DRAFT OF SEPTEMBER 17, 1999
ADVANCED ENERGY INDUSTRIES, INC.
COMMON STOCK, $0.001 PAR VALUE
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UNDERWRITING AGREEMENT
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September __, 1999
Xxxxxxx, Xxxxx & Co.,
BancBoston Xxxxxxxxx Xxxxxxxx
and CIBC World Markets
c/x Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Advanced Energy Industries, Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to Xxxxxxx, Xxxxx & Co., BancBoston Xxxxxxxxx Xxxxxxxx and CIBC
World Markets (the "Underwriters"), an aggregate of _________ shares of the
common stock, $0.001 par value of the Company ("Stock") and the stockholders of
the Company named in Schedule II hereto (the "Selling Stockholders"), propose,
subject to the terms and conditions stated herein, to sell to the Underwriters
an aggregate of ______ shares and, at the election of the Underwriters, up to
________ additional shares of Stock. The aggregate of _________ shares to be
sold by the Company and the Selling Stockholders is herein called the "Firm
Shares" and the aggregate of __________ additional shares to be sold by the
Selling Stockholders is herein called the "Optional Shares". The Firm Shares and
the Optional Shares which the Underwriters elect to purchase pursuant to Section
2 hereof are herein collectively called the "Shares."
1. (a) The Company and each of the Selling Stockholders
represents and warrants to, and agrees with, each of the Underwriters that:
(i) A registration statement on Form S-3 (File No. 33-____)
(the "Initial Registration Statement") in respect of the Shares has
been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any
post-effective amendment thereto, excluding exhibits thereto but
including all documents incorporated by reference in the prospectus
contained therein, each in the form heretofore delivered to you and for
each of the other Underwriters, have been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under
the Securities Act of 1933, as amended (the "Act"), which became
effective upon filing, no other document with respect to the Initial
Registration Statement or document incorporated by reference therein
has been filed with the Commission; and no stop order suspending the
effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission (any
preliminary prospectus included in the Initial Registration
Statement or filed with the Commission pursuant to Rule 424(a) of
the rules and regulations of the Commission under the Act is
hereinafter called a "Preliminary Prospectus"; the various parts of
the Initial Registration Statement and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto and including (i)
the information contained in the form of final prospectus filed with
the Commission pursuant to Rule 424(b) under the Act in accordance
with Section 5(a) hereof and deemed by virtue of Rule 430A under the
Act to be part of the Initial Registration Statement at the time it
was declared effective and (ii) the documents incorporated by
reference in the prospectus contained in the Initial Registration
Statement at the time such part of the Initial Registration
Statement became effective, each as amended at the time such part of
the Initial Registration Statement became effective or such part of
the Rule 462(b) Registration Statement, if any, became or hereafter
becomes effective, are hereinafter collectively called the
"Registration Statement"; such final prospectus, in the form first
filed pursuant to Rule 424(b) under the Act, is hereinafter called
the "Prospectus"; any reference herein to any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents
filed after the date of such Preliminary Prospectus or Prospectus,
as the case may be, under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and incorporated by reference in such
Preliminary Prospectus or Prospectus, as the case may be; and any
reference to any amendment to the Registration Statement shall be
deemed to refer to and include any annual report of the Company
filed pursuant to Section 13(a) or 15(d) of the Exchange Act after
the effective date of the Initial Registration Statement that is
incorporated by reference in the Registration Statement);
(ii) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; PROVIDED, HOWEVER, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company
by an Underwriter through Xxxxxxx, Xxxxx & Co. expressly for use
therein;
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(iii) The documents incorporated by reference in the
Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder, and none of
such documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the
Prospectus or any further amendment or supplement thereto, when such
documents become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; PROVIDED, HOWEVER, that this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter through Xxxxxxx, Xxxxx & Co.
expressly for use therein;
(iv) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the Registration Statement
or the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date
of the Registration Statement and any amendment thereto and as of the
applicable filing date of the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; PROVIDED,
HOWEVER, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter
through Xxxxxxx, Xxxxx & Co. expressly for use therein;
(v) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, except as set
forth or contemplated in the Prospectus or as would not have,
individually or in the aggregate, a material adverse effect on the
current or future consolidated financial position, business, prospects,
stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole ("Material Adverse Effect"); and, since
the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any
change in the capital stock, capital lease obligations or long-term
debt of the Company or any of its subsidiaries or any material adverse
change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, financial
position, stockholders'
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equity or results of operations of the Company and its subsidiaries,
taken as a whole, otherwise than as set forth or contemplated in the
Prospectus;
(vi) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title
to all personal property owned by them, in each case free and clear of
all liens, encumbrances and defects except such as are described in the
Prospectus or such as do not materially affect the value of such
property and do not materially interfere with the use made and proposed
to be made of such property by the Company and its subsidiaries; and
any real property and buildings held under lease by the Company and its
subsidiaries 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;
(vii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with the corporate power and authority to own its
properties and conduct its business as described in the Prospectus, and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so
qualified or in good standing in any such jurisdiction; and each
subsidiary of the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified or in good standing in any
such jurisdiction;
(viii) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital stock
of the Company have been duly and validly authorized and issued, are
fully paid and non-assessable and conform to the description of the
Stock contained in the Prospectus; and 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 or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims;
(ix) The unissued Shares to be issued and sold by the Company
to the Underwriters hereunder have been duly and validly authorized
and, when issued and delivered against payment therefor as provided
herein, will be duly and validly issued and fully paid and
non-assessable and will conform in all material respects to the
description of the Stock contained in the Prospectus.
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(x) The issue and sale of Shares by the Company, the
compliance by the Company with all of the provisions of this Agreement
and the consummation of the transactions herein contemplated will not
conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its
subsidiaries is subject, except, in each case, (A) breaches,
violations or defaults which, individually or in the aggregate, would
not have a Material Adverse Effect and (B) would not have an adverse
effect on the Company's ability to consummate the transactions
contemplated hereby; nor will such actions result in any violation of
the provisions of the Certificate of Incorporation or By-laws of the
Company or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or
any of its subsidiaries or any of their properties; and no consent,
approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the
issue and sale of the Shares or the consummation by the Company of the
transactions contemplated by this Agreement, except the registration
under the Act of the Shares and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters;
(xi) Neither the Company nor any of its subsidiaries (A) is in
violation of its Certificate of Incorporation or By-laws or (B) in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which
it is a party or by which it or any of its properties may be bound,
except in the case of (B) above where such default would not have a
Material Adverse Effect and would not have an adverse effect on the
Company's ability to consummate the transactions contemplated hereby;
(xii) The statements set forth in the Prospectus under the
caption "Description of Capital Stock", insofar as they purport to
constitute a summary of the terms of the Stock, under the caption
"Material U.S. Federal Income Tax Consequences", and under the caption
"Underwriting", insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate, complete and
fair;
(xiii) Other than as set forth in the Prospectus, there are
no legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect; and,
to the best of the Company's knowledge, no such
5
proceedings are threatened or contemplated by governmental authorities
or threatened by others;
(xiv) The Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company" or
an entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(xv) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida
Statutes;
(xvi) Xxxxxx Xxxxxxxx LLP, who has opined as to certain
financial statements of the Company and its subsidiaries, and KPMG
LLP, who has opined as to certain financial statements of RF Power
Products, Inc., are each independent public accountants as required by
the Act and the rules and regulations of the Commission thereunder;
(xvii) The Company has reviewed its operations and that of its
subsidiaries and has made reasonable inquiries of any third parties
with which the Company or any of its subsidiaries has a material
relationship to evaluate the extent to which the business or operations
of the Company or any of its subsidiaries will be affected by the Year
2000 Problem. As a result of such review, except as specifically
described in the Prospectus, the Company has no reason to believe, and
does not believe, that the Year 2000 Problem will have a material
adverse effect on the general affairs, management, the current or
future consolidated financial position, business, prospects,
stockholders' equity or results of operations of the Company and its
subsidiaries or result in any material loss or interference with the
Company's business or operations. The "Year 2000 Problem" as used
herein means any significant risk that computer hardware, firmware or
software used in the receipt, transmission, processing, manipulation,
storage, retrieval, retransmission or other utilization of data or in
the operation of mechanical or electrical systems of any kind will not,
in the case of dates or time periods occurring after December 31, 1999,
function at least as effectively as in the case of dates or time
periods occurring prior to January 1, 2000; and
(xviii) Neither the Company nor any of its subsidiaries own
any real property.
(b) Each of the Selling Stockholders, severally and not
jointly, solely with respect to himself, represents and warrants to, and
agrees with, each of the Underwriters and the Company that:
(i) All consents, approvals, authorizations and orders
necessary for the execution and delivery by such Selling Stockholder
of this Agreement and the Power of Attorney and the Custody Agreement
hereinafter referred to, and for the sale and delivery of the Shares
to be sold by such Selling Stockholder hereunder, have been obtained,
except such consents,
6
approvals, authorizations and orders as may be required under state
securities and Blue Sky laws, and such Selling Stockholder has full
right, power and authority to enter into this Agreement, the
Power-of-Attorney and the Custody Agreement (each is defined in
clause 1(b)(viii) below) and to sell, assign, transfer and deliver
the Shares to be sold by such Selling Stockholder hereunder;
(ii) The sale of the Shares to be sold by such Selling
Stockholder hereunder and the compliance by such Selling
Stockholder with all of the provisions of this Agreement, the Power
of Attorney and the Custody Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with
or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any statute,
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which such Selling Stockholder is a
party or by which such Selling Stockholder is bound or to which any
of the property or assets of such Selling Stockholder is subject,
except, in each case (A) breaches, violations or defaults which,
individually or in the aggregate, would not have a material adverse
effect on such Selling Stockholder's current or future financial
position, and (B) would not have an adverse effect on such Selling
Stockholder's ability to consummate the transactions contemplated
hereby; nor will such action result in any violation of the
provisions of or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over
such Selling Stockholder or the property of such Selling
Stockholder;
(iii) Such Selling Stockholder has, and immediately prior to
each Time of Delivery (as defined in Section 4 hereof) such Selling
Stockholder will have, good and valid title to the Shares to be sold
by such Selling Stockholder hereunder, free and clear of all liens,
encumbrances, equities or claims; and, upon delivery of such Shares
and payment therefor pursuant hereto, good and valid title to such
Shares, free and clear of all liens, encumbrances, equities or claims,
will pass to the several Underwriters;
(iv) During the period beginning from the date of the
Prospectus and continuing to and including the date 90 days after the
date of the Prospectus, not to offer, sell contract to sell or
otherwise dispose of, except as provided hereunder, any securities of
the Company that are substantially similar to the Shares, including
but not limited to any securities that are convertible into or
exchangeable for, or that represent the right to receive, Stock or any
such substantially similar securities (other than pursuant to employee
stock option plans existing on, or upon the conversion or exchange of
convertible or exchangeable securities outstanding as of, the date of
this Agreement), without your prior written consent;
(v) Such Selling Stockholder has not taken and will not
take, directly or indirectly, any action which is designed to or which
has constituted or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Shares;
7
(vi) To the extent that any statements or omissions made in
the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto are made in
reliance upon and in conformity with written information furnished
to the Company by such Selling Stockholder expressly for use
therein, such Preliminary Prospectus and the Registration Statement
did, and the Prospectus and any further amendments or supplements
to the Registration Statement and the Prospectus, when they become
effective or are filed with the Commission, as the case may be,
will conform in all material respects to the requirements of the
Act and the rules and regulations of the Commission thereunder and
will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary
to make the statements therein not misleading;
(vii) In order to document the Underwriters' compliance with
the reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Stockholder will deliver to you prior to or
at the First Time of Delivery (as hereinafter defined) a properly
completed and executed United States Treasury Department Form W-9 (or
other applicable form or statement specified by Treasury Department
regulations in lieu thereof);
(viii) Certificates in negotiable form representing all of
the Shares to be sold by such Selling Stockholder hereunder have
been placed in custody under a Custody Agreement, in the form
heretofore furnished to you (the "Custody Agreement"), duly
executed and delivered by such Selling Stockholder to
_______________, as custodian (the "Custodian"), and such Selling
Stockholder has duly executed and delivered a Power of Attorney, in
the form heretofore furnished to you (the "Power of Attorney"),
appointing the persons indicated in Schedule II hereto, and each of
them, as such Selling Stockholder's attorneys-in-fact (the
"Attorneys-in-Fact") with authority to execute and deliver this
Agreement on behalf of such Selling Stockholder, to determine the
purchase price to be paid by the Underwriters to the Selling
Stockholders as provided in Section 2 hereof, to authorize the
delivery of the Shares to be sold by such Selling Stockholder
hereunder and otherwise to act on behalf of such Selling
Stockholder in connection with the transactions contemplated by
this Agreement and the Custody Agreement; and
(ix) The Shares represented by the certificates held in
custody for such Selling Stockholder under the Custody Agreement
are subject to the interests of the Underwriters hereunder; the
arrangements made by such Selling Stockholder for such custody, and
the appointment by such Selling Stockholder of the
Attorneys-in-Fact by the Power of Attorney, are to that extent
irrevocable; the obligations of the Selling Stockholders hereunder
shall not be terminated by operation of law, whether by the death
or incapacity of any individual Selling Stockholder or, in the case
of an estate or trust, by the death or incapacity of any executor
or trustee or the termination of such estate or trust, or in the
case of a partnership
8
or corporation, by the dissolution of such partnership or
corporation, or by the occurrence of any other event; if any
individual Selling Stockholder or any such executor or trustee
should die or become incapacitated, or if any such estate or trust
should be terminated, or if any such partnership or corporation
should be dissolved, or if any other such event should occur,
before the delivery of the Shares hereunder, certificates
representing the Shares shall be delivered by or on behalf of the
Selling Stockholders in accordance with the terms and conditions of
this Agreement and of the Custody Agreements; and actions taken by
the Attorneys-in-Fact pursuant to the Powers of Attorney shall be
as valid as if such death, incapacity, termination, dissolution or
other event had not occurred, regardless of whether or not the
Custodian, the Attorneys-in-Fact, or any of them, shall have
received notice of such death, incapacity, termination, dissolution
or other event.
2. Subject to the terms and conditions herein set forth, (a) the
Company agrees to issue and sell and each of the Selling Stockholders agrees,
severally and not jointly, to sell to each of the Underwriters, and each of
the Underwriters agrees, severally and not jointly, to purchase from the
Company and each of the Selling Stockholders, at a purchase price per share
of $__________, the number of Firm Shares (to be adjusted by you so as to
eliminate fractional shares) determined by multiplying the aggregate number
of Firm Shares to be sold by the Company and each of the Selling Stockholders
as set forth opposite their respective names in Schedule II hereto by a
fraction, the numerator of which is the aggregate number of Firm Shares to be
purchased by such Underwriter as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the
aggregate number of Firm Shares to be purchased by all of the Underwriters
from all of the Selling Stockholders hereunder and (b) in the event and to
the extent that the Underwriters shall exercise the election to purchase
Optional Shares as provided below, each of the Selling Stockholders agrees,
severally and not jointly, to sell to each of the Underwriters, and each of
the Underwriters agrees, severally and not jointly, to purchase from each of
the Selling Stockholders, at the purchase price per share set forth in clause
(a) of this Section 2, that portion of the number of Optional Shares as to
which such election shall have been exercised (to be adjusted by you so as to
eliminate fractional shares) determined by multiplying such number of
Optional Shares by a fraction the numerator of which is the maximum number of
Optional Shares which such Underwriter is entitled to purchase as set forth
opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the maximum number of Optional Shares that all of the
Underwriters are entitled to purchase hereunder.
The Selling Stockholders, as and to the extent indicated in
Schedule II hereto, hereby grant, severally and not jointly, to the
Underwriters the right to purchase at their election up to _________ Optional
Shares, at the purchase price per share set forth in clause (a) of the first
paragraph of this Section 2, for the sole purpose of covering sales of Shares
in excess of the number of the Firm Shares. Any such election to purchase
Optional Shares shall be made in proportion to the number of Optional Shares
to be sold by each Selling Stockholder. Any such election to purchase
Optional Shares may be exercised by written notice from you to the
Attorneys-in-Fact, given within a period of 30 calendar days after the date
of this Agreement, and setting forth the aggregate number of Optional Shares
to be purchased and the date on which such Optional Shares are to be
delivered, as
9
determined by you but in no event earlier than the First Time of Delivery (as
defined in Section 4 hereof) or, unless you and the Attorneys-in-Fact
otherwise agree in writing, earlier than two or later than ten business days
after the date of such notice.
As compensation to the Underwriters for their commitments hereunder,
each of the Company and the Selling Stockholders, as applicable, at each Time
of Delivery (as defined in Section 4 hereof) will pay to Xxxxxxx, Xxxxx &
Co., for the accounts of the several Underwriters, an amount equal to
$__________ per share for the Shares to be delivered by the Company and the
Selling Stockholders, as applicable, hereunder at such Time of Delivery.
3. Upon the authorization by you of the release of the Firm Shares,
the several Underwriters propose to offer the Firm Shares for sale upon the
terms and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Xxxxxxx, Xxxxx & Co. may request upon at least forty-eight hours'
prior notice to the Company and the Selling Stockholders shall be delivered
by or on behalf of the Company and the Selling Stockholders to Xxxxxxx, Xxxxx
& Co., through the facilities of The Depository Trust Company ("DTC"), for
the account of each Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified by the Company and the Custodian to
Xxxxxxx, Xxxxx & Co. at least forty-eight hours in advance. The Company will
cause the certificates representing the Shares to be made available for
checking and packaging at least twenty-four hours prior to the Time of
Delivery (as defined below) with respect thereto at the office of DTC or its
designated custodian (the "Designated Office"). The time and date of such
delivery and payment shall be, with respect to the Firm Shares, 9:30 a.m.,
New York time, on ____________, 1999 or such other time and date as Xxxxxxx,
Xxxxx & Co., the Company and the Selling Stockholders may agree upon in
writing, and, with respect to the Optional Shares, 9:30 a.m., New York time,
on the date specified by Xxxxxxx, Xxxxx & Co. in the written notice given by
Xxxxxxx, Xxxxx & Co. of the Underwriters' election to purchase such Optional
Shares, or such other time and date as Xxxxxxx, Xxxxx & Co., the Selling
Stockholders may agree upon in writing. Such time and date for delivery of
the Firm Shares is herein called the "First Time of Delivery", such time and
date for delivery of the Optional Shares, if not the First Time of Delivery,
is herein called the "Second Time of Delivery", and each such time and date
for delivery is herein called a "Time of Delivery".
At each Time of Delivery, the Company and each of the Selling
Stockholders, as applicable, will pay, or cause to be paid, the commission
payable at each Time of Delivery to the Underwriters under Section 2 hereof
by wire transfer of Federal (same-day) funds to the account specified by
Xxxxxxx, Xxxxx & Co.
(b) The documents to be delivered at each Time of Delivery by
or on behalf of the parties hereto pursuant to Section 7 hereof, including the
cross receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 7(k) hereof will be delivered
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at the offices of [Xxxx, Scholer, Fierman, Xxxx & Handler, LLP, 1999 Avenue of
the Xxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000] (the "Closing Location"),
and the Shares will be delivered at the Designated Office, all at such Time of
Delivery. A meeting will be held at the Closing Location at _______ p.m.,
New York City time, on the New York Business Day next preceding such Time of
Delivery, at which meeting the final drafts of the documents to be delivered
pursuant to the preceding sentence will be available for review by the parties
hereto. For the purposes of this Section 4, "New York Business Day" shall mean
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York are generally authorized or obligated by law or
executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to
file such Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second business day
following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Act; to make no further amendment or any supplement to the
Registration Statement or Prospectus prior to such Time of Delivery
which shall be disapproved by you promptly after reasonable notice
thereof; to advise you, promptly after it receives notice thereof, of
the time when any amendment to the Registration Statement has been
filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish you with copies
thereof; to file timely all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long
as the delivery of a prospectus is required in connection with the
offering or sale of the Shares; to advise you, promptly after it
receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus, of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus or suspending any such
qualification, promptly to use its best efforts to obtain the
withdrawal of such order;
(b) Promptly from time to time to take such action as you
may reasonably request to qualify the Shares for offering and sale
under the securities laws of such jurisdictions as you may request
and to comply with such laws so as to permit the continuance of
sales and dealings therein in such jurisdictions for as long as may
be necessary to complete the distribution of the Shares, provided
that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
11
(c) Prior to 10:00 a.m., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time
to time, to furnish the Underwriters with copies of the Prospectus in
New York City in such quantities as you may reasonably request, and, if
the delivery of a prospectus is required at any time prior to the
expiration of nine months after the time of issue of the Prospectus in
connection with the offering or sale of the Shares and if at such time
any event shall have occurred as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in light of the circumstances under which
they were made when such Prospectus is delivered, not misleading, or,
if for any other reason it shall be necessary during such period to
amend or supplement the Prospectus or to file under the Exchange Act
any document incorporated by reference in the Prospectus in order to
comply with the Act or the Exchange Act, to notify you and upon your
request to file such document and to prepare and furnish without charge
to each Underwriter and to any dealer in securities as many copies as
you may from time to time reasonably request of an amended Prospectus
or a supplement to the Prospectus which will correct such statement or
omission or effect such compliance, and in case any Underwriter is
required to deliver a prospectus in connection with sales of any of the
Shares at any time nine months or more after the time of issue of the
Prospectus, upon your request but at the expense of such Underwriter,
to prepare and deliver to such Underwriter as many copies as you may
request of an amended or supplemented Prospectus complying with Section
10(a)(3) of the Act;
(d) To make generally available to its securityholders as
soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined
in Rule 158(c) under the Act), an earnings statement of the Company
and its subsidiaries (which need not be audited) complying with
Section 11(a) of the Act and the rules and regulations of the
Commission thereunder (including, at the option of the Company, Rule
158);
(e) During the period beginning from the date of the
Prospectus and continuing to and including the date 90 days after the
date of the Prospectus, not to offer, sell, contract to sell or
otherwise dispose of, except as provided hereunder, any securities of
the Company that are substantially similar to the Shares, including but
not limited to any securities that are convertible into or exchangeable
for, or that represent the right to receive, Stock or any such
substantially similar securities (other than pursuant to employee stock
option plans existing on, or upon the conversion or exchange of
convertible or exchangeable securities outstanding as of, the date of
this Agreement and other than the ___% Convertible Subordinated Notes
sold to the Underwriters pursuant to that certain Underwriting
Agreement, dated the date hereof), among the Company and Xxxxxxx, Xxxxx
& Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and Banc of
America Securities LLC, without your prior written consent;
12
(f) To furnish to its stockholders as soon as practicable
after the end of each fiscal year an annual report (including a
balance sheet and statements of income, stockholders' equity and
cash flows of the Company and its consolidated subsidiaries
certified by independent public accountants) and, as soon as
practicable after the end of each of the first three quarters of
each fiscal year (beginning with the fiscal quarter ending after the
effective date of the Registration Statement), to make available to
its stockholders consolidated summary financial information of the
Company and its subsidiaries for such quarter in reasonable detail;
(g) During a period of five years from the effective date of
the Registration Statement, to furnish to you copies of all reports or
other communications (financial or other) furnished to stockholders,
and to deliver to you (i) as soon as they are available, copies of any
reports and financial statements furnished to or filed with the
Commission or any national securities exchange on which the Stock or
any class of securities of the Company is listed; and (ii) such
additional information concerning the business and financial condition
of the Company as you may from time to time reasonably request (such
financial statements to be on a consolidated basis to the extent the
accounts of the Company and its subsidiaries are consolidated in
reports furnished to its stockholders generally or to the Commission);
(h) To use the net proceeds received by it from the sale of
the Shares pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds";
(i) To use its best efforts to list for quotation the Shares
on the National Association of Securities Dealers Automated Quotations
National Market System ("NASDAQ"); and
(j) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 P.M., Washington,
D.C. time, on the date of this Agreement, and the Company shall at
the time of filing either pay to the Commission the filing fee for
the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b)
under the Act.
6. The Company and each of the Selling Stockholders covenant
and agree with one another and with the several Underwriters that (a) the
Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or
producing any Agreement among Underwriters, this Agreement, the Blue Sky
Memorandum, closing documents (including
13
any compilations thereof) and any other documents in connection with the
offering, purchase, sale and delivery of the Shares; (iii) all expenses in
connection with the qualification of the Shares for offering and sale under
state securities laws as provided in Section 5(b) hereof, including the fees
and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky and legal investment
survey; (iv) all fees and expenses in connection with listing the Shares on
the NASDAQ; (v) the filing fees incident to, and the fees and disbursements
of counsel for the Underwriters in connection with, any required review by
NASD Regulations, Inc. of the terms of the sale of the Shares; (vi) the cost
of preparing stock certificates; (vii) the cost and charges of any transfer
agent or registrar; and (viii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section; and (b) such Selling Stockholder will pay or
cause to be paid all costs and expenses incident to the performance of such
Selling Stockholder's obligations hereunder which are not otherwise
specifically provided for in this Section, including (i) any fees and
expenses of counsel for such Selling Stockholder; (ii) such Selling
Stockholder's pro rata share of the fees and expenses of the
Attorneys-in-Fact and the Custodian; and (iii) all other costs, expenses and
taxes incident to the sale and delivery of the Shares to be sold by such
Selling Stockholder to the Underwriters hereunder. In connection with clause
(b)(iii) of the preceding sentence, Xxxxxxx, Xxxxx & Co. agrees to pay New
York State stock transfer tax, and the Selling Stockholder agrees to
reimburse Xxxxxxx, Xxxxx & Co. for associated carrying costs if such tax
payment is not rebated on the day of payment and for any portion of such tax
payment not rebated. It is understood, however, that the Company shall bear,
and the Selling Stockholders shall not be required to pay or to reimburse the
Company for, the cost of any other matters not directly relating to the sale
and purchase of the Shares pursuant to this Agreement, and that, except as
provided in this Section, and Sections 8 and 11 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Shares by them, and any advertising
expenses connected with any offers they may make.
7 The obligations of the Underwriters hereunder, as to the
Shares to be delivered at each Time of Delivery, shall be subject, in their
discretion, to the condition that all representations and warranties and
other statements of the Company and of the Selling Stockholders herein are,
at and as of such Time of Delivery, true and correct, the condition that the
Company and the Selling Stockholders shall have performed all of its and
their obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) The Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and regulations under the
Act and in accordance with Section 5(a) hereof; if the Company has
elected to rely upon Rule 462(b), the Rule 462(b) Registration
Statement shall have become effective by 10:00 P.M., Washington,
D.C. time, on the date of this Agreement; no stop order suspending
the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to your reasonable satisfaction;
14
(b) Xxxx, Scholer, Xxxxxxx, Xxxx & Handler, LLP, counsel
for the Underwriters, shall have furnished to you such written
opinion or opinions (a draft of each such opinion is attached as
Xxxxx XX(a) hereto), dated such Time of Delivery, with respect to
the matters covered in paragraphs (i), (ii), (vii), (xiii) and (xiv)
of subsection (c) below as well as such other related matters as you
may reasonably request, and such counsel shall have received such
papers and information as they may reasonably request to enable them
to pass upon such matters;
(c) Xxxxxx Xxxx & Priest LLP, counsel for the Company,
shall have furnished to you their written opinion (a draft of such
opinion is attached as Xxxxx XX(b) hereto), dated such Time of
Delivery, in form and substance satisfactory to you, to the effect
that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware. The Company has the corporate
power and authority to own its properties and conduct its
business as described in the Prospectus;
(ii) The Company has an authorized capitalization
as set forth in the Prospectus, and all of the issued
shares of capital stock of the Company (including the
Shares being delivered at such Time of Delivery) have been
duly and validly authorized and issued and are fully paid
and non-assessable; and the Shares conform, in all material
respects, to the description of the Stock contained in the
Prospectus;
(iii) The Company is duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of each jurisdiction in which it owns
or leases properties or conducts any business so as to require
such qualification, except where the failure to be so
qualified or in good standing would not, individually or in
the aggregate, have a Material Adverse Effect (such counsel
being entitled to rely in respect of the opinion in this
clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company,
provided that such counsel shall state that they believe that
both you and they are justified in relying upon such opinions
and certificates);
(iv) Each subsidiary of the Company organized under
the laws of the United States, any state of the United States
or the District of Columbia (a "Domestic Subsidiary") has been
duly incorporated and is validly existing as a corporation in
good standing under the laws of its jurisdiction of
incorporation; and all of the issued shares of capital stock
of each Domestic Subsidiary have been duly and validly
authorized and issued, are fully paid and non-assessable, and
are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims (such
counsel being entitled to rely in respect of the opinion in
this
15
clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the
Company or its subsidiaries, provided that such counsel
shall state that they believe that both you and they are
justified in relying upon such opinions and certificates);
(v) To such counsel's knowledge, the manufacturing
facilities located at 0000 Xxxxx Xxxxx Xxxxx, Xxxx Xxxxxxx,
Xxxxxxxx and 0000 Xxxxxx Xxx Xxxxx, Xxxxxxxx, Xxx Xxxxxx, held
under lease by the Company and RF Power Products, Inc. (the
"Principal Subsidiary") are held by them under valid,
subsisting and enforceable leases except as such enforcement
may be limited by bankruptcy and with such exceptions as are
not material and do not interfere with the use made and
proposed to be made of such property and buildings by the
Company and the Principal Xxxxxxxxxx (in giving the opinion
in this clause, such counsel may state that no examination of
record titles for the purpose of such opinion has been made,
and that they are relying upon a general review of the titles
of the Company and the Principal Subsidiary, upon opinions of
local counsel and abstracts, reports and policies of title
companies rendered or issued at or subsequent to the time of
acquisition of such property by the Company or the Principal
Subsidiary, upon opinions of counsel to the lessors of such
property and, in respect of matters of fact, upon certificates
of officers of the Company or its subsidiaries, provided that
such counsel shall state that they believe that both you
and they are justified in relying upon such opinions,
abstracts, reports, policies and certificates);
(vi) To the best of such counsel's knowledge and
other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which
any property of the Company or any of its subsidiaries is
the subject which, if determined adversely to the Company
or any of its subsidiaries, would, individually or in the
aggregate, have a Material Adverse Effect and, to the best
of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or
threatened by others;
(vii) This Agreement has been duly authorized,
executed and delivered by the Company;
(viii) The issue and sale of Shares by the Company,
the compliance by the Company with all of the provisions of
this Agreement and the consummation of the transactions herein
contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such
counsel to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, except in each
16
case, (A) breaches, violations or defaults which,
individually or in the aggregate, would not have a Material
Adverse Effect and (B) would not have an adverse effect on
the Company's ability to consummate the transactions
contemplated hereby; nor will such actions result in any
violation of the provisions of the Certificate of
Incorporation or By-laws of the Company or any statute or
any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their properties;
(ix) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale
of the Shares or the consummation by the Company of the
transactions contemplated by this Agreement, except such as
have been obtained under the Act, and such consents,
approvals, authorizations, registrations or qualifications as
may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by
the Underwriters;
(x) Neither the Company nor any of its Domestic
Subsidiaries is (A) in violation of its Certificate of
Incorporation or By-laws or (B) in default in the performance
or observance of any obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument known
to such counsel to which it is a party or by which it or any
of its properties may be bound, except in the case of (B)
where such default (1) would not have a Material Adverse
Effect and (2) would not have an adverse effect on the
Company's ability to consummate the transactions contemplated
hereby (such counsel being entitled to rely in respect of the
opinion in this clause upon opinions of local counsel and in
respect of matters of fact upon certificates of officers of
the Company or its Domestic Subsidiaries, provided that such
counsel shall state that they believe that both you and they
are justified in relying upon such opinions and certificates);
(xi) The statements set forth in the Prospectus under
the caption "Description of Capital Stock", insofar as they
purport to constitute a summary of the terms of the Stock,
under the caption "Material United States Federal Income Tax
Consequences", and under the caption "Underwriting", insofar
as they purport to describe the provisions of the laws and
documents referred to therein, are accurate, complete and fair
in all material respects;
(xii) The Company is not an "investment company" or
an entity "controlled" by an "investment company", as such
terms are defined in the Investment Company Act;
17
(xiii) The documents incorporated by reference in the
Prospectus or any further amendment or supplement thereto made
by the Company prior to the Time of Delivery (other than the
financial statements and related schedules therein, as to
which such counsel need express no opinion), when they became
effective or were filed with the Commission, as the case may
be, complied as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable and
the rules and regulations of the Commission thereunder; and
they have no reason to believe that any of such documents,
when such documents became effective or were so filed, as the
case may be, contained, in the case of a registration
statement which became effective under the Act, an untrue
statement of a material fact, or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading, or, in the case of other
documents which were filed under the Act or the Exchange Act
with the Commission, an untrue statement of a material fact or
omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances
under which they were made when such documents were so filed,
not misleading; and
(xiv) The Registration Statement and the Prospectus
and any further amendments and supplements thereto made by the
Company prior to such Time of Delivery (other than the
financial statements and related schedules therein, as to
which such counsel need express no opinion) comply as to form
in all material respects with the requirements of the Act and
the rules and regulations thereunder; although they do not
assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration
Statement or the Prospectus, except for those referred to in
the opinion in subsection (xi) of this Section 7(c), they have
no reason to believe that, as of its effective date, the
Registration Statement or any further amendment thereto made
by the Company prior to such Time of Delivery (other than the
financial statements and related schedules therein, as to
which such counsel need express no opinion) contained an
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading or that, as of its
date, the Prospectus or any further amendment or supplement
thereto made by the Company prior to such Time of Delivery
(other than the financial statements and related schedules
therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements
therein, in the light of the circumstances under which they
were made, not misleading or that, as of such Time of
Delivery, either the Registration Statement or the Prospectus
or any further amendment or supplement thereto made by the
Company prior to such Time of Delivery (other than the
financial statements and related schedules therein, as to
which such counsel need express no opinion) contains an untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and
they do not know of any amendment to the Registration
18
Statement required to be filed or of any contracts or other
documents of a character required to be filed as an exhibit to
the Registration Statement or required to be incorporated by
reference into the Prospectus or required to be described in
the Registration Statement or the Prospectus which are not
filed or incorporated by reference or described as required;
(d) The respective counsel for each of the Selling
Stockholders, as indicated in Schedule II hereto, each shall have
furnished to you their written opinion with respect to each of the
Selling Stockholders for whom they are acting as counsel (a draft of
each such opinion is attached as Xxxxx XX(c) hereto), dated such
Time of Delivery, in form and substance satisfactory to you, to the
effect that:
(i) A Power-of-Attorney and a Custody Agreement
have been duly executed and delivered by such Selling
Stockholder and constitute valid and binding agreements of
such Selling Stockholder in accordance with their terms;
(ii) This Agreement has been duly executed and
delivered by or on behalf of such Selling Stockholder; and the
sale of the Shares to be sold by such Selling Stockholder
hereunder and the compliance by such Selling Stockholder with
all of the provisions of this Agreement, the Power-of-Attorney
and the Custody Agreement and the consummation of the
transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any terms or
provisions of, or constitute a default under, any statute,
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which such
Selling Stockholder is a party or by which such Selling
Stockholder is bound or to which any of the property or assets
of such Selling Stockholder is subject, except in each case,
breaches, violations or defaults which, individually or in the
aggregate, would not have a Material Adverse Effect and would
not have an adverse effect on the Company's ability to
consummate the transactions contemplated hereby, nor will such
action result in any violation of the provisions of or any
order, rule or regulation known to such counsel of any court
or governmental agency or body having jurisdiction over such
Selling Stockholder or the property of such Selling
Stockholder;
(iii) No consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation of the transactions contemplated by this
Agreement in connection with the Shares to be sold by such
Selling Stockholder hereunder, except ______________ which
[HAS] [HAVE] been duly obtained and [IS] [ARE] in full force
and effect, such as have been obtained under the Act and such
as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of such Shares
by the Underwriters;
19
(iv) Immediately prior to such Time of Delivery, to
such counsel's knowledge, such Selling Stockholder has full
right, power and authority to sell, assign, transfer and
deliver the Shares to be sold by such Selling Stockholder
hereunder; and
(v) Good and valid title to such Shares, free and
clear of all liens, encumbrances, equities or claims, has been
transferred to each of the several Underwriters.
In rendering the opinion in paragraph (iv), such counsel may rely
upon a certificate of such Selling Stockholder in respect of matters of fact
as to ownership of, and liens, encumbrances, equities or claims on, the
Shares sold by such Selling Stockholder, provided that such counsel shall
state that they believe that both you and they are justified in relying upon
such certificate;
(e) [(i)] On the date of the Prospectus at a time
prior to the execution of this Agreement, at 9:30 a.m., New
York City time, on the effective date of any post-effective
amendment to the Registration Statement filed subsequent to
the date of this Agreement and also at each Time of
Delivery, Xxxxxx Xxxxxxxx LLP shall have furnished to you a
letter or letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you, to the
effect set forth in Annex I hereto (the executed copy of
the letter delivered prior to the execution of this
Agreement is attached as Annex I(a) hereto and a draft of
the form of letter to be delivered on the effective date of
any post-effective amendment to the Registration Statement
and as of each Time of Delivery is attached as Annex I(b)
hereto);
[(ii) On the date of the Prospectus at a time prior
to the execution of this Agreement, at 9:30 a.m., New York
City time, on the effective date of any post-effective
amendment to the Registration Statement filed subsequent to
the date of this Agreement and also at each Time of Delivery,
KPMG LLP shall have furnished to you a letter or letters,
dated the respective dates of delivery thereof, in form and
substance satisfactory to you, to the effect set forth in
Annex II hereto (the executed copy of the letter delivered
prior to the execution of this Agreement is attached as Xxxxx
XX(a) hereto and a draft of the form of letter to be delivered
on the effective date of any post-effective amendment to the
Registration Statement and as of each Time of Delivery is
attached as Xxxxx XX(b) hereto);]
(f) (i) Neither the Company nor any of its
subsidiaries shall have sustained since the date of the latest
audited financial statements included or incorporated by reference
in the Prospectus any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated
in the Prospectus, and (ii) since the respective dates as of which
information is given in the
20
Prospectus there shall not have been any change in the capital
stock, capital lease obligations or long-term debt of the Company or
any of its subsidiaries or any change, or any development involving
a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in any such case described in clause (i) or (ii),
is in the judgment of Xxxxxxx, Xxxxx & Co., as representatives of
the Underwriters, so material (to the Company and its subsidiaries
taken as a whole) and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of
the Shares being delivered at such Time of Delivery on the terms and
in the manner contemplated in the Prospectus;
(g) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization", as that term
is defined by the Commission for purposes of Rule 436(g)(2) under the
Act, and (ii) no such organization shall have publicly announced that
it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities;
(h) On or after the date hereof there shall not have occurred
any of the following: (i) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange or on
NASDAQ; (ii) a suspension or material limitation in trading in the
Company's securities on NASDAQ; (iii) a general moratorium on
commercial banking activities declared by either Federal or New York
State authorities; or (iv) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of
a national emergency or war, if the effect of any such event specified
in this clause (iv) in the judgment of Xxxxxxx, Xxxxx & Co. makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Prospectus;
(i) The Shares at such Time of Delivery shall have been
duly listed for quotation on NASDAQ;
(j) The Company has obtained and delivered to the Underwriters
executed copies of an agreement from each of the executive officers and
directors of the Company and from each Selling Stockholder
substantially to the effect set forth in Subsection 1(b)(iv) hereof in
form and substance satisfactory to you;
(k) The Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on
the New York Business Day next succeeding the date of this Agreement;
and
21
(l) The Company and the Selling Stockholders shall have
furnished or caused to be furnished to you at such Time of Delivery
certificates of officers of the Company and of the Selling
Stockholders, respectively, satisfactory to you as to the accuracy
of the representations and warranties of the Company and the Selling
Stockholders, respectively, herein at and as of such Time of
Delivery, as to the performance by the Company and the Selling
Stockholders of all of their respective obligations hereunder to be
performed at or prior to such Time of Delivery, and as to such other
matters as you may reasonably request, and the Company shall have
furnished or caused to be furnished certificates as to the matters
set forth in subsections (a) and (f) of this Section.
8 (a) The Company and each of the Selling Stockholders,
jointly and severally, will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to
which such Underwriter may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred; PROVIDED, HOWEVER, that the Company and
the Selling Stockholders shall not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement or
the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter through Xxxxxxx, Xxxxx & Co. expressly for use therein; and
PROVIDED, FURTHER HOWEVER, that no Selling Stockholder (other than Xx. Xxxxxx
and Xx. Xxxxxxx with respect to (ii) and (iii)) shall be liable in any such
case to the extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any such amendment or supplement
with respect to (i) the number of shares of Stock beneficially owned by any
other Selling Stockholder; (ii) the percentage interests held by Xxxxxxx X.
Xxxxxx and X. Xxxxx Xxxxxxx in the leasing entities referred to in "Risk
Factors-We lease our Fort Xxxxxxx, Colorado facilities and a condominium from
entities in which two individuals who are insiders and major stockholders
have financial interests"; and (iii) the percentage interests which Xx.
Xxxxxx and Xx. Xxxxxxx hold in AEI Properties.
(b) Each Underwriter will indemnify and hold harmless the
Company and each Selling Stockholder against any losses, claims, damages or
liabilities to which the Company or such Selling Stockholder may become
subject, under the Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
an untrue statement or alleged untrue statement of a material fact contained
in any Preliminary Prospectus, the Registration Statement or the Prospectus,
or any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through Xxxxxxx,
Xxxxx & Co. expressly for use therein; and will reimburse the Company and
each Selling Stockholder for any legal or other expenses reasonably incurred
by the Company or such Selling Stockholder in connection with investigating
or defending any such action or claim as such expenses are incurred.
22
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Stockholders on the
one hand and the Underwriters on the other from the offering of the Shares. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (c) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and the Selling Stockholders on the one hand
and the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Selling Stockholders on the
one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company and the Selling Stockholders bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to, among other things, whether the
23
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Selling Stockholders on the one hand or the Underwriters on the other and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company, each of the
Selling Stockholders and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by PRO
RATA allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company and the Selling Stockholders under
this Section 8 shall be in addition to any liability which the Company and the
respective Selling Stockholders may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section 8 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person, if
any, who controls the Company or any Selling Stockholder within the meaning of
the Act.
9 (a) If any Underwriter shall default in its obligation to purchase
the Shares which it has agreed to purchase hereunder at a Time of Delivery,
you may in your discretion arrange for you or another party or other parties
to purchase such Shares on the terms contained herein. If within thirty-six
hours after such default by any Underwriter you do not arrange for the
purchase of such Shares, then the Company and the Selling Stockholders shall
be entitled to a further period of thirty-six hours within which to procure
another party or other parties satisfactory to you to purchase such Shares on
such terms. In the event that, within the respective prescribed periods, you
notify the Company and the Selling Stockholders that you have so arranged for
the purchase of such Shares, or the Company and the Selling Stockholders
notify you that they have so arranged for the purchase of such Shares, you or
the Company or the Selling Stockholders shall have the right to postpone such
Time of Delivery for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Registration Statement
or the Prospectus, or in any other documents or arrangements, and the Company
agrees to file promptly any amendments to the
24
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall
include any person substituted under this Section with like effect as if such
person had originally been a party to this Agreement with respect to such
Shares.
(b) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by you and the Company
and the Selling Stockholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased does not exceed one-eleventh of
the aggregate number of all the Shares to be purchased at such Time of Delivery,
then the Company and the Selling Stockholders shall have the right to require
each non-defaulting Underwriter to purchase the number of Shares which such
Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Shares which such Underwriter agreed to purchase
hereunder) of the Shares of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by you and the Company
and the Selling Stockholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased exceeds one-eleventh of the
aggregate number of all of the Shares to be purchased at such Time of Delivery,
or if the Company and the Selling Stockholders shall not exercise the right
described in subsection (b) above to require non-defaulting Underwriters to
purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement
(or, with respect to the Second Time of Delivery, the obligations of the
Underwriters to purchase and of the Selling Stockholders to sell the Optional
Shares) shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Company or the Selling Stockholders, except
for the expenses to be borne by the Company and the Selling Stockholders and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10 The respective indemnities, agreements, representations,
warranties and other statements of the Company, the Selling Stockholders and
the several Underwriters, as set forth in this Agreement or made by or on
behalf of them, respectively, pursuant to this Agreement, shall remain in
full force and effect, regardless of any investigation (or any statement as
to the results thereof) made by or on behalf of any Underwriter or any
controlling person of any Underwriter, or the Company, or any of the Selling
Stockholders, or any officer or director or controlling person of the
Company, or any controlling person of any Selling Stockholder, and shall
survive delivery of and payment for the Shares.
11 If this Agreement shall be terminated pursuant to Section 9
hereof, neither the Company nor the Selling Stockholders shall then be under
any liability to any Underwriter except as provided in Sections 6 and 8
hereof; but, if for any other reason any Shares are not delivered by
25
or on behalf of the Company or a Selling Stockholder as provided herein, the
Company and each of the Selling Stockholders pro rata (based on the number of
Shares to be sold by the Company and the Selling Stockholders hereunder) will
reimburse the Underwriters through you for all out-of-pocket expenses
approved in writing by you, including fees and disbursements of counsel,
reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Shares, but the Company and the Selling
Stockholders shall then be under no further liability to any Underwriter in
respect of the Shares except as provided in Sections 6 and 8 hereof.
12 In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you; and in all dealings with any Selling Stockholder hereunder, you
and the Company shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of such Selling Stockholder made or given by any
or all of the Attorneys-in-Fact for such Selling Stockholder.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to you as the representatives at 00 Xxx Xxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration Department; if to
any Selling Stockholder shall be delivered or sent by mail, telex or
facsimile transmission to counsel for such Selling Stockholder at its address
set forth in Schedule II hereto; and if to the Company shall be delivered or
sent by mail, telex or facsimile transmission to the address of the Company
set forth in the Registration Statement, Attention: Secretary; provided,
however, that any notice to an Underwriter pursuant to Section 8(c) hereof
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its Underwriters' Questionnaire or
telex constituting such Questionnaire, which address will be supplied to the
Company or the Selling Stockholders by you upon request. Any such statements,
requests, notices or agreements shall take effect upon receipt thereof.
13 This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and the Selling Stockholders and,
to the extent provided in Sections 8 and 10 hereof, the officers and
directors of the Company and each person who controls the Company, any
Selling Stockholder or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser
of any of the Shares from any Underwriter shall be deemed a successor or
assign by reason merely of such purchase.
14 Time shall be of the essence of this Agreement. As used herein,
the term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15 THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY CHOICE OF
LAW PROVISIONS THEREOF.
26
16 This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such counterparts shall together constitute one
and the same instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us four counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement among each of the Underwriters,
the Company and each of the Selling Stockholders. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is pursuant
to the authority set forth in a form of Agreement among Underwriters, the
form of which shall be submitted to the Company and the Selling Stockholders
for examination, upon request, but without warranty on your part as to the
authority of the signers thereof.
Any person executing and delivering this Agreement as Attorney-in-Fact
for a Selling Stockholder represents by so doing that he has been duly
appointed as Attorney-in-Fact by such Selling Stockholder pursuant to a
validly existing and binding Power-of-Attorney which authorizes such
Attorney-in-Fact to take such action.
Very truly yours,
ADVANCED ENERGY INDUSTRIES, INC.
By:
-------------------------------------
Name:
Title:
XXXXXXX X. XXXXXX
X. XXXXX XXXXXXX
XXXXXXX X. XXXX
XXXXXX XXXXXXX
XXXXXXX XXXXXX
XXXXXX XXXXX
By:
-------------------------------------
Name:
Title:
As Attorney-in-Fact acting on behalf of
each of the Selling Stockholders named in
Schedule II to in Schedule II to this
Agreement.
Accepted as of the date hereof
27
XXXXXXX, XXXXX & CO.
By:
----------------------------------
Name:
Title:
28
SCHEDULE I
NUMBER OF OPTIONAL
TOTAL NUMBER OF SHARES TO BE
UNDERWRITER FIRM SHARES PURCHASED IF
----------- TO BE PURCHASED MAXIMUM OPTION
----------------------- EXERCISED
-----------------------
Xxxxxxx, Xxxxx & Co.
BancBoston Xxxxxxxxx Xxxxxxxx
CIBC World Markets
----------------------- -----------------------
2,000,000 450,000
Total ----------------------- -----------------------
----------------------- -----------------------
29
SCHEDULE II
NUMBER OF OPTIONAL
TOTAL NUMBER OF SHARES TO BE
UNDERWRITER FIRM SHARES SOLD IF
----------- TO BE SOLD MAXIMUM OPTION
----------------------- EXERCISED
-----------------------
The Company......................................... 1,000,000
The Selling Stockholder(s):
Xxxxxxx X. Xxxxxx (a) 875,000
X. Xxxxx Xxxxxxx (a) 875,000
Xxxxxxx X. Xxxx (a) 50,000
Xxxxxx Xxxxxxx (a) 50,000
Xxxxxxx Xxxxxx (a) 100,000
Xxxxxx Xxxxx (a) 50,000
--------- -------
2,000,000 450,000
Total.......................................
------------ ----------
------------ ----------
__________
(a) These Selling Stockholders are represented by Xxxxxx Xxxx & Priest LLP and
have appointed _________________ and _______________, and each of them, as the
Attorneys-in-Fact for such Selling Stockholders.
