S&S DRAFT 1/31/97
______________ Shares
SPECIAL METALS CORPORATION
Common Stock (par value $.01 per share)
UNDERWRITING AGREEMENT
___________, 1997
_____________, 1997
Xxxxxx Xxxxxxx & Co. Incorporated
Salomon Brothers Inc
Credit Lyonnais Securities (USA) Inc.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
Special Metals Corporation, a Delaware corporation (the
"Company"), proposes to issue and sell to the several Underwriters named in
Schedule I hereto (the "Underwriters"), and certain stockholders of the Company
(the "Selling Stockholders") named in Schedule II, hereto severally propose to
sell to the several Underwriters, an aggregate of 3,700,000 shares of the
Common Stock (par value $.01 per share) of the Company (the "Firm Shares"), of
which 3,000,000 shares are to be issued and sold by the Company (the "Company
Shares") and 700,000 shares are to be sold by the Selling Stockholders, each
Selling Stockholder selling the amount set forth opposite such Selling
Stockholder's name in Schedule II hereto.
The Company also proposes to issue and sell to the several
Underwriters not more than an additional 555,000 shares of its Common Stock
(par value $.01 per share) (the "Additional Shares") if and to the extent that
you, as managers of the offering, shall have determined to exercise, on behalf
of the Underwriters, the right to purchase such shares of Common Stock granted
to the Underwriters in Section 4 hereof. The Firm Shares and the Additional
Shares are hereinafter collectively referred to as the "Shares". The shares of
Common Stock (par value $.01 per share) of the Company to be outstanding after
giving effect to the sales contemplated hereby are hereinafter referred to as
the "Common Stock". The Company and the Selling Stockholders are hereinafter
collectively referred to as the "Sellers".
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement, including a prospectus,
relating to the Shares. The registration statement as amended at the time it
becomes effective, including the exhibits thereto and the information (if any)
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A under the Securities Act of 1933, as amended (the
"Securities Act"), is hereinafter referred to as the "Original Registration
Statement"; any registration statement filed pursuant to Rule 462(b) under the
Securities Act is hereinafter
2
referred to as the "Rule 462(b) Registration Statement"; the Original
Registration Statement and any Rule 462(b) Registration Statement are
hereinafter referred to collectively as the "Registration Statement"; the
prospectus in the form first used to confirm sales of Shares is hereinafter
referred to as the "Prospectus".
As part of the offering contemplated by this Agreement, the
Underwriters have agreed to reserve up to 100,000 Shares, for sale to certain
employees of the Company (and to certain other persons designated by the
Company) (collectively, "Participants"), as set forth in the Prospectus under
the heading "Underwriters" (the "Directed Share Program"). The Shares to be
sold by the Underwriters pursuant to the Directed Share Program (the "Directed
Shares") will be sold by the Underwriters pursuant to this Agreement at the
Public Offering Price (as defined). Any Directed Shares not orally confirmed
for purchase by any Participants by the end of the first business day after the
date on which this Agreement is executed will be offered to the public by the
Underwriters as set forth in the Prospectus.
1. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) The Original Registration Statement has become effective,
and if the Company has elected to rely upon Rule 462(b) under the
Securities Act, the Rule 462(b) Registration Statement shall have
become effective not later than the earlier of (i) 10:00 p.m. Eastern
time on the date hereof and (ii) the time confirmations are sent or
given, as specified by Rule 462(b) under the Securities Act; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or, to
the knowledge of the Company, threatened by the Commission.
(b) (i) The Registration Statement, when it became effective,
did not contain and, as amended or supplemented, if applicable, will
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement and
the Prospectus comply and, as amended or supplemented, if applicable,
will comply in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder and
(iii) the Prospectus does not contain and, as amended or supplemented,
if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, except that the representations and
warranties set forth in this paragraph 1(b) do not apply to statements
or omissions in the Registration Statement or the Prospectus based
upon information relating to any Underwriter furnished to the Company
in writing by such Underwriter through you expressly for use therein.
3
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(d) Each subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its
business as presently conducted and is duly qualified to transact
business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole
(it being understood that the Company's Delaware subsidiary, Special
Metals International Corporation, is an inactive subsidiary); all of
the issued shares of capital stock of each subsidiary of the Company,
other than one share of Udimet Special Metals Ltd., which is owned by
a director thereof, have been duly and validly authorized and issued,
are fully paid and non-assessable and are owned directly by the
Company, free and clear of all liens, encumbrances, equities or
claims.
(e) The authorized capital stock of the Company conforms in
all material respects as to legal matters to the description thereof
contained in the Prospectus.
(f) The shares of Common Stock (including the Shares to be
sold by the Selling Stockholders) outstanding prior to the issuance of
the Company Shares have been duly authorized and are validly issued,
fully paid and non-assessable.
(g) The Company Shares have been duly authorized and, when
issued and delivered in accordance with the terms of this Agreement,
will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive or
similar rights.
(h) This Agreement and each of the Irrevocable Power of
Attorney and Custody Agreements (collectively, the "Power of Attorney
and Custody Agreements"), each dated the date hereof, by each Selling
Stockholder and the Company as Custodian (the "Custodian"), appointing
certain individuals as the Selling Stockholders' attorneys-in-fact to
the extent set forth therein relating to the
4
transactions contemplated hereby and by the Registration Statement
have been duly authorized, executed and delivered by the Company.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
and the Power of Attorney and Custody Agreements, and the issuance and
delivery of the Company Shares will not contravene any provision of
applicable law or the articles of incorporation or by-laws of the
Company or any agreement or other instrument binding upon the Company
or any of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or any judgment, order or decree of
any governmental body, agency or court having jurisdiction over the
Company or any subsidiary, and no consent, approval, authorization or
order of, or qualification with, any governmental body or agency is
required for the performance by the Company of its obligations under
this Agreement, except such as may be required by the securities or
Blue Sky laws of the various states or foreign securities laws in
connection with the offer and sale of the Shares and except for any
such consent, approval authorization, order or qualification the
failure of which to obtain would not result in a material adverse
change in the condition, financial or otherwise, or in the earnings,
business or operations of the Company and its subsidiaries, taken as a
whole.
(j) There has not occurred any material adverse change, or
any development involving a prospective material adverse change, in
the condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(k) There are no legal or governmental proceedings pending
or, to the knowledge of the Company, threatened to which the Company
or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject that
are required to be described in the Registration Statement or the
Prospectus and are not so described or any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not described or filed as
required.
(l) Except as described in the Prospectus, each of the
Company and its subsidiaries has all necessary consents,
authorizations, approvals, orders, certificates and permits of and
from, and has made all declarations and filings with, all federal,
state, local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, to own, lease,
license and use its properties and assets and to conduct its business
in the manner described in the Prospectus, except to the extent that
the failure to obtain such consents, authorizations, approvals,
orders,
5
certificates and permits or make such declarations and filings would
not have a material adverse effect on the Company and its
subsidiaries, taken as a whole. Neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such consent, authorization,
approval, order, certificate or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a material adverse change in the condition,
financial or otherwise, or in the earnings, business or operations of
the Company and its subsidiaries, taken as a whole, except as
described in or contemplated by the Prospectus.
(m) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act or
incorporated by reference into or filed as part of the Rule 462(b)
Registration Statement, complied when so filed in all material
respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(n) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as such term is defined in the Investment Company Act of
1940, as amended.
(o) Except as described in the Prospectus, the Company and
its subsidiaries (i) are in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), (ii) have received all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(p) In the ordinary course of its business, the Company
conducts a periodic review of the effect of Environmental Laws on the
business, operations and properties of the Company and its
subsidiaries, in the course of which it identifies and evaluates
associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any permit,
license or approval, any related constraints on operating activities
and any potential liabilities to third parties). On the basis of such
6
review, except as described in the Prospectus, the Company has
reasonably concluded that such associated costs and liabilities would
not, singly or in the aggregate, have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(q) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
(1) the Company and its subsidiaries have not incurred any material
liability or obligation, direct or contingent, nor entered into any
material transaction not in the ordinary course of business; (2) the
Company has not purchased any of its outstanding capital stock, nor
declared, paid or otherwise made any dividend or distribution of any
kind on its capital stock; and (3) there has not been any material
change in the capital stock, short-term debt or long-term debt of the
Company and its consolidated subsidiaries, except for borrowings and
repayments under the Company's credit facility or repayment of the
Company's subordinated notes as described in or contemplated by the
Prospectus.
(r) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title
to all personal property in each case owned by them which is material
to the business of the Company and its subsidiaries, in each case free
and clear of all liens, encumbrances and defects except for any liens
or encumbrances created in connection with the Company's Credit
Agreement dated October 18, 1996 and except such as are described in
the Prospectus or such as do not materially affect the value of such
property and do not materially interfere with the use made and
proposed to be made of such property by the Company and its
subsidiaries; and any material real property and buildings held under
lease by the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as are
not material and do not materially interfere with the use made and
proposed to be made of such property and buildings by the Company and
its subsidiaries, in each case except as described in or contemplated
by the Prospectus.
(s) The Company and its subsidiaries own or otherwise have
the right to use, or can acquire on reasonable terms, all material
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names currently employed by them
in connection with the business now operated by them, and neither the
Company nor any of its subsidiaries has received any written notice of
infringement of or conflict with asserted rights of others with
respect to any of the foregoing which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, could
reasonably be expected to result in any material adverse change in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole.
7
(t) Except as described in the Prospectus, no material labor
dispute with the employees of the Company or any of its subsidiaries
exists or, to the knowledge of the Company, is threatened.
(u) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; neither the Company nor any such
subsidiary [during the last five years] has been refused any insurance
coverage sought or applied for; and neither the Company nor any such
subsidiary has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not materially and
adversely affect the condition, financial or otherwise, or the
earnings, business or operations of the Company and its subsidiaries,
taken as a whole, except as described in or contemplated by the
Prospectus.
(v) The Company and each of its subsidiaries maintain a
system of internal accounting controls sufficient to provide
reasonable assurance that (1) transactions are executed in accordance
with management's general or specific authorizations; (2) transactions
are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles
and to maintain asset accountability; (3) access to assets is
permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(w) There are no holders of securities (debt or equity) of
the Company or any of its subsidiaries, or holders of rights, options,
or warrants to obtain securities of the Company or any of its
subsidiaries, who have the right, during the 180 day period after the
date of this Agreement to require the Company to register securities
held by them under the Securities Act, other than holders who have
waived such right for the 180 day period after the date of the initial
public offering of the Shares and have waived their rights with
respect to the inclusion of their securities in the Registration
Statement.
(x) The Company has not offered, or caused the Underwriters
to offer, Shares to any person pursuant to the Directed Share Program
with the specific intent to unlawfully influence (i) a customer or
supplier of the Company to alter the customer's or supplier's level or
type of business with the Company, or (ii) a trade journalist or
publication to write or publish favorable information about the
Company or its products.
8
Furthermore, the Company represents and warrants to the
Underwriters that (i) the Registration Statement, the Prospectus and any
preliminary prospectus comply, and any further amendments or supplements
thereto will comply, in all material respects, with any applicable laws or
regulations of foreign jurisdictions in which the Prospectus or any preliminary
prospectus, as amended or supplemented, if applicable, is distributed in
connection with the Directed Share Program, and that (ii) no authorization,
approval, consent, license, order, registration or qualification of or with any
government, governmental instrumentality or court, other than such as have been
obtained, is necessary under the securities laws and regulations of foreign
jurisdictions in which the Directed Shares are offered outside the United
States.
2. Representations and Warranties of the Selling
Stockholders. Each of the Selling Stockholders, severally and not jointly,
represents and warrants to and agrees with each of the Underwriters that:
(a) This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Stockholder.
(b) The execution and delivery by such Selling Stockholder
of, and the performance by such Selling Stockholder of its obligations
under, this Agreement and its Power of Attorney and Custody Agreement
will not contravene any provision of applicable law, or the
certificate of incorporation or by-laws of such Selling Stockholder
(if such Selling Stockholder is a corporation), or any material
agreement or other instrument binding upon such Selling Stockholder or
any judgment, order or decree of any governmental body, agency or
court having jurisdiction over such Selling Stockholder, and no
consent, approval, authorization or order of, or qualification with,
any governmental body or agency is required for the performance by
such Selling Stockholder of its obligations under this Agreement or
the Power of Attorney and Custody Agreement of such Selling
Stockholder, except such as may be required by the securities or Blue
Sky laws of the various states or foreign securities laws in
connection with the offer and sale of the Shares.
(c) Such Selling Stockholder has, and on the Closing Date (as
defined below) will have, valid and marketable title to the Shares to
be sold by such Selling Stockholder and the legal right and power, and
all authorization and approval required by law, to enter into this
Agreement and its Power of Attorney and Custody Agreement and to sell,
transfer and deliver the Shares to be sold by such Selling
Stockholder.
(d) The Power of Attorney and Custody Agreement of such
Selling Stockholder has been duly authorized, executed and delivered
by such Selling Stockholder and is a valid and binding agreement of
such Selling Stockholder,
9
enforceable in accordance with its terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) the
availability of equitable remedies may be limited by equitable
principles of general applicability.
(e) Delivery of the Shares to be sold by such Selling
Stockholder pursuant to this Agreement will pass valid and marketable
title to such Shares free and clear of any security interests, claims,
liens, equities and other encumbrances.
(f) All information furnished to the Company in writing by or
on behalf of such Selling Stockholder expressly for use (i) in the
Registration Statement will, on the Closing Date (as defined below),
be true, correct and complete, and will not, on the Closing Date,
contain any untrue statement of material fact or omit to state any
material fact necessary in order to make such information not
misleading and (ii) in the Prospectus is, and on the Closing Date,
will be, true, correct and complete, and does not, and on the Closing
Date, will not, contain any untrue statement of material fact or omit
to state any material fact necessary in order to make such
information, in light of the circumstances in which such information
was provided, not misleading.
(g) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action designed to, or that might be
reasonably expected to, cause or result in stabilization or
manipulation of the price of the Common Stock (provided that such
Selling Stockholder does not make any representation as to any actions
that may be taken by any Underwriter); and such Selling Stockholder
has not distributed and will not distribute any prospectus or other
offering material in connection with the offering and sale of the
Shares other than any preliminary prospectus filed with the Commission
or the Prospectus or other material permitted by the Securities Act.
(h) Such Selling Stockholder has no direct or indirect
association or affiliation with any National Association of Securities
Dealers, Inc. ("NASD") members and has had no arrangements, dealings
or affiliation with, and is not aware of any information relating to
underwriting compensation payable to or for the benefit of, any NASD
member, person associated with a member or any Underwriter, relating
to the offering of Shares that has not been disclosed in the
Registration Statement.
3. Representations of the Underwriters. Each Underwriter
represents and, during the period of six months from the date hereof, agrees
that (i) it has not offered or sold and will not offer or sell any Shares to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the
00
Xxxxxx Xxxxxxx within the meaning of the Public Offers of Securities
Regulations 1995 (the "Regulations"); (ii) it has complied and will comply with
all applicable provisions of the Financial Services Xxx 0000 and the
Regulations with respect to anything done by it in relation to the Shares in,
from or otherwise involving the United Kingdom; and (iii) it has only issued or
passed on and will only issue or pass on to any person in the United Kingdom
any document received by it in connection with the issue of the Shares if that
person is of a kind described in Article 11(3) of the Financial Services Xxx
0000 (Investment Advertisements) (Exemptions) Order 1996 or is a person to whom
such document may otherwise lawfully be issued or passed on.
4. Agreements to Sell and Purchase. Each Seller, severally
and not jointly, hereby agrees to sell to the several Underwriters, and each
Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees, severally
and not jointly, to purchase from such Seller at $______ a share (the "Purchase
Price") the number of Firm Shares (subject to such adjustments to eliminate
fractional shares as you may determine) that bears the same proportion to the
number of Firm Shares to be sold by such Seller (as specified in Schedule II
hereto) as the number of Firm Shares set forth in Schedule I hereto opposite
the name of such Underwriter bears to the total number of Firm Shares.
On the basis of the representations and warranties contained
in this Agreement, and subject to its terms and conditions, the Company agrees
to sell to the Underwriters the Additional Shares, and the Underwriters shall
have a one-time right to purchase, severally and not jointly, up to _________
Additional Shares at the Purchase Price. If you, on behalf of the Underwriters,
elect to exercise such option, you shall so notify the Company in writing not
later than 30 days after the date of this Agreement, which notice shall specify
the number of Additional Shares to be purchased by the Underwriters and the
date on which such shares are to be purchased. Such date may be the same as the
Closing Date (as defined below) but not earlier than the Closing Date nor later
than ten business days after the date of such notice. Additional Shares may be
purchased as provided in Section 6 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each Underwriter agrees, severally and
not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the
same proportion to the total number of Additional Shares to be purchased as the
number of Firm Shares set forth in Schedule I hereto opposite the name of such
Underwriter bears to the total number of Firm Shares.
Each Seller hereby agrees that, without the prior written
consent of Xxxxxx Xxxxxxx & Co. Incorporated ("Xxxxxx Xxxxxxx") on behalf of
the Underwriters, it will not, during the period ending 180 days after the date
of the Prospectus, (i) offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to
11
sell, grant any option, right or warrant to purchase or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock
(provided that such shares or securities are either now owned by such Seller or
are hereafter acquired in connection with the public offering of Common Stock
hereunder) or (ii) enter into any swap or other agreement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
such shares of the Common Stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the Shares to be sold hereunder or (B) the issuance by the Company of
shares of Common Stock upon the exercise of any options granted or shares of
Common Stock issued pursuant to existing benefit plans of the Company. In
addition, each Selling Stockholder, agrees that, without the prior written
consent of Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not, during
the period ending 180 days after the date of the Prospectus, make any demand
for, or exercise any right with respect to, the registration of any shares of
Common Stock or any security convertible into or exercisable or exchangeable
for Common Stock.
5. Terms of Public Offering. The Sellers are advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Original Registration Statement and
this Agreement have become effective as in your judgment is advisable. The
Sellers are further advised by you that the Shares are to be offered to the
public initially at $____ a share (the "Public Offering Price") and to certain
dealers selected by you at a price that represents a concession not in excess
of $____ a share under the Public Offering Price, and that any Underwriter may
allow, and such dealers may reallow, a concession, not in excess of $____ a
share, to any Underwriter or to certain other dealers.
6. Payment and Delivery. Payment for the Firm Shares to be
sold by each Seller shall be made by wire transfers to the Company's account
and the Custodian's account (for the benefit of the Selling Stockholders) in
federal funds or other funds immediately available in New York City against
delivery of such Firm Shares for the respective accounts of the several
Underwriters at the office of Shearman & Sterling, 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 at 9:00 A.M., New York City time, on _________, 1997, or
at such other time on the same or such other date, not later than _________,
1997, as shall be designated in writing by you. The time and date of such
payment are hereinafter referred to as the "Closing Date".
Payment for any Additional Shares shall be made by wire
transfer payable to the Company's account in federal funds or other funds
immediately available in New York City against delivery of such Additional
Shares for the respective accounts of the several Underwriters at the office of
Shearman & Sterling, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 9:00
A.M., New York City time, on the date specified in the notice
12
described in Section 4 or at such other time on the same or on such other date,
in any event not later than _______ 1997, as shall be designated in writing by
you. The time and date of such payment are hereinafter referred to as the
"Option Closing Date".
Certificates for the Firm Shares and Additional Shares shall
be in definitive form and registered in such names and in such denominations as
you shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes
payable in connection with the transfer of the Shares to the Underwriters duly
paid, against payment of the Purchase Price therefor.
7. Conditions to the Underwriters' Obligations. The
obligations of the Sellers and the several obligations of the Underwriters
hereunder are subject to the condition that the Registration Statement shall
have become effective not later than the date hereof.
The several obligations of the Underwriters are subject to
the following further conditions:
(a) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date:
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization", as
such term is defined for purposes of Rule 436(g)(2) under the
Securities Act; and
(ii) there shall not have occurred any change, or
any development involving a prospective change, in the
condition, financial or otherwise, or in the earnings,
business or operations of the Company and its subsidiaries,
taken as a whole, from that set forth in the Prospectus
(exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement) that, in your
judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Shares on the terms and
in the manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date
a certificate, dated the Closing Date and signed by an executive
officer of the Company, to the effect set forth in clause (a)(i) above
and to the effect that the representations and
13
warranties of the Company contained in this Agreement are true and
correct as of the Closing Date and that the Company has complied with
all of the agreements and satisfied all of the conditions on its part
to be performed or satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely
upon the best of his knowledge as to proceedings threatened.
(c) No stop order suspending the effectiveness of the
Registration Statement shall be in effect and no proceedings for such
purpose shall be pending before or, to the knowledge of the Company or
the Underwriters, threatened by the Commission.
(d) The Underwriters shall have received on the Closing Date
an opinion of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, special
counsel for the Company, dated the Closing Date, in the form attached
hereto as Exhibit A.
The opinion of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx shall
be rendered to the Underwriters at the request of the Company and
shall so state therein.
(e) The Underwriters shall have received on the Closing Date
an opinion of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx and Xxxxxx &
Xxxxxxxxx, U.S. and Luxembourg counsel, respectively, for the Selling
Stockholders, dated the Closing Date, in the form attached hereto as
Exhibit B(i) and Exhibit B(ii), respectively.
The opinions of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx and
Xxxxxx & Xxxxxxxxx shall be rendered to the Underwriters at the
request of the Selling Stockholders and shall so state therein.
(f) The Underwriters shall have received on the Closing Date
an opinion of Shearman & Sterling, counsel for the Underwriters, dated
the Closing Date, with respect to the Registration Statement and the
Prospectus and such other related matters as the Underwriters may
reasonably request, and such counsel shall have received such
documents and information as they may reasonably request to enable
them to pass upon such matters.
(g) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory
to the Underwriters, from Ernst & Young LLP, independent public
accountants, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the Registration
14
Statement and the Prospectus; provided that the letter delivered on
the Closing Date shall use a "cut-off date" not earlier than the date
hereof.
(h) The "lock-up" agreements, each substantially in the form
of Exhibit C hereto, between you and Societe Industrielle Materiaux
Avances S.A. and officers and directors of the Company relating to
sales and certain other dispositions of shares of Common Stock or
certain other securities, delivered to you on or before the date
hereof, shall be in full force and effect on the Closing Date.
(i) The Underwriters shall have received on the Closing Date
certificates dated the Closing Date and signed by the Selling
Stockholders or by attorneys-in-fact of the Selling Stockholders, to
the effect that the representations and warranties of each such
Selling Stockholder contained in this Agreement are true and correct
in all material respects as of the Closing Date and that each such
Selling Stockholder has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or
satisfied hereunder on or before the Closing Date.
(j) The Company shall have complied with the provisions of
Section 8(a) hereof with respect to the furnishing of Prospectuses on
the business day next succeeding the date of this Agreement, in such
quantities as you shall have reasonably requested.
(k) The Shares shall have been approved for quotation on the
Nasdaq National Market by the Nasdaq Stock Market, Inc.
(l) True and complete copies of the waivers by the lenders
under the Company's Credit Agreement dated as of October 18, 1996
shall be delivered to you on or before the date hereof and shall be in
full force and effect on the Closing Date.
(m) The merger of the Company with Special Metals and
Technologies Corporation ("SMTC") pursuant to which each share of
common stock of SMTC will be converted into 12,400 shares of Common
Stock shall have been consummated prior to the Closing Date.
(n) The Underwriters shall have received on the Closing Date
a certificate, dated the Closing Date and signed by Xxxxxx X. Xxxxxxx,
Vice President, Secretary and Chief Legal Counsel of the Company, in
form and substance satisfactory to Xxxxxx Xxxxxxx.
(o) You shall have received such other documents and
certificates as are reasonably requested by you or your counsel.
15
The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to the delivery to you on the Option
Closing Date of such documents as you may reasonably request with respect to
the good standing of the Company, the due authorization and issuance of the
Additional Shares and other matters related to the issuance of the Additional
Shares.
8. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with
each Underwriter as follows:
(a) To furnish to you, without charge, three signed copies of
the Registration Statement (including exhibits thereto) and for
delivery to each other Underwriter a conformed copy of the
Registration Statement (without exhibits thereto) and to furnish to
you in New York City, without charge, prior to 5:00 P.M. New York City
time on the business day next succeeding the date of this Agreement
and during the period mentioned in Section (c) below, as many copies
of the Prospectus and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object in a timely
manner; and to file with the Commission within the applicable period
specified in Rule 424(b) under the Securities Act any prospectus
required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances when the Prospectus is delivered to
a purchaser, not misleading, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriters and to
the dealers (whose names and addresses you will furnish to the
Company) to which Shares may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, either amendments
or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
16
(d) To endeavor to qualify the Shares for offer and sale
under the securities or Blue Sky laws of such jurisdictions, to the
extent applicable, as you shall reasonably request; provided, however,
that no such qualification shall be required in any jurisdiction
where, as a result thereof, the Company would be subject to service of
general process or to taxation as a foreign corporation doing business
in such jurisdiction.
(e) If the Company elects to rely on Rule 462(b) under the
Securities Act, the Company shall file a Rule 462(b) Registration
Statement with the Commission in compliance with Rule 462(b) under the
Securities Act no later than the earlier of (i) 10:00 p.m. Eastern
time on the date hereof and (ii) the time confirmations are sent or
given, as specified by Rule 462(b)(2) under the Securities Act, and
shall pay the applicable fees in accordance with Rule 111 under the
Securities Act.
(f) To make generally available to the Company's security
holders and to you as soon as practicable, but no later than 60 days
after the end of the twelve-month period beginning at the end of the
Company's fiscal quarter during which the effective date of the
Original Registration Statement occurs, an earnings statement of the
Company covering such twelve-month period that satisfies the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
(g) To use the net proceeds received by the Company from the
sale of the Shares hereunder in the manner specified in the Prospectus
under the caption "Use of Proceeds".
(h) That in connection with the Directed Share Program, the
Company will ensure that the Directed Shares will be restricted to the
extent required by the NASD or the NASD rules from sale, transfer,
assignment, pledge or hypothecation for a period of three months
following the date of the effectiveness of the Registration Statement.
The Underwriters will notify the Company as to which Participants will
need to be so restricted. At the request of the Underwriters, the
Company will direct the transfer agent to place stop transfer
restrictions upon such securities for such period of time.
[(i) To pay all fees and disbursements of counsel incurred by
the Underwriters in connection with the Directed Share Program and
stamp duties, similar taxes or duties or other taxes, if any, incurred
by the Underwriters in connection with the Directed Share Program.]
Furthermore, the Company covenants with the Underwriters that
the Company will comply with all applicable securities and other applicable
laws, rules and regulations in
17
each foreign jurisdiction in which the Directed Shares are offered in
connection with the Directed Share Program.
9. Covenants of the Selling Stockholders. In further
consideration of the agreements of the Underwriters herein contained, each of
the Selling Stockholders severally and not jointly covenants as follows:
(a) Whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, to pay or cause to be
paid (i) all taxes, if any, on the transfer and sale of the Shares
being sold by such Selling Stockholder and (ii) such Selling
Stockholder's pro rata share (determined by dividing the number of
Shares sold by such Selling Stockholder by the total number of Shares
sold by all Sellers) of all costs and expenses incident to the
performance of the obligations of such Selling Stockholder under this
Agreement, including, but not limited to, all expenses incident to the
delivery of the Shares and the fees and expenses of counsel and
accountants for such Selling Stockholder.
(b) Such Selling Stockholder has carefully reviewed the
Registration Statement and will carefully review, promptly upon
receipt, each amendment thereto provided to such Selling Stockholder.
Such parts of the Registration Statement, including the tables and
notes thereto, that specifically relate to information provided by
such Selling Stockholder in writing expressly for use in the
Registration Statement, do not contain an untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the
light of the circumstances in which they were made, not misleading. At
any time during the period from the date hereof through the Closing
Date, if there is any change in the information referred to in the
preceding sentence relating to such Selling Stockholder, such Selling
Stockholder will immediately notify the Company of such change.
(c) Such Selling Stockholder shall cooperate fully with the
Company in supplying such information relating to such Selling
Stockholder and the Shares as the Company may reasonably request for
use in preparation of the Registration Statement and all other
documents reasonably necessary or desirable in connection with the
offering of Shares. In addition, such Selling Stockholder shall
furnish to the Company (or, at the Company's request, to the
Underwriters or other parties) such further certificates and documents
confirming the representations and warranties contained herein, or
with respect to related matters, as the Company may reasonably
request.
10. Expenses. Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, the Sellers
agree to pay or
18
cause to be paid (except as provided for herein) all expenses incident to the
performance of their obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel, the Company's accountants
and counsel for the Selling Stockholders in connection with the registration
and delivery of the Shares under the Securities Act and all other fees or
expenses in connection with the preparation and filing of the Registration
Statement, any preliminary prospectus, the Prospectus and amendments and
supplements to any of the foregoing, including (except as otherwise agreed) all
costs associated with the printing and mailing and delivery to the Underwriters
and dealers of the Registration Statement and the Prospectus, in the quantities
hereinabove specified, (ii) all costs and expenses related to the transfer and
delivery of the Shares to the Underwriters, including any transfer or other
taxes payable thereon, (iii) the cost of printing or producing any preliminary
or supplementary Blue Sky memorandum in connection with the offer and sale of
the Shares under state securities laws and all expenses in connection with the
qualification of the Shares for offer and sale under state securities laws as
provided in Section 8(d) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with any preliminary or supplementary Blue Sky
memorandum, (iv) all filing fees and disbursements of counsel to the
Underwriters incurred in connection with the review and qualification of the
offering of the Shares by the NASD, (v) all fees of counsel incurred on behalf
of or disbursements by Xxxxxx Xxxxxxx in its capacity as "qualified independent
underwriter" within the meaning of Rule 2720 of the NASD's Conduct Rules
("QIU"), (vi) all fees and expenses in connection with the preparation and
filing of the registration statement on Form 8-A relating to the Common Stock
and all costs and expenses incident to quoting the Shares on the Nasdaq
National Market System, (vii) the cost of printing certificates representing
the Shares, (viii) the costs and charges of any transfer agent, registrar or
depositary and (ix) except as otherwise agreed, the costs and expenses of the
Company relating to investor presentations on any "road show" undertaken in
connection with the marketing of the offering of the Shares, including, without
limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with the
road show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and any
such consultants, and the cost of any aircraft chartered in connection with the
road show. It is understood, however, that except as provided in this Section,
Section 11 entitled "Indemnity and Contribution", and the last paragraph of
Section 13 below, the Underwriters will pay all of their costs and expenses,
including fees and disbursements of their counsel, stock transfer taxes payable
on resale of any of the Shares by them and any advertising expenses connected
with any offers they may make.
The provisions of this Section shall not supersede or
otherwise affect any agreement that the Sellers may otherwise have for the
allocation of such expenses among themselves.
19
11. Indemnity and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission that is based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use therein; provided, however, that the foregoing indemnity
agreement with respect to any preliminary prospectus shall not inure to the
benefit of any Underwriter from whom the person asserting any such losses,
claims, damages or liabilities purchased Shares, or any person controlling such
Underwriter, if a copy of the Prospectus (as then amended or supplemented if
the Company shall have furnished any amendments or supplements thereto) was not
sent or given by or on behalf of such Underwriter to such person, if required
by law so to have been delivered, at or prior to the written confirmation of
the sale of the Shares to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses, claims,
damages or liabilities, unless such failure is the result of noncompliance by
the Company with Section 8(a) hereof.
(b) Each Selling Stockholder agrees, severally and not
jointly, to indemnify and hold harmless the Company, its directors, its
officers who sign the Registration Statement, each Underwriter and each person,
if any, who controls the Company or any Underwriter within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act from
and against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim) caused by
any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, but
only with reference to information relating to such Selling Stockholder
furnished in writing by or on behalf of such Selling Stockholder expressly for
use in the Registration Statement; provided, however, that the foregoing
indemnity agreement with respect to any preliminary prospectus shall not inure
to the benefit of any Underwriter from whom the person asserting any such
20
losses, claims, damages or liabilities purchased Shares, or any person
controlling such Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Underwriter to such
person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such losses, claims, damages or liabilities, unless such failure is the
result of noncompliance by the Company with Section 8(a) hereof.
Notwithstanding the provisions of this Section 11, the liability of each
Selling Stockholder hereunder shall be limited to the net proceeds received by
such Selling Stockholder from the offering of the Shares hereunder.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Selling Stockholders, the
directors of the Company, the officers of the Company who sign the Registration
Statement and each person, if any, who controls the Company or any Selling
Stockholder within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary prospectus,
the Prospectus or any amendments or supplements thereto.
(d) The Company also agrees to indemnify and hold harmless
Xxxxxx Xxxxxxx and each person, if any, who controls Xxxxxx Xxxxxxx within the
meaning of either Section 15 of the Securities Act, or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages, liabilities
and judgments incurred as a result of Xxxxxx Xxxxxxx'x participation as a QIU
in connection with the offering of the Common Stock, except for any losses,
claims, damages, liabilities, and judgments resulting from Xxxxxx Xxxxxxx'x or
such control person's bad faith, gross negligence or willful misconduct.
(e) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to paragraph (a), (b), (c) or (d) of this
Section 11, such person (the "indemnified party") shall promptly notify the
person against whom such indemnity may be sought (the "indemnifying party") in
writing and the indemnifying party, upon request of the indemnified party,
shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified
21
party and any others the indemnifying party may designate in such proceeding
and shall pay the reasonable fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for (i) the reasonable fees and
expenses of more than one separate firm (in addition to any local counsel) for
all Underwriters and all persons, if any, who control any Underwriter within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, (ii) the reasonable fees and expenses of more than one separate
firm (in addition to any local counsel) for the Company, its directors, its
officers who sign the Registration Statement and each person, if any, who
controls the Company within the meaning of either such Section and (iii) the
reasonable fees and expenses of more than one separate firm (in addition to any
local counsel) for all Selling Stockholders and all persons, if any, who
control any Selling Stockholder within the meaning of either such Section, and
that in each case all such fees and expenses shall be reimbursed as they are
incurred. In the case of any such separate firm for the Underwriters and such
control persons of any Underwriters, such firm shall be designated in writing
by Xxxxxx Xxxxxxx. In the case of any such separate firm for the Company, and
such directors, officers and control persons of the Company, such firm shall be
designated in writing by the Company. In the case of any such separate firm for
the Selling Stockholders and such control persons of Selling Stockholders, such
firm shall be designated in writing by the persons named as attorneys-in-fact
for the Selling Stockholders under the Power of Attorney and Custody
Agreements. Notwithstanding anything contained herein to the contrary, if
indemnity may be sought pursuant to paragraph (d) of this Section 11 in respect
of such action or proceeding, then in addition to such separate firm for the
indemnified parties, the indemnifying party shall be liable for the reasonable
fees and expenses of not more than one separate firm (in addition to any local
counsel) for Xxxxxx Xxxxxxx in its capacity as a QIU and all persons, if any,
who control Xxxxxx Xxxxxxx within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act. The indemnifying party shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than
22
45 days after receipt by such indemnifying party of the aforesaid request and
(ii) such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement other than
such fees and expenses of counsel which are being contested in good faith by
such indemnifying party. 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.
(f) To the extent the indemnification provided for in
paragraph (a), (b), (c) or (d) of this Section 11 is unavailable to an
indemnified party or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each indemnifying party under such
paragraph, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
or parties on the one hand and the indemnified party or parties on the other
hand from the offering of the Shares or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the indemnifying party or parties on the
one hand and of the indemnified party or parties on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Sellers on the one hand
and the Underwriters on the other hand in connection with the offering of the
Shares shall be deemed to be in the same respective proportions as the net
proceeds from the offering of the Shares (before deducting expenses) received
by each Seller and the total underwriting discounts and commissions received by
the Underwriters, in each case as set forth in the table on the cover of the
Prospectus, bear to the aggregate Public Offering Price of the Shares. The
relative fault of the Sellers on the one hand and of the Underwriters on the
other hand 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 Sellers or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Underwriters' respective obligations to contribute pursuant to
this Section 11 are several in proportion to the respective number of Shares
they have purchased hereunder, and not joint.
(g) The Sellers and the Underwriters agree that it would not
be just or equitable if contribution pursuant to this Section 11 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in
23
paragraph (f) of this Section 11. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages and liabilities referred to in
paragraph (f) of this Section 11 shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 11, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Shares underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages that
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission and no Selling
Shareholder shall be required to contribute any amount in excess of the net
proceeds received by such Selling Shareholder from the offering of the Shares
hereunder. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
remedies provided for in this Section 11 are not exclusive and shall not limit
any rights or remedies which may otherwise be available to any indemnified
party at law or in equity.
(h) The indemnity and contribution provisions contained in
this Section 11 and the representations, warranties and other statements of the
Company and the Selling Stockholders contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of
this Agreement, (ii) any investigation made by or on behalf of any Underwriter
or any person controlling any Underwriter, any Selling Stockholder or any
person controlling any Selling Stockholder, or the Company, its officers or
directors or any person controlling the Company and (iii) acceptance of and
payment for any of the Shares.
12. Termination. This Agreement shall be subject to
termination by notice given by you to the Company, if (a) after the execution
and delivery of this Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
NASD, the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or
the Chicago Board of Trade, (ii) trading of any securities of the Company shall
have been suspended on any exchange or in any over-the-counter market, (iii) a
general moratorium on commercial banking activities in New York shall have been
declared by either federal or New York State authorities or (iv) there shall
have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in your judgment, is material
and adverse and (b) in the case of any of the events specified in clauses
(a)(i) through (iv), such event, singly or together with any other such event,
makes it, in your judgment, impracticable to market the Shares on the terms and
in the manner contemplated in the Prospectus.
24
13. Effectiveness; Defaulting Underwriters. This Agreement
shall become effective upon the execution and delivery hereof by the parties
hereto.
If, on the Closing Date or the Option Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse to
purchase Shares that it or they have agreed to purchase hereunder on such date,
and the aggregate number of Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than
one-tenth of the aggregate number of the Shares to be purchased on such date,
the other Underwriters shall be obligated severally in the proportions that the
number of Firm Shares set forth opposite their respective names in Schedule I
bears to the aggregate number of Firm Shares set forth opposite the names of
all such non-defaulting Underwriters, or in such other proportions as you may
specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 13 by
an amount in excess of one-ninth of such number of Shares without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Firm Shares to be purchased, and
arrangements satisfactory to you, the Company and the Selling Stockholders for
the purchase of such Firm Shares are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter, the Company or the Selling Stockholders. In any
such case either you or the relevant Sellers shall have the right to postpone
the Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and in the Prospectus
or in any other documents or arrangements may be effected. If, on the Option
Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase
Additional Shares and the aggregate number of Additional Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of
Additional Shares to be purchased, the non-defaulting Underwriters shall have
the option to (i) terminate their obligation hereunder to purchase Additional
Shares or (ii) purchase not less than the number of Additional Shares that such
non-defaulting Underwriters would have been obligated to purchase in the
absence of such default. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of any Seller to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason any Seller shall be unable to perform its obligations under
this Agreement, the Sellers will reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and disbursements
of their
25
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder.
14. Jurisdiction. Each of the Selling Stockholders hereby (i)
acknowledges that it has irrevocably designated and appointed the Company, 0000
Xxxxxxxxxxxxxxxx Xxxx, Xxx Xxxxxxxx, XX 00000 (together with any successor, the
"Process Agent"), as its authorized agent upon which process may be served in
any suit, action or proceeding arising out of or relating to this Agreement or
the transactions contemplated herein or brought under federal or state
securities laws that may be instituted in any federal or state court in the
State of New York, sitting in the City of New York, and acknowledges that the
Process Agent has accepted such designation, (ii) agrees that service of
process upon the Process Agent and written notice of such service to the
Selling Stockholders (mailed or delivered to the [Chief Executive Officer] of
each Selling Stockholder at its principal office at [Addresses]), shall be
deemed in every respect effective service of process upon the Selling
Stockholders in any such suit, action or proceeding and (iii) agrees to take
any and all action, including the execution and filing of any and all such
documents and instruments as may be necessary to continue such designation and
appointment of the Process Agent in full force and effect so long as any of the
Shares shall be outstanding. Each of the Selling Stockholders hereby agrees to
submit to the nonexclusive jurisdiction of any such federal or state court in
the State of New York in any such suit, action or proceeding arising out of or
relating to this Agreement or the transactions contemplated herein and hereby
waives to the fullest extent permitted by law any defense to the institution or
continuance of any such suit, action or proceeding based upon lack of proper
venue, inconvenient forum or similar grounds.
To the extent that each of the Selling Stockholders has or
hereafter may acquire any immunity from jurisdiction of any court or from any
legal process (whether through service of notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to itself
or its property, each of them hereby irrevocably waives such immunity in
respect of their obligations under this Agreement to the fullest extent
permitted by law.
If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder into any currency other than United
States dollars, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be the rate at which in
accordance with normal banking procedures Xxxxxx Xxxxxxx could purchase United
States dollars with such other currency in the City of New York on the business
day preceding that on which final judgment is given. The obligation of each of
the Selling Stockholders in respect of any sum due from it to any Underwriter
shall, notwithstanding any judgment in a currency other than United States
dollars, not be discharged until the first business day, following receipt by
such Underwriter of any sum adjudged to be so due in such other currency, on
which (and only to the extent that) such Underwriter may in accordance with
normal banking procedures purchase United States
26
dollars with such other currency; if the United States dollars so purchased are
less than the sum originally due to such Underwriter hereunder, each of the
Selling Stockholders agrees, as a separate obligation and notwithstanding any
such judgment, to indemnify such Underwriter against such loss. If the United
States dollars so purchased are greater than the sum originally due to such
Underwriter hereunder, such Underwriter agrees to pay to each of the Selling
Stockholders an amount equal to the excess of the dollars so purchased over the
sum originally due to such Underwriter hereunder.
15. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
16. Applicable Law. This Agreement shall be governed by the
laws of the State of New York.
17. Headings. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
Very truly yours,
SPECIAL METALS CORPORATION
By
--------------------------------
Name:
Title:
The Selling Stockholders named in
Schedule II hereto, acting severally
By
--------------------------------
Name:
Attorney-in-Fact
Accepted as of the date hereof
XXXXXX XXXXXXX & CO. INCORPORATED
27
SALOMON BROTHERS INC
CREDIT LYONNAIS SECURITIES (USA) INC.
Acting severally on behalf of themselves
and the several Underwriters
named herein.
By Xxxxxx Xxxxxxx & Co. Incorporated
By
--------------------------
Name:
Title:
SCHEDULE I
Underwriters
Number of
Firm Shares
Underwriter To Be Purchased
----------- ---------------
Xxxxxx Xxxxxxx & Co. Incorporated
Salomon Brothers Inc
Credit Lyonnais Securities (USA) Inc.
---------------
Total.................................................
===============
SCHEDULE II
Selling Stockholders
Number of
Firm Shares
Selling Stockholder To Be Sold
------------------- -----------
LWH Holding S.A.
Advanced Materials Investments
Holding S.A.
-----------
Total.....................................................
===========
EXHIBIT A
Pursuant to Section 7(d) of the Underwriting Agreement, Xxxx,
Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, special counsel for the Company, shall
furnish an opinion to the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Delaware, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business (or has a legal corporate existence)
and is in good standing in the states of California, Kentucky,
Michigan and New York, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole;
(ii) Special Metals International Corporation, a subsidiary
of the Company, has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation and has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus;
(iii) the authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the
Prospectus;
(iv) the shares of Common Stock (including the Shares to be
sold by the Selling Stockholders) outstanding prior to the issuance of
the Company Shares have been duly authorized by all requisite
corporate action on the part of the Company and are validly issued,
fully paid and non-assessable;
(v) all of the issued shares of capital stock of Special
Metals International Corporation have been duly and validly authorized
and issued, are fully paid and non-assessable and are owned of record
directly by the Company;
(vi) the Company Shares have been duly authorized by all
requisite corporate action on the part of the Company and, when issued
and delivered to and paid for by the Underwriters in accordance with
the terms of the Underwriting Agreement, will be validly issued, fully
paid and non-assessable, and the issuance of such Shares will not be
subject to any preemptive or similar rights pursuant to the Company's
certificate of incorporation, or by laws, each as in effect on the
date hereof, or in any agreement or other outstanding instrument known
to such counsel to which the Company is a party;
A-2
(vii) the Underwriting Agreement and each of the Irrevocable
Power of Attorney and Custody Agreements (collectively, the "Power of
Attorney and Custody Agreements") each dated the date hereof, by each
Selling Stockholder and the Company as Custodian, appointing certain
individuals as the Selling Stockholders' attorneys-in-fact to the
extent set forth therein relating to the transactions contemplated
hereby and by the Registration Statement have been duly authorized,
executed and delivered by the Company;
(viii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Underwriting
Agreement, the Power of Attorney and Custody Agreements, and the
issuance and delivery of the Company Shares will not contravene any
provision of any existing applicable law, rule or regulation of the
State of New York, the United States or the General Corporation Law of
the State of Delaware (other than the securities or blue sky laws of
the various states, as to which such counsel need express no opinion)
("Applicable Laws") or the articles of incorporation or by-laws of the
Company or any agreement, indenture or instrument listed as an exhibit
to the Registration Statement or to those court orders, decrees and
judgments specifically identified by the Company and set forth on a
schedule to such opinion, except where such violation would have not
have a material adverse effect on the Company and its subsidiaries as
a whole. No consent, approval, authorization or order of or filing,
registration or qualification under Applicable Laws with any
Governmental Authorities which has not been obtained, taken or made
(other than pursuant to any state securities laws or foreign
securities laws as to which such counsel need not express any opinion)
is required for the performance by the Company of its obligations
under the Underwriting Agreement. For purposes of this opinion, the
term "Governmental Authorities" means any executive, legislative,
judicial, administrative or regulatory body of the State of New York,
the State of Delaware or the United States of America;
(ix) the statements (A) in the Prospectus under the captions
"Certain Transactions - Transactions with Principal Stockholders -
Technology Exchange Agreement", "-- Managerial Assistance Agreement,"
"-- Registration Rights", "-- Subordinated Stockholder Notes",
"Description of Capital Stock", and "Certain United States Federal Tax
Consequences To Non-United States Holders of Common Stock" and (B) in
the Registration Statement in Items 14 and 15, in each case insofar as
such statements constitute summaries of the legal matters, documents
or proceedings referred to therein, fairly present the information
called for with respect to such legal matters, documents and
proceedings and fairly summarize the matters referred to therein;
(x) such counsel does not know of any legal or governmental
proceedings pending or threatened to which the Company or any of its
subsidiaries is a party or to
A-3
which any of the properties of the Company or any of its subsidiaries
is subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or of any statute
or regulation of the State of New York, the United States or the
General Corporation of the State of Delaware, contracts or other
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required;
(xi) the Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company", as such term is defined in the Investment Company Act of
1940, as amended;
(xii) each of the Registration Statement and the Prospectus,
as of their respective effective or issue dates appears on its face to
be appropriately responsive in all material respects to the
requirements of the Securities Act and the rules and regulations of
the Commission thereunder, except that in each case such counsel need
not express an opinion as to the financial statements, financial
statement schedules and other financial and statistical data included
therein.
Such counsel shall confirm that they have participated in the
preparation of the Registration Statement and the Prospectus and although such
counsel has not undertaken to investigate or verify independently, and do not
assume responsibility for, the accuracy or completeness of the statements
contained therein (other than as explicitly stated in the paragraph (ix)
above), based upon such participation, no facts have come to such counsel's
attention to lead such counsel to believe (A) that the Registration Statement
or any amendment thereto (except for the financial statements, financial
statement schedules and other financial or statistical data included therein or
omitted therefrom, as to which such counsel need not express any such belief),
at the time it became effective 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 (B) that the
Prospectus (except for the financial statements, financial schedules and other
financial or statistical data included therein or omitted therefrom, as to
which such counsel need not express any such belief), as of its date or the
Closing Date, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering the foregoing opinions, such counsel may (A)
rely, to the extent such counsel deems proper upon certificates of public
officials and officers of the Company as to factual matters, (B) assume without
independent investigation (i) that each of the parties to the Underwriting
Agreement (other than the Company and the Selling Stockholders) has complied
with all of its obligations and agreements arising thereunder, (ii) the
genuineness of
A-4
all signatures, (iii) the legal capacity of all individuals who have executed
any of the documents reviewed by such counsel, (iv) the authenticity of all
documents submitted to such counsel as originals, (v) the conformity to the
originals of all documents submitted to such counsel as certified, photostatic,
reproduced or conformed copies of valid existing agreements or other documents,
(vi) the authenticity of all such latter documents and (vii) that the
statements regarding matters of fact in the certificates, records, agreements,
instruments and documents that such counsel have examined are accurate and
complete and (C) indicate that whenever such counsel's opinion with respect to
the existence or absence of facts is based upon such counsel's knowledge, such
counsel's opinion is based solely on the actual knowledge of the attorneys in
such counsel's firm who are representing the Company in connection with the
transactions contemplated by the Underwriting Agreement and without any
independent verification.
EXHIBIT B(i)
Pursuant to Section 7(e) of the Underwriting Agreement, Xxxx,
Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, special counsel for the Selling
Stockholders, shall furnish an opinion to the effect that:
(i) the execution and delivery by each Selling Stockholder
of, and the performance by such Selling Stockholder of its obligations
under, the Underwriting Agreement and the Power of Attorney and
Custody Agreement of such Selling Stockholder will not contravene any
provision of any existing applicable law, rule or regulation of the
State of New York, the United States or the General Corporation Law of
the State of Delaware (other than the securities laws or blue sky laws
of the various states, as to which such counsel need express no
opinions) ("Applicable Laws") and no consent, approval, authorization
or order of or filing, registration or qualification under Applicable
Laws with any Governmental Authorities which has not been obtained,
taken or made (other than pursuant to any state securities laws or
foreign securities laws as to which such counsel need express no
opinion) is required for the performance by such Selling Stockholder
of its obligations under the Underwriting Agreement or Power of
Attorney and Custody Agreement of such Selling Stockholder. For
purposes of this opinion, the term "Governmental Authorities" means
any executive, legislative, judicial, administrative or regulatory
body of the State of New York, the State of Delaware or the United
States of America.
(ii) assuming that the Power of Attorney and Custody
Agreement of each of the Selling Stockholders has been duly
authorized, executed and delivered by such Selling Stockholder, the
Power of Attorney and Custody Agreement of each of the Selling
Stockholders is a valid and binding agreement of such Selling
Stockholder, enforceable in accordance with its terms, except as (a)
the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (b) the
availability of equitable remedies may be limited by equitable
principles of general applicability; and
(iii) delivery of the Shares to be sold by each Selling
Stockholder and payment therefor pursuant to the Underwriting
Agreement will pass valid and marketable title to such Shares free and
clear of any security interests, claims, liens, equities and other
encumbrances;
With respect to factual matters and to the extent such
counsel deems appropriate, such counsel may rely upon the representations of
each Selling Stockholder contained herein and in the Power of Attorney and
Custody Agreement of such Selling Stockholder and in other documents and
instruments; provided that copies of such Power of Attorney and Custody
Agreement and of any such other documents and instruments shall be
B(i)-2
delivered to you and shall be in form and substance satisfactory to counsel for
the Underwriters.
EXHIBIT B(ii)
Pursuant to Section 7(e) of the Underwriting Agreement,
Xxxxxx & Xxxxxxxxx, special counsel for the Selling Stockholders, shall furnish
an opinion to the effect that:
(i) the Underwriting Agreement has been duly authorized,
executed and delivered by or on behalf of each of the Selling
Stockholders;
(ii) the execution and delivery by each Selling Stockholder
of, and the performance by such Selling Stockholder of its obligations
under, the Underwriting Agreement and the Power of Attorney and
Custody Agreement of such Selling Stockholder will not contravene any
applicable law, or the certificate of incorporation or by-laws of such
Selling Stockholder (if such Selling Stockholder is a corporation),
or, to the best of such counsel's knowledge, any agreement or other
instrument binding upon such Selling Stockholder, or to the best of
such counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over such
Selling Stockholder, and no consent, approval, authorization or order
of or qualification with any governmental body or agency is required
for the performance by such Selling Stockholder of its obligations
under this Agreement or Power of Attorney and Custody Agreement of
such Selling Stockholder, except such as may be required by the
securities or Blue Sky laws of the various states in connection with
the offer and sale of the Shares;
(iii) each of the Selling Stockholders has valid and
marketable title to the Shares to be sold by such Selling Stockholder
and the legal right and power, and all authorization and approval
required by law, to enter into the Underwriting Agreement and Power of
Attorney and Custody Agreement of such Selling Stockholder and to
sell, transfer and deliver the Shares to be sold by such Selling
Stockholder;
(iv) the Power of Attorney and Custody Agreement of each of
the Selling Stockholders has been duly authorized, executed and
delivered by such Selling Stockholder;
(v) each Selling Stockholder has the power to submit, and has
taken any necessary corporate action to submit, to the jurisdiction of
any United States federal or state court in the State of New York. The
choice of New York state law to govern the Underwriting Agreement and
the Power of Attorney and Custody Agreement of such Selling
Stockholder is a valid choice of law and the submission therein by
each Selling Stockholder to New York state law and the appointment of
service of process is valid and binding upon such Selling Stockholder;
B(ii)-2
(vi) neither of the Selling Stockholders nor any of their
respective properties or assets has any sovereign immunity from the
jurisdiction of any court or from any legal process (whether through
service or notice, attachment prior to judgment, attachment in aid of
execution, execution of otherwise) under the laws of Luxembourg; and
(vii) to ensure the legality, validity, enforcement or
admissibility into evidence in Luxembourg of the Underwriting
Agreement, the Power of Attorney and Custody Agreement of such Selling
Stockholder and any other document to be furnished thereunder, it is
not necessary that the Underwriting Agreement, the Power of Attorney
and Custody Agreement of such Selling Stockholder or any other such
document be filed, recorded or registered with any court or other
authority in Luxembourg, or that any tax be paid in Luxembourg on or
in respect of any of the Underwriting Agreement, the Power of Attorney
and Custody Agreement of such Selling Stockholder or any other such
document.
With respect to factual matters and to the extent such
counsel deems appropriate, such counsel may rely upon the representations of
each Selling Stockholder contained herein and in the Power of Attorney and
Custody Agreement of such Selling Stockholder and in other documents and
instruments; provided that copies of such Power of Attorney and Custody
Agreement and of any such other documents and instruments shall be delivered to
you and shall be in form and substance satisfactory to counsel for the
Underwriters.
Such counsel is admitted to practice in Luxembourg and no
opinion need be expressed herein as to matters under or involved in any
jurisdiction other than Luxembourg.
EXHIBIT C
________, 1997
Xxxxxx Xxxxxxx & Co. Incorporated
Salomon Brothers Inc
Credit Lyonnais Securities (USA) Inc.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co.
Incorporated ("Xxxxxx Xxxxxxx") proposes to enter into an Underwriting
Agreement (the "Underwriting Agreement") with Special Metals Corporation, a
Delaware corporation (the "Company"), providing for the public offering (the
"Public Offering") by the several Underwriters, including Xxxxxx Xxxxxxx (the
"Underwriters"), of ___ shares (the "Shares") of the Common Stock (par value
$.01 per share) of the Company (the "Common Stock").
To induce the Underwriters that may participate in the Public
Offering to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Xxxxxx
Xxxxxxx on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 180 days after the date of the final
prospectus relating to the Public Offering (the "Prospectus"), (1) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock (provided that such shares or securities are
either currently owned by the undersigned or are hereafter acquired in
connection with the Public Offering), or (2) enter into any swap or other
agreement that transfers, in whole or in part, any of the economic consequences
of ownership of such shares of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. In addition, the
undersigned agrees that, without the prior written consent of Xxxxxx Xxxxxxx on
behalf of the Underwriters, it will not, during the period commencing on the
date hereof and ending 180 days after the date of the Prospectus, make any
demand for, or exercise any right with respect to, the registration of any
shares of Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock.
C-2
Whether or not the Public Offering actually occurs depends on
a number of factors, including market conditions. Any Public Offering will only
be made pursuant to an Underwriting Agreement, the terms of which are subject
to negotiation between the Company and the Underwriters.
Very truly yours,
_____________________________
(Signature)
_____________________________
(Print Name)
_____________________________
(Address)
C-3
EXHIBIT D
