ADVANCED POWER TECHNOLOGY, INC.
3,500,000 SHARES*
COMMON STOCK
($0.01 PAR VALUE)
UNDERWRITING AGREEMENT
Xxxxxxxx Inc.
Xxxxxxx & Company, Inc.
First Security Xxx Xxxxxx
As Representatives of the several
Underwriters named in Schedule I hereto.
c/o Stephens Inc.
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Gentlemen:
Advanced Power Technology, Inc., a Delaware corporation (the
"Company"), and the entities named in Schedule II hereto (the "Selling
Stockholders"), including Advanced Energy Industries, Inc. ("Advanced Energy
Industries"), confirm their agreement with the several underwriters (the
"Underwriters") for whom you are acting as representatives (the
"Representatives") for the Company to issue and sell 2,400,000 shares of the
Company's common stock, par value $0.01 per share, to the Underwriters, and for
the Selling Stockholders to sell an aggregate of 1,100,000 shares of the
Company's common stock to the Underwriters (said shares to be issued and sold by
the Company and shares to be sold by the Selling Stockholders collectively being
hereinafter called the "Underwritten Shares"). The Company's common stock is
more fully described in the Registration Statement and the Prospectus
hereinafter mentioned.
For the sole purpose of covering over-allotments in connection with the
sale of the Underwritten Shares, the Company and Advanced Energy Industries
shall grant to the Underwriters the option (the "Option") described in Section 2
hereof to purchase all or any part of an additional 525,000 shares of the
Company's common stock (the "Option Shares"). The Underwritten Shares and the
Option Shares purchased pursuant to this Underwriting Agreement (this
"Agreement") are herein called the "Shares" and the proposed offering of the
Shares by the Underwriters is hereinafter referred to as the "Public Offering."
The Company has filed with the Securities and Exchange Commission (the
"Commission"), pursuant to the Securities Act of 1933, as amended (the "Act"),
and published
-------------------
*Plus up to 525,000 additional shares of common stock to cover
over-allotments.
rules and regulations adopted by the Commission under the Act (the "Rules"), a
registration statement on Form S-1 ("Form S-1") (File No. 333-38418), including
a Preliminary Prospectus, relating to the Shares, and such amendments to such
registration statement as may have been filed with the Commission to the date of
this Agreement. The Company will also file with the Commission one of the
following: (A) prior to effectiveness of such registration statement, a further
amendment to such registration statement, including the form of final
prospectus, and/or (B) after effectiveness of such registration statement, a
final prospectus in accordance with Rules 430A and 424(b). The Company has
furnished to the Representatives copies of such registration statement, each
amendment to it filed by the Company with the Commission, and each Preliminary
Prospectus filed by the Company with the Commission. The registration statement
as amended at the time it becomes or became effective (the "Effective Date"),
including financial statements and all exhibits and any information deemed to be
included by Rule 430A, is called the "Registration Statement." The term
"Preliminary Prospectus" means the Preliminary Prospectus dated July 11, 2000
and any Preliminary Prospectus (as referred to in Rule 430 or Rule 430A of the
Rules) included at any time after July 11, 2000 as a part of the registration
statement, and the term "Prospectus" means the prospectus relating to the Shares
that is first filed pursuant to Rule 424(b) after the date hereof.
Any reference herein to the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include any
documents incorporated by reference therein on or before the Effective Date or
the date of such Preliminary Prospectus or the Prospectus, as the case may be.
As the Representatives, you have advised the Company and the Selling
Stockholders that (a) you are authorized to enter into this Agreement on behalf
of the several Underwriters and (b) the Underwriters are willing, acting
severally and not jointly, to purchase the amounts of the Underwritten Shares
set forth opposite their respective names in Schedule I hereto, plus their pro
rata portion of the Option Shares if you elect to exercise the over-allotment
Option in whole or in part for the accounts of the several Underwriters.
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the Company,
the Selling Stockholders and the Underwriters hereby agree as follows:
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
(a) The Company and the Selling Stockholders, other than Advanced
Energy Industries, jointly and severally, represent and warrant to, and agree
with, each Underwriter as follows:
(i) The Company has been duly organized, is in compliance
with its Certificate of Incorporation, and is validly existing as a
corporation in good standing under the laws of the State of Delaware,
with full power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus.
Each significant subsidiary (as defined by the Act) of the Company
(each a "Subsidiary" and collectively, the "Subsidiaries") has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its organization, with
full power and
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authority (corporate and other) to own or lease its properties, and
conduct its business. The Company and the Subsidiaries are duly
qualified to transact business in all jurisdictions in which the
conduct of its business or the ownership or lease of its properties
requires such qualifications except where the failure to be so
qualified would not reasonably be expected to have a Material Adverse
Effect (as defined below). The Company owns all of the outstanding
capital stock of its Subsidiaries free and clear of any pledge, lien,
security interest, encumbrance, claim or equitable interest.
(ii) The outstanding shares of common stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable; the Shares are duly and validly authorized, and, if not
now issued, when issued and paid for as contemplated herein, will be
fully paid and non-assessable. As of the Closing Date, there will be no
preemptive or other similar rights to subscribe for or to purchase, or
any restriction upon the voting or transfer of the Shares pursuant to
the Company's Certificate of Incorporation, bylaws, or other governing
documents or any agreement or other instrument to which the Company or
any of its Subsidiaries is a party or by which any of them may be
bound. Neither the filing of the Registration Statement nor the
offering of the Shares as contemplated by this Agreement gives rise to
any rights, other than those which have been waived or satisfied, for
or relating to the registration of any shares of any class of the
Company's capital stock. The Shares have been approved for listing on
The Nasdaq National Market, subject to official notice of issuance.
(iii) The Shares conform in all material respects with the
statements concerning them in the Prospectus. As of the Closing Date
(as defined below) and any Option Closing Date (as defined below), if
applicable, the Company will have the authorized capital stock set
forth under the caption "Description of Capital Stock" in the
Prospectus. No further corporate approval or authority on behalf of the
Company will be required for the issuance and sale of the Shares to be
sold by the Company as contemplated herein.
(iv) Any Preliminary Prospectus, the Prospectus and the
Registration Statement comply as to form with the requirements of the
Act and the Rules, including Form S-1.
(v) Neither the Commission nor any other agency, body,
authority, court or arbitrator of competent jurisdiction has, by order
or otherwise, prohibited or suspended the use of any Preliminary
Prospectus or the Prospectus relating to the proposed offering of the
Shares or, to the Company's knowledge, instituted proceedings for that
purpose. The Registration Statement, the Prospectus and any Preliminary
Prospectus and any amendments or supplements thereto at the time they
became or become effective or were filed or are filed with the
Commission contained or will contain all statements which are required
to be stated therein by, and in all material respects conformed or will
conform to the requirements of, the Act and the Rules. Neither the
Registration Statement nor any Preliminary Prospectus nor any amendment
thereto, and neither the Prospectus nor any supplement thereto, as of
its date and while effective, contained any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that the Company does not make any representations or
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warranties as to information contained in or omitted from the
Registration Statement or any Preliminary Prospectus or the Prospectus,
or any such amendment or supplement, in reliance upon, and in
conformity with, written information furnished to the Company by or on
behalf of any Underwriter through the Representatives, expressly for
use in the preparation thereof as hereinafter set forth in Section 15.
(vi) The consolidated financial statements of the Company
and the Subsidiaries, together with related notes and schedules as set
forth in the Registration Statement, present fairly the consolidated
financial condition and the results of operations of the Company and
the Subsidiaries, at the indicated dates and for the indicated periods.
Such financial statements have been prepared in accordance with
generally accepted accounting principles ("GAAP"), consistently applied
throughout the periods involved, and all adjustments necessary for a
fair presentation of results for such periods have been made. The
summary financial information and the selected financial data included
in the Prospectus present fairly in accordance with GAAP the
information shown therein and have been compiled on a basis consistent
with that of the audited and unaudited financial statements from which
they were derived.
(vii) Except as is disclosed in the Prospectus, there is no
action or proceeding pending or, to the knowledge of the Company,
threatened against the Company, any of its Subsidiaries or any of their
respective officers or any of their properties, assets or rights before
any court or administrative or governmental agency or other body which
reasonably would be expected to (A) result in any material adverse
change in the financial condition, or in the earnings, business,
affairs, properties, business prospects or results of operations of the
Company and its Subsidiaries taken as a whole ("Material Adverse
Change" or "Material Adverse Effect," as the case may be), whether or
not arising in the ordinary course of business, (B) adversely affect
the performance of this Agreement or the consummation of the
transactions herein contemplated, except as disclosed in the Prospectus
and for which the Company maintains a reserve in an amount which it
believes is adequate to cover potential liabilities, or (C) be required
to be disclosed in the Registration Statement.
(viii) The Company and each of its Subsidiaries are not in
violation of any law, ordinance, governmental rule or regulation or
court decree to which they may be subject which violation reasonably
would be expected to have a Material Adverse Effect.
(ix) The Company and its Subsidiaries have valid title to
all assets reflected in the consolidated financial statements
hereinabove described or as described in the Prospectus as being owned
by them, subject to no lien, mortgage, pledge, charge or encumbrance of
any kind except those securing indebtedness described in such financial
statements or as described in the Prospectus or which do not materially
affect the present or proposed use of such properties or assets or
would not cause a Material Adverse Effect. The Company and its
Subsidiaries occupy their leased properties under valid, subsisting and
binding leases with only such exceptions as in the aggregate are not
material and do not interfere with the conduct of the business of the
Company and its Subsidiaries. There
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exists no default under the provisions of any lease, contract or other
obligation to which the Company is a party which may result in a
Material Adverse Change.
(x) The Company and its Subsidiaries have filed all
federal, state and other tax returns and reports which have been
required to be filed and have paid all taxes indicated by said returns
and all assessments received by them to the extent that such taxes have
become due and there is no tax deficiency that has been or, to the
Company's knowledge, might be asserted against the Company or any of
its Subsidiaries that might have a Material Adverse Effect. All
material tax liabilities are adequately provided for on the books of
the Company and its Subsidiaries.
(xi) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, as they may be
amended or supplemented, and except as set forth in the Registration
Statement, (A) there has not been any Material Adverse Change nor, to
the knowledge of the Company, is any such change threatened, (B) there
has not been any transaction entered into by the Company or its
Subsidiaries that is material to the earnings, business, affairs,
properties, business prospects or operations of the Company and its
Subsidiaries taken as a whole, other than transactions in the ordinary
course of business and changes and transactions contemplated by the
Registration Statement and the Prospectus, as they may be amended or
supplemented, (C) other than changes in the amounts outstanding under
the Company's and its Subsidiaries' revolving credit facilities, there
has not been any material change in the capital stock, long term debt
or material liabilities of the Company or its Subsidiaries, and (D)
there has not been any dividend or distribution of any kind declared,
paid or made on the capital stock of the Company or any of its
Subsidiaries. Neither the Company nor any Subsidiary has any contingent
obligations or liabilities which are required to be but are not
disclosed in the Registration Statement and the Prospectus.
(xii) The filing of the Registration Statement and related
Prospectus and the execution and delivery of this Agreement have been
duly authorized by the Board of Directors of the Company; this
Agreement constitutes a valid and legally binding obligation of the
Company enforceable in accordance with its terms except as
enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other laws affecting
creditors' rights generally and by general principles of equity and
federal and state securities laws. The Company is not in breach or
violation of or default under any indenture, mortgage, deed of trust,
lease, contract, note or other agreement or instrument to which it is a
party or by which it or any of its properties is bound and which
breach, violation or default would reasonably be expected to have a
Material Adverse Effect. The consummation of the transactions herein
contemplated and the fulfillment of the terms hereof will not result in
a breach or violation of any of the material terms and provisions of,
or constitute a default under, any indenture, mortgage, deed of trust,
lease, contract, note or other agreement or instrument to which the
Company or any Subsidiary is a party, or of the Company's or any
Subsidiary's charter documents or any law, decree, order, rule, writ,
injunction or regulation applicable to the Company or any Subsidiary of
a court or of any regulatory body or administrative agency or other
governmental body having jurisdiction over the Company and its
Subsidiaries
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except for such breaches, violations or defaults as would not
reasonably be expected to have a Material Adverse Effect.
(xiii) Each approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory,
administrative or other governmental body necessary in connection with
the execution and delivery by the Company of this Agreement and
performance of its obligations hereunder (except such additional steps
as may be necessary to qualify the Shares for public offering by the
Underwriters under state securities or Blue Sky laws, and filing the
Prospectus under Rule 424(b)) has been obtained or made and is in full
force and effect.
(xiv) The Company and each Subsidiary hold all material
licenses, authorizations, charters, certificates and permits from
governmental authorities which are necessary to the conduct of their
businesses and neither the Company nor any Subsidiary has received
notice of any proceeding relating to the revocation or modification of
any of such licenses, authorizations, charters, certificates or
permits. The Company and its Subsidiaries own or otherwise possess
rights to the patents, patent rights, licenses, inventions, copyrights,
trademarks, service marks and trade names presently employed by them in
connection with the businesses now operated by them as described in the
Prospectus, and neither the Company nor any of its Subsidiaries has
infringed or received any notice of infringements of or conflict with
asserted rights of others with respect to any of the foregoing, except
where such infringement or conflict would not reasonably be expected to
result in a Material Adverse Effect.
(xv) KPMG LLP, independent auditors, who have certified
certain of the financial statements filed with the Commission and
included as part of the Registration Statement and Prospectus, are
independent public accountants within the meaning of the Act, the Rules
and Regulation S-X of the Commission and Rule 101 of the Code of
Professional Ethics of the American Institute of Certified Public
Accountants.
(xvi) There are no agreements, contracts or other documents
of a character required to be described in the Registration Statement
or the Prospectus or required by Form S-1 to be filed as exhibits to
the Registration Statement or incorporated by reference in the
Registration Statement which are not described, filed or incorporated
as required.
(xvii) No labor dispute is pending or, to the knowledge of
the Company, threatened by the Company's or any Subsidiary's employees
which could result in a Material Adverse Effect. No collective
bargaining agreement exists with any of the Company's employees and, to
the Company's knowledge, no agreement is imminent.
(xviii) Except as contemplated by Section 2 hereof and as
disclosed in the Prospectus and permitted by the Rules, the Company has
not (itself or through any person) taken and will not take, directly or
indirectly, any action designed to or which might reasonably be
expected to, cause or result in a violation of Section 5 of the Act or
Regulation M under the Act or in stabilization or manipulation of the
price of the Company's common stock.
6
(xix) Without limiting the generality of any of the
foregoing representations and warranties and except to the extent no
Material Adverse Effect would reasonably be expected to occur, (a) none
of the operations of the Company or its Subsidiaries is in violation of
any material environmental law, regulation or any permit; (b) neither
the Company nor any of its Subsidiaries has been notified that it is
under investigation or under review by any governmental agency with
respect to compliance therewith or with respect to the generation, use,
treatment, storage or release of hazardous material; (c) neither the
Company nor any of its Subsidiaries have any material liability in
connection with the past generation, use, treatment, storage, disposal
or release of any hazardous material; (d) there is no hazardous
material that may reasonably be expected to pose any material risk to
safety, health, or the environment, on, under or about any property
owned, leased or operated by the Company or any of its Subsidiaries or,
to the knowledge of the Company, any property adjacent to any such
property; and (e) there has heretofore been no release of any hazardous
material on, under or about such property, or, to the knowledge of the
Company, any such adjacent property. None of the present or, to the
knowledge of the Company, past property of the Company or any of its
Subsidiaries is listed or proposed for listing on the National
Priorities List pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"), or on
the Comprehensive Environmental Response Compensation Liability
Information System List ("CERCLIS") or any similar state list of sites
requiring remedial action. Neither the Company nor any of its
Subsidiaries is subject to any state Environmental Property Transfer
Act, or to the extent that any such statute is applicable to any
property, the Company and its Subsidiaries have fully complied with
their obligations under such statute(s), and neither has any
outstanding obligations or liabilities under any state Environmental
Property Transfer Act.
(xx) The Company and its Subsidiaries maintain insurance
of the types and in the amounts customary for their businesses,
including, but not limited to, insurance covering liability and real
and personal property owned or leased by the Company against theft,
damage, destruction, acts of vandalism and all other risks customarily
insured against, all of which insurance is in full force and effect.
(xxi) Neither the Company nor any Subsidiary has at any
time during the last five years (a) made any unlawful contribution to
any candidate for foreign office, or failed to disclose fully any
contribution in violation of law, or (b) made any payment to any
federal or state governmental officer or official, or other person
charged with similar public or quasi-public duties, other than payments
required or permitted by the laws of the United States or any
jurisdiction thereof.
(xxii) Except for stockholders owning an aggregate of 520
shares of the Company's common stock, each executive officer, director
and stockholder of the Company has executed a lock-up agreement, a form
of which is attached hereto as Exhibit "A" (the "Lock-Up Agreement").
7
Any certificate signed by any officer of the Company or a Selling
Stockholder, other than Advanced Energy Industries, and delivered to you or
counsel for the Underwriters shall be deemed a representation and warranty by
the Company and the Selling Stockholders to the Underwriters as to the matters
covered thereby.
(b) Each Selling Stockholder, severally, but not jointly,
represents and warrants to, and agrees with, each Underwriter as follows:
(i) The Selling Stockholder is the record and beneficial
owner of the Shares to be sold by it hereunder free and clear of all
liens, encumbrances, equities and claims and has duly endorsed such
Shares in blank, and, assuming that each underwriter acquires its
interest in the Shares it has purchased from the Selling Stockholder
without notice of any adverse claim (within the meaning of Section
8-105 of the Uniform Commercial Code ("UCC")), each Underwriter that
has purchased such Shares delivered on the Closing Date to The
Depository Trust Company or other securities intermediary by making
payment therefor as provided herein, and that has had such Shares
credited to the securities account or accounts of such Underwriters
maintained with The Depository Trust Company or such other securities
intermediary will have acquired such Shares free and clear of any
adverse claim (within the meaning of Section 8-105 of the UCC).
(ii) The Selling Stockholder has not taken and will not
take, directly or indirectly, any action designed to or which might
reasonably be expected to cause or result in a violation of Section 5
of the Act or Regulation M under the Act or in stabilization or
manipulation of the price of the Company's common stock.
(iii) Certificates in negotiable form for the Shares to be
sold by the Selling Stockholder hereunder have been placed in custody,
or delivery pursuant to the terms of this Agreement, under a Custody
Agreement and Power of Attorney duly executed and delivered by the
Selling Stockholder, in the form heretofore furnished to you, with the
Company, as Custodian (the "Custodian"); and the Shares represented by
the certificates so held in custody for the Selling Stockholder are
subject to the interests hereunder of the Underwriters.
(iv) No consent, approval, authorization or order of any
court or governmental agency or body is required for the consummation
by the Selling Stockholder of the transactions contemplated herein,
except such as may have been obtained under the Act and such as may be
required under the securities or blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Shares by the
Underwriters and such other approvals as have been obtained.
(v) Neither the sale of the Shares being sold by the
Selling Stockholder nor the consummation of any other of the
transactions herein contemplated by the Selling Stockholder or the
fulfillment of the terms hereof by the Selling Stockholder will result
in a breach or violation of, or constitute a default under any law or
the terms of any indenture or other agreement or instrument to which
the Selling Stockholder is a party or bound, or any judgment, order or
decree applicable to the Selling Stockholder of any court, regulatory
8
body, administrative agency, governmental body or arbitrator having
jurisdiction over the Selling Stockholder.
(vi) The information in the Registration Statement, the
Preliminary Prospectus and the Prospectus under the caption "Principal
and Selling Stockholders" that specifically relates to such Selling
Stockholder has been furnished to the Company in writing by such
Selling Stockholder expressly for use therein and does not, and will
not on the date of the execution of this Agreement or on the Closing
Date or the Option Closing Date, 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, in the light of
the circumstances under which they were made, not misleading.
(vii) In the case of Advanced Energy Industries only, it
has no reason to believe that the representations and warranties of the
Company and the other Selling Stockholder contained in this Section
1(a) are not true and correct, is familiar with the Registration
Statement and has no knowledge of any material fact, condition or
information not disclosed in the Prospectus or any supplement thereto
which has adversely affected or is reasonably expected to adversely
affect the business of the Company or any of its subsidiaries; and the
sale of Shares by Advanced Energy Industries pursuant hereto is not
prompted by any information concerning the Company or any of its
subsidiaries which is not set forth in the Prospectus or any supplement
thereto.
Any certificate signed by a Selling Stockholder and delivered
to you or counsel for the Underwriters shall be deemed a representation and
warranty by that Selling Stockholder as to matters covered thereby.
2. PURCHASE, SALE AND DELIVERY OF THE UNDERWRITTEN SHARES. On the
basis of the representations, warranties and covenants herein contained, and
subject to the terms and conditions herein set forth, the Company and the
Selling Stockholders, severally and not jointly, agree to sell each Underwriter,
severally and not jointly, and each Underwriter agrees, severally and not
jointly, to purchase from the Company and the Selling Stockholders, at a price
of $_____ per share, the number of the Underwritten Shares set forth on Schedule
I attached hereto, subject to adjustment in accordance with Section 12 hereof.
Payment for the Underwritten Shares shall be made by wire transfer of
immediately available U.S. Funds to the designated accounts of the Company and
each Selling Stockholder, respectively, to the order of the Company and each
Selling Stockholder, respectively, against delivery of certificates for the
Shares to the Representatives for the accounts of the several Underwriters.
Delivery of certificates shall be to the Representatives c/o Stephens Inc.
("Stephens"), 000 Xxxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000, or at such other
address as Stephens may designate in writing. Payment will be made at the
offices of Xxxxxxxx, or at such other place as shall be agreed upon by Xxxxxxxx,
the Company and the Selling Stockholders, at approximately 9:00 a.m., central
time, on August __, 2000, such time and date being herein referred to as the
"Closing Date." The certificates for the Underwritten Shares will be delivered
in such denominations and in such registrations as Xxxxxxxx reasonably requests
in writing and will be
9
made available for inspection at such locations as Xxxxxxxx may reasonably
request at least one full business day prior to the Closing Date.
In addition, on the basis of the representations, warranties,
agreements and covenants herein contained and subject to the terms and
conditions herein set forth, Advanced Energy Industries hereby grants the Option
to the several Underwriters to purchase up to 150,000 of the Option Shares and
the Company hereby grants the Option to the several Underwriters to purchase the
remaining Option Shares at the price per share as set forth in the first
paragraph of this Section 2. The Option may be exercised in whole or in part on
one occasion upon written notice (or oral notice, subsequently confirmed in
writing) given not more than thirty (30) days following the date of this
Agreement, by Xxxxxxxx, on behalf of the Representatives of the several
Underwriters, to the Company and Advanced Energy Industries setting forth the
number of Option Shares as to which the several Underwriters are exercising the
Option and the names and denominations in which the Option Shares are to be
registered. If the Option is exercised in part, the number of Option shares to
be purchased from Advanced Energy Industries and from the Company, respectively,
shall be in the same proportion as the number of Option Shares granted by
Advanced Energy Industries and the Company, respectively, bears to the total
number of Option Shares. The Closing on the purchase of the Option Shares (the
"Option Closing Date"), if any, shall occur no later than three (3) business
days following the date upon which notice of exercise of the Option is given to
the Company and Advanced Energy Industries, and shall take place at the offices
of Xxxxxxxx, or at such other place as shall be agreed upon by Xxxxxxxx and the
Company. Subject to Section 12, the number of Option Shares to be purchased by
each Underwriter shall be in the same proportion to the total number of shares
of the common stock being purchased by such Underwriter bears to 3,500,000
shares, adjusted by you in such manner as to avoid fractional shares. The Option
may be exercised only to cover over-allotments in the sale of the Underwritten
Shares by the Underwriters. Xxxxxxxx, on behalf of the Representatives of the
several Underwriters, may cancel such option at any time prior to its expiration
by giving written notice (or oral notice, subsequently confirmed in writing) of
such cancellation to the Company and Advanced Energy Industries. To the extent,
if any, that the Option is exercised, payment for the Option Shares shall be
made by wire transfer of immediately available U.S. Funds to designated accounts
of the Company and Advanced Energy Industries, to the order of the Company and
Advanced Energy Industries. Certificates for the Option Shares shall be
delivered in the same manner and upon the same terms as the Underwritten Shares.
3. [Intentionally Omitted].
4. OFFERING BY THE UNDERWRITERS. It is understood that the Public
Offering of the Underwritten Shares is to be made as soon as the Representatives
deem it advisable to do so after the Registration Statement has become
effective. The Underwritten Shares are to be initially offered to the public at
the public offering price set forth in the Prospectus. The Representatives may
from time to time thereafter change the public offering price and other selling
terms. To the extent, if at all, that any Option Shares are purchased pursuant
to Section 2 hereof, the Underwriters will offer them to the public on the
foregoing terms.
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It is further understood that you will act as the Representatives for
the Underwriters in the offering and sale of the Shares, in accordance with an
Agreement Among Underwriters which has been entered into by you and the several
other Underwriters.
5. COVENANTS.
(a) The Company covenants and agrees with each of the several
Underwriters that:
(i) The Company will use its best efforts to cause the
Registration Statement to become effective and will not, either before
or after effectiveness, file any amendment thereto or supplement to the
Prospectus (including a prospectus filed pursuant to Rule 424(b) which
differs from the Prospectus on file at the time the Registration
Statement becomes effective) or file any documents under the Exchange
Act before the earlier to occur of (A) the 35th day following the
Effective Date or (B) the closing date of the Underwriters' purchase of
the Option Shares if such document would be deemed to be incorporated
by reference into the Registration Statement, the Preliminary
Prospectus or the Prospectus of which the Representatives shall not
previously have been advised and furnished with a copy or to which the
Representatives shall have reasonably objected in writing or which is
not in compliance with the Act or Rules.
(ii) The Company will advise the Representatives promptly
of any request of the Commission or other securities regulatory agency
("Other Securities Regulator") for amendment of the Registration
Statement or for supplement to the Prospectus or for any additional
information, or of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the use
of the Prospectus or of the institution of any proceedings for that
purpose, or comparable action taken or initiated by any Other
Securities Regulator, and the Company will use its reasonable efforts
to prevent the issuance of any such stop order preventing or suspending
the use of the Prospectus and to obtain as soon as possible the lifting
thereof, if issued.
(iii) The Company will use its reasonable efforts with the
Representatives in endeavoring to qualify the Shares for sale under the
securities laws of such jurisdictions (including foreign jurisdictions)
as the Representatives may reasonably designate, and will make such
applications, file such documents, and furnish such information as may
be reasonably required for that purpose; PROVIDED, HOWEVER, 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 where it is
not so qualified or required to file such a consent. The Company will,
from time to time, prepare and file such statements, reports, and other
documents, as are or may be required to continue such qualifications in
effect for so long a period as the Representatives may reasonably
request for distribution of the Shares.
(iv) The Company will deliver to, or upon the order of,
the Representatives, from time to time, as many copies of any
Preliminary Prospectus or the Prospectus as the Representatives may
reasonably request. The Company will deliver to, or upon the order of,
the Representatives, on the Trade Date and thereafter from time to time
during the period necessary to effect the distribution of the Shares as
many copies of the Prospectus in
11
final form, or as thereafter amended or supplemented, as the
Representatives may reasonably request. The Company will deliver to
each of the Representatives at or before the Closing Date, one (1)
manually signed copy of the Registration Statement and all amendments
thereto including all exhibits filed therewith (including any document
filed under the Exchange Act and deemed to be incorporated by reference
into the Registration Statement, the Preliminary Prospectus or the
Prospectus) and will deliver to the Representatives such number of
copies of the Registration Statement, but without exhibits, and of all
amendments thereto, as the Representatives may reasonably request.
(v) During the time necessary to effect the distribution
of the Shares, the Company shall comply with all requirements imposed
upon it by the Act, as now and hereafter amended, and by the Rules, as
from time to time in force, so far as is necessary to permit the
continuance of sales of or dealings in the Shares as contemplated by
the provisions hereof and the Prospectus. If, during the period
necessary to effect the distribution of the Shares, any event shall
occur as a result of which, in the judgment of the Company or in the
opinion of counsel for the Underwriters, it becomes necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances existing at the time the Prospectus
is delivered to a purchaser, not misleading, or, if it is necessary at
any time to amend or supplement the Prospectus to comply with any law
or to file under the Exchange Act any document which would be deemed to
be incorporated by reference in the Prospectus in order to comply with
the Act or the Exchange Act, the Company promptly will notify the
Representatives and, subject to the Representatives' prior review,
prepare and file with the Commission and any appropriate Other
Securities Regulator an appropriate amendment or supplement to the
Prospectus (at the expense of the Company) so that the Prospectus as so
amended or supplemented will not, in light of the circumstances when it
is so delivered, be misleading, or so that the Prospectus will comply
with the law.
(vi) The Company will make generally available to its
security holders in the manner contemplated by Rule 158(b) under the
Act, as soon as it is practicable to do so, but in any event not later
than the 90th day after the end of the fiscal quarter first occurring
one year after the Effective Date, an earnings statement in reasonable
detail, covering a period of at least twelve consecutive months
beginning after the Effective Date, which earnings statement shall
satisfy the requirements of Section 11(a) of the Act and will advise
you in writing when such statement has been so made available.
(vii) For a period of three years from the date of this
Agreement, the Company will furnish to the Representatives (a)
concurrently with furnishing of such reports to its stockholders,
statements of income of the Company for each quarter in the form
furnished to the Company's stockholders and certified by the Company's
principal financial or accounting officer; (b) concurrently with
furnishing to its stockholders, a balance sheet of the Company as at
the end of such fiscal year, together with statements of earnings,
stockholders' equity and cash flow of the Company for such fiscal year,
all in reasonable detail and accompanied by a copy of the certificate
or report thereon of independent public accountants; (c) as soon as
they are available, copies of all reports (financial or other) mailed
to stockholders; (d) as soon as they are available, copies of all
reports and financial
12
statements furnished to or filed with the Commission; (e) every press
release which was released or prepared by the Company; and (f) any
additional information of a public nature concerning the Company or its
business which you may reasonably request. During such period, if the
Company shall have active subsidiaries the foregoing financial
statements shall be on a consolidated basis to the extent that the
accounts of the Company and its subsidiaries are consolidated, and
shall be accompanied by similar financial statements for any
significant subsidiary (as defined by the Act) which is not so
consolidated.
(viii) Promptly after the Company is advised thereof, it
will advise the Representatives, and confirm in writing, that the
Registration Statement and any amendments shall have become effective.
(ix) The Company will use the net proceeds from the sale
of the Shares substantially in the manner set forth in the Prospectus
under the caption "Use of Proceeds."
(x) Other than as permitted by the Act and the Rules, the
Company will not distribute any prospectus or offering materials in
connection with the offering and sale of the Shares and prior to the
Closing Date or the Option Closing Date will not issue any press
releases or other communications directly or indirectly and will hold
no press conferences with respect to the Company, the financial
condition, results of operations, business, properties, assets or
liabilities of the Company, or the offering of the Shares, without the
prior written consent of Xxxxxxxx.
(xi) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a
registrar for its common stock and will use its best efforts to
maintain the listing of the Shares on The Nasdaq National Market.
(xii) Except as contemplated hereby or by the Prospectus,
the Company will not, directly or indirectly, for a period of one
hundred eighty (180) days after the Effective Date of the Registration
Statement, offer to sell, contract to sell, sell or otherwise dispose
of any shares of the Company's common stock or securities convertible
into or exercisable or exchangeable for shares of the Company's common
stock without the prior written consent of Xxxxxxxx.
The foregoing covenants and agreements shall apply to any successor of
the Company, including without limitation, any entity into which the Company
might consolidate or merge.
(b) Each of the Selling Stockholders, severally and not jointly,
covenants and agrees with each of the several Underwriters that:
(i) The Selling Stockholder will not, directly or
indirectly, for a period of one hundred eighty (180) days from the
Effective Date of the Registration Statement, offer to sell, contract
to sell, sell or otherwise dispose of any shares of the Company's
common stock or securities convertible into or exercisable or
exchangeable for shares of the Company's common stock without the prior
written consent of Xxxxxxxx.
13
(ii) The Selling Stockholder will advise you promptly, and
if requested by you, will confirm such advice in writing, so long as
delivery of a prospectus relating to the Shares by an Underwriter or
dealer may be required under the Act, of any change in information in
the Registration Statement or the Prospectus relating to the Selling
Stockholder.
(c) Tremoliere, L.L.C. agrees that it will use a portion of its
net proceeds from the Offering to repay in full the $3.3 million note payable
plus accrued interest thereon by Tremoliere, L.L.C. to Xxxxxxxx Sundstrand and
the $3.1 million notes payable plus accrued interest thereon by Tremoliere,
L.L.C. to the Company.
6. COSTS AND EXPENSES. Whether or not the Registration Statement
becomes effective, the Company will pay all costs, expenses and fees incident to
the performance of the obligations of the Company under this Agreement,
including, without limiting the generality of the foregoing, the following:
accounting fees of the Company; the fees and disbursements of counsel for the
Company; the cost of printing and delivering to Underwriters copies of the
Registration Statement, any Preliminary Prospectus, the Prospectus, this
Agreement, the Agreement Among Underwriters, the Selected Dealer Agreement,
Underwriters' Questionnaire and Power of Attorney, and the Blue Sky Survey and
any supplements thereto; the filing fees of the Commission; the filing fees
incident to securing any required review by the NASD of the terms of the sale of
the Shares on behalf of the Representatives and the fees and disbursements of
counsel to the Underwriters in connection therewith; the cost of printing
certificates representing the Shares; and the cost and charges of any transfer
agent or registrar. Any transfer taxes imposed on the sale of the Shares to the
Underwriters will be paid by the Company. The Company shall not, however, be
required to pay for any of the Underwriters' expenses (other than those related
to qualification under State securities or Blue Sky laws) except that, if the
Public Offering shall not be consummated because the conditions in Section 8
hereof are not satisfied, or because this Agreement is terminated by the
Representatives pursuant to Section 7 hereof, or by reason of any failure,
refusal or inability on the part of the Company to perform any undertaking or
satisfy any condition of this Agreement or to comply with any of the terms
hereof on their part to be performed, unless such failure to satisfy said
condition or to comply with said terms is due to the default or omission of any
Underwriter, then the Company shall reimburse the several Underwriters for all
costs and expenses, including attorney fees and out-of-pocket expenses,
reasonably incurred in connection with investigating, marketing and proposing to
market the Shares or in contemplation of performing their obligations hereunder.
7. CONDITIONS TO OBLIGATIONS OF THE UNDERWRITERS. The obligations
of the several Underwriters to purchase and pay for the Shares as provided
herein, are subject to the accuracy, as of the Closing Date and as of the Option
Closing Date, of the representations and warranties and agreements of the
Company and the Selling Stockholders contained herein, to the performance by the
Company and the Selling Stockholders of their respective obligations hereunder
and to the following additional conditions:
(a) The Registration Statement shall have become
effective not later than 2:00 p.m., central time, on the date of this
Agreement, unless a later time and date is agreed to by the
Representatives, and no stop order or other order suspending the
effectiveness
14
thereof or the qualification of the Shares under the State securities
or Blue Sky laws of any jurisdiction shall have been issued and no
proceeding for that purpose shall have been taken or, to the knowledge
of the Company, shall be contemplated or threatened by the Commission
or any Other Securities Regulator. If the Company has elected to rely
upon Rule 430A of the Rules, the price of the Shares and any
price-related information previously omitted from the effective
Registration Statement pursuant to such Rule 430A shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) of the
Act within the prescribed time period, and prior to the Closing Date
the Company shall have provided evidence satisfactory to the
Representatives of such timely filing, or a post-effective amendment
providing such information shall have been promptly filed and declared
effective in accordance with the requirements of Rule 430A under the
Act. All requests for additional information on the part of the
Commission or any other government or regulatory authority with
jurisdiction (to be included in the Registration Statement or
Prospectus or otherwise) shall be complied with to the satisfaction of
the Commission or such authorities.
(b) The Representatives shall have received on the
Closing Date and on the Option Closing Date the opinion of Xxxxx Xxxxxx
Xxxxxxxx LLP, counsel for the Company, with respect to matters set
forth below dated the Closing Date and the Option Closing Date,
addressed to the Underwriters in form and substance satisfactory to
O'Melveny & Xxxxx LLP, counsel to the Underwriters, to the effect that:
(i) The Company and the Subsidiaries have been
duly organized and are validly existing in good standing under
the laws of the state(s) or similar foreign jurisdictions
(with respect to the Subsidiaries) of their organization with
corporate power to own their properties and conduct their
business as described in the Registration Statement and
Prospectus; the Company and the Subsidiaries are duly
qualified to transact business in each state in which the
Company or the Subsidiaries own or lease properties as shown
in the Prospectus; all of the outstanding shares of capital
stock of each Subsidiary has been duly authorized and are duly
issued, fully paid and non-assessable; and except as set forth
in the Prospectus and the Registration Statement, no options,
warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any
obligations into any shares of capital stock of the Company or
any Subsidiary are outstanding.
(ii) The Company has authorized and outstanding
the capital stock set forth under the caption "Description of
Capital Stock" in the Registration Statement and Prospectus;
all of the outstanding shares of the capital stock of the
Company have been duly authorized and are validly issued,
fully paid and non-assessable; all of the Shares conform to
the description thereof contained in the Prospectus; the
Shares to be sold pursuant to this Agreement have been duly
authorized and, upon payment for and delivery of the Shares
and the countersigning of the certificates representing the
Shares by a duly authorized signatory, the Shares will be
validly issued, fully paid and non-assessable when issued and
paid for as contemplated by this Agreement; there are no
preemptive or other restrictive rights to subscribe for
15
or to purchase or any restriction upon the voting or transfer
of the Shares pursuant to the Company's Certificate of
Incorporation, bylaws, other governing documents or, to such
counsel's knowledge, any material agreement or other
instrument to which the Company is a party or by which it is
bound; and neither the filing of the Registration Statement
nor the offering or sale of the Shares as contemplated by this
Agreement gives rise to any rights, other than those which
have been waived or satisfied, for or relating to the
registration of any class of the Company's capital stock.
(iii) The Registration Statement has been declared
effective under the Act and to the knowledge of such counsel
no stop order proceedings with respect thereto have been
instituted by the Commission or threatened and all filings
required by Rule 424 and Rule 430A of the Rules have been
made.
(iv) The Registration Statement, all Preliminary
Prospectuses, the Prospectus and each amendment or supplement
thereto, as of their respective dates they were filed,
appeared on their face to comply as to form in all material
respects with the requirements of the Act and the Rules,
except that such counsel need express no opinion as to the
information supplied by the Underwriters or the financial
statements, schedules and other financial or statistical
information included therein.
(v) Except as set forth in the Registration
Statement and the Prospectus, to the knowledge of such
counsel, there are no contracts, agreements or understandings
between the Company and any person granting such person the
right to require the Company to file a registration statement
under the Act with respect to any securities of the Company
owned or to be owned by such person or to require the Company
to include such securities in the securities being registered
pursuant to a registration statement filed by the Company
under the Act.
(vi) The Company's execution and delivery of, and
performance of its obligations under, this Agreement do not
(A) violate the Company's and its Subsidiaries' respective
charter or bylaws, (B) breach or otherwise violate any
existing obligation of or restriction on the Company or its
Subsidiaries under any order, judgment or decree of any
federal or Delaware or Oregon court or government authority
binding on the Company or its Subsidiaries or (C) result in a
breach or constitute a default under any indenture, mortgage,
deed of trust, lease, contract, note or other agreement or
instrument to which the Company or any Subsidiary is a party
or to which any of their assets is bound. The execution and
delivery by the Company of, and performance of its obligations
under, the Agreement, do not violate any Delaware, Oregon or
federal statute or regulation that such counsel has, in the
exercise of customary professional diligence, recognized as
applicable to the Company or its Subsidiaries or to
transactions of the type contemplated by the Agreement, except
that such counsel need express no opinion regarding any
federal securities laws or Blue Sky or state securities laws.
16
(vii) This Agreement has been duly authorized,
executed and delivered by the Company and is a valid and
binding obligation of the Company.
(viii) No approval, consent, order or permit of any
Delaware, Oregon or any Federal governmental authority is
required on the part of the Company for the execution and
delivery of this Agreement or for the issuance and sale of the
Shares by the Company herein contemplated (other than required
by NASD regulation or state securities and Blue Sky laws, as
to which such counsel need express no opinion), except such as
have been obtained or made, specifying the same.
(ix) The Company is not and, after giving effect
to the sale of the Shares and the application of the net
proceeds thereof as described in the Prospectus, will not be
an "investment company" required to register under the
Investment Company Act of 1940, as amended.
(x) There are no actions or proceedings pending,
or to the knowledge of such counsel, threatened against the
Company, any of its Subsidiaries or any of their respective
officers or any of their properties, assets or rights before
any court or administrative or governmental agency or other
body which are not disclosed in the Prospectus and which
reasonably would be expected to have a Material Adverse Effect
or adversely affect the performance of this Agreement or the
consummation of the transactions herein contemplated.
(xi) Such counsel does not know of any contract
or other document of a character required to be filed as an
exhibit to or described in the Registration Statement which is
not filed as required or disclosed.
In addition to the matters set forth above, such counsel shall also
include a statement to the effect that such counsel has participated in
the preparation of the Registration Statement and the Prospectus and,
based on such participation, no facts have come to the attention of
such counsel which caused such counsel to believe that any part of the
Registration Statement or any amendment thereto (other than the
financial statements and other financial data contained therein, as to
which such counsel may express no belief), as of its effective date,
contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus or any
amendment or supplement thereto (other than the financial statements
and other financial data contained therein, as to which such counsel
may express no belief), as of their respective dates and as of the date
of the opinion contained or contains any untrue statement of a material
fact or omitted or omits to state any material fact necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading.
Such counsel may state that its opinion is limited to the
applicable law of the United States of America, the Delaware General
Corporation Law, the laws of Oregon and the general corporate law of
jurisdictions under which the Subsidiaries are organized, and that such
counsel renders no opinion with respect to the law of any other
jurisdiction. Such
17
opinion shall contain only those qualifications as O'Melveny & Xxxxx
LLP, counsel to the Underwriters, may reasonably request or allow.
(c) The Representatives shall have received on the
Closing Date and on the Option Closing Date the opinion of Karnopp,
Petersen, Noteboom, Hansen, Xxxxxx & Sayeg LLP as to Tremoliere,
L.L.C., and Xxxxxx, Xxxx & Priest, as to Advanced Energy Industries,
with respect to the matters set forth below dated the Closing Date and
the Option Closing Date, as the case may be, addressed to the
Underwriters in form and substance satisfactory to O'Melveny & Xxxxx
LLP, counsel to the Underwriters, to the effect that:
(i) The Selling Stockholder has been duly organized and
is validly existing in good standing under the laws of the state of its
organization with corporate power to own the Shares owned by it and
enter into this Agreement, the Custody Agreement and the Power of
Attorney.
(ii) Each of this Agreement, the Custody Agreement and the
Power of Attorney has been duly authorized by all necessary corporate
action on the part of the Selling Stockholder and has been duly
executed and delivered by the Selling Stockholder.
(iii) The Custody Agreement constitutes the legally valid
and binding obligation of the Selling Stockholder, enforceable against
the Selling Stockholder in accordance with its terms, except as may be
limited by bankruptcy, insolvency, moratorium or similar laws relating
to or affecting creditors' rights generally (including, without
limitation, fraudulent conveyance laws) and by general principles of
equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible
unavailability of specific performance or injunctive relief, regardless
of whether considered in a proceeding in equity or at law.
(iv) Upon payment for and delivery to the Underwriters of
the Shares sold by the Selling Stockholder in accordance with this
Agreement, assuming each of the Underwriters is acquiring the Shares
sold by the Selling Stockholder without notice of any adverse claim,
the Underwriters will acquire the Shares free and clear of any adverse
claim as defined in Article 8 of the UCC.
(v) No order, consent, permit or approval of any
Delaware, Oregon or federal governmental authority is required on the
part of the Selling Stockholder for the execution and delivery of this
Agreement, the Custody Agreement or the Power of Attorney or the sale
of the Shares sold by the Selling Stockholder, except such as have been
obtained under the Act and such as may be required under the securities
or blue sky laws of any other jurisdiction.
(vi) The Selling Stockholder's execution and delivery of,
and performance of its obligations under, this Agreement, the Custody
Agreement and the Power of Attorney do not (A) violate the Selling
Stockholder's charter or bylaws, (B) breach or otherwise violate any
existing obligation of or restriction on the Selling Stockholder under
any order,
18
judgment or decree of any federal or Delaware or Oregon court or
government authority binding on the Selling Stockholder or (C) result
in a breach or constitute a default under any indenture, mortgage, deed
of trust, lease, contract, note or other agreement or instrument to
which the Selling Stockholder is a party or to which any of its assets
is bound. The execution and delivery by the Selling Stockholder of, and
performance of its obligations under, the Agreement, the Custody
Agreement and the Power of Attorney do not violate any Delaware, Oregon
or federal statute or regulation that such counsel has, in the exercise
of customary professional diligence, recognized as applicable to the
Selling Stockholder or to transactions of the type contemplated by the
Agreement, the Custody Agreement or the Power of Attorney, except that
such counsel need express no opinion regarding any federal securities
laws or blue sky or state securities laws.
(d) The Representatives shall have received on the
Closing Date and on the Option Closing Date from O'Melveny & Xxxxx LLP,
counsel to the Underwriters, an opinion dated the Closing Date and the
Option Closing Date, substantially to the effects specified in
subparagraph (iii) and (iv) of paragraph (b) of this Section 7, and
that the Company is a validly organized and existing corporation under
the laws of the State of Delaware. In addition to the matters set forth
above, such opinion shall also include a statement to the effect that
nothing has come to the attention of such counsel which leads them to
believe that the Registration Statement or any amendment thereto at the
time the Registration Statement or amendment 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
therein not misleading or the Prospectus or any amendment or supplement
thereto as of their respective dates or as of the date of the opinion,
contained or contains an untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading (except that such counsel need express no view as
to financial statements and other financial information included
therein).
(e) The Representatives shall have received at or prior
to the Closing Date from O'Melveny & Xxxxx LLP a memorandum or summary,
in form and substance satisfactory to the Representatives, with respect
to the qualification or exemption therefrom for offering and sale by
the Underwriters of the Shares under the State securities or Blue Sky
laws of such jurisdictions as the Representatives may reasonably have
designated.
(f) The Representatives shall have received on the
Closing Date and on the Option Closing Date, as the case may be, signed
letters from KPMG LLP, addressed to the Underwriters dated as of the
Effective Date and again dated as of the Closing Date and as of the
Option Closing Date, as the case may be, with respect to the financial
statements and certain financial and statistical information contained
in the Registration Statement and the Prospectus. All such letters
shall be in form and substance satisfactory to the Representatives and
O'Melveny & Xxxxx LLP, counsel to the Underwriters.
(g) The Representatives shall have received on the
Closing Date and on the Option Closing Date, as the case may be, a
certificate or certificates of the President & Chief Executive Officer
and Vice President and Chief Financial Officer of the Company to
19
the effect that, on and as of the Closing Date and on and as of the
Option Closing Date, as the case may be, each of them severally
represents as follows:
(i) The Registration Statement has become
effective under the Securities Act and no stop order
suspending the effectiveness of the Registration Statement has
been issued, and no proceedings for such purpose have been
taken or are, to his knowledge, contemplated by the
Commission.
(ii) He has examined the Registration Statement
and the Prospectus and, in his opinion, as of the effective
date of the Registration Statement, the statements contained
in the Registration Statement and the Prospectus were true and
correct in all material respects, and such Registration
Statement and Prospectus did not omit to state a material fact
required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances in which
they were made, not misleading and, in his opinion, since the
effective date of the Registration Statement, no event has
occurred which should have been set forth in a supplement to
or an amendment of the Prospectus which has not been so set
forth in such supplement or amendment.
(h) The Company and each Selling Stockholder shall have
furnished to the Representatives such additional information and
further certificates and documents confirming the representations and
warranties contained herein and related matters as the Representatives
may reasonably have requested.
(i) Since the respective dates as of which information is
given in the Prospectus, there shall not have been any Material Adverse
Change.
(j) The Shares shall have been approved for listing on
The Nasdaq National Market, subject to official notice of issuance.
The opinions and certificates mentioned in this Agreement shall be
deemed to be in compliance with the provisions hereof only if they are in all
material respects satisfactory to the Representatives and O'Melveny & Xxxxx LLP,
counsel for the Underwriters.
If any of the conditions hereinabove provided for in this Section 7
shall not have been fulfilled when and as required by this Agreement to be
fulfilled, the obligations of the Underwriters hereunder may be terminated by
the Representatives by notifying the Company and the Selling Stockholders of
such termination in writing or by confirmed telefax at or prior to the Closing
Date. In such event, neither the Company, the Selling Stockholders or any of the
Underwriters shall be under any obligation to the other (except to the extent
provided in Sections 6, 9 and 10 hereof).
8. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY AND THE SELLING
STOCKHOLDERS. The obligations of the Company and the Selling Stockholders to
sell and deliver the Shares are subject to the conditions that (a) at or before
2:00 p.m., central time, on the date of this Agreement, or such later time and
date as the Company and the Representatives may from time to time consent to in
writing or by confirmed telefax, the Registration Statement shall have become
effective, and
20
(b) at the Closing Date no stop order suspending the effectiveness of the
Registration Statement shall have been issued or proceedings therefor initiated
or threatened. If either of the conditions hereinabove provided for in this
Section 8 shall not have been fulfilled when and as required by this Agreement
to be fulfilled, this Agreement may be terminated by the Company and the Selling
Stockholders jointly by notifying the Representatives of such termination in
writing or by confirmed telefax at or prior to the Closing Date.
9. INDEMNIFICATION.
(a) The Company and Tremoliere, L.L.C., jointly and severally,
agree to indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of the Act, the Rules and the
Exchange Act from and against any and all losses, claims, damages, liabilities,
joint or several, to which such Underwriter or such controlling person may
become subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise out
of or are based upon any breach of any representation or warranty of the Company
or Tremoliere, L.L.C. contained in Section 1(a) or any agreement or covenant of
the Company contained herein, or any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, any
Preliminary Prospectus, 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 the Company and Tremoliere, L.L.C.,
jointly and severally, will reimburse each Underwriter and each such controlling
person for legal and other expenses reasonably incurred in connection with
investigating or defending any such loss, claim, damage, liability, action or
proceeding; PROVIDED, HOWEVER, that neither the Company nor Tremoliere, L.L.C.
will 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 made in, or omission or alleged omission from, the Registration
Statement, any Preliminary Prospectus, the Prospectus, or such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by or through the Representatives specifically for use
in the preparation thereof, it being understood and agreed that the only such
information furnished by any Underwriter consists of the information described
as such in Section 15 below; and PROVIDED FURTHER, that with respect to any
untrue statement or alleged untrue statement in or omission or alleged omission
from any Preliminary Prospectus, the indemnity agreement contained in this
Section 9(a) shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased the
Shares concerned, to the extent that a prospectus relating to such Shares was
required to be delivered by such Underwriter under the Act in connection with
such purchase and any such loss, claim, damage or liability of such Underwriter,
results from the fact that there was not sent or given to such person, at or
prior to the written confirmation of the sale of such Shares to such person, a
copy of the Prospectus as then amended or supplemented (excluding any documents
incorporated by reference therein) if the Company had previously furnished
copies thereof to such Underwriter. This indemnity agreement will be in addition
to any liability which the Company or Tremoliere, L.L.C. may otherwise have.
(b) Each Selling Stockholder, severally, but not jointly, agrees
to indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the
21
meaning of the Act, the Rules and the Exchange Act from and against any and all
losses, claims, damages, liabilities, joint or several, to which such
Underwriter or such controlling person may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon any breach of any
representation or warranty of such Selling Stockholder contained in Section 1(b)
or any agreement or covenant of such Selling Stockholder contained herein and
each Selling Stockholder will reimburse each Underwriter and each such
controlling person for legal and other expenses reasonably incurred in
connection with investigating or defending any such loss, claim, damage,
liability, action or proceeding. This indemnity agreement will be in addition to
any liability which each Selling Stockholder may otherwise have.
(c) Each Underwriter severally, but not jointly, will indemnify
and hold harmless the Company, each of its directors, each of its officers who
have signed the Registration Statement, and each person, if any, who controls
the Company, within the meaning of the Act, the Rules and the Exchange Act and
each of the Selling Stockholders from and against any losses, claims, damages or
liabilities to which the Company, or any such director, officer, or controlling
person or Selling Stockholder may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, 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 light of
the circumstances under which they were made; and will reimburse any legal or
other expenses reasonably incurred by the Company, or any such director,
officer, controlling person or Selling Stockholder in connection with
investigating or defending any such loss, claim, damage, liability, action or
proceeding; PROVIDED, HOWEVER, that each Underwriter will be liable in such case
only to the extent that such untrue statement, or alleged untrue statement or
omission or alleged omission has been made in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or such amendment or supplement, in
reliance upon and in conformity with information furnished to the Company by or
through the Representatives expressly for use in the preparation thereof, which
information is described in Section 15. This indemnity agreement will be in
addition to any liability which such Underwriter may otherwise have.
(d) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action or proceeding, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section 9, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section 9, except to the extent that the indemnifying
party is substantially prejudiced by the omission of such notification. In case
any such action or proceeding is brought against any party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein, and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section 9 for any legal or other
expenses
22
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding. Any indemnified party shall have
the right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the employment of such counsel has
been specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party has failed to assume the defense and employ counsel, or (iii)
the named parties to any such action (including any impleaded parties) include
such indemnified party and the indemnifying party, as the case may be, and such
indemnified party shall have been advised in writing by such counsel that there
may be one or more legal defenses available to it which are different from or
additional to those available to the indemnifying party, in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, that (A) the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for all such indemnified parties, which firm shall be designated in
writing by the indemnified parties, and that (B) all such fees and expenses
shall be reimbursed as they are incurred. Subject to the foregoing provisions of
this Section 9(c), the indemnifying party shall not be liable for the costs and
expenses of any settlement of any action without the consent of the indemnifying
party.
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 9 is for
any reason held to be unavailable to an indemnified party under subsection (a)
or (b) above in respect to any losses, claims, damages, liabilities or expenses
referred to therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities and expenses (i) 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 hand from the offering of the Shares
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the parties in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, 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
hand shall be deemed to be in the same proportion as the total proceeds from the
offering (net of underwriting discounts and commissions but before deducting
expenses) received by the Company and the Selling Stockholders bears to the
underwriting discounts and commissions received by the Underwriters. The
relative fault of a party 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 each party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
23
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include
any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any such action or claim.
The Company, the Selling Stockholders and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 9
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 in the immediately
preceding paragraph. Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Shares underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages that
such Underwriters have 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 shall be several in proportion to their respective
underwriting obligations and not joint.
(f) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment thereto,
each party against whom contribution may be sought under this Section 9 hereby
consents to the jurisdiction of any court having jurisdiction over any other
contributing party, agrees that process issuing from such court may be served
upon him or it by any other contributing party and consents to the service of
such process and agrees that any other contributing party may join him or it as
an additional defendant in any such proceeding in which such other contributing
party is a party.
(g) The liability of Advanced Energy Industries under Section 9(b)
shall be limited to an amount equal to the net proceeds to Advanced Energy
Industries from the sale of the Shares sold by Advanced Energy Industries to the
Underwriters.
10. Upon the liquidation and winding up of Tremoliere, L.L.C., the
members of Tremoliere, L.L.C. executing this Agreement, jointly and severally,
will assume the obligations of Tremoliere, L.L.C. under this agreement;
PROVIDED, HOWEVER, that the liability of each member of Tremoliere, L.L.C. shall
be limited to an amount equal to the greater of (i) such member's proportionate
share of the net proceeds from the sale of the Shares sold by Tremoliere, L.L.C.
or (ii) the fair market value of the assets distributed to such member upon the
liquidation and winding up of Tremoliere, L.L.C.
11. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements of the Company or its
officers and of the Selling Stockholders herein or in certificates delivered
pursuant hereto, and the indemnity and contribution agreements contained in
Section 9 hereof, shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of any Underwriters or any controlling
person, or by or on behalf of any Selling Stockholder or the Company or any of
its officers,
24
directors or controlling persons, and shall survive delivery of the Underwritten
Shares and, if appropriate, the Option Shares to the Representatives or
termination of this Agreement.
12. DEFAULT BY UNDERWRITERS. If any Underwriter shall fail to
purchase and pay for the Shares which such Underwriter has agreed to purchase
and pay for hereunder (otherwise than by reason of any default on the part of
the Company), you, as the Representatives of the Underwriters, shall use your
best efforts to procure within twenty-four hours thereafter one or more of the
other Underwriters, or any others, to purchase from the Company and the Selling
Stockholders such amounts as may be agreed upon and upon the terms set forth
herein, the Shares which the defaulting Underwriter or Underwriters failed to
purchase. If during such twenty-four hours you, as such Representatives, shall
not have procured such other Underwriters, or any others, to purchase the Shares
agreed to be purchased by the defaulting Underwriter or Underwriters, then (a)
if the aggregate number of Shares with respect to which such default shall occur
does not exceed 10% of the Shares which the Underwriters are obligated to
purchase hereby, the other Underwriters shall be obligated, severally, in
proportion to the respective number of Shares which they are obligated to
purchase hereunder, to purchase the Shares which such defaulting Underwriter or
Underwriters failed to purchase, or (b) if the aggregate number of Shares with
respect to which such default shall occur exceeds 10% of the Company's common
stock covered hereby, the Company or you, as the Representatives of the
Underwriters will have the right, by written notice given within the next
twenty-four hour period to the parties to this Agreement, to terminate this
Agreement without liability on the part of the non-defaulting Underwriters, the
Company or the Selling Stockholders, except to the extent provided in Section 9
hereof. In the event of a default by any Underwriter or Underwriters, as set
forth in this Section 12, the time of closing may be postponed for such period,
not to exceed seven days, as you, as the Representatives, may determine in order
that the required changes in the Registration Statement, the Prospectus or in
any other documents or arrangements may be effected. The term "Underwriters"
includes any person substituted for a defaulting Underwriter. Any action taken
under Section 12 shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
13. NOTICES. All communications hereunder shall be in writing and,
except as otherwise provided in, will be mailed, delivered or telefaxed and
confirmed as follows: if to the Underwriters, c/o the Representatives as
follows: to Xxxxxxxx Inc., 000 Xxxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000,
Attention: Xxxxxx Xxxxxx, with a copy to O'Melveny & Xxxxx LLP, 000 Xxxxx Xxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxxx Xxxxxxx;
if to the Company, to Advanced Power Technology, Inc., 000 XX Xxxxxxxx Xxxxxx,
Xxxx, Xxxxxx 00000, Attention: Xxxxxxx Xxxxxx, with a copy to Karnopp, Petersen,
Noteboom, Hansen, Xxxxxx & Sayeg LLP, 0000 XX Xxxx Xxxxxx, Xxxxx 000, Xxxx,
Xxxxxx 00000-0000, Attention: Xxxxx X. Xxxxxxxx, and with a copy to Xxxxx Xxxxxx
Xxxxxxxx LLP, 0000 X.X. Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxx 00000,
Attention: Xxxx Xxxx; if to Advanced Energy Industries, to Advanced Energy
Industries, Inc., 0000 Xxxxx Xxxxx Xxxxx, Xxxx Xxxxxxx, Xxxxxxxx 00000,
Attention: Xxxxxxx Xxxxxx.
00
00. TERMINATION. This Agreement may be terminated by notice to the
Company and the Selling Stockholders as follows:
(a) at any time prior to the Closing Date if any of the
following has occurred: (i) since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
any Material Adverse Change which would, in your reasonable judgment,
materially make it impracticable to market the Shares in the manner
contemplated by the Prospectus, (ii) any outbreak of hostilities or
other national or international calamity or crisis or change in
economic or political conditions if the effect of such outbreak,
calamity, crisis or change on the financial markets of the United
States would, in your reasonable judgment, make the offering or
delivery of the Shares impracticable, (iii) suspension of trading or
general trading halts in securities on the New York Stock Exchange, the
American Stock Exchange, The Nasdaq National Market or the
over-the-counter market or limitation on prices (other than limitations
on hours or numbers of days or trading) for securities on either such
Exchange, The Nasdaq National Market or the over-the-counter market,
(iv) the enactment, publication, decree or other promulgation of any
federal or state statute, regulation, rule or order of any court or
other governmental authority which in your reasonable opinion
materially and adversely affects or will materially or adversely affect
the business or operations of the Company, (v) declaration of a banking
moratorium by either federal or state authorities, or (vi) the taking
of any action by any federal, state or local government or agency in
respect of its monetary or fiscal affairs which in your reasonable
opinion has a material adverse effect on the securities markets in the
United States; or
(b) as provided in Sections 7 and 12 of this Agreement.
15. INFORMATION FURNISHED BY UNDERWRITERS. The information set
forth in the Prospectus: (a) in the last paragraph on the cover page, (b) (i) in
the table under the caption "Underwriting" on page 52, listing the Underwriters
and the number of shares each has agreed to purchase, (ii) in the first
paragraph below said table on page 52, relating to the concession to dealers and
the reallowance to certain other dealers under the caption "Underwriting" in the
Prospectus and (c) in the four paragraphs on page 53 of the Prospectus under the
caption "Stabilization," constitute the written information furnished by or on
behalf of any Underwriters referred to in paragraph (a) (v) of Section 1 hereof
and in paragraphs (a) and (b) of Section 9 hereof.
16. SUCCESSORS. This Agreement has been and is made solely for the
benefit of the Underwriters, the Company and their respective successors,
executors, administrators, heirs, and assigns, and the officers, directors and
controlling persons referred to herein, and no other person will have any right
or obligation hereunder. The term "successors" shall not include any purchaser
of the Shares merely because of such purchase.
17. MISCELLANEOUS. The Representatives will act for the several
Underwriters in connection with this offering, and any action under this
Agreement taken by the Representatives jointly or by Xxxxxxxx Inc. will be
binding upon all of the Underwriters.
26
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Arkansas, without giving effect to the choice of law or
conflict of law principles thereof.
[Signature Page Follows]
27
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
Advanced Power Technology, Inc.
By:
------------------------------------
Xxxxxxx P.H. Sireta
President and Chief Executive Officer
Tremoliere, L.L.C.
By:
------------------------------------
Name:
Title:
Advanced Energy Industries, Inc.
By:
------------------------------------
Name:
Title:
MEMBERS (as to Section 10 only):
----------------------------------------
Xxxxxxx P.H. Sireta
----------------------------------------
Dah Xxx Xxxxx
----------------------------------------
Xxxx X. Xxxx
S-1
MEMBERS (as to Section 10 only):
----------------------------------------
Xxxxxx X. Xxxxx
----------------------------------------
Xxxxxxx X. Xxxxxxxx
----------------------------------------
Xxxx X. Xxxxxx
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first above written.
Xxxxxxxx Inc.
Xxxxxxx & Company, Inc.
First Security Xxx Xxxxxx
By: Xxxxxxxx Inc.
By:
-------------------------------------------
Name:
Title:
As Representatives of the several Underwriters
named in Schedule I hereto
S-2
SCHEDULE I
Name No. of Underwritten Shares
---- --------------------------
Xxxxxxxx Inc..............................................
Xxxxxxx & Company, Inc....................................
First Security Xxx Xxxxxx................................. -------------
Total 3,500,000
=========
Schedule I-1
SCHEDULE II
Selling Stockholder: No. of Underwritten Shares:
-------------------- ---------------------------
Tremoliere, L.L.C............................................................... 930,000
Advanced Energy Industries, Inc................................................. 170,000
Total..................................................................... 1,100,000
=========
Schedule II-1
EXHIBIT A
_______________, 2000
Xxxxxxxx Inc.
Xxxxxxx & Company, Inc.
First Security Xxx Xxxxxx
c/o Stephens Inc.
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Re: AGREEMENT NOT TO SELL ADVANCED POWER TECHNOLOGY, INC. STOCK
Ladies and Gentlemen:
This letter is provided, at the request of Advanced Power Technology,
Inc. (the "Company"), for the benefit of the Company and the Underwriters in
connection with the proposed public offering of shares of the Company's Common
Stock. As an inducement to the Underwriters to (a) enter into an Underwriting
Agreement with the Company and the Selling Stockholders and (b) consummate the
transactions contemplated in such Underwriting Agreement, the undersigned hereby
represents and agrees as follows:
1. Upon the closing of the Company's initial public offering, the
undersigned will beneficially own the number of shares of the Company's Common
Stock set forth below opposite the signature of the undersigned (the "Shares"),
and no others.
2. The undersigned agrees that, for a period of [180 days*] from the
effective date of the Registration Statement, the undersigned will not directly
or indirectly, offer to sell, contract to sell, sell or otherwise dispose of any
of the Shares or securities convertible into or exercisable or exchangeable for
the Company's Common Stock, without the prior written consent of Xxxxxxxx Inc.,
on behalf of the Representatives of the Underwriters.
Shares of Common Stock: Very truly yours,
-------------------- ----------------------------------
[* 90 days with respect to Finova Technology Finance, Inc.]
Exhibit A-1
