Advanced Energy Industries,
Inc.
New York, New York
August 11, 2005
To the
Representatives
named in Schedule I
hereto of the Under-
writers named in
Schedule II hereto
Advanced Energy
Industries, Inc., a corporation organized under the laws of the
state of Delaware (the “Company”), proposes to sell to
the several underwriters named in Schedule II hereto (the
“Underwriters”), for whom you (the
“Representatives”) are acting as representatives, the
number of shares of common stock, $0.001 par value (“Common
Stock”), of the Company set forth in Schedule I hereto
(such shares to be issued and sold by the Company being hereinafter
called the “Underwritten Securities”). The Company also
proposes to grant to the Underwriters an option to purchase up to
the number of additional shares of Common Stock set forth in
Schedule II hereto to cover over-allotments (the “Option
Securities,” and together with the Underwritten Securities,
the “Securities”). Any reference herein to the
Registration Statement, the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 which were filed under the Exchange Act on
or before the Effective Date of the Registration Statement or the
issue date of the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus, as the case may be; and any
reference herein to the terms “amend”,
“amendment” or “supplement” with respect to
the Registration Statement, the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus shall be deemed to refer
to and include the filing of any document under the Exchange Act
after the Effective Date of the Registration Statement or the issue
date of the Basic Prospectus, any Preliminary Final Prospectus or
the Final Prospectus, as the case may be, deemed to be incorporated
therein by reference. Certain terms used herein are defined in
Section 17 hereof.
1.
Representations and Warranties. The Company represents and
warrants to, and agrees with, each Underwriter as set forth below
in this Section 1.
(a) The Company
meets the requirements for use of Form S-3 under the Act and has
prepared and filed with the Commission a registration
statement (the
file number of which is set forth in Schedule I hereto) on
Form S-3, including a related basic prospectus, for registration
under the Act of the offering and sale of the Securities. The
Company may have filed one or more amendments thereto, including a
Preliminary Final Prospectus, each of which has previously been
furnished to you. The Company will next file with the Commission
one of the following: (1) after the Effective Date of such
registration statement, a final prospectus supplement relating to
the Securities in accordance with Rules 430A and 424(b),
(2) prior to the Effective Date of such registration
statement, an amendment to such registration statement (including
the form of final prospectus supplement) or (3) a final
prospectus in accordance with Rules 415 and 424(b). In the
case of clause (1), the Company has included in such registration
statement, as amended at the Effective Date, all information (other
than Rule 430A Information) required by the Act and the rules
thereunder to be included in such registration statement and the
Final Prospectus. As filed, such final prospectus supplement or
such amendment and form of final prospectus supplement shall
contain all Rule 430A Information, together with all other
such required information, and, except to the extent the
Representatives shall agree in writing to a modification, shall be
in all substantive respects in the form furnished to you prior to
the Execution Time or, to the extent not completed at the Execution
Time, shall contain only such specific additional information and
other changes (beyond that contained in the Basic Prospectus and
any Preliminary Final Prospectus) as the Company has advised you,
prior to the Execution Time, will be included or made therein. The
Registration Statement, at the Execution Time, meets the
requirements set forth in Rule 415(a)(1)(x).
(b) On the
Effective Date, the Registration Statement did or will, and when
the Final Prospectus is first filed (if required) in accordance
with Rule 424(b) and on the Closing Date (as defined herein) and on
any date on which Option Securities are purchased, if such date is
not the Closing Date (a “settlement date”), the Final
Prospectus (and any supplement thereto) will, comply in all
material respects with the applicable requirements of the Act and
the Exchange Act and the respective rules thereunder; on the
Effective Date and at the Execution Time, the Registration
Statement did not or will not contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein
not misleading; and, on the Effective Date, the Final Prospectus,
if not filed pursuant to Rule 424(b), will not, and on the
date of any filing pursuant to Rule 424(b) and on the Closing Date
and any settlement date, the Final Prospectus (together with any
supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided ,
however , that the Company makes no representations or
warranties as to the information contained in or omitted from the
Registration Statement or the Final Prospectus (or any supplement
thereto)
in reliance
upon and in conformity with information furnished in writing to the
Company by or on behalf of any Underwriter through the
Representatives specifically for inclusion in the Registration
Statement or the Final Prospectus (or any supplement
thereto).
(c) Each of the
Company and its subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the jurisdiction in which it is chartered or organized with full
corporate power and authority to own or lease, as the case may be,
and to operate its properties and conduct its business as described
in the Final Prospectus, and is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each
jurisdiction which requires such qualification, and in which the
failure to qualify would have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business
or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary
course of business. The Company is duly qualified to do business as
a foreign corporation and is in good standing under the laws of the
states of California, Colorado and Texas.
(d) All the
outstanding shares of capital stock of each subsidiary have been
duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Final
Prospectus, all outstanding shares of capital stock of the
subsidiaries are owned by the Company either directly or through
wholly owned subsidiaries free and clear of any perfected security
interest or any other security interests, claims, liens or
encumbrances.
(e) The
Company’s authorized equity capitalization is as set forth in
the Final Prospectus; the capital stock of the Company conforms in
all material respects to the description thereof contained in the
Final Prospectus; the outstanding shares of Common Stock have been
duly and validly authorized and issued and are fully paid and
nonassessable; the Securities have been duly and validly
authorized, and, when issued and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be fully paid and
nonassessable; the Securities are duly listed, and admitted and
authorized for trading, subject to official notice of issuance, on
the Nasdaq National Market; the certificates for the Securities are
in valid and sufficient form; and the holders of outstanding shares
of capital stock of the Company are not entitled to preemptive or
other rights to subscribe for the Securities; and, except as set
forth in the Final Prospectus, no options, warrants or other rights
to purchase, agreements or other obligations to issue, or rights to
convert any obligations into or exchange any securities for, shares
of capital stock of or ownership interests in the Company are
outstanding.
(f) There is no
franchise, contract or other document of a character required to be
described in the Registration Statement or Final Prospectus, or to
be filed as an exhibit thereto, which is not described or filed as
required; and the statements in the Basic Prospectus under the
headings “Description of Capital Stock” and “Plan
of Distribution”, the statements in the Final Prospectus
under the headings “Risk Factors” and
“Underwriting”, and the statements in the
Company’s Quarterly Report on Form 10-Q filed with the
Commission on August 9, 2005 (the “Quarterly
Report”) under the headings “Controls and
Procedures,” “Legal Proceedings,” and
“Management’s Discussion and Analysis of Financial
Condition and Results of Operations — Risk and
Uncertainties” insofar as such statements summarize legal
matters, agreements, documents or proceedings discussed therein,
are accurate and fair summaries of such legal matters, agreements,
documents or proceedings.
(g) This Agreement
has been duly authorized, executed and delivered by the
Company.
(h) The Company is
not and, after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described
in the Prospectus, will not be an “investment company”
as defined in the Investment Company Act of 1940, as
amended.
(i) No consent,
approval, authorization, filing with or order of any court or
governmental agency or body is required in connection with the
transactions contemplated herein, except such as have been obtained
under the Act and such as may be required under the blue sky laws
of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner
contemplated herein and in the Final Prospectus.
(j) Neither the
issue and sale of the Securities nor the consummation of any other
of the transactions herein contemplated nor the fulfillment of the
terms hereof will conflict with, result in a breach or violation
of, or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its Significant
Subsidiaries pursuant to, (i) the charter or by-laws of the
Company or any of its Significant Subsidiaries, (ii) the terms
of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which the Company or any of
its subsidiaries is a party or bound or to which its or their
property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or
any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or any of its
Significant Subsidiaries or any of its or their properties, and
that in the case of (ii) and (iii) above, that would have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and
its
subsidiaries,
taken as a whole, whether or not arising from transactions in the
ordinary course of business.
(k) No holders of
securities of the Company have rights to the registration of such
securities under the Registration Statement.
(l) The
consolidated historical financial statements and schedules of the
Company and its consolidated subsidiaries included in the Final
Prospectus and the Registration Statement present fairly in all
material respects the financial condition, results of operations
and cash flows of the Company as of the dates and for the periods
indicated, comply as to form with the applicable accounting
requirements of the Act and have been prepared in conformity with
generally accepted accounting principles applied on a consistent
basis throughout the periods involved (except as otherwise noted
therein). The selected financial data set forth under the caption
“Summary Consolidated Financial Statements” in the
Final Prospectus fairly present, on the basis stated in the Final
Prospectus, the information included therein.
(m) No action,
suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of
its subsidiaries or its or their property is pending or, to the
best knowledge of the Company, threatened that could reasonably be
expected to have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Final
Prospectus (exclusive of any supplement thereto).
(n) Each of the
Company and each of its Significant Subsidiaries owns or leases all
such properties as are necessary to the conduct of its operations
as presently conducted.
(o) Neither the
Company nor any Significant Subsidiary is in violation or default
of (i) any provision of its charter or bylaws, (ii) the
terms of any indenture, contract, lease, mortgage, deed of trust,
note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which it is a party or bound
or to which its property is subject, or (iii) any statute,
law, rule, regulation, judgment, order or decree of any court,
regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company
or such Significant Subsidiary or any of its properties, as
applicable, any of which defaults or violations described in
clauses (ii) through (iii) will have, or after any
required notice and passage of any applicable grace period, would
have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties
of
the Company and
its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business.
(p) Each of Grant
Thornton LLP and KPMG LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and
delivered their report with respect to the audited consolidated
financial statements and schedules included in the Final
Prospectus, are independent public accountants with respect to the
Company within the meaning of the Act and the applicable published
rules and regulations thereunder.
(q) There are no
transfer taxes or other similar fees or charges under Federal law
or the laws of any state, or any political subdivision thereof,
required to be paid in connection with the execution and delivery
of this Agreement or the issuance by the Company or sale by the
Company of the Securities.
(r) The Company
has filed all foreign, federal, state and local tax returns that
are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have
a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto)) and has paid all taxes
required to be paid by it and any other assessment, fine or penalty
levied against it, to the extent that any of the foregoing is due
and payable, except for any such assessment, fine or penalty that
is currently being contested in good faith or as would not have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(s) No labor
problem or dispute with the employees of the Company or any of its
Significant Subsidiaries exists or is threatened or imminent, and
the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or its Significant
Subsidiaries’ principal suppliers, contractors or customers,
that could have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Final
Prospectus (exclusive of any supplement thereto).
(t) The Company
and each of its Significant Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks
and
in such amounts
as are prudent and customary in the businesses in which they are
engaged; all policies of insurance and fidelity or surety bonds
insuring the Company or any of its Significant Subsidiaries or
their respective businesses, assets, employees, officers and
directors are in full force and effect; the Company and its
Significant Subsidiaries are in compliance with the terms of such
policies and instruments in all material respects; and there are no
claims by the Company or any of its Significant Subsidiaries under
any such policy or instrument as to which any insurance company is
denying liability or defending under a reservation of rights
clause; neither the Company nor any such Significant Subsidiary has
been refused any insurance coverage sought or applied for; and
neither the Company nor any such Significant Subsidiary has any
reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not have a material
adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(u) No subsidiary
of the Company is currently prohibited, directly or indirectly,
from paying any dividends to the Company, from making any other
distribution on such subsidiary’s capital stock, from
repaying to the Company any loans or advances to such subsidiary
from the Company or from transferring any of such
subsidiary’s property or assets to the Company or any other
subsidiary of the Company, except as described in or contemplated
by the Final Prospectus (exclusive of any supplement
thereto).
(v) The Company
and its subsidiaries possess all licenses, certificates, permits
and other authorizations issued by the appropriate federal, state
or foreign regulatory authorities necessary to conduct their
respective businesses, and neither the Company nor any such
subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization
or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a material
adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(w) The Company
and each of its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with
management’s general or specific authorizations; (ii)
transactions are recorded as necessary to permit
preparation of
financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and
(iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences except as set forth in or
contemplated in the Final Prospectus (exclusive of any supplement
thereto).
(x) The Company
has not taken, directly or indirectly, any action designed to or
that would constitute or that might reasonably be expected to cause
or result in, under the Exchange Act or otherwise, stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(y) The Company
and its subsidiaries are (i) in compliance with any and all
applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants
or contaminants (“Environmental Laws”), (ii) have
received and are in compliance with all permits, licenses or other
approvals required of them under applicable Environmental Laws to
conduct their respective businesses and (iii) have not
received notice of any actual or potential liability under any
environmental law, except where such non-compliance with
Environmental Laws, failure to receive required permits, licenses
or other approvals, or liability would not, individually or in the
aggregate, have a material adverse change in the condition
(financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Final
Prospectus (exclusive of any supplement thereto). Except as set
forth in the Final Prospectus, neither the Company nor any of the
subsidiaries has been named as a “potentially responsible
party” under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended.
(z) In the
ordinary course of its business, the Company periodically reviews
the effect of Environmental Laws on the business, operations and
properties of the Company and its subsidiaries, in the course of
which it identifies and evaluates associated costs and liabilities
(including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or
compliance with Environmental Laws, or any permit, license or
approval, any related constraints on operating activities and any
potential liabilities to third parties). On the basis of such
review, the Company has reasonably concluded that such associated
costs and liabilities would not, singly or in the aggregate, have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the
Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(aa) The minimum
funding standard under Section 302 of the Employee Retirement
Income Security Act of 1974, as amended, and the regulations and
published interpretations thereunder (“ERISA”), has
been satisfied by each “pension plan” (as defined in
Section 3(2) of ERISA) which has been established or
maintained by the Company and/or one or more of its subsidiaries,
and the trust forming part of each such plan which is intended to
be qualified under Section 401 of the Code is so qualified;
each of the Company and its subsidiaries has fulfilled its
obligations, if any, under Section 515 of ERISA; neither the
Company nor any of its subsidiaries maintains or is required to
contribute to a “welfare plan” (as defined in
Section 3(1) of ERISA) which provides for retiree or other
post employment welfare benefits or insurance coverage (other than
“continuation coverage” (as defined in Section 602
of ERISA)); each pension plan and welfare plan established or
maintained by the Company and/or one or more of its subsidiaries is
in compliance in all material respects with the currently
applicable provisions of ERISA; and neither the Company nor any of
its subsidiaries has incurred or could reasonably be expected to
incur any withdrawal liability under Section 4201 of ERISA,
any liability under Section 4062, 4063, or 4064 of ERISA, or
any other liability under Title IV of ERISA.
(bb) There is and
has been no failure on the part of the Company and any of the
Company’s directors or officers, in their capacities as such,
to comply with any provision of the Sarbanes Oxley Act of 2002 and
the rules and regulations promulgated in connection therewith (the
“Sarbanes Oxley Act”), including Section 402
related to loans and Sections 302 and 906 related to
certifications.
(cc) Neither the
Company nor any of its Significant Subsidiaries nor, to the
knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its Significant Subsidiaries is
aware of or has taken any action, directly or indirectly, that
would result in a violation by such Persons of the FCPA, including,
without limitation, making use of the mails or any means or
instrumentality of interstate commerce corruptly in furtherance of
an offer, payment, promise to pay or authorization of the payment
of any money, or other property, gift, promise to give, or
authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the
FCPA) or any foreign political party or official thereof or any
candidate for foreign political office, in contravention of the
FCPA and the Company, its Significant Subsidiaries and, to the
knowledge of the Company, its affiliates have conducted their
businesses in compliance with the FCPA and have
instituted and
maintain policies and procedures designed to ensure, and which are
reasonably expected to continue to ensure, continued compliance
therewith.
“FCPA”
means Foreign Corrupt Practices Act of 1977, as amended, and the
rules and regulations thereunder.
(dd) The
operations of the Company and its Significant Subsidiaries are and
have been conducted at all times in compliance with applicable
financial recordkeeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the
money laundering statutes of all jurisdictions, the rules and
regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any
governmental agency (collectively, the “Money Laundering
Laws”) and no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator
involving the Company or any of its Significant Subsidiaries with
respect to the Money Laundering Laws is pending or, to the best
knowledge of the Company, threatened.
(ee) Neither the
Company nor any of its subsidiaries nor, to the knowledge of the
Company, any director, officer, agent, employee or affiliate of the
Company or any of its Significant Subsidiaries is currently subject
to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”); and
the Company will not directly or indirectly use the proceeds of the
offering, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person
or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by
OFAC.
(ff) The
subsidiaries listed on Annex A attached hereto are the only
Significant Subsidiaries of the Company.
(gg) The Company
and its subsidiaries own, possess, license or have other rights to
use, on reasonable terms, all patents, patent applications, trade
and service marks, trade and service mark registrations, trade
names, copyrights, licenses, inventions, trade secrets, technology,
know-how and other intellectual property (collectively, the
“Intellectual Property”) necessary for the conduct of
the Company’s business as now conducted or as proposed in the
Final Prospectus to be conducted. Except as set forth in the Final
Prospectus (exclusive of any supplement thereto) under the caption
“Risk Factors” (i) to the Company’s best
knowledge, there are no rights of third parties to any such
Intellectual Property; (ii)&n
|
