DRAFT OF SEPTEMBER 17, 1999
ADVANCED ENERGY INDUSTRIES, INC.
___% CONVERTIBLE SUBORDINATED NOTES DUE 2006
-----------
UNDERWRITING AGREEMENT
September __, 1999
Xxxxxxx, Xxxxx & Co.,
Xxxxxxx Lynch, Pierce, Xxxxxx
& Xxxxx Incorporated and Banc
of America Securities LLC
c/x Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Advanced Energy Industries, Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to Xxxxxxx, Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated and Banc America Securities LLC (the "Underwriters") an aggregate
of $_________ principal amount of the Convertible Notes, convertible into Common
Stock, $0.001 par value ("Stock") of the Company, specified above (the "Firm
Securities") and, at the election of the Underwriters, up to an aggregate of
$_________ additional aggregate principal amount (the "Optional Securities")
(the Firm Securities and the Optional Securities which the Underwriters elect to
purchase pursuant to Section 2 hereof are herein collectively called the
"Securities").
1. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-3 (File No.
33-___________) (the "Initial Registration Statement") in respect of
the Securities and shares of the Stock issuable upon conversion
thereof has been filed with the Securities and Exchange Commission
(the "Commission"); the Initial Registration Statement and any
post-effective amendment
thereto, excluding exhibits thereto but including all documents
incorporated by reference in the prospectus contained therein, each
in the form heretofore delivered to you and for each of the other
Underwriters, have been declared effective by the Commission in such
form; other than a registration statement, if any, increasing the
size of the offering (a "Rule 462(b) Registration Statement"), filed
pursuant to Rule 462(b) under the Securities Act of 1933, as amended
(the "Act"), which became effective upon filing, no other document
with respect to the Initial Registration Statement or document
incorporated by reference therein has been filed with the
Commission; and no stop order suspending the effectiveness of the
Initial Registration Statement, any post-effective amendment thereto
or the Rule 462(b) Registration Statement, if any, has been issued
and no proceeding for that purpose has been initiated or threatened
by the Commission (any preliminary prospectus included in the
Initial Registration Statement or filed with the Commission pursuant
to Rule 424(a) of the rules and regulations of the Commission under
the Act, is hereinafter called a "Preliminary Prospectus"); the
various parts of the Initial Registration Statement and the Rule
462(b) Registration Statement, if any, including all exhibits
thereto but excluding Form T-1 and including (i) the information
contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section
5(a) hereof and deemed by virtue of Rule 430A under the Act to be
part of the Initial Registration Statement at the time it was
declared effective and (ii) the documents incorporated by reference
in the prospectus contained in the Initial Registration Statement at
the time such part of the Initial Registration Statement became
effective, each as amended at the time such part of the Initial
Registration Statement became effective or such part of the Rule
462(b) Registration Statement, if any, became or hereafter becomes
effective, are hereinafter collectively called the "Registration
Statement"; such final prospectus, in the form first filed pursuant
to Rule 424(b) under the Act, is hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3
under the Act, as of the date of such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after the date of
such Preliminary Prospectus or Prospectus, as the case may be, under
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and incorporated by reference in such Preliminary Prospectus
or Prospectus, as the case may be; and any reference to any
amendment to the Registration Statement shall be deemed to refer to
and include any annual report of the Company filed pursuant to
Section 13(a) or 15(d) of the Exchange Act after the effective date
of the Initial Registration Statement that is incorporated by
reference in the Registration Statement;
(b) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the
rules and regulations of the Commission thereunder, and did not contain
an untrue statement of a
2
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
PROVIDED, HOWEVER, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by
an Underwriter through Xxxxxxx, Xxxxx & Co. expressly for use
therein;
(c) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so filed
and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective
or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; PROVIDED,
HOWEVER, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter
through Xxxxxxx, Xxxxx & Co. expressly for use therein;
(d) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the Registration Statement
or the Prospectus will conform, in all material respects to the
requirements of the Act and the Trust Indenture Act and the rules and
regulations of the Commission thereunder and do not and will not, as of
the applicable effective date of the Registration Statement and any
amendment thereto and as of the applicable filing date of the
Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; PROVIDED, HOWEVER, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company
by an Underwriter through Xxxxxxx, Xxxxx & Co. expressly for use
therein;
(e) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, except as set
forth or contemplated in the Prospectus or as would not have,
individually or in the aggregate, a material adverse effect on the
3
current or future consolidated financial position, business, prospects,
stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole (a "Material Adverse Effect"); and,
since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any
change in the capital stock, capital lease obligations or long-term
debt of the Company or any of its subsidiaries or any material adverse
change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company
and its subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Prospectus;
(f) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title
to all personal property owned by them, in each case free and clear of
all liens, encumbrances and defects except such as are described in the
Prospectus or such as do not materially affect the value of such
property and do not materially interfere with the use made and proposed
to be made of such property by the Company and its subsidiaries; and
any real property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not materially
interfere with the use made and proposed to be made of such property
and buildings by the Company and its subsidiaries;
(g) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with the corporate power and authority to own its
properties and conduct its business as described in the Prospectus, and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so
qualified or in good standing in any such jurisdiction; and each
subsidiary of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified or in good standing in any
such jurisdiction;
(h) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable; the shares of Stock initially issuable upon
conversion of the Securities have been duly and validly authorized and
reserved for issuance and, when issued and delivered in accordance with
the provisions of the Securities and the Indenture referred to below,
will be duly and validly issued, fully paid and non-assessable and will
conform to the description of the Stock contained in the
4
Prospectus; and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and are owned directly or
indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims;
(i) The Securities have been duly authorized and, when issued
and delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company entitled to the benefits
provided by the indenture to be dated as of September __, 1999 (the
"Indenture") between the Company and State Street Bank and Trust, as
Trustee (the "Trustee"), under which they are to be issued, which will
be substantially in the form filed as an exhibit to the Registration
Statement; the Indenture has been duly authorized and duly qualified
under the Trust Indenture Act and, when executed and delivered by the
Company and the Trustee, will constitute a valid and legally binding
instrument, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights and
to general equity principles; and the Securities and the Indenture will
conform to the descriptions thereof in the Prospectus;
(j) The issue and sale of the Securities and the compliance by
the Company with all of the provisions of the Securities, the Indenture
and this Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound
or to which any of the property or assets of the Company or any of its
subsidiaries is subject, except , in each case, (i) breaches,
violations or defaults which, individually or in the aggregate, would
not have a Material Adverse Effect and (ii) would not have an adverse
effect on the Company's ability to consummate the transactions
contemplated hereby; nor will such actions result in any violation of
the provisions of the Certificate of Incorporation or By-laws of the
Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their properties; and no consent,
approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the
issue and sale of the Securities or the consummation by the Company of
the transactions contemplated by this Agreement or the Indenture,
except the registration under the Act of the Securities and the shares
of Stock issuable upon conversion thereof, such as have been obtained
under the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the purchase
and distribution of the Securities by the Underwriters;
5
(k) Neither the Company nor any of its subsidiaries (i) is in
violation of its Certificate of Incorporation or By-laws or (ii) in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which
it is a party or by which it or any of its properties may be bound,
except in the case of (ii) above where such default would not have a
Material Adverse Effect and would not have an adverse effect on the
Company's ability to consummate the transactions contemplated hereby;
(l) The statements set forth in the Prospectus under the
captions "Description of Notes" and "Description of Capital Stock",
insofar as they purport to constitute a summary of the terms of the
Securities and the Stock, under the caption "Material United States
Federal Income Tax Consequences", and under the caption "Underwriting",
insofar as they purport to describe the provisions of the laws and
documents referred to therein, are accurate, complete and fair;
(m) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would individually
or in the aggregate have a Material Adverse Effect; and, to the best of
the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(n) The Company is not and, after giving effect to the
offering and sale of the Securities, will not be an "investment
company" or an entity "controlled" by an "investment company", as such
terms are defined in the Investment Company Act of 1940, as amended
(the "Investment Company Act");
(o) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida
Statutes;
(p) Xxxxxx Xxxxxxxx LLP, who has opined as to certain
financial statements of the Company and its subsidiaries, and KPMG LLP,
who has opined as to certain financial statements of RF Power Products,
Inc., are each independent public accountants as required by the Act
and the rules and regulations of the Commission thereunder;
(q) The Company has reviewed its operations and that of its
subsidiaries and has made reasonable inquiries of any third parties
with which the Company or any of its subsidiaries has a material
relationship to evaluate the extent to which the business or operations
of the Company or any of its subsidiaries will be affected by the Year
2000 Problem. As a result of such review, except as specifically
described in the Prospectus, the Company has no reason to believe, and
does not believe, that the Year 2000 Problem will
6
have a material adverse effect on the general affairs, management,
the current or future consolidated financial position, business,
prospects, stockholders' equity or results of operations of the
Company and its subsidiaries or result in any material loss or
interference with the Company's business or operations. The "Year
2000 Problem" as used herein means any significant risk that
computer hardware, firmware or software used in the receipt,
transmission, processing, manipulation, storage, retrieval,
retransmission or other utilization of data or in the operation of
mechanical or electrical systems of any kind will not, in the case
of dates or time periods occurring after December 31, 1999, function
at least as effectively as in the case of dates or time periods
occurring prior to January 1, 2000; and
(r) Neither the Company not any of its subsidiaries own any
real property.
2. Subject to the terms and conditions herein set forth, (a) the
Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company,
at a purchase price of ____% of the principal amount thereof, plus accrued
interest, if any, from ____________, 1999 to the First Time of Delivery
hereunder, the principal amount of Firm Securities set forth opposite the
name of such Underwriter in Schedule I hereto, and (b) in the event and to
the extent that the Underwriters shall exercise the election to purchase
Optional Securities as provided below, the Company agrees to issue and sell
to each of the Underwriters, and each of the Underwriters agrees, severally
and not jointly, to purchase from the Company, at the same purchase price set
forth in clause (a) of this Section 2, that portion of the aggregate
principal amount of the Optional Securities as to which such election shall
have been exercised (to be adjusted by you so as to eliminate fractions of
$_________), determined by multiplying such aggregate principal amount of
Optional Securities by a fraction, the numerator of which is the maximum
aggregate principal amount of Optional Securities which such Underwriter is
entitled to purchase as set forth opposite the name of such Underwriter in
Schedule I hereto and the denominator of which is the maximum aggregate
principal amount of Optional Securities which all of the Underwriters are
entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to $_________ aggregate principal amount of Optional
Securities, at the purchase price set forth in clause (a) of the first paragraph
of this Section 2, for the sole purpose of covering sale of Securities in excess
of the number of Firm Securities. Any such election to purchase Optional
Securities may be exercised by written notice from you to the Company, given
within a period of 30 calendar days after the date of this Agreement, setting
forth the aggregate principal amount of Optional Securities to be purchased and
the date on which such Optional Securities are to be delivered, as determined by
you but in no event earlier than the First Time of Delivery (as defined in
Section 4 hereof) or, unless you and the Company otherwise agree in writing,
earlier than two or later than ten business days after the date of such notice.
7
3. Upon the authorization by you of the release of the Firm Securities,
the several Underwriters propose to offer the Firm Securities for sale upon the
terms and conditions set forth in the Prospectus.
4. (a) The Securities to be purchased by each Underwriter
hereunder will be represented by one or more definitive global
Securities in book-entry form which will be deposited by or on
behalf of the Company with The Depository Trust Company ("DTC") or
its designated custodian. The Company will deliver the Securities to
Xxxxxxx, Xxxxx & Co., for the account of each Underwriter, against
payment by or on behalf of such Underwriter of the purchase price
therefor by wire transfer of Federal (same-day) funds to the account
specified by the Company to Xxxxxxx, Xxxxx & Co. at least
forty-eight hours in advance, by causing DTC to credit the
Securities to the account of Xxxxxxx, Xxxxx & Co. at DTC. The
Company will cause the certificates representing the Securities to
be made available to Xxxxxxx, Xxxxx & Co. for checking at least
twenty-four hours prior to the Time of Delivery (as defined below)
at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment shall be,
with respect to the Firm Securities, 9:30 a.m., New York City time,
on ____________, 1999 or such other time and date as Xxxxxxx, Xxxxx
& Co. and the Company may agree upon in writing, and, with respect
to the Optional Securities, 9:30 a.m., New York City time, on the
date specified by Xxxxxxx, Xxxxx & Co. in the written notice given
by Xxxxxxx, Xxxxx & Co. of the Underwriters' election to purchase
such Optional Securities, or such other time and date as Xxxxxxx,
Sachs & Co. and the Company may agree upon in writing. Such time and
date for delivery of the Firm Securities is herein called the "First
Time of Delivery", such time and date for delivery of the Optional
Securities, if not the First Time of Delivery, is herein called the
"Second Time of Delivery", and each such time and date for delivery
is herein called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by
or on behalf of the parties hereto pursuant to Section 7 hereof,
including the cross-receipt for the Securities and any additional
documents requested by the Underwriters pursuant to Section 7(k)
hereof, will be delivered at the offices of [Xxxx, Scholer, Fierman,
Xxxx & Handler, LLP, 1999 Avenue of the Xxxxx, Xxxxx 0000, Xxx Xxxxxxx,
Xxxxxxxxxx 00000] (the "Closing Location"), and the Securities will be
delivered at the Designated Office, all at such Time of Delivery. A
meeting will be held at the Closing Location at _______ p.m., New York
City time, on the New York Business Day next preceding such Time of
Delivery, at which meeting the final drafts of the documents to be
delivered pursuant to the preceding sentence will be available for
review by the parties hereto. For the purposes of this Section 4, "New
York Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in New York
City are generally authorized or obligated by law or executive order to
close.
8
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to
file such Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second business day
following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Act; to make no further amendment or any supplement to the
Registration Statement or Prospectus prior to such Time of Delivery
which shall be disapproved by you promptly after reasonable notice
thereof; to advise you, promptly after it receives notice thereof, of
the time when any amendment to the Registration Statement has been
filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish you with copies
thereof; to file timely all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long
as the delivery of a prospectus is required in connection with the
offering or sale of the Securities; to advise you, promptly after it
receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus, of the suspension of the
qualification of the Securities or the shares of Stock issuable upon
conversion of the Securities for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus or suspending any such
qualification, promptly to use its best efforts to obtain the
withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities and the shares of Stock
issuable upon conversion of the Securities for offering and sale under
the securities laws of such jurisdictions as you may request and to
comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary
to complete the distribution of the Securities, provided that in
connection therewith 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;
(c) Prior to 10:00 a.m., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time
to time, to furnish the Underwriters with copies of the Prospectus in
New York City in such quantities as you may reasonably request, and, if
the delivery of a prospectus is required at any time prior to the
expiration of nine months after the time of issue of the Prospectus in
connection with the offering or sale of the Securities and the shares
of Stock issuable upon conversion of the Securities and if at such time
any event shall have occurred as a result of which the
9
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary during such period to amend or supplement the Prospectus or
to file under the Exchange Act any document incorporated by reference
in the Prospectus in order to comply with the Act, the Exchange Act or
the Trust Indenture Act, to notify you and upon your request to file
such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as you may
from time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or
omission or effect such compliance; and in case any Underwriter is
required to deliver a prospectus in connection with sales of any of
the Securities and the shares of Stock issuable upon conversion of the
Securities at any time nine months or more after the time of issue of
the Prospectus, upon your request but at the expense of such
Underwriter, to prepare and deliver to such Underwriter as many copies
as you may request of an amended or supplemented Prospectus complying
with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon
as practicable, but in any event not later than eighteen months after
the effective date of the Registration Statement (as defined in Rule
158(c) under the Act), an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);
(e) During the period beginning from the date of the
Prospectus and continuing to and including the date 90 days after the
date of the Prospectus, not to offer, sell, contract to sell or
otherwise dispose of, except as provided hereunder any securities of
the Company that are substantially similar to the Securities or the
Stock, including but not limited to any securities that are convertible
into or exchangeable for, or that represent the right to receive, Stock
or any such substantially similar securities (other than pursuant to
employee stock option plans existing on, or upon the conversion or
exchange of convertible or exchangeable securities outstanding as of,
the date of this Agreement) and other than the shares of Stock sold to
the Underwriters pursuant to that certain Underwriting Agreement, dated
the date hereof, among the Company, the Selling Stockholders and
Xxxxxxx, Xxxxx & Co., BancBoston Xxxxxxxxx Xxxxxxxx and CIBC World
Markets, without your prior written consent;
(f) To furnish to the holders of the Securities as soon as
practicable after the end of each fiscal year an annual report
(including a balance sheet and statements of income, stockholders'
equity and cash flows of the Company and its consolidated subsidiaries
certified by independent public accountants) and, as soon as
practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the
effective date of the Registration Statement), to make available to the
holders of the
10
Securities consolidated summary financial information of the Company
and its subsidiaries for such quarter in reasonable detail;
(g) During a period of five years from the effective date of
the Registration Statement, to furnish to you copies of all reports or
other communications (financial or other) furnished to stockholders,
and to deliver to you (i) as soon as they are available, copies of any
reports and financial statements furnished to or filed with the
Commission or any national securities exchange on which the Securities
or any class of securities of the Company is listed; and (ii) such
additional information concerning the business and financial condition
of the Company as you may from time to time reasonably request (such
financial statements to be on a consolidated basis to the extent the
accounts of the Company and its subsidiaries are consolidated in
reports furnished to its stockholders generally or to the Commission);
(h) To use the net proceeds received by it from the sale of
the Securities pursuant to this Agreement in the manner specified in
the Prospectus under the caption "Use of Proceeds";
(i) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 P.M., Washington,
D.C. time, on the date of this Agreement, and the Company shall at the
time of filing either pay to the Commission the filing fee for the Rule
462(b) Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Act;
(j) To reserve and keep available at all times, free of
preemptive rights, shares of Stock for the purpose of enabling the
Company to satisfy any obligations to issue shares of its Stock upon
conversion of the Securities; and
(k) To use its best efforts to list for quotation, subject to
notice of issuance, the shares of Stock issuable upon conversion of the
Securities on the Nasdaq National Market ("NASDAQ").
6. The Company covenants and agrees with the several
Underwriters that the Company will pay or cause to be paid the following: (i)
the fees, disbursements and expenses of the Company's counsel and accountants
in connection with the registration of the Securities and the shares of Stock
issuable upon conversion of the Securities under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or
producing any Agreement among Underwriters, this Agreement, the Indenture,
the Blue Sky Memorandum, closing documents (including any compilations
thereof) and any other documents in connection with the
11
offering, purchase, sale and delivery of the Securities; (iii) all expenses
in connection with the qualification of the Securities and the shares of
Stock issuable upon conversion of the Securities for offering and sale under
state securities laws as provided in Section 5(b) hereof, including the fees
and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky and legal investment
surveys; (iv) any fees charged by securities rating services for rating the
Securities; (v) the filing fees incident to, and the fees and disbursements
of counsel for the Underwriters in connection with, any required review by
NASD Regulations, Inc. of the terms of the sale of the Securities; (vi) the
cost of preparing the Securities; (vii) the fees and expenses of the Trustee
and any agent of the Trustee and the fees and disbursements of counsel for
the Trustee in connection with the Indenture and the Securities; and (viii)
all other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section.
It is understood, however, that, except as provided in this Section, and
Sections 8 and 11 hereof, the Underwriters will pay all of their own costs
and expenses, including the fees of their counsel, transfer taxes on resale
of any of the Securities by them, and any advertising expenses connected with
any offers they may make.
7. The obligations of the Underwriters hereunder, as to the
Securities to be delivered at each Time of Delivery, shall be subject, in
their discretion, to the condition that all representations and warranties
and other statements of the Company herein are, at and as of such Time of
Delivery, true and correct, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, and
the following additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in
accordance with Section 5(a) hereof; if the Company has elected to rely
upon Rule 462(b), the Rule 462(b) Registration Statement shall have
become effective by 10:00 P.M., Washington, D.C. time, on the date of
this Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened
by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Xxxx, Scholer, Xxxxxxx, Xxxx & Handler, LLP, counsel for
the Underwriters, shall have furnished to you such written opinion or
opinions (a draft of each such opinion is attached as Xxxxx XX(a)
hereto), dated such Time of Delivery, with respect to the matters
covered in paragraphs (i), (ii), (vii), (viii), (ix) and (xvi) of
subsection (c) below as well as such other related matters as you may
reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass
upon such matters;
(c) Xxxxxx Xxxx & Priest LLP, counsel for the Company, shall
have furnished to you their written opinion (a draft of such opinion is
attached as Xxxxx XX(b) hereto), dated such Time of Delivery, in form
and substance satisfactory to you, to the effect that:
12
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing
under the laws of the State of Delaware. The Company
has the corporate power and authority to own its
properties and conduct its business as described in
the Prospectus;
(ii) The Company has an authorized capitalization as
set forth in the Prospectus, and all of the issued
shares of capital stock of the Company have been duly
and validly authorized and issued and are fully paid
and non-assessable; and the shares of Stock initially
issuable upon conversion of the Securities have been
duly and validly authorized and reserved for issuance
and, when issued and delivered in accordance with the
provisions of the Securities and the Indenture, will
be duly and validly issued and fully paid and
non-assessable, and will conform, in all material
respects, to the description of the Stock contained
in the Prospectus;
(iii) The Company is duly qualified as a foreign
corporation for the transaction of business and is in
good standing under the laws of each jurisdiction in
which it owns or leases properties or conducts any
business so as to require such qualification except
where the failure to be so qualified or in good
standing would not, individually or in the aggregate,
have a Material Adverse Effect (such counsel being
entitled to rely in respect of the opinion in this
clause upon opinions of local counsel and in respect
of matters of fact upon certificates of officers of
the Company, provided that such counsel shall state
that they believe that both you and they are
justified in relying upon such opinions and
certificates);
(iv) Each subsidiary of the Company organized under
the laws of the United States, any state of the
United States or the District of Columbia (a
"Domestic Subsidiary") has been duly incorporated and
is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation;
and all of the issued shares of capital stock of each
Domestic Subsidiary have been duly and validly
authorized and issued, are fully paid and
non-assessable, and are owned directly or indirectly
by the Company, free and clear of all liens,
encumbrances, equities or claims (such counsel being
entitled to rely in respect of the opinion in this
clause upon opinions of local counsel and in respect
of matters of fact upon certificates of officers of
the Company or its subsidiaries, provided that such
counsel shall state that they believe that both you
and they are justified in relying upon such opinions
and certificates);
(v) To such counsel's knowledge, the manufacturing
facilities located at 0000 Xxxxx Xxxxx Xxxxx, Xxxx
Xxxxxxx, Xxxxxxxx and 0000 Xxxxxx Xxx Xxxxx,
Xxxxxxxx, Xxx Xxxxxx held under lease by the Company
and RF Power Products, Inc. (the "Principal
13
Subsidiary") are held by them under valid,
subsisting and enforceable leases, except as such
enforcement may be limited by bankruptcy and with
such exceptions as are not material and do not
interfere with the use made and proposed to be
made of such property and buildings by the Company
and the Principal Subsidiary (in giving the
opinion in this clause, such counsel may state
that no examination of record titles for the
purpose of such opinion has been made, and that
they are relying upon a general review of the
titles of the Company and the Principal
Subsidiary, upon opinions of local counsel and
abstracts, reports and policies of title companies
rendered or issued at or subsequent to the time of
acquisition of such property by the Company or the
Principal Subsidiary, upon opinions of counsel to
the lessors of such property and, in respect of
matters of fact, upon certificates of officers of
the Company or its subsidiaries, provided that
such counsel shall state that they believe that
both you and they are justified in relying upon
such opinions, abstracts, reports, policies and
certificates);
(vi) To the best of such counsel's knowledge and
other than as set forth in the Prospectus, there
are no legal or governmental proceedings pending
to which the Company or any of its subsidiaries is
a party or of which any property of the Company or
any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its
subsidiaries, would, individually or in the
aggregate, have a Material Adverse Effect; and, to
the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(vii) This Agreement has been duly authorized,
executed and delivered by the Company;
(viii) The Securities have been duly authorized,
executed, authenticated, issued and delivered and
constitute valid and legally binding obligations
of the Company entitled to the benefits provided
by the Indenture; and the Securities and the
Indenture conform to the descriptions thereof in
the Prospectus;
(ix) The Indenture has been duly authorized, executed
and delivered by the parties thereto and constitutes
a valid and legally binding instrument, enforceable
in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency,
reorganization and other laws of general
applicability relating to or affecting creditors'
rights and to general equity principles; and the
Indenture has been duly qualified under the Trust
Indenture Act;
(x) The issue and sale of the Securities being issued
and sold at such Time of Delivery and the compliance
by the Company with all of the
14
provisions of the Securities, the Indenture and
this Agreement and the consummation of the
transactions herein and therein contemplated will
not conflict with or result in a breach or
violation of any of the terms or provisions of, or
constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to
which the Company or any of its subsidiaries is a
party or by which the Company or any of its
subsidiaries is bound or to which any of the
property or assets of the Company or any of its
subsidiaries is subject, except in each case,
breaches, violations or defaults which,
individually or in the aggregate, would not have a
Material Adverse Effect and would not have an
adverse effect on the Company's ability to
consummate the transactions contemplated hereby,
nor will such actions result in any violation of
the provisions of the Certificate of Incorporation
or By-laws of the Company or any statute or any
order, rule or regulation of any court or
governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or any
of their properties;
(xi) No consent, approval, authorization, order,
registration or qualification of or with any such
court or governmental agency or body is required for
the issue and sale of the Securities being issued at
such Time of Delivery or the consummation by the
Company of the transactions contemplated by this
Agreement or the Indenture, except such as have been
obtained under the Act and the Trust Indenture Act,
such as have been obtained under the Act in
connection with the shares of Stock issuable upon
conversion of the Securities and such consents,
approvals, authorizations, registrations or
qualifications as may be required under state
securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the
Underwriters;
(xii) Neither the Company nor any of its Domestic
Subsidiaries is (A) in violation of its Certificate
of Incorporation or By-laws or (B) in default in the
performance or observance of any obligation,
agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement,
lease or other agreement or instrument known to such
counsel to which it is a party or by which it or any
of its properties may be bound, except in the case of
(B) where such default (1) would not have a Material
Adverse Effect and (2) would not have an adverse
effect on the Company's ability to consummate the
transactions contemplated hereby (such counsel being
entitled to rely in respect of the opinion in this
clause upon opinions of local counsel and in respect
of matters of fact upon certificates of officers of
the Company or its Domestic Subsidiaries, provided
that such counsel shall
15
state that they believe that both you and they are
justified in relying upon such opinions and
certificates);
(xiii) The statements set forth in the Prospectus
under the captions "Description of Convertible Notes"
and "Description of Capital Stock", insofar as they
purport to constitute a summary of the terms of the
Securities and the Stock, under the caption "Material
United States Federal Income Tax Consequences", and
under the caption "Underwriting", insofar as they
purport to describe the provisions of the laws and
documents referred to therein, are accurate, complete
and fair in all material respects;
(xiv) The Company is not an "investment company" or
an entity "controlled" by an "investment company", as
such terms are defined in the Investment Company Act;
(xv) The documents incorporated by reference in the
Prospectus or any further amendment or supplement
thereto made by the Company prior to the Time of
Delivery (other than the financial statements and
related schedules therein, as to which such counsel
need express no opinion), when they became effective
or were filed with the Commission, as the case may
be, complied as to form in all material respects with
the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the
Commission thereunder; and they have no reason to
believe that any of such documents, when such
documents became effective or were so filed, as the
case may be, contained, in the case of a registration
statement which became effective under the Act, an
untrue statement of a material fact, or omitted to
state a material fact required to be stated therein
or necessary to make the statements therein not
misleading, or, in the case of other documents which
were filed under the Act or the Exchange Act with the
Commission, an untrue statement of a material fact or
omitted to state a material fact necessary in order
to make the statements therein, in the light of the
circumstances under which they were made when such
documents were so filed, not misleading; and
(xvi) The Registration Statement and the Prospectus
and any further amendments and supplements thereto
made by the Company prior to such Time of Delivery
(other than the financial statements and related
schedules therein, as to which such counsel need
express no opinion) comply as to form in all material
respects with the requirements of the Act and the
Trust Indenture Act and the rules and regulations
thereunder; although they do not assume any
responsibility for the accuracy, completeness or
fairness of the statements contained in the
Registration Statement or the Prospectus, except for
those referred to in the opinion in subsection (xiii)
of this Section 7(c),
16
they have no reason to believe that, as of its
effective date, the Registration Statement or any
further amendment thereto made by the Company
prior to such Time of Delivery (other than the
financial statements and related schedules
therein, as to which such counsel need express no
opinion) contained an untrue statement of a
material fact or omitted to state a material fact
required to be stated therein or necessary to make
the statements therein not misleading or that, as
of its date, the Prospectus or any further
amendment or supplement thereto made by the
Company prior to such Time of Delivery (other than
the financial statements and related schedules
therein, as to which such counsel need express no
opinion) contained an untrue statement of a
material fact or omitted to state a material fact
necessary to make the statements therein, in the
light of the circumstances under which they were
made, not misleading or that, as of such Time of
Delivery, either the Registration Statement or the
Prospectus or any further amendment or supplement
thereto made by the Company prior to such Time of
Delivery (other than the financial statements and
related schedules therein, as to which such
counsel need express no opinion) contains an
untrue statement of a material fact or omits to
state a material fact necessary to make the
statements therein, in the light of the
circumstances under which they were made, not
misleading; and they do not know of any amendment
to the Registration Statement required to be filed
or of any contracts or other documents of a
character required to be filed as an exhibit to
the Registration Statement or required to be
incorporated by reference into the Prospectus or
required to be described in the Registration
Statement or the Prospectus which are not filed or
incorporated by reference or described as required;
(d) [(i)] On the date of the Prospectus at a time
prior to the execution of this Agreement, at 9:30
a.m., New York City time, on the effective date of
any post-effective amendment to the Registration
Statement filed subsequent to the date of this
Agreement and also at each Time of Delivery,
Xxxxxx Xxxxxxxx LLP shall have furnished to you a
letter or letters, dated the respective dates of
delivery thereof, in form and substance
satisfactory to you, to the effect set forth in
Annex I hereto (the executed copy of the letter
delivered prior to the execution of this Agreement
is attached as Annex I(a) hereto and a draft of
the form of letter to be delivered on the
effective date of any post-effective amendment to
the Registration Statement and as of each Time of
Delivery is attached as Annex I(b) hereto);
[(ii) On the date of the Prospectus at a time prior
to the execution of this Agreement, at 9:30 a.m., New
York City time, on the effective date of any
post-effective amendment to the Registration
Statement filed subsequent to the date of this
Agreement and also at each Time of Delivery, KPMG LLP
17
shall have furnished to you a letter or letters,
dated the respective dates of delivery thereof, in
form and substance satisfactory to you, to the effect
set forth in Annex II hereto (the executed copy of
the letter delivered prior to the execution of this
Agreement is attached as Annex II(a) hereto and a
draft of the form of letter to be delivered on the
effective date of any post-effective amendment to the
Registration Statement and as of each Time of
Delivery is attached as Annex II(b) hereto;]
(e) (i) Neither the Company nor any of its
subsidiaries shall have sustained since the date of the latest
audited financial statements included or incorporated by reference
in the Prospectus any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated
in the Prospectus, and (ii) since the respective dates as of which
information is given in the Prospectus there shall not have been any
change in the capital stock, capital lease obligations or long-term
debt of the Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting the
general affairs, management, financial position, stockholders'
equity or results of operations of the Company and its subsidiaries,
taken as a whole, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in
clause (i) or (ii), is in the judgment of Xxxxxxx, Xxxxx & Co., as
representatives of the Underwriters, so material (to the Company and
its subsidiaries taken as a whole) and adverse as to make it
impracticable or inadvisable to proceed with the public offering or
the delivery of the Securities being issued at such Time of Delivery
on the terms and in the manner contemplated in the Prospectus;
(f) On or after the date hereof (i) no downgrading
shall have occurred in the rating accorded the Company's debt
securities by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its
rating of any of the Company's debt securities;
(g) On or after the date hereof there shall not have
occurred any of the following: (i) a suspension or material
limitation in trading in securities generally on the New York Stock
Exchange or on NASDAQ; (ii) a suspension or material limitation in
trading in the Company's securities on NASDAQ; (iii) a general
moratorium on commercial banking activities declared by either
Federal or New York State authorities; or (iv) the outbreak or
escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if
the effect of any such event specified in this clause (iv) in the
judgment of Xxxxxxx, Xxxxx & Co. makes it impracticable or
inadvisable to proceed with the public offering or the delivery of
the Securities being issued at such Time of Delivery on the terms
and in the manner contemplated in the Prospectus;
18
(h) The shares of Stock issuable upon conversion of the
Securities shall have been duly listed for quotation, subject to notice
of issuance, on NASDAQ;
(i) The Company has obtained and delivered to the
Underwriters executed copies of an agreement from each of the
officers and directors of the Company, substantially to the effect
set forth in Exhibit A attached hereto and incorporated herein by
this reference;
(j) The Company shall have complied with the
provisions of Section 5(c) hereof with respect to the furnishing of
prospectuses on the New York Business Day next succeeding the date
of this Agreement; and
(k) The Company shall have furnished or caused to be
furnished to you at such Time of Delivery certificates of officers
of the Company satisfactory to you as to the accuracy of the
representations and warranties of the Company herein at and as of
such Time of Delivery, as to the performance by the Company of all
of its obligations hereunder to be performed at or prior to such
Time of Delivery, as to the matters set forth in subsections (a) and
(e) of this Section and as to such other matters as you may
reasonably request.
8 (a) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such action or claim as such
expenses are incurred; PROVIDED, HOWEVER, that the Company shall not
be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished
to the Company by any Underwriter through Xxxxxxx, Xxxxx & Co.
expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which the
Company may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or
19
necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission
was made in any Preliminary Prospectus, the Registration Statement or
the Prospectus or any such amendment or supplement in reliance upon and
in conformity with written information furnished to the Company by such
Underwriter through Xxxxxxx, Xxxxx & Co. expressly for use therein; and
will reimburse the Company for any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending
any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection, notify
the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and, after notice from the indemnifying party
to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal expenses of other counsel or
any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without
the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to,
any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not
the indemnified party is an actual or potential party to such action or
claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other from
the offering of the Securities. If, however, the allocation provided by
the immediately preceding sentence is not permitted by applicable law
or if the indemnified party failed to give the notice required
20
under subsection (c) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the
one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims,
damages or liabilities (or actions in respect thereof), as well as
any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by
the Company bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault shall be
determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information
supplied by the Company on the one hand or the Underwriters on the
other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this subsection
(d) were determined by PRO RATA allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of
the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this subsection (d) to contribute are
several in proportion to their respective underwriting obligations
and not joint.
(e) The obligations of the Company under this Section 8 shall
be in addition to any liability which the Company may otherwise have
and shall extend, upon the same terms and conditions, to each person,
if any, who controls any Underwriter within the meaning of the Act; and
the obligations of the Underwriters under this Section 8 shall be in
addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to
each officer and director of the Company and to each person, if any,
who controls the Company within the meaning of the Act.
21
9 (a) If any Underwriter shall default in its obligation to
purchase the Securities which it has agreed to purchase hereunder at
a Time of Delivery, you may in your discretion arrange for you or
another party or other parties to purchase such Securities on the
terms contained herein. If within thirty-six hours after such
default by any Underwriter you do not arrange for the purchase of
such Securities, then the Company shall be entitled to a further
period of thirty-six hours within which to procure another party or
other parties satisfactory to you to purchase such Securities on
such terms. In the event that, within the respective prescribed
periods, you notify the Company that you have so arranged for the
purchase of such Securities, or the Company notifies you that it has
so arranged for the purchase of such Securities, you or the Company
shall have the right to postpone such Time of Delivery for a period
of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or arrangements, and the
Company agrees to file promptly any amendments to the Registration
Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like
effect as if such person had originally been a party to this
Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the
purchase of the Securities of a defaulting Underwriter or Underwriters
by you and the Company as provided in subsection (a) above, the
aggregate principal amount of such Securities which remains unpurchased
does not exceed one-eleventh of the aggregate principal amount of all
the Securities to be purchased at such Time of Delivery, then the
Company shall have the right to require each non-defaulting Underwriter
to purchase the principal amount of Securities which such Underwriter
agreed to purchase hereunder at such Time of Delivery and, in addition,
to require each non-defaulting Underwriter to purchase its pro rata
share (based on the principal amount of Securities which such
Underwriter agreed to purchase hereunder) of the Securities of such
defaulting Underwriter or Underwriters for which such arrangements have
not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Securities of a defaulting Underwriter or Underwriters
by you and the Company as provided in subsection (a) above, the
aggregate principal amount of such Securities which remains unpurchased
exceeds one-eleventh of the aggregate principal amount of all of the
Securities to be purchased at such Time of Delivery, or if the Company
shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Securities of a
defaulting Underwriter or Underwriters, then this Agreement (or, with
respect to the Second Time of Delivery, the obligations of the
Underwriters to purchase and of the Company to sell the Optional
Securities) shall thereupon terminate, without liability on the part of
any non-defaulting Underwriter or the Company, except for the expenses
to be borne by the Company and the Underwriters as provided in Section
6 hereof and the indemnity and
22
contribution agreements in Section 8 hereof; but nothing herein shall
relieve a defaulting Underwriter from liability for its default.
10 The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters,
as set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless
of any investigation (or any statement as to the results thereof) made by or
on behalf of any Underwriter or any controlling person of any Underwriter, or
the Company, or any officer or director or controlling person of the Company,
and shall survive delivery of and payment for the Securities.
11 If this Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
except as provided in Sections 6 and 8 hereof; but, if for any other reason,
any Securities are not delivered by or on behalf of the Company as provided
herein, the Company will reimburse the Underwriters through you for all
out-of-pocket expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of the Securities, but the
Company shall then be under no further liability to any Underwriter except in
respect of the Securities as provided in Sections 6 and 8 hereof.
12 In all dealings hereunder, you shall act on behalf of each
of the Underwriters, and the parties hereto shall be entitled to act and rely
upon any statement, request, notice or agreement on behalf of any Underwriter
made or given by you.
All statements, requests, notices and agreements hereunder shall be
in writing, and if to the Underwriters shall be delivered or sent by mail,
telex or facsimile transmission to you as the representatives at 00 Xxx Xxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration Department; and
if to the Company shall be delivered or sent by mail, telex or facsimile
transmission to the address of the Company set forth in the Registration
Statement, Attention: Secretary; provided, however, that any notice to an
Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by you upon
request. Any such statements, requests, notices or agreements shall take
effect upon receipt thereof.
13 This Agreement shall be binding upon, and inure solely to
the benefit of, the Underwriters, the Company and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and each
person who controls the Company or any Underwriter, and their respective
heirs, executors, administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement. No
purchaser of any of the Securities from any Underwriter shall be deemed a
successor or assign by reason merely of such purchase.
23
14 Time shall be of the essence of this Agreement. As used
herein, the term "business day" shall mean any day when the Commission's
office in Washington, D.C. is open for business.
15 THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO
ANY CHOICE OF LAW PROVISIONS THEREOF.
16 This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such counterparts shall together constitute one
and the same instrument.
If the foregoing is in accordance with your understanding, please
sign and return to us four counterparts hereof, and upon the acceptance
hereof by you, on behalf of each of the Underwriters, this letter and such
acceptance hereof shall constitute a binding agreement among each of the
Underwriters and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in a form of Agreement among Underwriters, the form of which shall be
submitted to the Company for examination upon request, but without warranty
on your part as to the authority of the signers thereof.
Very truly yours,
ADVANCED ENERGY INDUSTRIES, INC.
By:
------------------------------
Name:
Title:
Accepted as of the date hereof:
XXXXXXX, XXXXX & CO.
By:
----------------------------------
Name:
Title:
24
SCHEDULE I
PRINCIPAL
PRINCIPAL AMOUNT OF
AMOUNT OF OPTIONAL SECURITIES
FIRM SECURITIES TO BE PURCHASED
TO BE IF MAXIMUM OPTION
UNDERWRITER PURCHASED EXERCISED
----------- --------- ---------
Xxxxxxx, Xxxxx & Co. $ $
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Banc of America Securities LLC
------------------- ---------------------
Total $ $
------------------- ---------------------
------------------- ---------------------
25
