this
Section 8 shall be in addition to any liability which the Company and the
Guarantor may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriters under this Section
8 shall be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company and the Guarantor and to each person, if
any, who controls the Company or the Guarantor within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Shares which it has agreed to purchase hereunder at a Time of Delivery, you
may in your discretion arrange for you or another party or other parties to
purchase such Shares on the terms contained herein. If within thirty-six hours
after such default by any Underwriter you do not arrange for the purchase of
such Shares, then the Company and the Guarantor shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties satisfactory to you to purchase such Shares on such terms. In the
event that, within the respective prescribed periods, you notify the Company
and the Guarantor that you have so arranged for the purchase of such Shares, or
the Company or the Guarantor notifies you that it has so arranged for the
purchase of such Shares, you or the Company and the Guarantor shall have the
right to postpone such Time of Delivery for a period of not more than seven
days, in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Final Supplemented Prospectus, or in any other
documents or arrangements, and the Company and the Guarantor agree to file
promptly any amendments or supplements to the Registration Statement or the
Prospectus which in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by you and the Company
and the Guarantor as provided in subsection (a) above, the aggregate number of
such Shares which remains unpurchased does not exceed one-eleventh of the
aggregate number of all the Shares to be purchased at such Time of Delivery,
then the Company and the Guarantor shall have the right to require each
non-defaulting Underwriter to purchase the number of shares which such
Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Shares which such Underwriter agreed to purchase
hereunder) of the Shares of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by you and the Company
and the Guarantor as provided in subsection (a) above, the aggregate number of
such Shares which remains unpurchased exceeds one-eleventh of the aggregate
number of all the Shares to be purchased at such Time of Delivery, or if the
Company and the Guarantor shall not exercise the right described in subsection
(b) above to require non-defaulting Underwriters to purchase Shares of a
defaulting Underwriter or Underwriters, then this Agreement (or, with respect
to the Second Time of Delivery, the obligations of the Underwriters to purchase
and of the Company and Guarantor to sell the Optional Shares) shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter,
the Company or the
17
<PAGE> 18
Guarantor, except for the expenses to be borne by the Company, the Guarantor
and the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company, the Guarantor and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Underwriter or any controlling person of
any Underwriter, or the Company, the Guarantor or any officer or director or
controlling person of the Company or the Guarantor, and shall survive delivery
of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company and the Guarantor shall not then be under any liability to any
Underwriter except as provided in Section 6 and Section 8 hereof; but, if for
any other reason, any Shares are not delivered by or on behalf of the Company
(or the related Backup Undertakings issuable by the Guarantor are not
concurrently issued by the Guarantor) as provided herein, the Company and the
Guarantor will reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Shares not so delivered (or Backup
Undertakings not so issued), but the Company and the Guarantor shall then be
under no further liability to any Underwriter except as provided in Section 6
and Section 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Goldman, Sachs & Co. on behalf of you as the
representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to you as the representatives in care of Goldman,
Sachs & Co., 85 Broad Street, New York, New York 10004, Attention: Registration
Department; and if to the Company by mail to it care of USX Capital
Management Company, 5555 San Felipe Road, Houston, Texas 77056, Attention:
Secretary or if to the Guarantor shall be delivered or sent
by mail to the address of the Guarantor set forth in the Registration
Statement, Attention: Secretary; provided, however, that any notice to an
Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by mail,
telex or facsimile transmission to such Underwriter at its address set forth in
its Underwriters' Questionnaire, or telex constituting such Questionnaire,
which address will be supplied to the Company or the Guarantor by you upon
request. Any such statements, requests, notices or agreements shall take
effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company, the Guarantor and, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the
Guarantor and each person who controls the Company and the Guarantor or any
Underwriter, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. No purchaser of any of the Shares from any
Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
14. Time shall be of the essence of this Agreement. As used herein,
the term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
18
<PAGE> 19
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
19
<PAGE> 20
If the foregoing is in accordance with your understanding, please sign
and return to us [ ] counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement between each of the Underwriters,
on the one hand, and the Company and the Guarantor, on the other hand. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement
among Underwriters, the form of which shall be submitted to the Company and the
Guarantor for examination upon request, but without warranty on your part as to
the authority of the signers thereof.
Very truly yours,
USX Capital LLC
By: USX Capital Management Company, as Manager
_______________________________________
Name:
Title:
USX Corporation
________________________________________
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
By: __________________________________
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
20
<PAGE> 21
SCHEDULE I
LIST OF DESIGNATED SUBSIDIARIES
21
<PAGE> 22
SCHEDULE II
<TABLE>
<CAPTION>
Total Number of Total Number of
Firm Shares Optional Shares
Underwriter to be Purchased to be Purchased
----------- --------------- ---------------
<S> <C> <C>
Total ___________ ___________
=========== ===========
</TABLE>
22
<PAGE> 23
ANNEX I
[Form of letter of accountants
to be delivered pursuant to Section 7(f)]
Pursuant to Section 7(f) of the Underwriting Agreement, the
accountants shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Guarantor and its subsidiaries within the meaning of
the Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if
applicable, prospective financial statements and/or pro forma
financial information examined) by them and included or incorporated
by reference in the Registration Statement or the Prospectus comply as
to form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable, and the
related published rules and regulations thereunder; and, if
applicable, they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the consolidated interim financial statements, selected financial
data, pro forma financial information, prospective financial
statements and/or condensed financial statements derived from audited
financial statements of the Guarantor for the periods specified in
such letter, as indicated in their reports thereon, copies of which
have been furnished to the representatives of the Underwriters (the
"Representatives");
(iii) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Guarantor for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 6 of the
Guarantor's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for such
five fiscal years which were included or incorporated by reference in
the Guarantor's Annual Reports on Form 10-K for such fiscal years;
(iv) On the basis of limited procedures, not constituting an
audit in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and
other information referred to below, a reading of the latest available
interim financial statements of the Guarantor and its subsidiaries,
inspection of the minute books of the Guarantor and its subsidiaries
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of
the Guarantor and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused
them to believe that:
(A) the unaudited condensed consolidated statements
of income, consolidated balance sheets and consolidated
statements of cash flows included or incorporated by reference
in the Guarantor's Quarterly Reports on Form 10-Q incorporated
by reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements
of the Exchange Act as it applies to Form 10-Q and the related
published rules and regulations thereunder or are not in
conformity with generally accepted accounting principles
applied on a basis substantially consistent with the basis for
the audited consolidated statements of income, consolidated
balance sheet and
23
<PAGE> 24
consolidated statements of cash flows included or incorporated by
reference in the Guarantor's Annual Report on Form 10-K for the most
recent fiscal year;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in
the Guarantor's Annual Report on Form 10-K for the most recent
fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in Clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in Clause (B)
were not determined on a basis substantially consistent with
the basis for the audited financial statements included or
incorporated by reference in the Guarantor's Annual Report on
Form 10-K for the most recent fiscal year;
(D) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in the consolidated capital stock (other than the issuance of
capital stock upon exercise of options and stock appreciation
rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were
outstanding on the date of the latest balance sheet included
or incorporated by reference in the Prospectus), or any
increase in the consolidated long-term debt of the Guarantor
and its subsidiaries or any increases in any items specified
by the Representatives, in each case as compared with amounts
shown in the latest balance sheet included or incorporated by
reference in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter;
and
(E) for the period from the date of the latest
financial statements included or incorporated by reference in
the Prospectus to the specified date referred to in Clause (D)
there were any decreases in consolidated net revenue or other
items specified by the Representatives, or any increases in
any items specified by the Representatives, in each case as
compared with the comparable period in the preceding year and
with any other period of corresponding length specified by the
Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(v) In addition to the audit referred to in their report(s)
included or incorporated by reference in the Prospectus and the
limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iii) and (iv) above, they have
carried out certain specified procedures, not constituting an audit in
accordance with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified by
the Representatives which are derived from the general accounting
records of the Guarantor and its subsidiaries, which appear in the
Prospectus (excluding documents incorporated by reference) or in Part
II of, or in exhibits and schedules to, the Registration Statement
specified by the Representatives or in documents incorporated by
reference in the Prospectus specified by the Representatives, and have
compared certain of such amounts, percentages and financial
information with the accounting records of the Guarantor and its
subsidiaries and have found them to be in agreement.
24
<PAGE> 25
For purposes of this letter, all references in this Annex I to the
Prospectus shall be deemed to refer to the Final Supplemented Prospectus in the
form in which it is proposed to be filed but otherwise as defined in the
Underwriting Agreement (including all documents incorporated by reference
therein) as of the date of the letter delivered on the date of the Underwriting
Agreement and to the Final Supplemented Prospectus as defined in the
Underwriting Agreement (including all documents incorporated by reference
therein), or, if the Prospectus has at such time been further amended or
supplemented, to the Prospectus as so further amended or supplemented, as of
the date of the letter delivered at each Time of Delivery.
25
<PAGE> 1
EXHIBIT 3.1
MEMORANDUM OF ASSOCIATION
OF
USX CAPITAL LLC
1 The name of the Company is USX CAPITAL LLC
2 The registered office of the Company will be situated at the MacLaw
House, PO Box 103, Duke Street, Grand Turk, Turks and Caicos Islands,
British West Indies
3 The life of the Company shall be for a period of 150 years from the
date of its incorporation.
4 The Company shall at all times have at least two members
5 The objects for which the Company is established are:
5.1. To issue its common shares to USX Corporation, a
Delaware corporation, whose principal place of business
is at 600 Grant Street, Pittsburgh, PA 15219, U.S.A., to
USX Capital Management Company, a Delaware corporation,
whose principal place of business is at 5555 San Felipe
Road, Houston, Texas 77056, U.S.A., or to Marathon Oil
Company, an Ohio corporation, whose principal place
of business is at 5555 San Felipe Road, Houston,
Texas 77056, U.S.A.
5.2. To issue its preferred shares to underwriters or to members of
the public and to use the proceeds thereof to finance the
business operations of USX Corporation.
5.3. To engage in any activity which may be incidental or conducive
to the foregoing objects.
Provided that the Company has no power to borrow any money from or
become liable in respect of any borrowings of a third party.
6 THE LIABILITY of the Members is limited
7 The Company shall be treated as a partnership for United States federal
income tax purposes and this Memorandum of Association and the Articles
of Association and all resolutions of members shall, to the fullest
extent permitted by the Companies Ordinance, be interpreted and
construed accordingly
8 THE CAPITAL of the Company at the date of adoption of this Memorandum
is $10,005,000 divided into 5,000 common shares of $1.00 each and
10,000,000 preferred shares of $1.00 each.
Provided always that the Company shall have the power to increase or reduce
such capital, and to issue any part of its capital, original or increased
with or without any preference, priority or special privilege, or subject to
any postponement of rights, or to any conditions or restrictions; and so that,
unless the conditions of issue shall otherwise expressly declare, every issue
of shares, whether declared to be preference or otherwise, shall be subject to
the power hereinbefore contained
<PAGE> 2
-2-
We, the several persons whose names and addresses are subscribed, are desirous
of being formed into a Company in pursuance of this Memorandum of Association
and we respectively agree to take the number of shares in the capital of the
Company set opposite to our respective names:
- -------------------------------------------------------------------------------
NAMES ADDRESSES & DESCRIPTION NUMBER OF SHARES TAKEN
OF SUBSCRIBERS BY EACH SUBSCRIBER
- -------------------------------------------------------------------------------
USX CAPITAL MANAGEMENT COMPANY
whose principal place of business
is at 5555 San Felipe Road,
Houston, Texas 77056 U.S.A.
/s/ A. R. MISICK
by A. R. Misick ____________________ Authorized Agent 4,997
MARATHON OIL COMPANY, an Ohio corporation,
whose principal place of business is at
5555 San Felipe Road,
Houston, Texas 77056 U.S.A.
/s/ A. R. MISICK
by A. R. Misick ____________________ Authorized Agent
1
Dated this 20th day of December 1993
WITNESS to the above signatures:
/s/ DEBORAH L. SWANN
- --------------------------------
DEBORAH L. SWANN
GRAND TURK
(SECRETARY)
<PAGE> 1
EXHIBIT 3.2
THE COMPANIES ORDINANCE 1981
ARTICLES OF ASSOCIATION
OF
USX CAPITAL LLC
Interpretation.
(1) In these Regulations the following words and expressions shall, where
not inconsistent with the context, have the following meanings
respectively:
"Auditor" includes any individual or partnership;
"Common Shares" means ordinary shares of US$1.00 each in the capital of
the Company;
"Common Shareholder" means a holder of a Common Share;
"Former Member" means a person who was a member but who has ceased to be
a member by virtue of Regulation 15;
"Manager" means USX Capital Management Company, a company incorporated
under the laws of the State of Delaware and having its principal place
of business at 5555 San Felipe Road, Houston, Texas 77056, U.S.A. or
any successor entity which acquires substantially all the assets and
liabilities of USX Capital Management Company;
"Member" means the person, body corporate or partnership registered in
the Register of Members as the holder of shares in the Company, and
when two or more persons are so registered as joint holders of shares,
means the person whose name stands first in the Register of Members as
one of such joint holders;
"Notice" means written notice unless otherwise specifically stated;
"Preferred Shares" means shares issued pursuant to Regulation 10;
"Preferred Shareholder" means the holder of a Preferred Share;
"Register of Members" means the Register of Members kept in accordance
with Regulation 14;
"the Ordinance" means the Companies Ordinance 1981 and any statutory
modification thereof for the time being in force;
"the Company" means the Company for which these Articles are approved
and confirmed;
"Secretary" means the person appointed to perform the duties of
Secretary of the Company and includes any Assistant or Acting Secretary;
"Transfer" means with respect to any Common Shares, the transfer, sale,
assignment, mortgage, creation or permission to subsist of any pledge,
lien, charge or encumbrance over, grant of any option, interest or
other rights in, or other disposition of any such shares, any part
thereof or any interest therein, whether by agreement, operation of
law or otherwise.
(2) In these Regulations, unless there be something in the subject or
context inconsistent with such construction, words importing the plural
number shall be deemed to include the singular number.
(3) Expressions referring to writing shall, unless the contrary intention
appears, be construed as including printing, lithography, photography
and other modes of representing words in a visible form.
<PAGE> 2
-2-
(4) Unless the context otherwise requires, words or expressions contained in
these Regulations shall bear the same meaning as in the Ordinance or any
statutory modification thereof in force for the time being.
Shares.
(5) Subject to the provisions of these Regulations, the unissued shares of
the Company (whether forming part of the original or any increased
authorised capital) shall be at the disposal of the Manager who may
offer, allot, grant options over or otherwise dispose of them to such
persons at such times and for such consideration and upon such terms
and conditions as the Manager may determine consistent with these
Regulations.
(6) No share shall be issued except as fully paid up.
(7) The name and address of every person being the holder of registered
nominative shares, their class or series and the date when they became
or ceased to become a Member shall be entered in the Register of
Members.
(8) Every person whose name is entered as a Member in the Register of
Members being the holder of registered nominative shares, may request,
and the Company shall issue thereto, a certificate specifying the share
or shares held and the par value thereof, provided that in respect of
a registered nominative share, or shares, held jointly by several
persons, the Company shall not be bound to issue more than one
certificate, and delivery of a certificate for a share to one of
several joint holders shall be sufficient delivery to all. Except as
required by law, no person shall be recognised by the Company as
holding any share upon any trust, and the Company shall not be bound
by or be compelled in any way to recognise (even when having notice
thereof) any equitable, contingent, future or partial interest in
any share, or any interest in any fractional part of a share, or
(except only as by these Regulations otherwise provided or as by
law required or under an order of court) any other rights in respect
of any share except an absolute right to the entirety thereof in
the registered holder.
(9) Any Member receiving a share certificate shall indemnify and hold
the Company and the Manager harmless from any loss or liability which
it or they may incur by reason of wrongful or fraudulent use or
representation made by any person by virtue of the possession of
such certificate. If a certificate is worn-out or lost it may be
renewed on production of the worn-out certificate, or on satisfactory
proof of its loss together with such indemnity as the Manager may
require.
Share Capital and Variation of Rights.
(10) Without prejudice to any special rights previously conferred on the
holders of any existing shares or classes of shares, any share may
be issued with such preferred, deferred or other special rights or
such restrictions, whether in regard to dividend, voting, return of
capital or otherwise as the Manager may from time to time determine.
(10a) The Company may from time to time by Special Resolution increase the
share capital by such sum to be divided into shares of such amount
as the Special Resolution shall prescribe.
(11) Subject to and in accordance with the provisions of Section 198 of
the Ordinance, shares may be issued on terms that they are liable to
be redeemed on such terms as the Manager before the issue of the
shares may determine. The Manager may but is not obliged to require
the passing of a Special Resolution to make such alterations to
these Regulations as may be necessary to specify the terms on which and
the manner in which such shares shall be redeemed and the rights and
restrictions attaching thereto.
(11a) Subject to and in accordance with the provisions of Section 198 of the
Ordinance the Company may purchase the Preferred Shares.
(11b) Deleted
(12) If at any time the authorised share capital is divided into different
classes or series of shares other than those provided for in the
Memorandum of Association as initially executed, the
<PAGE> 3
-3-
rights attached to any existing class or series (unless otherwise
provided by the terms of issue of the shares of that class or series)
may only be varied or abrogated with the consent in writing of the
Members holding interests aggregating to two thirds of the issued
shares or series of shares which may be affected by such variation or
with the sanction of a separate general meeting of the holders of
shares so affected. To every such general meeting the provisions of
these Regulations relating to General Meetings shall apply but so that
the necessary quorum shall be two persons holding or representing by
proxy two thirds of the issued shares or series of shares so affected.
(13) The rights conferred upon the holders of the shares of any class issued
with preferred or other rights shall not, unless otherwise expressly
provided by the terms of issue of the shares of that class, be deemed
to be varied by the creation or issue of further shares ranking pari
passu therewith. The holders of the shares of any class shall not have
any pre-emptive right to purchase or subscribe for any shares of the
Company unless expressly provided by the terms of the issue of the
shares of that class.
Registration of Members.
(14) The Company shall keep in one or more books a Register of its Members
and shall enter therein the following particulars, that is to say -
(a) the name and address of each Member, the number of shares held by
him and the amount paid or agreed to be considered to be paid on
such shares;
(b) the date on which each person was entered in the Register of
Members; and
(c) the date on which any person ceased to be a Member.
Cessation of Membership of Common Shareholders.
(15) A Common Shareholder ceases to be a Member of the Company upon the
happening of any one or more of the following events -
(a) the death, bankruptcy, insanity, retirement, resignation,
withdrawal, expulsion, termination, cessation or dissolution of
such Common Shareholder;
(b) if such Common Shareholder makes any assignment for the benefit of
his creditors or files a petition voluntarily for bankruptcy under
the laws of any country or files a petition seeking for himself
any arrangement, re-organisation, amalgamation, composition,
re-adjustment, liquidation, dissolution or similar relief under
any law or regulation;
(c) if such Common Shareholder files an answer or other pleading
admitting or failing to contest the material allegation of a
petition filed against him in any proceedings of a nature
described in the immediately preceding paragraph of this Regulation;
(d) if such Common Shareholder seeks, consents to, or acquiesces in the
appointment of a trustee, receiver or liquidator of himself or all
or a substantial part of his properties;
(e) any proceedings of a nature mentioned in the foregoing paragraphs
of this Regulation occurs without the consent of such Common
Shareholder and is not dismissed or vacated within 120 days;
(f) if such Common Shareholder attempts to make a Transfer of his share
in breach of the provisions of these Regulations.
Transfer and Transmission of Shares.
(16) Subject to Regulation 16(a) the transfer of any Common Share is
prohibited absolutely.
(16a) Regulation 16 shall not apply to the Transfer by Marathon Oil Company to
USX Capital Management Company of the one share subscribed for by
Marathon Oil Company nor to a single Transfer by USX Capital Management
Company to USX Corporation of the 4,997 shares subscribed for by USX
Capital Management Company.
(17) Any Transfer of any Common Shares or other interest in the Company shall
not, save as is mentioned in Regulations 16(a) or 51, be effective to
transfer to any transferee thereof any rights conferred on a Member
including but not limited to rights to receive Notice of or attend
<PAGE> 4
4
meetings of the Company to vote on any matter, to receive dividends, or
to receive a share of the net assets of the Company upon its
dissolution and winding up.
General Meetings.
(18) The Manager may convene a general meeting of the Company for the
purpose of considering and if thought fit, and subject to any class
voting rights of outstanding Preferred Shares, passing of a Special
Resolution to:
(a) alter the Memorandum and Articles of Association of the Company; or
(b) require the Company to be dissolved and wound up.
(19) Fourteen days Notice in writing of a general meeting shall be given to
each of the Members entitled to vote at such meeting and mailed to each
Member entitled to vote at his or her address as registered in the
Register of Members by air mail (if appropriate) and such Notice shall
state the time, place and as far as practicable the objects of the
Meeting.
(20) The accidental omission to give Notice of a meeting to or the
non-receipt of Notice of a meeting by any person entitled to receive
Notice shall not invalidate the proceedings at that meeting.
(21) A meeting of the Company shall, notwithstanding that it is called by
shorter Notice than that specified in these Regulations, be deemed to
have been properly called if it is so agreed by all the Members entitled
to attend and vote thereat.
Proceedings at General Meetings.
(22) (a) The Manager shall preside at any general meeting of the Company.
(b) At any general meeting of the Company one or more Members entitled
to vote, present in person or representing in person or by proxy in
excess of 50% of the outstanding voting shares of the capital stock
of the Company, shall form a quorum for the transaction of
business; if within half an hour from the time appointed for the
meeting a quorum is not present, the meeting shall stand adjourned
to the following day at the same time or at such other time as the
Manager may determine.
(c) The Manager may, with the consent of any meeting at which a quorum
is present (and shall if so directed by the meeting), adjourn the
meeting from time to time and from place to place, and only the
business left unfinished at the meeting from which the Members
present in person or represented by proxy have adjourned shall be
dealt with. It shall not be necessary to give any notice of the
adjourned meeting or of the business to be transacted at the
adjourned meeting; save and except for a meeting adjourned sine
die, when Notice of the adjourned meeting shall be given as in the
case of an original meeting.
(23) (a) Subject to any rights or restrictions lawfully attached to any
class of shares, at any Meeting of the Company each Member entitled
to vote shall be entitled to one vote for each share held by him
and such vote may be given in person or by proxy.
(b) At any meeting of the Company any question proposed for the
consideration of the Members entitled to vote shall be decided on a
simple majority of the votes of Members entitled to vote and such
majority shall be ascertained in accordance with the provisions of
these Regulations.
(c) At any meeting of the Company a declaration by the Manager that a
question proposed for consideration has, on a show of hands, been
carried, or carried unanimously or by a particular majority or lost
and an entry to that effect in a book containing the minutes of the
proceedings of the Company shall be conclusive evidence of that
fact without proof of the number or proportion of the votes
recorded in favour of or against such question.
(24) When a vote is taken by ballot each Member entitled to vote shall be
furnished with a ballot paper on which he shall record his vote in such
manner as shall be determined at the
<PAGE> 5
-5-
meeting having regard to the nature of the question on which the
vote is taken; and each ballot paper shall be signed or initialled
or otherwise marked so as to identify the voter. At the conclusion
of the ballot the ballot paper shall be examined by the Manager with
assistance of a Member appointed for the purpose, and the result of
the ballot shall be declared by the Manager.
(25) An instrument appointing a proxy shall be in writing under the hand
of a Member or his attorney duly authorised in writing or, if the
Member is a corporation either under seal or under the hand of an
officer or attorney of the corporation duly authorised, and shall be
in the Form B hereunder or such other form as the Manager may from
time to time approve:
"FORM B
________________________________________________________________ LLC
PROXY
I/WE ______________________________________________________________
of _________________________________________________________________
the holder of ___________________ shares in the above named Company,
hereby appoint ____________________ of __________________ or failing
him ____________________ of _____________________________ or failing
him ____________________ of ______________________________ as my/our
proxy to vote on my/our behalf at the ______________________ general
meeting of the Company to be held on the _____ day of ________ 19__,
and at any adjournment thereof.
Dated this _______ day of ______________ 19__
Signed by the above named
__________________________________
in the presence of
__________________________________
Witness
____________________________________________''
(26) Any corporation which is a Member of the Company may authorise such
persons as it thinks fit to act as its representative at any meeting
of the Members of the Company and the person so authorised shall be
entitled to exercise the same powers on behalf of the corporation
which he represents as that corporation could exercise if it were
an individual Member of the Company.
<PAGE> 6
-6-
Minutes.
(27) The Manager shall cause minutes to be duly entered in books provided
for the purpose of all resolutions and proceedings of each meeting
of the Company, provided that any minute of such meeting, if purporting
to be signed by the Manager, shall be sufficient evidence of the
proceedings without any further proof of the facts therein stated,
and further provided that when all the Members entitled to vote in
person or by proxy sign the minutes of meeting, the same shall be
deemed to have been duly held, notwithstanding that the Members have not
actually come together or that there may have been technical defects
in the proceedings, and a resolution in writing in one or more parts
signed by all the Members entitled to vote shall be valid and effectual
as if it has been passed at a meeting duly called and constituted.
Manager.
(28) There shall be no directors of the Company. The business of the Company
shall be managed and conducted by the Manager, managing in its capacity
as a Member of the Company, who shall have the following powers and
duties.
(a) to pay commissions conferred or permitted by the Ordinance on
the sale and allotment of shares;
(b) to call meetings;
(c) to establish the rights or restrictions of any Preferred Shares
as contemplated in Regulation 10;
(d) to issue and allot shares;
(e) to pay all expenses incurred in forming and registering the
Company;
(f) to manage and supervise the affairs of the Company;
(g) to declare and pay dividends on shares;
(h) to set aside out of profits any amount which shall in the
discretion of the Manager be required as a reserve or reserves;
(i) to redeem or repurchase on behalf of the Company shares which
may be redeemed or repurchased on behalf of the Company;
(j) to appoint officers, attorneys and agents on behalf of the
Company;
(k) to act as liquidator or appoint a liquidator if the Company is
dissolved pursuant to Regulation 52;
(l) to execute all documents on behalf of and in the name of the
Company;
(m) to institute, bring, prosecute and defend proceedings in the
name of the Company;
(n) to perform such other duties and to exercise such powers as are
not by Regulation 18 required to be performed by the Company in
general meetings or by Regulation 55 required to be performed by
former Common Shareholders.
Provided always that any Trustee appointed by the Preferred Shareholders
pursuant to the rights conferred on them in that behalf by the terms
of issue of the Preferred Shares may perform such acts and exercise such
powers as they are authorised to do under the terms of the issue of the
Preferred Shares
(29) A Manager of the Company may hold other office or place of profit
with the Company and may be paid such extra remuneration therefor
whether by way of salary commission participation of profits or
otherwise.
<PAGE> 7
-7-
(30) Any contract or arrangement between the Manager and the Company may
contain provisions giving security and indemnity to the Manager for
obligations undertaken for the benefit of the Company and may contain
terms customarily found in agreements with beneficial (as opposed to
fiduciary) owners of property, and the Manager shall not be liable for
breach of fiduciary duties by virtue of such provisions if in all the
circumstances a prudent man of business would accept such a provision.
(31) A Manager may be party to or otherwise interested in any transaction or
arrangement with the Company or in which the Company is otherwise
interested and shall not by reason of occupying the office of Manager
be accountable to the Company for any benefit which he derives from any
such office or from any such transaction or arrangement, and no such
transaction or arrangement shall be avoidable on the grounds of such
interest or benefit.
(32) Subject to the provisions of these Regulations the Manager may delegate
any of the Manager's powers and duties to other persons and any such
delegation may be made subject to any conditions the Manager may impose
and either collaterally with or to the exclusion of the powers of the
Manager, and any such delegation may be revoked or altered.
(33) The Company will be treated as a partnership for U.S. federal income tax
purposes, and the Manager will serve as the "Tax Matters Partner" as
that term is defined in the U.S. Internal Revenue Code. The Company will
adopt a convention for U.S. federal income tax purposes under which all
of the income accrued by the Company in any calendar month will be
allocated and distributed to shareholders of record, including Preferred
Shareholders, on the last day of the month.
(34) USX Corporation will at all times directly or indirectly retain Common
Shares of the Company representing, in its judgment, at least twenty
one percent (21%) of the total value of the Company and at least twenty
one percent (21%) of all interests in the capital, income, gain, loss
deduction and credit of the Company.
(35) The Manager may be paid for all travelling, hotel and other expenses in
connection with attendances at any meeting of the Company or otherwise
in connection with the discharge of the Manager's duties.
Officers.
(36) The Manager will be entitled to appoint any of its officers and
directors to perform any of the rights or duties of the Manager set out
in these Regulations;
(37) The Manager will appoint such officers of the Company as is required
pursuant to the rights of Preferred Shareholders, or other shareholders,
under the terms of shares issued by the Company.
Custodian.
(38) The Manager may appoint a custodian or trustee for the safekeeping of
all moneys, assets and securities of the Company with such powers and
duties in respect thereof as may be specified in such appointment, and
such custodian or trustee shall be subject to audit by the Auditors of
the Company.
Dividends.
(39) The Manager may declare dividends to be paid to the Members, in
accordance with the terms of such shares, in proportion to their
shares, out of the surplus or profits including unrealised profits of
the Company.
(40) The Manager may from time to time before declaring a dividend set aside
out of the surplus or profits of the Company such sums as they think
proper as a reserve fund to be used to meet contingencies or for
equalising dividends or for any other special purpose.
(41) To the extent that there are surplus or profits available for
distribution in any accounting period, preferential dividends (including
preferential dividends which may have fallen in arrears), shall be paid
to the Preferred Shareholders in accordance with the terms of the issue
of the Preferred Shares.
<PAGE> 8
8
(42) The surplus or profits of the Company which the Manager shall from time
to time declare to be distributable in respect of any accounting period
shall be applied first in payment to the Preferred Shareholders of
preferential dividends payable on the Preferred Shares.
(43) For the purpose of determining the amount of surplus or profit available
for distribution, all expenses of the Company shall be allocated to,
and reduce the amounts distributable to, Common Shareholders. To the
extent that such surplus or profits are available for distribution to
Members of the Company, the portion of such amounts distributable to
Preferred Shareholders shall be determined without regard to any
expenses of the Company.
(44) The Manager is authorised and empowered to lend to any officer or Member
of the Company any sum or sums of money without restriction as to amount
upon such terms and conditions as the Manager in its absolute discretion
may determine.
Accounts and Financial Statements.
(45) The Manager shall cause true accounts to be kept of all transactions of
the Company in such manner as to show the assets and liabilities of the
Company for the time being.
(46) The financial year end of the Company shall be determined by the Manager
and failing such determination the financial year end shall be 31st
December.
(47) Each Member may demand and shall receive from the Manager true and full
information regarding the state of the business and financial condition
of the Company.
(48) An independent representative of the Members may be appointed by the
Manager as Auditor of the Accounts of the Company and such Auditor shall
hold office until the Manager shall appoint another Auditor. Such
Auditor may be a Member but the Manager of the Company shall not during
its continuance in office be eligible as an Auditor of the Company.
(49) The duties and remuneration of the Auditor shall be fixed by the Manager
or in such manner as the Manager may determine.
Former Members.
(50) A Common Shareholder who ceases to be a Member by virtue of Regulation
15-
(a) if the event causes the Company to be in dissolution shall have the
rights of a Former Member upon winding up of the Company;
(b) if the event does not cause the Company to be in dissolution shall
have the rights set out in Regulation 51.
(51) The rights of a Common Shareholder such as is mentioned in Regulation 17
or Regulation 50 shall be an entitlement solely to receive an amount
equal to the book value of the relevant Common Shareholder's share or
other interest in the Company as determined in good faith by the Manager
and if such payment is not made within 90 days then the Company shall be
deemed to be in dissolution under Regulation 52.
Dissolution and Winding Up.
(52) The Company shall be considered to have commenced voluntary winding up
and dissolution automatically and without the requirement of any other
act-
(a) when the period fixed for the duration of the Company expires; or
(b) if the Common Shareholders of the Company pass a Special Resolution
requiring the Company to be wound up and dissolved; or
(c) upon the happening of any one or more of the following events-
(i) the bankruptcy, death, insanity, retirement, resignation,
withdrawal, expulsion, termination, cessation, or dissolution
under U.S. law of the Manager;
<PAGE> 9
-9-
(ii) the bankruptcy, insolvency or dissolution of USX Corporation;
(iii) the redemption, repurchase or cancellation of all the shares
of all the Common Shareholders of the Company.
(53) On dissolution and winding up of the Company, the balance of the
assets available for distribution and subject to any special rights
or restrictions attaching to any class of shares shall be applied in
paying to the Former Members who were Members immediately preceding
the commencement of dissolution and winding up of the Company the
amounts paid up on the shares held by them and the surplus shall
belong to such Former Members according to the respective number of
shares held by them.
(54) As between the Common Shareholders and the Preferred Shareholders,
the expenses incurred in the establishment and maintenance of the
Company and in conducting the Company's business shall be deducted
in determining what assets are available for distribution.
Continuance.
(55) If the Company is in dissolution solely by virtue of Regulation 52 (a),
then the dissolution and winding up may be discontinued by the unanimous
resolution of all the persons who were Members immediately preceding
the commencement of dissolution and winding up passed within 30 days
of the occurrence of the event and on the passing of such resolution
the Company shall continue to exist as if the dissolution and winding
up had never occurred.
Liquidator.
(56) When the Company is in dissolution by virtue of Regulation 52, the
Manager shall serve as liquidator unless and until the majority of
the former Common Shareholders who were Members immediately preceding
the commencement of dissolution and winding up by majority vote appoint
a liquidator to replace the Manager.
Notices.
(57) Unless otherwise herein or by law expressly provided, a Notice may be
served by the Company on any Member either personally or by telex cable
or facsimile to his registered address or by sending it using air mail
(if appropriate) through the post prepaid in an envelope addressed to
such Member at his address as registered in the Register of Members.
(58) Any Notice required to be given to the Members shall with respect to
any shares held jointly by two or more persons be given to all such
persons.
(59) Any Notice shall be deemed to have been served at the time when the
same would be delivered in the ordinary course of transmission, and
in proving such service it shall be sufficient to prove that the
Notice was properly addressed and prepaid, if posted, and the time
when it was posted or transmitted by telex, cable or facsimile to
or from the Company as the case may be.
Seal of the Company.
(60) The Seal of the Company shall not be affixed to any instrument except
over the signature of the Manager and the Secretary or by some person
appointed by the Manager, provided that the Secretary may affix the
Seal of the Company over his signature only to any authenticated copies
of these Regulations and the Memorandum of Association, the minutes
of any meetings or any other document required to be authenticated by
him and to any instrument which the Manager has specifically approved
beforehand.
Alteration of Regulations.
(61) No Regulation shall be rescinded, altered or amended, and no new
Regulation shall be made until the same has been proposed and, subject
to any class voting rights of outstanding Preferred Shares, passed as
a Special Resolution at a general meeting duly convened.
<PAGE> 10
10
We, the several persons whose names and addresses are subscribed, are desirous
of being formed into a Company in pursuance of these Articles of Association
and we respectively agree to take the number of shares in the capital of the
Company set opposite to our respective names:
Shares
USX CAPITAL MANAGEMENT COMPANY
whose principal place of business
is at 5555 San Felipe Road,
Houston, Texas 77056, U.S.A.
/s/ A. R. MISICK
by: A. R. Misick ____________________ Authorized Agent 4,997
MARATHON OIL COMPANY, an Ohio corporation,
whose principal place of business
is at 5555 San Felipe Road,
Houston, Texas 77056, U.S.A.
/s/ A. R. MISICK
by: A. R. Misick ____________________ Authorized Agent 1
Dated this 20th day of December 1993
WITNESS to the above signatures:
/s/ DEBORAH L. SWANN
- --------------------------------
DEBORAH L. SWANN
GRAND TURK
(SECRETARY)
<PAGE> 11
SPECIAL RESOLUTIONS OF USX CAPITAL LLC ("the Company")
Passed Pursuant to Regulations 21 and 27 of the Articles of Association
and Section 61A of the Companies Ordinance 1981 made on the 3rd day
of January 1993
We the undersigned being the only shareholders of the above-named Company do
hereby resolve as follows:
1. That pursuant to Section 186 of the Companies Ordinance 1981 the
Memorandum of Association of the Company is hereby altered in the
following manner:
(a) by the insertion of a common each after "Street", "Grand Turk", and
"Island" in paragraph 2; and
(b) by extending the life of the Company to a period of 150 years from
the date of its incorporation;
(c) by the deletion therefrom of paragraph 5.1. in its entirety and the
substitution therefor of the following:
"5.1. To issue its common shares to USX Corporation, a Delaware
corporation, whose principal place of business is at 600 Grant
Street, Pittsburgh, PA 15219, U.S.A., to USX Capital
Management Company, a Delaware Corporation, whose principal
place of business is at 5555 San Felipe Road, Houston, Texas
77056, U.S.X or to Marathon Oil Company, an Ohio corporation
whose principal place of business is at 5555 San Felipe Road,
Houston, Texas 77056, U.S.A."
(d) by increasing the authorised capital by 10,000,000 Preferred Shares
of US $1.00 each with such rights and restrictions as the Manager
shall determine.
2. That pursuant to section 23 of the Companies Ordinance 1981 the Articles
of Association of the Company is hereby altered in the following manner:
(a) by the deletion therefrom in its entirety of Regulation 11(b);
(b) by the insertion at the beginning of Regulation 16 of the words
"Subject to Regulation 16(a)";
(c) by the insertion after Regulation 16 of the following new Regulation
as Regulation 16(a);
"(16a) Regulation 16 shall not apply to the Transfer by Marathon Oil
Company to USX Capital Management Company of the one share
subscribed for by Marathon Oil Company nor to a single
Transfer by USX Capital Management Company to USX Corporation
of the 4,997 shares subscribed for by USX Capital Management
Company.";
(d) by the insertion in Regulation 17 of the words "16(a) or" between the
words "Regulations" and the figure "51";
(e) by the insertion at the beginning of Regulation 32 of the words
"Subject to the provisions of these Regulations";
(f) by the deletion of the words "The Manager" in Regulation 34 and the
substitution therefor of "USX Corporation" and by the insertion in
Regulation 34 of the words "or indirectly" between the words
"directly" and "retain.";
(g) by the deletion in its entirety of Regulation 52 (c) and the
substitution therefor of the following:
"(c) upon the happening of any one or more of the following events -
(i) the bankruptcy, death, insanity, retirement,
resignation, withdrawal, expulsion, termination,
cessation, or dissolution under U.S. law of the Manager;
(ii) the bankruptcy, insolvency or dissolution of USX
Corporation
(iii) the redemption, repurchase or cancellation of all the
shares of all the Common Shareholders of the Company."
USX CAPITAL MANAGEMENT COMPANY LTD
By ________________________________
MARATHON OIL COMPANY
By ________________________________
<PAGE> 1
EXHIBIT 4.1
CDM:lw-14850
PAYMENT AND GUARANTEE AGREEMENT
THIS PAYMENT AND GUARANTEE AGREEMENT (the
"Guarantee"), dated as of _____________________, is
executed and delivered by USX Corporation, a Delaware
corporation ("USX" or the "Guarantor") for the benefit
of the Holders (as defined below) from time to time of
the Preferred Shares (as defined below) of USX Capital
LLC, a limited life company organized under the Laws
of the Turks and Caicos Islands (the "Issuer").
WHEREAS, the Issuer is issuing on the date
hereof ______________ shares of its ______%
Cumulative Monthly Income Preferred Shares,
Series A (the "Series A MIPS" or "Preferred
Shares"), and the Guarantor desires to issue this
Guarantee for the benefit of the Holders, as
provided herein;
WHEREAS, the Issuer pursuant to the Loan
Agreement (as defined below) will loan the proceeds
from the issuance and sale of the Preferred Shares
and its common shares (the "Common Shares") to
the Guarantor; and
WHEREAS, the Guarantor desires hereby
to irrevocably and unconditionally agree to the
extent set forth herein to pay to the Holders the
Guarantee Payments (as defined below) and to make
certain other payments on the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the
purchase by each Holder of the Preferred Shares,
which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and
delivers this Guarantee for the benefit of the Holders.
ARTICLE I
As used in this Guarantee, the terms set forth
below shall, unless the context otherwise requires, have
the following meanings. Capitalized terms used but not
otherwise defined herein shall have the meanings assigned
to such terms in the Memorandum of Association and the
Articles of Association of the Issuer adopted on
December 20, 1993.
"Expense Agreement" shall mean the Agreement as to
Expenses and Liabilities entered into between the Issuer
and USX pursuant to which USX has agreed to guarantee
the payment of any indebtedness or liabilities incurred
by the Issuer (other than obligations to Holders of
Preferred Shares in such holders' capacities as holders
of such Preferred Shares).
<PAGE> 2
"Guarantee Payments" shall mean the following
payments, without duplication, to the extent not
paid by the Issuer: (i) any accumulated and
unpaid dividends which have been theretofore declared
on the Preferred Shares of any series from moneys
legally available therefor, (ii) the redemption price
(including all accumulated and unpaid dividends)
payable with respect to any Preferred Shares of any
series called for redemption by the Issuer out of
funds legally available therefor, (iii) upon a
liquidation of the Issuer, the lesser of (a) the
Liquidation Distribution and (b) the amount of
assets of the Issuer available for distribution
to Holders of such series in liquidation of the
Issuer and (iv) any Additional Amounts (as defined
below) payable by the Issuer with respect to the
Preferred Shares of any series.
"Holder" shall mean any holder from time to
time of any Preferred Shares of the Issuer;
provided, however, that in determining whether the
Holders of the requisite percentage of Preferred
Shares have given any request, notice, consent or
waiver hereunder, "Holder" shall not include the
Guarantor or any entity owned 50% or more by the
Guarantor, either directly or indirectly.
"Keep Well Agreement" shall mean the
agreement, dated the date hereof, between the
Guarantor and the Manager (as defined below),
pursuant to which USX will cause the Manager to
have at all times at least $1.00 more than its
cash obligations.
"Liquidation Distribution" shall mean the
aggregate of the liquidation preference of $25 per
Preferred Share and all accumulated and unpaid
dividends (whether or not declared) to the date
of payment.
"Loan Agreement" shall mean the agreement,
dated the date hereof, pursuant to which the Issuer
will loan to the Guarantor the proceeds received by
the Issuer from the issuance and sale of the Preferred
Shares and the Common Shares.
"Loans" shall mean the loans from the Issuer to
the Guarantor pursuant to the Loan Agreement.
"Manager" shall mean USX Capital Management Company,
an indirect, wholly-owned subsidiary of the Guarantor,
which will manage the Issuer pursuant to the duties and
obligations assigned to the Manager in the Memorandum of
Association and the Articles of Association of the Issuer.
"Redemption Price" shall mean $25 per Preferred
Share plus accumulated and unpaid dividends (whether or
not declared) to the date fixed for redemption.
ARTICLE II
Section 2.01. (a) The Guarantor irrevocably
and unconditionally agrees to pay in full to the
Holders the Guarantee Payments, as and when due
(except to the extent paid by the Issuer),
regardless of any defense, right of set-off or
counterclaim which the Issuer may have or assert.
<PAGE> 3
This Guarantee is continuing, irrevocable,
unconditional and absolute. The Guarantor's
obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts
by the Guarantor to the Holders or by causing the
Issuer to pay such amounts to such Holders.
(b) All Guarantee Payments shall be made
without withholding or deduction for or on account
of any present or future taxes, duties, assessments
or governmental charges of whatever nature imposed
or levied upon or as a result of such payment by or
on behalf of the United States, any State thereof
or any other jurisdiction through which or from
which such payment is made, or any authority
therein or thereof having power to tax, unless the
withholding or deduction of such taxes, duties,
assessments or governmental charges is required by
law. In that event, the Guarantor shall pay such
additional amounts as may be necessary in order
that the net amounts received by the Holders after
such withholding or deduction will equal the amount
which would have been receivable in respect of the
Preferred Shares in the absence of such withholding
or deduction ("Additional Amounts"), except that no
such Additional Amounts will be payable to any Holder
(or a third party on his behalf):
(i) if such Holder is liable for such
taxes, duties, assessments or governmental
charges in respect of the Preferred Shares by
reason of such Holder's having some connection
with the United States, any State thereof or
any other jurisdiction through which or from
which such payment is made, other than being a
Holder, or
(ii) if the Issuer or the Guarantor has
notified such Holder of the obligation to
withhold taxes and requested but not received
from such Holder a declaration of non-residence
or other similar claim for exemption, and such
withholding or deduction would not have been
required had such declaration or similar claim
been received.
<PAGE> 4
Section 2.02. The Guarantor hereby waives
notice of acceptance of this Guarantee and of any
liability to which it applies or may apply,
presentment, demand for payment, protest, notice of
nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
Section 2.03. The obligations covenants,
agreements and duties of the Guarantor under this
Guarantee shall in no way be affected or impaired
by reason of the happening from time to time of any
of the following:
(a) the release or waiver, by operation
of law or otherwise, of the performance or
observance by the Issuer of any express or
implied agreement, covenant, term or condition
relating to the Preferred Shares to be
performed or observed by the Issuer;
(b) the extension of time for the payment
by the Issuer of all or any portion of the
dividends, redemption price, liquidation
distributions or any other sums payable under
the terms of the Preferred Shares or the
extension of time for the performance of any
other obligation under, arising out of, or in
connection with, the Preferred Shares;
(c) any failure, omission, delay or lack
of diligence on the part of the Holders to
enforce, assert or exercise any right,
privilege, power or remedy conferred on the
Holders pursuant to the terms of the Preferred
Shares, or any action on the part of the Issuer
granting indulgence or extension of any kind;
(d) the voluntary or involuntary
liquidation, dissolution, sale of any
collateral, receivership, insolvency,
bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement,
composition or readjustment of debt of, or
other similar proceedings affecting, the Issuer
or any of the assets of the Issuer;
<PAGE> 5
(e) any invalidity of, or defect or
deficiency in, any of the Preferred Shares; or
(f) the settlement or compromise of any
obligation guaranteed hereby or hereby
incurred.
There shall be no obligation of the Holders to give
notice to, or obtain consent of, the Guarantor with
respect to the happening of any of the foregoing.
Section 2.04. This is a guarantee of payment
and not of collection. A Holder may enforce this
Guarantee directly against the Guarantor, and the
Guarantor waives any right or remedy to require
that any action be brought against the Issuer or
any other person or entity before proceeding
against the Guarantor. Subject to Section 2.05
hereof, all waivers herein contained shall be without
prejudice to the Holders' right at the Holders'
option to proceed against the Issuer, whether by
separate action or by joinder. The Guarantor
agrees that this Guarantee shall not be discharged
except by payment of the Guarantee Payments in full
and by complete performance of all obligations of
the Guarantor contained in this Guarantee.
Section 2.05. The Guarantor shall be
subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid
to the Holders by the Guarantor under this
Guarantee and shall have the right to waive payment
of any amount of dividends in respect of which
payment has been made to the Holders by the
Guarantor pursuant to Section 2.01 hereof; provided,
however, that the Guarantor shall not (except to
the extent required by mandatory provisions of law)
exercise any rights which it may acquire by way of
subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of a
payment under this Guarantee, if, at the time of
any such payment, any amounts are due and unpaid
under this Guarantee. If any amount shall be paid
to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to pay over such
amount to the Holders.
<PAGE> 6
Section 2.06. The Guarantor acknowledges
that its obligations hereunder are independent of
the obligations of the Issuer with respect to
the Preferred Shares and that the Guarantor
shall be liable as principal and sole
debtor hereunder to make Guarantee Payments
pursuant to the terms of this Guarantee
notwithstanding the occurrence of any event
referred to in subsections (a) through (f),
inclusive, of Section 2.03 hereof.
ARTICLE III
Section 3.01. So long as any Preferred Shares
of any series remain outstanding, the Guarantor shall
not declare or pay any dividend on, or redeem, purchase,
acquire or make a liquidation payment with respect to,
any of its capital stock or make any guarantee payments
with respect to the foregoing (other than payments
under this Guarantee), if at such time the Guarantor
shall be in default with respect to its payment or other
obligations hereunder or under the Expense Agreement or
the Keep Well Agreement or there shall have occurred any
event that, with the giving of notice or the lapse of
time or both, would constitute an Event of Default under
the Loan Agreement. The Guarantor shall take all actions
necessary to ensure the compliance of its subsidiaries
with this Section 3.01.
Section 3.02. The Guarantor covenants, so long as
any Preferred Shares of any series remain outstanding: (i) to
maintain direct or indirect 100% ownership of the Common Shares
and any other shares of the Issuer other than the Preferred
Shares of any series; (ii) to cause at least 21% of the total
value of the Issuer and at least 21% of all interests in the
capital, income, gain, loss, deduction and credit of the Issuer
to be represented by Common Shares; (iii) not to voluntarily
dissolve, wind-up or liquidate the Issuer or the Manager;
(iv) to cause USX Capital Management Company to remain the
Manager of the Issuer and to timely perform all of its duties
as Manager (including the duty to declare and pay dividends
on the Preferred Shares); (v) to use reasonable efforts to
cause the Issuer to remain a limited life company and
otherwise continue to be treated as a partnership for United
States federal income tax purposes; and (vi) to at all times own
directly or indirectly all of the capital stock of the Manager.
<PAGE> 7
Section 3.03. The Guarantee will constitute
an unsecured obligation of the Guarantor and will
rank (i) subordinate and junior in right of payment
to all other liabilities of the Guarantor and (ii)
senior to the most senior preferred or preference
stock of any series now or hereafter issued by the
Guarantor and senior to any guarantee now or
hereafter entered into by the Guarantor in respect
of any preferred or preference stock of any
affiliate of the Guarantor.
ARTICLE IV
This Guarantee shall terminate and be of no
further force and effect upon full payment of the
Redemption Price of all Preferred Shares of all
series or upon full payment of the amounts payable
to the Holders upon liquidation of the Issuer;
provided, however, that this Guarantee shall
continue to be effective or shall be reinstated,
as the case may be, if at any time any holder of
Preferred Shares of any series must restore payment
of any sums paid under the Preferred Shares of such
series or under this Guarantee for any reason
whatsoever. The Guarantor agrees to indemnify each
Holder and hold it harmless against any loss it
may suffer in such circumstances.
ARTICLE V
Section 5.01. All guarantees and agreements
contained in this Guarantee shall bind the
successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to
the benefit of the Holders. The Guarantor shall
not assign its obligations hereunder without the
prior approval of the Holders of not less than
66-2/3% in liquidation preference of all Preferred
Shares of all series then outstanding voting as
a single class.
<PAGE> 8
Section 5.02. Except with respect to any
changes which do not adversely affect the rights
of Holders (in any of which cases no vote will
be required), this Guarantee may only be amended
by instrument in writing signed by the Guarantor
with the prior approval of the Holders of not
less than 66-2/3% in liquidation preference of
all Preferred Shares of all series voting as
a single class.
Section 5.03. Any notice, request or other
communication required or permitted to be given
hereunder to the Guarantor shall be given in
writing by delivering the same against receipt
therefor by facsimile transmission (confirmed by
mail) or telex, addressed to the Guarantor, as
follows (and if so given, shall be deemed given
when mailed or upon receipt of an answer-back, if
sent by telex), to wit:
USX Corporation
600 Grant Street
Pittsburgh PA 15219-4776
Facsimile No.: (412) 433-4765
Attention: Vice President & Treasurer
Any notice,request or other communication
required or permitted to be given hereunder to the
Holders shall be given by the Guarantor in the same manner
as notices sent by the Issuer to the Holders.
Section 5.04. The masculine and neuter genders
used herein shall include the masculine, feminine
and neuter genders.
<PAGE> 9
Section 5.05. This Guarantee is solely for the
benefit of the Holders and is not separately
transferable from the Preferred Shares.
Section 5.06. THIS GUARANTEE SHALL BE GOVERNED
BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
THIS GUARANTEE is executed as of the day and
year first above written.
USX Corporation
By _________________________
<PAGE> 1
EXHIBIT 4.2
CDM:lw- 14778
LOAN AGREEMENT
LOAN AGREEMENT, dated as of _____________
between USX Corporation ("USX"), a Delaware
corporation and USX Capital LLC, a limited life company
organized under the laws of the Turks and Caicos
Islands ("Capital").
WHEREAS, Capital intends to issue its common
shares (the "Common Shares") to USX, and receive related
capital contributions from USX in an aggregate amount
of $_________ (the "Common Share Payments") and to
issue and sell _________ shares of Cumulative
Monthly Income Preferred Shares, Series A
(the "Preferred Shares") with a liquidation preference
(the "Liquidation Preference") of $25 per share;
WHEREAS, USX is guaranteeing the payment of
dividends on the Preferred Shares if and when declared
to the extent that there are sufficient funds legally
available therefor, the Redemption Price (as defined
in the Guarantee Agreement) and the Liquidation
Distribution (as defined in the Guarantee Agreement)
on the Preferred Shares all to the extent set forth
in the Payment and Guarantee Agreement,
dated __________________ (the "Guarantee");
WHEREAS, USX has asked Capital to make loans
to USX in an aggregate principal amount equal to
the sum of the aggregate Common Share Payments and
the aggregate Liquidation Preference of the
Preferred Shares issued and sold by Capital;
WHEREAS, Capital is willing to make such loans
to USX, on the terms and conditions hereinafter
stated;
WHEREAS, USX Capital Management Company ("Capital
Management"), an indirect, wholly-owned subsidiary of USX,
will be the Manager (as defined in the Articles of
Association of Capital) of Capital;
NOW, THEREFORE, USX and Capital hereby agree as
follows:
ARTICLE I
THE LOANS
Section 1.01. The Loans. Subject to the terms
and conditions herein, Capital agrees to make loans to
USX on the date hereof in an aggregate principal amount
of $_________. Such loans shall be referred to herein
as the "Loans".
<PAGE> 2
Section 1.02. Term of the Loans; Mandatory
Prepayment.
(a) If Capital redeems Preferred Shares
in accordance with the terms thereof, the Loans
pertaining to such Shares will become due and
payable in a principal amount equal to the
aggregate stated Liquidation Preference of the
Preferred Shares so redeemed, together with any and
all accrued interest thereon. Any payment pursuant
to this Section 1.02(a) shall be made prior to
12:00 noon, New York time, on the date fixed for such
redemption or at such other time on such earlier
date as Capital and USX shall agree.
(b) The entire principal amount of the
Loans shall become due and payable (together with
any accrued and unpaid interest thereon, including
Additional Interest (as defined in Section 2.02),
if any) on the earliest of the date that is the 50th
anniversary of the issuance of the Preferred Shares
or the date upon which Capital, USX or Capital
Management shall be dissolved, wound-up or liquidated.
Section 1.03. Optional Prepayment. USX shall
have the right to prepay the Loans, without premium
or penalty,
(i) in whole or in part (together with
any accrued but unpaid interest, including
Additional Interest, if any, on the portion
being prepaid) at any time following
_________________; and
(ii) in whole (together with all accrued
and unpaid interest, including Additional
Interest, if any, thereon) at any time if USX
is or would be required to pay any Additional
Interest on the entire amount of the Loans
or in part (together with all accrued and
unpaid interest, including Additional Interest
on the portion being prepaid) at any time if
USX is or would be required to pay Additional
Interest with respect to only a portion of
the Loans, provided that if a partial prepayment
would, through the corresponding partial redemption
required under the terms of the Preferred Shares,
result in a delisting of the Preferred Shares,
USX may, and may only, prepay the Loans in
whole. In no event, however, shall USX have the
right to prepay the Loans, or a portion thereof, under
this clause (ii) based on (a) a technical obligation
to pay Additional Interest because of a withholding
obligation to the extent USX would not incur any
significant penalties, interest or tax under the
Internal Revenue Code or applicable law if USX did
not withhold, or (b) a de minimis obligation to pay
Additional Interest. For purposes of the foregoing,
in the event that USX is advised by independent legal
counsel that more than an insubstantial risk exists
that USX will incur penalties, interest or tax under
the Internal Revenue Code or other applicable law if
it does not withhold, USX shall have the right to
repay the Loans, or a portion thereof, under this
clause (ii) unless the obligation to pay Additional
Interest if USX does so withhold is a de minimus
obligation.
<PAGE> 3
ARTICLE II
INTEREST
Section 2.01. Interest on the Loans. The Loans
shall bear interest at an annual rate equal to _____%
from the date they are made until maturity. Such
interest shall be payable on the last day of each
calendar month of each year commencing ___________.
In the event that any date on which interest is
payable on the Loans is not a Business Day,
then payment of the interest payable on such
date will be made on the next succeeding day
which is a Business Day (and without any interest
or other payment in respect of any such delay),
except that, if such Business Day is in the next
succeeding calendar year, such payment shall be
made on the immediately preceding Business Day,
in each case with the same force and effect as
if made on such date. A "Business Day" shall mean
any day other than a day on which banking institutions
in the City of New York are authorized or required
by law to close.
Section 2.02. Additional Interest. In
addition, if at any time following the date hereof
(a) Capital shall be required to pay
any Additional Amounts in respect of the Preferred
Shares pursuant to the terms thereof or
(b) USX shall be required to withhold or
deduct any amounts, for or on account of any taxes,
duties or governmental charges of whatever nature
imposed by the United States of America (or any
political subdivision thereof or therein), from the
interest payments to be made by USX on the Loans or
(c) Capital shall be required to pay,
with respect to its income derived from the
interest payments on the Loans, any amounts, for or
on account of any taxes, duties or governmental
charges of whatever nature imposed by the Turks and
Caicos Islands (or any political subdivision
thereof or therein), or any other taxing authority,
then, in any such case, USX will pay as interest
such additional amounts ("Additional Interest") as
may be necessary in order that the net amounts
received and retained by Capital after paying such
Additional Amounts, or after such withholding or
deduction or the payment of such taxes, duties,
assessments or governmental charges, as the case
may be, shall result in Capital's having such funds
as it would have had in the absence of the
obligation to pay such Additional Amounts, or such
withholding or deduction or the payment of such
taxes, duties, assessments or governmental charges,
as the case may be. The obligation to pay
Additional Interest under (b) above shall be
reduced proportionately to the extent that (x) USX
or Capital has notified holders of Preferred Shares
of the obligation to withhold taxes and requested
but not received from such holders declarations of
non-residence or other similar claim for exemption
and (y) such withholding or deduction would not
have been required had such declaration or similar
claim been received.
<PAGE> 4
Section 2.03. Extension of Interest Period.
Notwithstanding the provisions of Section 2.01 hereof,
USX shall have the right at any time or times during
the term of the Loans, so long as USX is not in
default in the payment of interest on the Loans, to
extend the interest payment period up to 18 months;
provided that at the end of such period USX shall pay
all interest which has accrued and not been paid together
with interest thereon at the rate specified for the
Loans to the extent permitted by applicable law;
provided, further, that, during any such extended
interest period neither USX, nor any majority-owned
subsidiary of USX, shall declare or pay any dividend
on, or redeem, purchase,acquire or make a liquidation
payment with respect to, any of its capital stock
or make any guarantee payments with respect to the
foregoing (other than (i) payments under the Guarantee
or (ii) dividends or guarantee payments to USX); and
provided further that any such extended interest period
may only be selected with respect to a Loan if an extended
interest period of identical length is simultaneously
selected for all Loans. Prior to the termination of any
such extended interest payment period, USX may further
extend the interest payment period, provided that such
extended interest payment period, together with all
such further extensions thereof, may not exceed
18 months. USX shall give Capital notice of its
selection of such extended interest payment period one
Business Day prior to the earlier of (i) the date
Capital declares the related dividend or (ii) the
date Capital is required to give notice of the record
or payment date of such related dividend to the
New York Stock Exchange or other applicable self-
regulatory organization or to holders of the Preferred
Shares, but in any event not less than two Business Days
prior to such record date. USX shall cause Capital to
give such notice of USX's selection of such extended
interest payment period to the holders of the
Preferred Shares.
ARTICLE III
PAYMENTS
Section 3.01. Method and Date of Payment.
Each payment by USX of principal and interest
(including Additional Interest, if any) on the Loans
shall be made to Capital in lawful money of the
United States at such place and to such account as
may be designated by Capital.
Section 3.02. Set-off. Notwithstanding
anything to the contrary herein, USX shall have the
right to set off any payment it is otherwise
required to make hereunder with and to the extent
USX has theretofore made, or is concurrently on the
date of such payment making, a payment under the
Guarantee.
ARTICLE IV
SUBORDINATION
SECTION 4.01. Subordination. USX and Capital
covenant and agree that the Loans are subordinate and
junior in right of payment to all Senior
Indebtedness as provided herein. The term "Senior
Indebtedness" shall mean the principal, premium, if
any, and interest on
(i) all indebtedness of USX, whether
outstanding on the date hereof or hereafter
created, incurred or assumed, which is for
money borrowed, or evidenced by a note or
similar instrument given in connection with the
acquisition of any business properties or
assets, including securities,
(ii) any indebtedness of others of the
kinds described in the preceding clause (i) for
the payment of which USX is responsible or
liable (directly or indirectly, contingently
or otherwise) as guarantor or otherwise and
(iii) amendments, renewals, extensions
and refundings of any such indebtedness, unless
in any instrument or instruments evidencing or
securing such indebtedness or pursuant to which
the same is outstanding, or in any such
amendment, renewal, extension or refunding, it
is expressly provided that such indebtedness is
not superior in right of payment to the Loans.
The Senior Indebtedness shall continue to be
Senior Indebtedness and entitled to the benefits
of these subordination provisions irrespective of
any amendment, modification or waiver of any term
of the Senior Indebtedness or extension or renewal
of the Senior Indebtedness.
<PAGE> 5
In the event that
(i) USX shall default in the payment of
any principal, or premium, if any, or interest
on any Senior Indebtedness when the same
becomes due and payable, whether at maturity or
at a date fixed for prepayment or declaration
or otherwise or
(ii) an event of default occurs with
respect to any Senior Indebtedness permitting
the holders thereof to accelerate the maturity
thereof and written notice describing such
event of default and requesting commencement of
payment blockage on transactions as hereinafter
described is given to USX by the holders of
Senior Indebtedness, then unless and until such
default in payment and event of default shall
have been cured or waived or shall have ceased
to exist, no direct or indirect payment (in
cash, property, securities, by set-off or
otherwise) shall be made or agreed to be made
on account of the Loans or interest thereon or
in respect of any repayment, redemption,
retirement, purchase or other acquisition of
the Loans.
In the event of
(i) any insolvency, bankruptcy,
receivership, liquidation, reorganization,
readjustment, composition or other similar
proceeding relating to USX, its creditors or
its property,
(ii) any proceeding for the liquidation,
dissolution or other winding up of USX,
voluntary or involuntary, whether or not
involving insolvency or bankruptcy proceedings,
(iii) any assignment by USX for the
benefit of its creditors, or
(iv) any other marshalling of the assets
of USX,
all Senior Indebtedness shall first be paid in
full before any payment or distribution, whether
in cash, securities or other property, shall be
made by USX on account of the Loans. Any payment
or distribution, whether in cash, securities or
other property (other than securities of USX or
any other corporation provided for by a plan of
reorganization or a readjustment, the payment
of which is subordinate, at least to the extent
provided in these subordination provisions with
respect to the indebtedness evidenced by the
Loans, to the payment of all Senior Indebtedness
at the time outstanding and to any securities
issued in respect thereof under any such plan
of reorganization or readjustment), which
would otherwise (but for these subordination
provisions) be payable or deliverable in
respect of the Loans shall be paid or delivered
directly to the holders of Senior Indebtedness
in accordance with the priorities then existing
among such holders until all Senior
Indebtedness shall have been paid in full. No
present or future holder of any Senior
Indebtedness shall be prejudiced in the right
to enforce subordination of the indebtedness
constituting the Loans by any act or failure to
act on the part of USX.
<PAGE> 6
Senior Indebtedness shall not be deemed to have
been paid in full unless the holders thereof shall
have received cash, securities or other property
equal to the amount of such Senior Indebtedness
then outstanding. Upon the payment in full of all
Senior Indebtedness, Capital shall be subrogated to
all the rights of any holders of Senior
Indebtedness to receive any further payments or
distributions applicable to the Senior Indebtedness
until the Loans shall have been paid in full, and
such payments or distributions received by Capital,
by reason of such subrogation, of cash, securities
or other property which otherwise would be paid or
distributed to the holders of Senior Indebtedness,
shall, as between USX and its creditors other than
the holders of Senior Indebtedness, on the one
hand, and Capital, on the other, be deemed to be a
payment by USX on account of Senior Indebtedness,
and not on account of the Loans.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.01. Representations and Warranties.
USX represents and warrants to Capital that:
(a) Good Standing. USX is a corporation
duly established and validly existing under the
laws of the State of Delaware, with power and
authority (corporate and other) to own its
properties and conduct its business as now being
conducted.
(b) Power and Authority. USX has full
power and authority to enter into this Agreement
and to incur and perform the obligations provided
for herein, all of which have been duly authorized
by all proper and necessary action.
(c) No Conflict. The execution and
delivery of this Agreement and the performance by USX
of all its obligations hereunder 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 USX is a party
or by which USX is bound or subject, nor will this
Agreement result in a violation of the provisions of
USX's Certificate of Incorporation or by-laws.
(d) Binding Agreement. This Agreement
constitutes the valid and legally binding
obligation of USX enforceable in accordance with
its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to
or affecting creditors' rights and to general
equity principles.
ARTICLE VI
COVENANTS
Section 6.01. Covenants. (a) USX agrees
(i) that it shall not declare or pay any dividend on,
or redeem, purchase, acquire or make a liquidation
payment with respect to, any of its capital stock,
or make any guarantee payments with respect to the
foregoing (other than payments under the Guarantee)
if at such time (a) there shall have occurred any
event that, with the giving of notice or the lapse of
time or both, would constitute an Event of Default
hereunder or (b) USX shall be in default with respect
to its payment or other obligations under the Guarantee
Agreement or under the Agreement as to Expenses and
Liabilities, dated as of January ___, 1994, between USX
and Capital or under the Keep Well Agreement, dated as of
January ____, 1994, between USX and Capital Management,
(ii) to maintain direct or indirect 100% ownership of
the Common Shares and any other shares of Capital other
than any series of the Preferred Shares, (iii) to cause
at least 21% of the total value of Capital and at least
21% of all interests in the capital, income, gain,
loss, deduction and credit of Capital to be represented
by Common Shares, (iv) not to voluntarily dissolve, wind-up
or liquidate Capital or Capital Management, (v) to cause
Capital Management to remain the Manager of Capital and
to timely perform all of its duties as Manager of Capital
(including the duty to declare and pay dividends on the
Preferred Shares), (vi) to use its reasonable efforts
to cause Capital to remain a limited life company and
otherwise continue to be treated as a partnership for
United States federal income tax purposes and
(vii) to at all times own directly or indirectly
all of the capital stock of Capital Management.
<PAGE> 7
(b) USX agrees that its obligations under this
Agreement will also be for the benefit of the holders
from time to time of Preferred Shares, and USX acknowledges
and agrees that such holders will be entitled to enforce
this Agreement directly against USX.
(c) USX agrees not to merge with or into another
entity, or permit another entity to merge with or into it,
and agrees not to sell, transfer or lease all or substantially
all of its assets to another entity unless: (i) at such
time no Event of Default hereunder has occurred and is
continuing, or would occur as a result of such merger, sale,
transfer or lease, and (ii) USX is the survivor of such merger
or the survivor of such merger or entity to which USX's assets
are sold, transferred or leased is an entity organized under
the laws of the United States or any state thereof and assumes
all of USX's obligations under this Agreement.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01. Events of Default. If one or
more of the following events (each an "Event of
Default") shall occur and be continuing:
(a) default in the payment of any interest
on the Loans under this Agreement, including any Additional
Interest, when due for ten days (whether by virtue of the
provisions described under Article IV hereof or otherwise);
provided that a valid extension of the interest payment
period by USX pursuant to Section 2.03 hereof shall
not constitute a default in the payment of interest
for this purpose; or
(b) default in the payment of any principal
on the Loans under this Agreement when due (whether by
virtue of Article IV hereof or otherwise); or
(c) dissolution or winding up or
liquidation of Capital; or
(d) the bankruptcy, insolvency or
liquidation of USX; or
(e) the bankruptcy, insolvency or
liquidation of Capital Management; or
(f) the breach of any of the covenants
contained in Section 6.01 hereof, continued for 30 days
after notice to USX by any Preferred Shareholder;
then, provided that the holders of a majority in
liquidation preference of outstanding Preferred
Shares have been entitled to appoint a trustee,
then, in every such event, and at any time
thereafter during the continuance of such event,
Capital will have the right to declare the
principal of and the interest on the Loans
(including any Additional Interest and any
interest subject to an extension election)
and any other amounts payable hereunder to be
forthwith due and payable, whereupon the same
shall become and be forthwith due and payable,
without presentment, demand, protest or other
notice of any kind, all of which are hereby
expressly waived, anything in this Agreement to
the contrary notwithstanding. If an Event of
Default specified in subparagraph (c) or (d)
above shall have occurred, the principal of
and interest on the Loans and any other amounts
payable hereunder shall thereupon and concurrently
become due and payable without presentment, demand,
protest or other notice of any kind, all of which
are hereby expressly waived, anything in this
Agreement to the contrary notwithstanding. USX expressly
acknowledges that under the terms of the Preferred Shares,
the holders of the outstanding Preferred Shares shall in
certain circumstances have the right to appoint a trustee,
which trustee shall be authorized to exercise Capital's
creditor rights under this Agreement, and USX agrees to
cooperate with such Trustee.
<PAGE> 8
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Notices. All notices hereunder
shall be deemed given by a party hereto if in
writing and delivered personally or by telegram or
facsimile transmission or by registered or
certified mail (return receipt requested) to the
other party at the following address for such party
(or at such other address as shall be specified by
like notice):
If to Capital, to:
USX Capital LLC
c/o USX Capital Management Company
5555 San Felipe Road
Houston, TX 77056
Attention:
If to USX, to:
USX Corporation
600 Grant Street
Pittsburgh PA 15219-4776
Attention: Vice President & Treasurer
Any notice given by mail or telegram or
facsimile transmission shall be effective when
received.
Section 8.02. Binding Effect. USX shall have
the right at all times to assign any of its rights
or obligations under this Agreement to a direct or
indirect wholly-owned subsidiary of USX; provided,
that, in the event of any such assignment, USX
shall remain jointly and severally liable for all
such obligations. Capital may not assign any of
its rights hereunder without the prior written
consent of USX. Subject to the foregoing, this
Agreement shall be binding upon and inure to the
benefit of USX and Capital and their respective
successors and assigns. Any assignment by USX or
Capital in contravention of this Section 8.02 shall
be null and void.
Section 8.03. Governing Law. EXCEPT AS TO
MATTERS RELATING TO THE AUTHORIZATION, EXECUTION
AND DELIVERY OF THIS AGREEMENT, WHICH SHALL BE
GOVERNED BY THE LAWS OF THE TURKS AND CAICOS
ISLANDS IN THE CASE OF CAPITAL, THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
<PAGE> 9
Section 8.04. Counterparts. This Agreement
may be executed in counterparts, each of which
shall be deemed an original, but all of which taken
together shall constitute one and the same
instrument.
Section 8.05. Amendments. This Agreement may
be amended by mutual consent of the parties in the
manner the parties shall agree; provided that, so
long as any of the Preferred Shares shall remain
outstanding, no such amendment shall be made, and
no termination of this Agreement shall occur,
without the prior consent of at least 66-2/3% of
the holders of the Preferred Shares, in writing or
at a duly constituted meeting of such holders,
unless and until the Loans and all accrued and
unpaid interest thereon (including Additional
Interest, if any) shall have been paid in full.
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be executed by their
respective officers thereunto duly authorized as
of the day and year first above written.
USX CORPORATION
By _______________________________
G. R. Haggerty
Vice President & Treasurer
USX CAPITAL LLC
By USX Capital Management Company,
as Manager
By _______________________________
Treasurer
<PAGE> 1
EXHIBIT 4.3
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT, dated as of _______________ between
USX Corporation ("USX"), a corporation organized under
the laws of the State of Delaware, United States of
America, and USX Capital LLC, a limited life company
organized under the laws of the Turks and
Caicos Islands ("Capital").
WHEREAS, Capital is issuing on the date hereof
_______ shares of its_______% Cumulative Monthly Income
Preferred Shares, Series A (the "Preferred Shares")
with a liquidation preference (the "Liquidation
Preference") of $25 per share;
WHEREAS, USX Capital Management Company
("Capital Management") will be the Manager of
Capital (as defined in the Articles of Association
of Capital);
WHEREAS, USX will directly or indirectly own all
of the common shares of Capital (the "Common Shares");
WHEREAS, USX and Capital Management have
entered into a Keep Well Agreement dated the date
hereof (the "Keep Well Agreement"), pursuant to which
USX will cause Capital Management to at all times
have at least $1.00 more than its cash obligations;
NOW, THEREFORE, in consideration of the fact
that USX will directly or indirectly own all of the
Common Shares, USX and Capital hereby agree as follows:
Section 1.01. Guarantee by USX. Subject
to the terms and conditions hereof, USX hereby
irrevocably and unconditionally guarantees to each
person or entity to whom Capital is now or hereafter
becomes indebted or liable (other than obligations
to holders of the Preferred Shares in such holders'
capacities as holders of such shares; such obligations
being separately guaranteed to the extent set forth
in the Payment and Guarantee Agreement dated the date
hereof between USX and Capital) (the "Beneficiaries")
the full payment, when and as due, regardless of any
defense, right of set-off or counterclaim which Capital
may have or assert, of any and all indebtedness and
liabilities of Capital to such Beneficiaries
(collectively, the "Obligations"). This Agreement
is intended to be for the benefit of, and to be
enforceable by, all such Beneficiaries, whether or
not such Beneficiaries have received notice hereof.
Section 1.02. Term of Agreement. This
Agreement will remain in effect until (i) the later
of such time as all of the Preferred Shares shall
have been redeemed in accordance with their terms
or the Preferred Shares and the Common Shares
shall have been purchased by Capital, Capital
Management or USX, as the case may be and (ii) there
are no Beneficiaries remaining. This Agreement
is continuing, irrevocable, unconditional and absolute.
Section 1.03. Waiver of Notice. USX hereby
waives notice of acceptance of this Agreement and
of any Obligation to which it applies or may apply
and USX hereby waives presentment, demand for payment,
protest, notice of nonpayment, notice of dishonor, notice
of redemption and all other notices and demands.
Section 1.04. Releases, Waivers, Etc. The
obligations, covenants, agreements and duties of
USX under this Agreement shall in no way be affected
or impaired by reason of the happening from time to
time of any of the following:
<PAGE> 2
(a) the release or waiver, by operation
of law or otherwise, of the performance or
observance by Capital of any express or implied
agreement, covenant, term or condition relating
to the Obligations to be performed or observed
by Capital;
(b) the extension of time for the payment
by Capital of all or any portion of the
Obligations or for the performance of any other
obligation under, arising out of, or in
connection with, the Obligations;
(c) any failure, omission, delay or lack
of diligence on the part of the Beneficiaries
to enforce, assert or exercise any right,
privilege, power or remedy conferred on the
Beneficiaries with respect to the Obligations
or any action on the part of Capital granting
indulgence or extension of any kind;
(d) the voluntary or involuntary
liquidation, dissolution, sale of any
collateral, receivership, insolvency,
bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement,
composition or readjustment of debt of, or
other similar proceedings affecting, Capital or
any of the assets of Capital; or
(e) the settlement or compromise of any
Obligation guaranteed hereby or any obligation
hereby incurred.
There shall be no obligation of the Beneficiaries
to give notice to, or obtain the consent of, USX
with respect to the happening of any of the foregoing.
Section 1.05. Enforcement. A Beneficiary may
enforce this Agreement directly against USX and USX
waives any right or remedy to require that any action
be brought against Capital or any other person or
entity before proceeding against USX.
ARTICLE II
Section 2.01. Binding Effect. All guarantees
and agreements contained in this Agreement shall
bind the successors, assigns, receivers, trustees
and representatives of USX and shall inure to the
benefit of the Beneficiaries.
Section 2.02. Amendment. So long as there
remains any Beneficiary of Capital, or any Preferred
Shares are outstanding, this Agreement shall not be
modified or amended in any manner adverse to such
Beneficiaries and shareholders.
-2-
<PAGE> 3
Section 2.03. Notices. Any notice, request or
other communication required or permitted to be
given hereunder shall be given in writing by
delivering the same against receipt therefor by
facsimile transmission (confirmed by mail) or
telex, addressed as follows (and if so given, shall
be deemed given when mailed or upon receipt of an
answer-back, if sent by telex), to wit:
USX Capital LLC
c/o USX Capital Management Company
Facsimile No.:
Attention: Treasurer
USX Corporation
Facsimile No.:
Attention:
Section 2.04. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
THIS AGREEMENT is executed as of the day and
year first above written.
USX CORPORATION
By _______________________________
USX CAPITAL LLC
By: USX Capital Management Company
By ________________________________
Treasurer
-3-
<PAGE> 1
EXHIBIT 4.4
KEEP WELL AGREEMENT
AGREEMENT dated as of _________________, between
USX CORPORATION, a Delaware corporation ("USX"), and
USX CAPITAL MANAGEMENT COMPANY, a Delaware corporation
("Management").
WHEREAS, Management is Manager (as defined in the
Articles of Association of USX Capital LLC) of USX Capital
LLC, a limited life company organized under the laws of the
Turks and Caicos Islands ("Capital");
WHEREAS, Capital is issuing on the date hereof
_______ shares of its Cumulative Monthly Income
Preferred Shares, Series A (the "Preferred Shares")
and its common shares (the "Common Shares");
WHEREAS, Capital is loaning to USX the proceeds
Capital receives from the sale of the Preferred Shares and
the Common Shares; and
WHEREAS, USX in consideration for the loan from
Capital desires to execute this Agreement for the benefit
of Management, Capital and holders of Preferred Shares.
NOW, THEREFORE, in consideration of the promises
herein contained, USX and Management hereby agree as follows:
1. Stock Ownership.
At all times during the term of this Agreement,
USX shall (i) maintain direct or indirect ownership
of 100% of the Common Shares and any other shares of
Capital other than the Preferred Shares of any series,
(ii) cause at least 21% of the total value of Capital
and at least 21% of all interests in the capital, income,
gain, loss, deduction and credit of Capital to be represented
by Common Shares and (iii) own directly or indirectly all of
the capital stock of Management.
2. Maintenance of Net Worth.
At all times during the term of this Agreement,
USX agrees that it shall cause Management to have the
greater of (i) at least U.S. $1.00 more than its cash
obligations or (ii) have a consolidated tangible net worth
as determined in accordance with United States generally
accepted accounting principles of at least U.S. $1.00.
<PAGE> 2
3. Maintenance of Liquidity.
At all times during the term of this Agreement,
USX will cause Management to maintain sufficient
liquidity to punctually meet all of its obligations
as Manager, or USX will make available to Management
sufficient liquidity to enable Management to meet
its obligations in full as they fall due.
4. Corporate Existence.
At all times during the term of this Agreement,
USX shall take all steps as may be necessary to prevent
the bankruptcy, insolvency or liquidation of the Manager.
5. Term.
This Agreement shall remain in full force and
effect so long as there are any Preferred Shares outstanding.
6. Waiver.
USX hereby waives any failure or delay on the part
of Management in asserting or enforcing any of its rights or
in making any claims or demands hereunder.
7. Modification, Amendment and Termination.
So long as there are any Preferred Shares outstanding,
this Agreement shall not be modified or amended in any manner
adverse to the interests of such holders of Preferred Shares
and this Agreement shall not be terminated.
8. Successors; Beneficiaries.
The agreements herein set forth shall be mutually
binding upon and inure to the mutual benefit of Management
and any successor of Management. USX expressly acknowledges
that this Agreement is being entered into for the benefit of
the holders of Preferred Shares and agrees that the provisions
of this Agreement may be enforced by such holders of Preferred
Shares on behalf of Management against USX in the event that
USX breaches its agreements herein set forth or in the
event that Management fails to enforce its rights against
USX under this Agreement.
9. Governing Law and Jurisdiction.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
- 2 -
<PAGE> 3
10. Counterparts.
This Agreement may be executed in any number of
counterparts. Each counterpart shall be deemed to be an
original, but all such counterparts shall together
constitute one and the same instrument.
THIS AGREEMENT is executed as of the day and year
first above written.
USX CORPORATION
By: _______________________________
Name:
Title:
USX CAPITAL MANAGEMENT COMPANY
By: ________________________________
Name:
Title:
- 3 -
<PAGE> 1
EXHIBIT 5.1
MISICK AND STANBROOK
P.O. Box 127
Town Center Mall
Providencioles
Turks & Caicos Islands
British West Indies
February , 1994
USX Corporation
600 Grant Street
Pittsburgh, PA 15219-4776
USX Capital LLC
c/o USX Capital Management Company
5555 San Felipe Road
Houston, Texas 77056
Gentlemen:
We have acted as Turks & Caicos Islands counsel for USX Corporation ("USX")
and USX Capital LLC (the "Company") in connection with the proposed issuance and
sale by the Company of up to 10,000,000 of the Company's Cumulative Guaranteed
Monthly Income Preferred Shares and the Guarantees of such Preferred Shares by
USX.
We have participated in the preparation of the Registration Statement on
Form S-3 with respect to said Preferred Shares and Guarantees to be filed with
the Securities and Exchange Commission.
Based on the foregoing, we are of the opinion that USX Capital LLC has been
duly incorporated and is validly existing and in good standing under the laws of
Turks and Caicos Islands. We are further of the opinion that, when the Preferred
Shares are issued by the Company, and sold, said Preferred Shares will be
legally issued, valid and binding obligations of the Company.
We hereby confirm our opinion as set forth under the caption "TAXATION" in
the Prospectus constituting part of the Company's and USX's Registration
Statement on Form S-3.
We hereby consent to the use of our name, including under the captions
"TAXATION" and "VALIDITY OF SECURITIES", in the Prospectus constituting part of
the Form S-3 Registration Statement of the Company and USX relating to the
Preferred Shares of the Company guaranteed to the extent set forth in the
Prospectus by USX, and to the filing of this consent as an exhibit thereto.
MISICK AND STANBROOK
<PAGE> 1
EXHIBIT 5.2
February , 1994
USX Corporation
600 Grant Street
Pittsburgh, PA 15219-4776
USX Capital LLC
c/o USX Capital Management Company
5555 San Felipe Road
Houston, Texas 77056
Gentlemen:
I, or lawyers acting under my supervision, have acted as
counsel for USX Corporation ("USX") and USX Capital LLC (the
"Company") in connection with the proposed issuance and sale by
the Company of up to 10,000,000 of the Company's Cumulative
Guaranteed Monthly Income Preferred Shares (the "Preferred
Shares") and the Guarantees of such Preferred Shares by USX.
I, or lawyers acting under my supervision, have
participated in the preparation of the Registration Statement on
Form S-3 with respect to said Preferred Shares and Guarantees to
be filed with the Securities and Exchange Commission.
Based on the foregoing, I am of the opinion that USX has
been duly incorporated and is validly existing and in good
standing under the laws of the State of Delaware. I am further
of the opinion that, when the Payment and Guarantee Agreement,
the Loan Agreement, the Agreement as to Expenses and Liabilities
and the Keep Well Agreement shall have been executed and
delivered by USX and the Company, the guarantees provided
thereunder shall be legally issued and binding obligations of
USX.
I hereby consent to the use of my name, including under the
caption "VALIDITY OF SECURITIES," in the Prospectus constituting
part of the Form S-3 Registration Statement of the Company and
USX relating to the preferred shares of the Company guaranteed
to the extent set forth in the Prospectus by USX and to the
filing of this consent as an exhibit thereto.
Dan D. Sandman
General Counsel and Secretary
<PAGE> 1
EXHIBIT 8.2
February , 1994
John T. Mills, Esq.
Vice President -- Taxes
USX Corporation
600 Grant Street
Pittsburgh, PA 15219-4776
Re: USX Capital LLC Cumulative Guaranteed
Monthly Income Preferred Shares
Dear Mr. Mills:
We have reviewed the Form S-3 Registration Statement and related Prospectus
describing shares of USX Capital LLC Cumulative Guaranteed Monthly Income
Preferred Shares ("Preferred Shares"), guaranteed by USX Corporation to the
extent indicated.
This will confirm that, in our opinion, under current law the United States
federal income tax consequences of acquiring and owning the Preferred Shares
described in the Prospectus under the heading "TAXATION" are complete and
accurate in all material respects. Our opinion is subject to the qualifications
stated under that heading. As noted, the discussion may be supplemented in a
Prospectus Supplement for a particular series of Preferred Shares, as required
by the terms of such series.
We consent to the filing of the opinion with the Securities and Exchange
Commission and to the references to us in the Prospectus.
Very truly yours,
MILLER & CHEVALIER, CHARTERED
/s/ THOMAS W. MAHONEY, JR.
By:..............................
Thomas W. Mahoney, Jr.
<PAGE> 1
EXHIBIT 12
USX CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
TOTAL ENTERPRISE BASIS--UNAUDITED
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------------------------
1993 1992 1991 1990 1989
---- ---- ---- ------ ------
<S> <C> <C> <C> <C> <C>
Portion of rentals representing interest............ $ 84 $ 87 $ 91 $ 88 $ 79
Capitalization interest............................. 105 78 63 50 42
Other interest and combined fixed charges........... 372 408 474 554 761
Pretax earnings which would be required to cover
preferred stock dividend requirements of parent... 44 14 15 28 93
---- ---- ---- ------ ------
Total combined fixed charges and preferred stock
dividends (A)..................................... $605 $587 $643 $ 720 $ 975
---- ---- ---- ------ ------
---- ---- ---- ------ ------
Earnings--pretax income (loss) with applicable
adjustments (B)................................... $280 $376 $(53) $1,935 $2,271
---- ---- ---- ------ ------
---- ---- ---- ------ ------
Ratio of (B) to (A)................................. (a) (a) (a) 2.69 2.33
---- ---- ---- ------ ------
---- ---- ---- ------ ------
</TABLE>
- ---------
(a) Earnings did not cover combined fixed charges and preferred stock dividends
by $325 million for 1993, by $211 million for 1992 and by $696 million for
1991.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our reports
dated February 8, 1994, relating to the consolidated financial statements of USX
Corporation, the financial statements of the Marathon Group, the financial
statements of the U.S. Steel Group, and the financial statements of the Delhi
Group, appearing in the Form 8-K of USX Corporation dated February 14, 1994. We
also consent to the reference to us under the heading "Experts" in such
Prospectus.
PRICE WATERHOUSE
Pittsburgh, Pennsylvania
February 15, 1994
<PAGE> 1
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned, J. D. Low,
President and Director, K. L. Matheny, Vice President and Director, W. F.
Schwind, Jr., Secretary and Director, and Jerry Howard, Treasurer, of USX
Capital Management Company, a Delaware corporation, which is acting as Manager
of USX Capital LLC (the "Company"), a limited life company organized under the
laws of the Turks and Caicos Islands, hereby makes, designates, constitutes and
appoints G. R. Haggerty, L. B. Jones and A. E. Ferrara and each of them (with
full power to act without the other), as the undersigned's true and lawful
attorneys-in-fact and agents, with full power and authority to act in any and
all capacities for and in the name, place and stead of the undersigned in
connection with the filing of any and all registration statements and all
amendments and post-effective amendments thereto (collectively, "Registration
Statements") under the Securities Act of 1933, as amended, with the Securities
and Exchange Commission, and any and all registrations, qualifications or
notifications under the applicable securities laws of any and all states and
other jurisdictions, with respect to the securities of the Company of whatever
class, including without limitation thereon the Company's common stock and
preferred stock, however offered, sold, issued, distributed, placed or resold by
the Company or by any other person or entity that may be required to effect any
such filings.
Without limiting the generality of the foregoing grant of authority, such
attorneys-in-fact and agents, or each of them, are hereby granted full power and
authority, on behalf of and in the name, place and stead of the undersigned, to
execute and deliver all such Registration Statements, registrations,
qualifications, or notifications, any and all amendments thereto, statements of
changes, and any and all other documents in connection with the foregoing, and
take such other and further action as such attorneys-in-fact and agents, or each
of them, deem necessary or appropriate. The powers and authorities granted
herein to such attorneys-in-fact and agents, and each of them, also include the
full right, power and authority to effect necessary or appropriate substitutions
or revocations. Each of the undersigned hereby ratifies, confirms, and adopts,
as his own act and deed, all action lawfully taken pursuant to the powers and
authorities herein granted by such attorneys-in-fact and agents, or each of
them, or by their respective substitutes.
IT WITNESS WHEREOF, each of the undersigned has hereunto set his name and
seal as of the 31st day of December, 1993.
/s/ J. D. LOW
(SEAL)
J. D. Low
President and Director
/s/ K. L. MATHENY
(SEAL)
K. L. Matheny
Vice President and Director
/s/ W. F. SCHWIND, JR.
(SEAL)
W. F. Schwind, Jr.
Secretary and Director
/s/ JERRY HOWARD
(SEAL)
Jerry Howard
Treasurer
<PAGE> 2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
The Board of Directors of USX Corporation (the "Corporation") having, on
November 30, 1993, approved, inter alia, the following action by the
Corporation: (a) formation of a special purpose subsidiary of the Corporation
(the "SPC") for the purpose of having the SPC issue and sell shares of preferred
stock to the public commonly referred to as "Monthly Income Preferred Shares"
("MIPS"), (b) issuance of up to $375,000,000 of obligations of the Corporation
(which may take the form of notes or guarantees or both) in connection with the
issuance and sale of MIPS, and (c) all action of the Corporation and the SPC
which may be necessary or appropriate to consummate the sale of the MIPS to the
public (including, without limitation, the registration of MIPS (and, if
appropriate, the aforementioned notes and/or guarantees of the Corporation) with
the United States Securities and Exchange Commission ["SEC"]), the undersigned
member of said Board of Directors does hereby make, constitute and appoint
Robert M. Hernandez, Gretchen R. Haggerty or Lewis B. Jones, my true and lawful
attorney-in-fact to sign and execute for me and on my behalf one or more
registration statements to be filed with the SEC in connection with the proposed
issuance of MIPS and any and all amendments to said registration statement(s) in
such form as they or any one or more of them may approve, and to take such other
action as may be appropriate to cause the Corporation and the SPC to comply with
applicable law.
WITNESS the due execution hereof this 30th day of November, 1993.
/s/ NEIL A. ARMSTRONG
------------------------------------
<PAGE> 3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
The Board of Directors of USX Corporation (the "Corporation") having, on
November 30, 1993, approved, inter alia, the following action by the
Corporation: (a) formation of a special purpose subsidiary of the Corporation
(the "SPC") for the purpose of having the SPC issue and sell shares of preferred
stock to the public commonly referred to as "Monthly Income Preferred Shares"
("MIPS"), (b) issuance of up to $375,000,000 of obligations of the Corporation
(which may take the form of notes or guarantees or both) in connection with the
issuance and sale of MIPS, and (c) all action of the Corporation and the SPC
which may be necessary or appropriate to consummate the sale of the MIPS to the
public (including, without limitation, the registration of MIPS (and, if
appropriate, the aforementioned notes and/or guarantees of the Corporation) with
the United States Securities and Exchange Commission ["SEC"]), the undersigned
member of said Board of Directors does hereby make, constitute and appoint
Robert M. Hernandez, Gretchen R. Haggerty or Lewis B. Jones, my true and lawful
attorney-in-fact to sign and execute for me and on my behalf one or more
registration statements to be filed with the SEC in connection with the proposed
issuance of MIPS and any and all amendments to said registration statement(s) in
such form as they or any one or more of them may approve, and to take such other
action as may be appropriate to cause the Corporation and the SPC to comply with
applicable law.
WITNESS the due execution hereof this 30th day of November, 1993.
/s/ V. G. BEGHINI
------------------------------------
<PAGE> 4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
The Board of Directors of USX Corporation (the "Corporation") having, on
November 30, 1993, approved, inter alia, the following action by the
Corporation: (a) formation of a special purpose subsidiary of the Corporation
(the "SPC") for the purpose of having the SPC issue and sell shares of preferred
stock to the public commonly referred to as "Monthly Income Preferred Shares"
("MIPS"), (b) issuance of up to $375,000,000 of obligations of the Corporation
(which may take the form of notes or guarantees or both) in connection with the
issuance and sale of MIPS, and (c) all action of the Corporation and the SPC
which may be necessary or appropriate to consummate the sale of the MIPS to the
public (including, without limitation, the registration of MIPS (and, if
appropriate, the aforementioned notes and/or guarantees of the Corporation) with
the United States Securities and Exchange Commission ["SEC"]), the undersigned
member of said Board of Directors does hereby make, constitute and appoint
Robert M. Hernandez, Gretchen R. Haggerty or Lewis B. Jones, my true and lawful
attorney-in-fact to sign and execute for me and on my behalf one or more
registration statements to be filed with the SEC in connection with the proposed
issuance of MIPS and any and all amendments to said registration statement(s) in
such form as they or any one or more of them may approve, and to take such other
action as may be appropriate to cause the Corporation and the SPC to comply with
applicable law.
WITNESS the due execution hereof this 30th day of November, 1993.
/s/ JEANETTE GRASSELLI BROWN
------------------------------------
<PAGE> 5
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
The Board of Directors of USX Corporation (the "Corporation") having, on
November 30, 1993, approved, inter alia, the following action by the
Corporation: (a) formation of a special purpose subsidiary of the Corporation
(the "SPC") for the purpose of having the SPC issue and sell shares of preferred
stock to the public commonly referred to as "Monthly Income Preferred Shares"
("MIPS"), (b) issuance of up to $375,000,000 of obligations of the Corporation
(which may take the form of notes or guarantees or both) in connection with the
issuance and sale of MIPS, and (c) all action of the Corporation and the SPC
which may be necessary or appropriate to consummate the sale of the MIPS to the
public (including, without limitation, the registration of MIPS (and, if
appropriate, the aforementioned notes and/or guarantees of the Corporation) with
the United States Securities and Exchange Commission ["SEC"]), the undersigned
member of said Board of Directors does hereby make, constitute and appoint
Robert M. Hernandez, Gretchen R. Haggerty or Lewis B. Jones, my true and lawful
attorney-in-fact to sign and execute for me and on my behalf one or more
registration statements to be filed with the SEC in connection with the proposed
issuance of MIPS and any and all amendments to said registration statement(s) in
such form as they or any one or more of them may approve, and to take such other
action as may be appropriate to cause the Corporation and the SPC to comply with
applicable law.
WITNESS the due execution hereof this 30th day of November, 1993.
/s/ C. A. CORRY
------------------------------------
<PAGE> 6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
The Board of Directors of USX Corporation (the "Corporation") having, on
November 30, 1993, approved, inter alia, the following action by the
Corporation: (a) formation of a special purpose subsidiary of the Corporation
(the "SPC") for the purpose of having the SPC issue and sell shares of preferred
stock to the public commonly referred to as "Monthly Income Preferred Shares"
("MIPS"), (b) issuance of up to $375,000,000 of obligations of the Corporation
(which may take the form of notes or guarantees or both) in connection with the
issuance and sale of MIPS, and (c) all action of the Corporation and the SPC
which may be necessary or appropriate to consummate the sale of the MIPS to the
public (including, without limitation, the registration of MIPS (and, if
appropriate, the aforementioned notes and/or guarantees of the Corporation) with
the United States Securities and Exchange Commission ["SEC"]), the undersigned
member of said Board of Directors does hereby make, constitute and appoint
Robert M. Hernandez, Gretchen R. Haggerty or Lewis B. Jones, my true and lawful
attorney-in-fact to sign and execute for me and on my behalf one or more
registration statements to be filed with the SEC in connection with the proposed
issuance of MIPS and any and all amendments to said registration statement(s) in
such form as they or any one or more of them may approve, and to take such other
action as may be appropriate to cause the Corporation and the SPC to comply with
applicable law.
WITNESS the due execution hereof this 30th day of November, 1993.
/s/ JOHN H. FILER
------------------------------------
<PAGE> 7
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
The Board of Directors of USX Corporation (the "Corporation") having, on
November 30, 1993, approved, inter alia, the following action by the
Corporation: (a) formation of a special purpose subsidiary of the Corporation
(the "SPC") for the purpose of having the SPC issue and sell shares of preferred
stock to the public commonly referred to as "Monthly Income Preferred Shares"
("MIPS"), (b) issuance of up to $375,000,000 of obligations of the Corporation
(which may take the form of notes or guarantees or both) in connection with the
issuance and sale of MIPS, and (c) all action of the Corporation and the SPC
which may be necessary or appropriate to consummate the sale of the MIPS to the
public (including, without limitation, the registration of MIPS (and, if
appropriate, the aforementioned notes and/or guarantees of the Corporation) with
the United States Securities and Exchange Commission ["SEC"]), the undersigned
member of said Board of Directors does hereby make, constitute and appoint
Robert M. Hernandez, Gretchen R. Haggerty or Lewis B. Jones, my true and lawful
attorney-in-fact to sign and execute for me and on my behalf one or more
registration statements to be filed with the SEC in connection with the proposed
issuance of MIPS and any and all amendments to said registration statement(s) in
such form as they or any one or more of them may approve, and to take such other
action as may be appropriate to cause the Corporation and the SPC to comply with
applicable law.
WITNESS the due execution hereof this 30th day of November, 1993.
/s/ JAMES A. D. GEIER
------------------------------------
<PAGE> 8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
The Board of Directors of USX Corporation (the "Corporation") having, on
November 30, 1993, approved, inter alia, the following action by the
Corporation: (a) formation of a special purpose subsidiary of the Corporation
(the "SPC") for the purpose of having the SPC issue and sell shares of preferred
stock to the public commonly referred to as "Monthly Income Preferred Shares"
("MIPS"), (b) issuance of up to $375,000,000 of obligations of the Corporation
(which may take the form of notes or guarantees or both) in connection with the
issuance and sale of MIPS, and (c) all action of the Corporation and the SPC
which may be necessary or appropriate to consummate the sale of the MIPS to the
public (including, without limitation, the registration of MIPS (and, if
appropriate, the aforementioned notes and/or guarantees of the Corporation) with
the United States Securities and Exchange Commission ["SEC"]), the undersigned
member of said Board of Directors does hereby make, constitute and appoint
Robert M. Hernandez, Gretchen R. Haggerty or Lewis B. Jones, my true and lawful
attorney-in-fact to sign and execute for me and on my behalf one or more
registration statements to be filed with the SEC in connection with the proposed
issuance of MIPS and any and all amendments to said registration statement(s) in
such form as they or any one or more of them may approve, and to take such other
action as may be appropriate to cause the Corporation and the SPC to comply with
applicable law.
WITNESS the due execution hereof this 30th day of November, 1993.
/s/ ROBERT M. HERNANDEZ
------------------------------------
<PAGE> 9
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
The Board of Directors of USX Corporation (the "Corporation") having, on
November 30, 1993, approved, inter alia, the following action by the
Corporation: (a) formation of a special purpose subsidiary of the Corporation
(the "SPC") for the purpose of having the SPC issue and sell shares of preferred
stock to the public commonly referred to as "Monthly Income Preferred Shares"
("MIPS"), (b) issuance of up to $375,000,000 of obligations of the Corporation
(which may take the form of notes or guarantees or both) in connection with the
issuance and sale of MIPS, and (c) all action of the Corporation and the SPC
which may be necessary or appropriate to consummate the sale of the MIPS to the
public (including, without limitation, the registration of MIPS (and, if
appropriate, the aforementioned notes and/or guarantees of the Corporation) with
the United States Securities and Exchange Commission ["SEC"]), the undersigned
member of said Board of Directors does hereby make, constitute and appoint
Robert M. Hernandez, Gretchen R. Haggerty or Lewis B. Jones, my true and lawful
attorney-in-fact to sign and execute for me and on my behalf one or more
registration statements to be filed with the SEC in connection with the proposed
issuance of MIPS and any and all amendments to said registration statement(s) in
such form as they or any one or more of them may approve, and to take such other
action as may be appropriate to cause the Corporation and the SPC to comply with
applicable law.
WITNESS the due execution hereof this 30th day of November, 1993.
/s/ CHARLES R. LEE
------------------------------------
<PAGE> 10
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
The Board of Directors of USX Corporation (the "Corporation") having, on
November 30, 1993, approved, inter alia, the following action by the
Corporation: (a) formation of a special purpose subsidiary of the Corporation
(the "SPC") for the purpose of having the SPC issue and sell shares of preferred
stock to the public commonly referred to as "Monthly Income Preferred Shares"
("MIPS"), (b) issuance of up to $375,000,000 of obligations of the Corporation
(which may take the form of notes or guarantees or both) in connection with the
issuance and sale of MIPS, and (c) all action of the Corporation and the SPC
which may be necessary or appropriate to consummate the sale of the MIPS to the
public (including, without limitation, the registration of MIPS (and, if
appropriate, the aforementioned notes and/or guarantees of the Corporation) with
the United States Securities and Exchange Commission ["SEC"]), the undersigned
member of said Board of Directors does hereby make, constitute and appoint
Robert M. Hernandez, Gretchen R. Haggerty or Lewis B. Jones, my true and lawful
attorney-in-fact to sign and execute for me and on my behalf one or more
registration statements to be filed with the SEC in connection with the proposed
issuance of MIPS and any and all amendments to said registration statement(s) in
such form as they or any one or more of them may approve, and to take such other
action as may be appropriate to cause the Corporation and the SPC to comply with
applicable law.
WITNESS the due execution hereof this 30th day of November, 1993.
/s/ PAUL E. LEGO
------------------------------------
<PAGE> 11
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
The Board of Directors of USX Corporation (the "Corporation") having, on
November 30, 1993, approved, inter alia, the following action by the
Corporation: (a) formation of a special purpose subsidiary of the Corporation
(the "SPC") for the purpose of having the SPC issue and sell shares of preferred
stock to the public commonly referred to as "Monthly Income Preferred Shares"
("MIPS"), (b) issuance of up to $375,000,000 of obligations of the Corporation
(which may take the form of notes or guarantees or both) in connection with the
issuance and sale of MIPS, and (c) all action of the Corporation and the SPC
which may be necessary or appropriate to consummate the sale of the MIPS to the
public (including, without limitation, the registration of MIPS (and, if
appropriate, the aforementioned notes and/or guarantees of the Corporation) with
the United States Securities and Exchange Commission ["SEC"]), the undersigned
member of said Board of Directors does hereby make, constitute and appoint
Robert M. Hernandez, Gretchen R. Haggerty or Lewis B. Jones, my true and lawful
attorney-in-fact to sign and execute for me and on my behalf one or more
registration statements to be filed with the SEC in connection with the proposed
issuance of MIPS and any and all amendments to said registration statement(s) in
such form as they or any one or more of them may approve, and to take such other
action as may be appropriate to cause the Corporation and the SPC to comply with
applicable law.
WITNESS the due execution hereof this 30th day of November, 1993.
/s/ JOHN F. MCGILLICUDDY
------------------------------------
<PAGE> 12
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
The Board of Directors of USX Corporation (the "Corporation") having, on
November 30, 1993, approved, inter alia, the following action by the
Corporation: (a) formation of a special purpose subsidiary of the Corporation
(the "SPC") for the purpose of having the SPC issue and sell shares of preferred
stock to the public commonly referred to as "Monthly Income Preferred Shares"
("MIPS"), (b) issuance of up to $375,000,000 of obligations of the Corporation
(which may take the form of notes or guarantees or both) in connection with the
issuance and sale of MIPS, and (c) all action of the Corporation and the SPC
which may be necessary or appropriate to consummate the sale of the MIPS to the
public (including, without limitation, the registration of MIPS (and, if
appropriate, the aforementioned notes and/or guarantees of the Corporation) with
the United States Securities and Exchange Commission ["SEC"]), the undersigned
member of said Board of Directors does hereby make, constitute and appoint
Robert M. Hernandez, Gretchen R. Haggerty or Lewis B. Jones, my true and lawful
attorney-in-fact to sign and execute for me and on my behalf one or more
registration statements to be filed with the SEC in connection with the proposed
issuance of MIPS and any and all amendments to said registration statement(s) in
such form as they or any one or more of them may approve, and to take such other
action as may be appropriate to cause the Corporation and the SPC to comply with
applicable law.
WITNESS the due execution hereof this 30th day of November, 1993.
/s/ JOHN RICHMAN
------------------------------------
<PAGE> 13
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
The Board of Directors of USX Corporation (the "Corporation") having, on
November 30, 1993, approved, inter alia, the following action by the
Corporation: (a) formation of a special purpose subsidiary of the Corporation
(the "SPC") for the purpose of having the SPC issue and sell shares of preferred
stock to the public commonly referred to as "Monthly Income Preferred Shares"
("MIPS"), (b) issuance of up to $375,000,000 of obligations of the Corporation
(which may take the form of notes or guarantees or both) in connection with the
issuance and sale of MIPS, and (c) all action of the Corporation and the SPC
which may be necessary or appropriate to consummate the sale of the MIPS to the
public (including, without limitation, the registration of MIPS (and, if
appropriate, the aforementioned notes and/or guarantees of the Corporation) with
the United States Securities and Exchange Commission ["SEC"]), the undersigned
member of said Board of Directors does hereby make, constitute and appoint
Robert M. Hernandez, Gretchen R. Haggerty or Lewis B. Jones, my true and lawful
attorney-in-fact to sign and execute for me and on my behalf one or more
registration statements to be filed with the SEC in connection with the proposed
issuance of MIPS and any and all amendments to said registration statement(s) in
such form as they or any one or more of them may approve, and to take such other
action as may be appropriate to cause the Corporation and the SPC to comply with
applicable law.
WITNESS the due execution hereof this 30th day of November, 1993.
/s/ T. J. USHER
------------------------------------
<PAGE> 14
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
The Board of Directors of USX Corporation (the "Corporation") having, on
November 30, 1993, approved, inter alia, the following action by the
Corporation: (a) formation of a special purpose subsidiary of the Corporation
(the "SPC") for the purpose of having the SPC issue and sell shares of preferred
stock to the public commonly referred to as "Monthly Income Preferred Shares"
("MIPS"), (b) issuance of up to $375,000,000 of obligations of the Corporation
(which may take the form of notes or guarantees or both) in connection with the
issuance and sale of MIPS, and (c) all action of the Corporation and the SPC
which may be necessary or appropriate to consummate the sale of the MIPS to the
public (including, without limitation, the registration of MIPS (and, if
appropriate, the aforementioned notes and/or guarantees of the Corporation) with
the United States Securities and Exchange Commission ["SEC"]), the undersigned
member of said Board of Directors does hereby make, constitute and appoint
Robert M. Hernandez, Gretchen R. Haggerty or Lewis B. Jones, my true and lawful
attorney-in-fact to sign and execute for me and on my behalf one or more
registration statements to be filed with the SEC in connection with the proposed
issuance of MIPS and any and all amendments to said registration statement(s) in
such form as they or any one or more of them may approve, and to take such other
action as may be appropriate to cause the Corporation and the SPC to comply with
applicable law.
WITNESS the due execution hereof this 30th day of November, 1993.
/s/ DAVID WHITWAM
------------------------------------
<PAGE> 15
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
The Board of Directors of USX Corporation (the "Corporation") having, on
November 30, 1993, approved, inter alia, the following action by the
Corporation: (a) formation of a special purpose subsidiary of the Corporation
(the "SPC") for the purpose of having the SPC issue and sell shares of preferred
stock to the public commonly referred to as "Monthly Income Preferred Shares"
("MIPS"), (b) issuance of up to $375,000,000 of obligations of the Corporation
(which may take the form of notes or guarantees or both) in connection with the
issuance and sale of MIPS, and (c) all action of the Corporation and the SPC
which may be necessary or appropriate to consummate the sale of the MIPS to the
public (including, without limitation, the registration of MIPS (and, if
appropriate, the aforementioned notes and/or guarantees of the Corporation) with
the United States Securities and Exchange Commission ["SEC"]), the undersigned
member of said Board of Directors does hereby make, constitute and appoint
Robert M. Hernandez, Gretchen R. Haggerty or Lewis B. Jones, my true and lawful
attorney-in-fact to sign and execute for me and on my behalf one or more
registration statements to be filed with the SEC in connection with the proposed
issuance of MIPS and any and all amendments to said registration statement(s) in
such form as they or any one or more of them may approve, and to take such other
action as may be appropriate to cause the Corporation and the SPC to comply with
applicable law.
WITNESS the due execution hereof this 30th day of November, 1993.
/s/ D. C. YEARLEY
------------------------------------
<PAGE> 16
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
The Board of Directors of USX Corporation (the "Corporation") having, on
November 30, 1993, approved, inter alia, the following action by the
Corporation: (a) formation of a special purpose subsidiary of the Corporation
(the "SPC") for the purpose of having the SPC issue and sell shares of preferred
stock to the public commonly referred to as "Monthly Income Preferred Shares"
("MIPS"), (b) issuance of up to $375,000,000 of obligations of the Corporation
(which may take the form of notes or guarantees or both) in connection with the
issuance and sale of MIPS, and (c) all action of the Corporation and the SPC
which may be necessary or appropriate to consummate the sale of the MIPS to the
public (including, without limitation, the registration of MIPS (and, if
appropriate, the aforementioned notes and/or guarantees of the Corporation) with
the United States Securities and Exchange Commission ["SEC"]), the undersigned
member of said Board of Directors does hereby make, constitute and appoint
Robert M. Hernandez, Gretchen R. Haggerty or Lewis B. Jones, my true and lawful
attorney-in-fact to sign and execute for me and on my behalf one or more
registration statements to be filed with the SEC in connection with the proposed
issuance of MIPS and any and all amendments to said registration statement(s) in
such form as they or any one or more of them may approve, and to take such other
action as may be appropriate to cause the Corporation and the SPC to comply with
applicable law.
WITNESS the due execution hereof this 30th day of November, 1993.
/s/ LEWIS B. JONES
------------------------------------
<PAGE> 17
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
The Board of Directors of USX Corporation (the "Corporation") having, on
November 30, 1993, approved, inter alia, the following action by the
Corporation: (a) formation of a special purpose subsidiary of the Corporation
(the "SPC") for the purpose of having the SPC issue and sell shares of preferred
stock to the public commonly referred to as "Monthly Income Preferred Shares"
("MIPS"), (b) issuance of up to $375,000,000 of obligations of the Corporation
(which may take the form of notes or guarantees or both) in connection with the
issuance and sale of MIPS, and (c) all action of the Corporation and the SPC
which may be necessary or appropriate to consummate the sale of the MIPS to the
public (including, without limitation, the registration of MIPS (and, if
appropriate, the aforementioned notes and/or guarantees of the Corporation) with
the United States Securities and Exchange Commission ["SEC"]), the undersigned
member of said Board of Directors does hereby make, constitute and appoint
Robert M. Hernandez, Gretchen R. Haggerty or Lewis B. Jones, my true and lawful
attorney-in-fact to sign and execute for me and on my behalf one or more
registration statements to be filed with the SEC in connection with the proposed
issuance of MIPS and any and all amendments to said registration statement(s) in
such form as they or any one or more of them may approve, and to take such other
action as may be appropriate to cause the Corporation and the SPC to comply with
applicable law.
WITNESS the due execution hereof this 30th day of November, 1993.
/s/ GRETCHEN R. HAGGERTY
------------------------------------
