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EXHIBIT 1.1
USEC INC.
(A DELAWARE CORPORATION)
% SENIOR NOTES DUE 200[ ]
PURCHASE AGREEMENT
[ ], 1999
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[ ], 1999
Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated
X.X. Xxxxxx Securities Inc.
Xxxxxx Brothers Inc.
NationsBanc Xxxxxxxxxx Securities LLC
Xxxxxxxx & Partners, L.P.
as Representatives of the
several Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
USEC Inc., a Delaware corporation (the "COMPANY"), confirms its agreement
with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
("XXXXXXX XXXXX") and each of the other Underwriters named in Schedule A hereto
(collectively, the "UNDERWRITERS", which term shall also include any
underwriter substituted as hereinafter provided in Section 9 hereof), for whom
Xxxxxxx Xxxxx, X.X. Xxxxxx Securities Inc., Xxxxxx Brothers Inc., NationsBanc
Xxxxxxxxxx Securities LLC and Xxxxxxxx & Partners, L.P. are acting as
representatives (in such capacity, the "REPRESENTATIVES"), with respect to the
issue and sale by the Company and the purchase by the Underwriters, acting
severally and not jointly, of the respective principal amounts set forth in
said Schedule A of $[ ] million aggregate principal amount of the
Company's % Senior Notes due 200[ ] (the "SECURITIES"). The Securities are
to be issued pursuant to an indenture dated as of [ ],
1999 (the "INDENTURE") between the Company and First Union National Bank, as
trustee (the "TRUSTEE").
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this
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Agreement has been executed and delivered and the Indenture has been qualified
under the Trust Indenture Act of 1939, as amended (the "TRUST INDENTURE ACT").
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement relating to the Securities. The
registration statement as amended at the time it becomes effective, including
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
"REGISTRATION STATEMENT"; the prospectus in the form first used to confirm
sales of Securities is hereinafter referred to as the "PROSPECTUS" (including
in the case of all references to the Registration Statement or the Prospectus,
documents incorporated by reference therein). If the Company has filed an
abbreviated registration statement to register additional % Senior Notes due
200[ ] pursuant to Rule 462(b) under the Securities Act (the "RULE 462
REGISTRATION STATEMENT"), then any reference herein to the term "REGISTRATION
STATEMENT" shall be deemed to include such Rule 462 Registration Statement.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective, no
stop order suspending the effectiveness of the Registration Statement
is in effect, and no proceedings for such purpose are pending before
or threatened by the Commission.
(b) (i) The 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 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 do not
apply to (A) statements or omissions in the Registration
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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 or (B) that part of the
Registration Statement that constitutes the Statement of Eligibility
(Form T-1) under the Trust Indenture Act.
(c) 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 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. As used herein, "subsidiary" and "subsidiaries"
refers to the Company's subsidiaries (either individually or
collectively, as the context may require) listed on Exhibit A hereto.
(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 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; all of the issued shares of capital stock of each subsidiary
of the Company 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) This Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the
Company.
(f) The Indenture has been duly authorized by the
Company and duly qualified under the Trust Indenture Act and, when
duly executed and
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delivered by the Company and the Trustee, will constitute a valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally and
except as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(g) The Securities have been duly authorized and, on the
Closing Date (as defined in Section 3), will have been duly executed
by the Company and, when authenticated, issued and delivered in the
manner provided for in the Indenture and delivered against payment of
the purchase price therefor as provided in this Agreement, will
constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at
law), and will be in the form contemplated by, and entitled to the
benefits of, the Indenture.
(h) The Securities and the Indenture will conform in all
material respects to the respective statements relating thereto
contained in the Prospectus and will be in substantially the
respective forms filed as exhibits to the Registration Statement.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement,
the Indenture and the Securities, will not contravene any provision of
applicable law or the charter or by-laws of the Company or any
agreement or other instrument binding upon the Company and 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 and its
subsidiaries, and, except as described in the Prospectus, no material
consent, approval, authorization or order of, or qualification with,
any governmental body or agency is required for the performance by the
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Company of its obligations under this Agreement, the Indenture and the
Securities, 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 Securities.
(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 material 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 of which
the Company's or and of its subsidiaries' property is the 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 so described or filed as
required.
(l) Except as described in the Prospectus, the Company
and its subsidiaries have all necessary consents, authorizations,
approvals, clearances, orders, certificates and permits of and from,
and have made all declarations and filings with, all federal, state,
local and other governmental authorities (including, without
limitation, the Nuclear Regulatory Commission and the Occupational
Safety and Health Administration), all self-regulatory organizations
and all courts and other tribunals, to own, lease, license and use
their respective properties and assets and to conduct their respective
businesses in the manner described in the Prospectus, except to the
extent that the failure to obtain or file would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(m) Except as described in the Prospectus, the Company or
its subsidiaries own, or have the right to use, 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
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employed by the Company and its subsidiaries in connection with the
business now operated by the Company and its subsidiaries, and, except
as described in the Prospectus, none of the Company or any of its
subsidiaries has received any 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, would have a material adverse effect on
the Company and its subsidiaries, taken as a whole.
(n) Each preliminary prospectus publicly 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, complied when so filed in all material respects with the
Securities Act and the applicable rules and regulations of the
Commission thereunder.
(o) The Company is not and, after giving effect to the
offering and sale of the Securities 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.
(p) Except as described in the Prospectus, the Company
and its subsidiaries (i) are in compliance with any and all applicable
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.
(q) Except as described in the Prospectus, to the best of
the Company's knowledge, there are no costs or liabilities associated
with Environmental Laws (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
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constraints on operating activities and any potential liabilities to
third parties) that would, after taking into account existing
indemnities from the United States Department of Energy and after
giving effect to the Privatization Act, Chapter 1, Title 3 of Public
Law 104-134, and the Energy Policy Act of 1992, Public Law 102-486,
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(r) Except as described in the Prospectus, no material
labor dispute with the employees of the Company or any of its
subsidiaries or, to the knowledge of the Company, of Lockheed Xxxxxx
Utility Services, Inc. exists, or, to the knowledge of the Company, is
imminent that could have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(s) The Company, its subsidiaries and each other person
or entity that, together with the Company and its subsidiaries, is
treated as a single employer under Section 414 of the Internal Revenue
Code of 1986, as amended (the "CODE") (each such person or entity
being an "ERISA AFFILIATE"), comply in all material respects with the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")
if and to the extent applicable. The Company, its subsidiaries and
each ERISA Affiliate comply in all material respects with the Code, if
and to the extent applicable, with respect to each pension plan (as
defined in Section 3(2) of ERlSA) maintained by the Company, its
subsidiaries or such ERISA Affiliate, and none of the Company, its
subsidiaries or any of their respective ERISA Affiliates has incurred
any material liability to any pension plan or to the Pension Benefit
Guaranty Corporation that has not been fully paid as of the date
hereof.
(t) The Company and its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable
assurance that (l) 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 principals 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.
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2. AGREEMENTS TO SELL AND PURCHASE. The Company 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 the
Company at the price set forth in Schedule B, the aggregate principal amount of
Securities set forth in Schedule A opposite the name of such Underwriter, plus
any additional principal amount of Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 9 hereof.
3. PAYMENT AND DELIVERY. Payment for the purchase price for, and
delivery of certificates for, the Securities shall be made at the offices of
Xxxxx Xxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, or at
such other place as shall be agreed upon by the Representatives and the
Company, at 9:00 a.m. (New York City time) on the third (fourth, if the pricing
occurs after 4:30 p.m. (Eastern time) on any given day) business day after the
date hereof (unless postponed in accordance with the provisions of Section 9),
or such other time not later than ten business days after such date as shall be
agreed upon by the Representatives and the Company (such time and date of
payment and delivery being herein called the "CLOSING DATE").
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery
to the Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for and make payment of the purchase price for, the
Securities which it has agreed to purchase. Xxxxxxx Xxxxx, individually and
not as representative of the Underwriters, may (but shall not be obligated to)
make payment of the purchase price for the Securities to be purchased by any
Underwriter whose funds have not been received by the Closing Date, but such
payment shall not relieve such Underwriter from its obligations hereunder.
Certificates for the Securities shall be in such denominations ($1,000
or integral multiples thereof) and registered in such names as the
Representatives may request in writing at least one full business day before
the Closing Date. The Securities, which may be in temporary form, will be made
available for examination
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and packaging by the Representatives in the City of New York not later than
10:00 a.m. (New York City time) on the business day prior to the Closing Date.
4. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The obligations
of the Company to sell the Securities to the Underwriters and the several
obligations of the Underwriters to purchase and pay for the Securities on the
Closing Date are subject to the condition that the Registration Statement shall
have become effective not later than 5:30 p.m. (New York City time) on the date
hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) (i) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date, 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 reasonable judgment, is material and adverse and that makes it,
in your reasonable judgment, impracticable to market the Securities on
the terms and in the manner contemplated in the Prospectus.
(ii) As of the Closing Date, the Securities shall
be rated at least [ ] by Moody's Investor's Service Inc.
and [ ] by Standard & Poor's Ratings Group, and the
Company shall have delivered to the Representatives a letter
dated the Closing Date, from each such rating agency, or other
evidence satisfactory to the Representatives, confirming that
the Securities have such ratings; and since the date of this
Agreement, there shall not have occurred a downgrading in the
rating assigned to the Securities or any of the Company's
other debt securities by any "NATIONALLY RECOGNIZED
STATISTICAL RATING AGENCY", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities
Act, and no such organization shall have publicly announced
that it has under surveillance or review its rating of the
Securities or any of the Company's other debt.
(b) The Underwriters shall have received on the Closing
Date a certificate, dated the Closing Date and signed by an executive
officer of the
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Company, to the effect set forth in Section 4(a)(ii) above and to
the effect that the representations and 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 or her
knowledge as to proceedings threatened).
(c) The Underwriters shall have received on the Closing
Date an opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, special
counsel for the Company, dated the Closing Date, to the effect set
forth in Exhibit B hereto.
(d) The Underwriters shall have received on the Closing
Date an opinion of Xxxxxx X. Xxxxx, Esq., Senior Vice President and
General Counsel of the Company, dated the Closing Date, to the effect
set forth in Exhibit C hereto.
(e) The Underwriters shall have received on the Closing
Date an opinion of Xxxxx Xxxx & Xxxxxxxx, counsel for the
Underwriters, dated the Closing Date, covering the matters referred to
in subparagraphs (iii), (iv), (v), (vii), (ix) (as to the statements
in the Prospectus under "DESCRIPTION OF THE NOTES" and "UNDERWRITING")
and (xiii) set forth in Exhibit B hereto.
The opinions of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP and
Xxxxxx X. Xxxxx, Esq. described in paragraphs (c) and (d) above shall be
rendered to the Underwriters at the request of the Company and shall so state
therein.
(f) 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 Xxxxxx Xxxxxxxx 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 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.
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5. 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, four 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 following the date of this Agreement and
during the period mentioned in paragraph (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 Securities 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 Securities 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 applicable law. The expense of complying with this
Section 6(c) shall be borne by the Company in respect of any
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amendment or supplement required during the nine-month period after
effectiveness of the Registration Statement and by the Underwriters
thereafter.
(d) To endeavor to qualify the Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions as
you shall reasonably request.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement
covering the twelve-month period ending December 31, 1999 that
satisfies the provisions of Section 11(a) of the Securities Act and
the rules and regulations of the Commission thereunder.
(f) During the period beginning on the date hereof and
continuing to and including the Closing Date, not to offer, sell,
contract to sell or otherwise dispose of any debt securities of the
Company or warrants to purchase or otherwise acquire debt securities
of the Company substantially similar to the Securities (other than (i)
the Securities and (ii) commercial paper issued in the ordinary course
of business), without the prior written consent of Xxxxxxx Xxxxx.
6. EXPENSES. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, all expenses
incident to the performance of the Company's obligations under this Agreement
will be paid or caused to be paid by the Company, including: (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the registration and delivery of the Securities
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 all printing costs associated therewith, and the mailing
and delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Securities to the Underwriters, including any
transfer or other taxes payable thereon, (iii) the cost of printing or
producing any Blue Sky memorandum in connection with the offer and sale of the
Securities under state securities laws and all expenses in connection with the
qualification of the Securities for offer and sale under state securities laws
as provided in Section 5(d) hereof,
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including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection with such qualification and in connection with
the Blue Sky memorandum, which are not expected to exceed $5,000, (iv) all
filing fees, if any, incurred in connection with the review and qualification
of the offering by the National Association of Securities Dealers, Inc., (v)
any fees charged by the rating agencies for the rating of the Securities, (vi)
the cost of printing certificates representing the Securities, (vii) the costs
and charges of any trustee, transfer agent, registrar or depositary, (viii) 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
Securities, including, without limitation, expenses of the Company associated
with the production of road show slides and graphics, fees and expenses of any
consultants engaged by the Company in connection with the road show
presentations, and travel and lodging expenses of the representatives and
officers of the Company and any such consultants, and (ix) all other costs and
expenses incident to the performance of the obligations of the Company
hereunder for which provision is not otherwise made in this Section. It is
understood, however, that except as provided in this Section, Section 7
entitled "INDEMNITY AND CONTRIBUTION", and the last paragraph of Section 9
below, the Underwriters will pay all of their costs and expenses, including
fees and disbursements of their counsel, transfer taxes payable on resale of
any of the Securities by them and any advertising expenses connected with any
offers they may make.
7. INDEMNITY AND CONTRIBUTION. (a) From and after the Closing
Date, 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 based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through
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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 Securities, 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 Securities to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage or liability unless such failure is the result
of non-compliance by the Company with Section 5(a) hereof.
(b) Each Underwriter agrees, severally and not
jointly, to indemnify and hold harmless the Company, the directors of
the Company, the officers of the Company who sign the Registration
Statement and each person, if any, who controls the Company 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.
(c) 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) or (b) of this
Section 7, 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
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represent the indemnified party in such proceeding and shall pay the
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 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 and (ii) the 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 that 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
Underwriters, such firm shall be designated in writing by Xxxxxxx
Xxxxx. 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. 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
30 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
16
17
request prior to the date of such settlement. 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 (i) includes an unconditional release of
such indemnified party from all liability on claims that are the
subject matter of such proceeding and (ii) does not include a
statement as to an admission of fault, culpability or a failure to act
by or on behalf of any indemnified party.
(d) To the extent the indemnification provided for in
paragraph (a) or (b) of this Section 7 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 Securities 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 Company on the one hand and the
Underwriters on the other hand in connection with the offering of the
Securities shall be deemed to be in the same respective proportions as
the net proceeds from the offering of the Securities (before deducting
expenses) received by the Company 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 initial public offering price of the Securities. The
relative fault of the Company on the one hand and 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 Company or by the Underwriters
and the parties' relative intent, knowledge, access to information
17
18
and opportunity to correct or prevent such statement or omission. The
Underwriters' respective obligations to contribute pursuant to this
Section 7 are several in proportion to the respective principal amount
of Securities they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would
not be just or equitable if contribution pursuant to this Section 7
were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations
referred to in paragraph (d) of this Section 7. The amount paid or
payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding
paragraph 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
7, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the
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. 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 7 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. The Underwriters' respective
obligations to contribute pursuant to this Section 7 are several in
proportion to the principal amount of Securities set forth opposite
their respective names in Schedule A hereto, and not joint.
(f) The indemnity and contribution provisions contained
in this Section 7 and the representations, warranties and other
statements of the Company contained in this Agreement shall remain
operative and in full force and effect regardless of (i) termination
of this Agreement, (ii) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter or by or on
behalf of the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of
the Securities;
18
19
8. 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 National Association
of Securities Dealers, Inc., 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 Securities on the terms and in the manner contemplated in the
Prospectus.
9. EFFECTIVENESS; DEFAULTING UNDERWRITERS. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date any one or more of the Underwriters shall fail
or refuse to purchase Securities that it has or they have agreed to purchase
hereunder on such date, and the aggregate principal amount of Securities which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase is not more than one-tenth of the aggregate principal amount of
Securities to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the principal amount of Securities
set forth opposite their respective names in Schedule A bears to the principal
amount of Securities set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase on such date; provided that in no event shall the
principal amount of Securities that any Underwriter has agreed to purchase
pursuant to this Agreement be increased pursuant to this Section 9 by an amount
in excess of one-ninth of such principal amount of Securities without the
written consent of such Underwriter. If, on the Closing Date, any Underwriter
or Underwriters shall fail or refuse to purchase Securities and the aggregate
principal amount of Securities with respect to which such default occurs is
more than one-
19
20
tenth of the aggregate principal amount of Securities to be purchased by all of
the Underwriters, and arrangements satisfactory to you and the Company for the
purchase of such Securities and are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case either you or the
Company 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 this Agreement shall be terminated by the Underwriters, or any of
them because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company 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
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder.
10. 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.
11. APPLICABLE LAW. This Agreement, and the rights and
obligations of the parties hereunder, shall be governed by, and construed and
interpreted in accordance with the internal laws of the State of New York,
without giving effect to the provisions thereof relating to conflicts of law.
12. 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.
20
21
Very truly yours,
USEC Inc., a Delaware corporation
By:
-----------------------------------------------
Name:
Title:
Accepted as of the date hereof
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated
X.X. Xxxxxx Securities Inc.
Xxxxxx Brothers Inc.
NationsBanc Xxxxxxxxxx Securities LLC
Xxxxxxxx & Partners, L.P.
Acting severally on behalf of themselves
and the several Underwriters named
in Schedule A hereto.
By: Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated
By:
-----------------------------------------
Name:
Title:
22
SCHEDULE A
Underwriters
Principal Amount of
Underwriter Securities to be Purchased
----------- --------------------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated . . . . . . . . . . . . . . . . . . . . . . $
X.X. Xxxxxx Securities Inc. . . . . . . . . . . . . . . .
Xxxxxx Brothers Inc. . . . . . . . . . . . . . . . . . .
NationsBanc Xxxxxxxxxx Securities LLC . . . . . . . . . .
Xxxxxxxx & Partners, L.P. . . . . . . . . . . . . . . . .
[Names of other Underwriters]
Total . . . . . . . . . . . . . . . . . . . . . . . . . . $
22
23
SCHEDULE B
USEC Inc.
% Senior Notes due 200[ ]
1. The initial public offering price of the Securities shall be
__% of the principal amount thereof, plus accrued interest, if any, from the
date of issuance.
2. The purchase price to be paid by the Underwriters for the
Securities shall be __% of the principal amount thereof.
3. The interest rate on the Securities shall be __% per annum.
Sch B-1
24
EXHIBIT A
SUBSIDIARIES OF USEC INC.
Name of Subsidary State of Incorporation
----------------- ----------------------
United States Enrichment Corporation Delaware
USEC Services Corporation Delaware
USEC Overseas, Inc. U.S. Virgin Islands
25
EXHIBIT B
Opinions to be delivered by Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
(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 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;
(ii) 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 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 its subsidiaries, taken
as a whole;
(iii) this Agreement has been duly authorized,
executed and delivered by the Company;
(iv) the Indenture has been duly authorized,
executed and delivered by the Company and (assuming the due
authorization, execution and delivery thereof by the Trustee)
constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms,
except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors'
rights generally
26
and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law);
(v) the Securities are in the form contemplated
by the Indenture, have been duly authorized by the Company,
assuming that the Securities have been duly authenticated by
the Trustee in the manner described in its certificate
delivered to you today (which fact such counsel need not
determine by an inspection of the Securities), the Securities
have been duly executed, issued and delivered by the Company
and constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their
terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors'
rights generally and except as enforcement thereof is subject
to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at
law), and will be entitled to the benefits of the Indenture;
(vi) the Indenture has been duly qualified under
the Trust Indenture Act;
(vii) the Securities and the Indenture conform as
to legal matters in all material respects to the descriptions
thereof contained in the Prospectus;
(viii) the execution and delivery by the Company of,
and the performance by the Company of its obligations under
this Agreement will not contravene any provision of applicable
law or the charter or by-laws of the Company or, to the best
of such counsel's knowledge, 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, to the best of such counsel's knowledge, any
judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company or any subsidiary,
and, except as described in the Prospectus, no material
consent, approval, authorization or order of, or qualification
with, any governmental
B-2
27
body or agency is required for the performance by the Company
of its obligations under this Agreement, the Indenture and the
Securities, 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 Securities or which are not required to
be obtained, made or taken prior to the date hereof;
(ix) the statements (A) in the Prospectus under
the caption, "DESCRIPTION OF THE NOTES" 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) the Company is not and, after giving effect
to the offering and sale of the Securities 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;
(xi) each of the Registration Statement, as of the
Effective Date, and the Prospectus, as of its date, appeared
on its face to have been appropriately responsive in all
material respects to the requirements of the Securities Act
and the applicable rules and regulations of the Commission
thereunder, except that such counsel does not: (i) express any
opinion as to the financial statements and related notes,
schedules and other financial and statistical data included in
or excluded from the Registration Statement or the Prospectus
or (ii) except as set forth in clause (x) above, assume any
responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement and the
Prospectus;
(xii) (A) except as provided in the Prospectus, and
based solely upon such counsel's review of the Search Reports
dated October 23, 1995 and May 24, 1996 provided by Thomson
and Thomson, an independent trademark search company, the
Company
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and its subsidiaries own or have the right to use the
trademark "USEC" (the "TRADEMARK") in connection with the
business of uranium enrichment in all areas within the United
States where such xxxx is in use. Such counsel may note that,
in the United States, trademark rights can accrue based on use
of a xxxx without benefit of registration, and that the
Thomson and Thomson search reveals only such users of similar
marks and only such information about such users that appear
in Thomson and Thomson's databases. Accordingly, there may be
additional information or prior users of similar marks which
is not revealed in the Thomson and Thomson search reports,
providing a basis for a third party to assert superior rights
in the Trademark; and (B) except as set forth in the
Prospectus, to such counsel's knowledge, none of the Company
or any of its subsidiaries has received any notice from a
third party, which remains unresolved, as to infringement of
or conflict with asserted rights of others with respect to any
patents, patent rights, licenses, inventions, copyrights,
knowhow (including trade secrets or other unpatented and/or
unpatentable propriety or confidential information, systems or
procedures), trademarks, service marks and trade names, which,
singly or in the aggregate, would be likely to 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; and
(xiii) no facts have come to such counsel's
attention that have caused such counsel to believe that the
Registration Statement, at the time it became effective,
contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or
necessary to make the statements contained therein not
misleading or that the Prospectus, as of its date and as of
the date of the opinion, contained or contains any untrue
statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements
contained therein, in light of the circumstances under which
they were made, not misleading, except that such counsel
expresses no opinion or belief with respect to the financial
statements and related notes, schedules and other financial
and statistical data included in or excluded from the
Registration Statement or the Prospectus, the exhibits to the
Registration Statement or that part of
B-4
29
the Registration Statement that constitutes the Form T-1
heretofore referred to.
B-5
30
EXHIBIT C
Opinions to be delivered by Xxxxxx X. Xxxxx, Esq.
(i) 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 which any
of their respective properties is subject that are required to
be described in the Registration Statement or the Prospectus
and are not so described or of 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;
(ii) except as described in the Prospectus, no
material labor dispute with the employees of the Company or
any of its subsidiaries or, to the knowledge of such counsel,
of Lockheed Xxxxxx Utility Services, Inc. exists, or, to such
counsel's knowledge, is imminent that could have a material
adverse effect on the Company and its subsidiaries, taken as a
whole;
(iii) except as described in the Prospectus, the
Company and its subsidiaries have, to such counsel's
knowledge, all necessary consents, authorizations, approvals,
clearances, orders, certificates and permits of and from, and
have made all declarations and filings with, all federal,
state, local and other governmental authorities (including,
without limitation, the Nuclear Regulatory Commission and the
Occupational Safety and Health Administration), all
self-regulatory organizations and all courts and other
tribunals, to own, lease, license and use their respective
properties and assets and to conduct their respective business
in the manner described in the Prospectus, except to the
extent that the failure to obtain or file would not have a
material adverse effect on the Company and its subsidiaries,
taken as a whole; and
(iv) except as described in the Prospectus, to
such counsel's knowledge, each of the Company and its
subsidiaries (A) is in
31
compliance with any and all applicable Environmental Laws, (B)
has received all permits, consents, authorizations,
clearances, orders, certificates, licenses or other approvals
required of it under applicable Environmental Laws to conduct
its business and (C) is in compliance with all terms and
conditions of any such permit, consent, authorization,
clearance, order, certificate, license or approval, except
where such noncompliance with Environmental Laws, failure to
receive required permits, consents, authorizations,
clearances, orders, certificates, licenses or other approvals
or failure to comply with the terms and conditions of such
permits, certificates, 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.
C-2
