Document:

THIS WARRANT AND THE COMMON STOCK OF RUBY MINING COMPANY, A COLORADO
CORPORATION, (THE "COMPANY") ISSUABLE UPON CONVERSION HEREOF (UNTIL SUCH TIME AS
SUCH COMMON STOCK IS REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT) HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES STATUTE, AND NO
SALE, TRANSFER, OR OTHER DISPOSITION OF ANY INTEREST HEREIN MAY BE MADE UNLESS,
IN THE WRITTEN OPINION OF COUNSEL TO THE COMPANY, SUCH TRANSFER WOULD NOT
VIOLATE OR REQUIRE REGISTRATION UNDER ANY SUCH STATUTE.

ISSUE NO. W061104-4                                    ISSUE DATE: JUNE 11, 2004

                                FIVE YEAR WARRANT
                           To Purchase Common Stock of
                               RUBY MINING COMPANY
            NOT EXERCISABLE FOR FIRST 180 DAYS FROM DATE OF ISSUANCE

        This is to certify that, for value received, JAMES W. LARSEN,
(together with his or its legal representatives, successors and permitted
assigns, "Holder" or "Warrant Holder"), is entitled to purchase from Ruby Mining
Company, a Georgia Corporation (the "Company"), at any time and from time to
time BEGINNING ON JUNE 11, 2004 AND EXPIRING ON JUNE 11, 2009 (except as
otherwise provided herein) 2,400,000 duly authorized, validly issued, fully paid
and nonassessable shares of common stock, par value $.001 per share, of the
Company (the "Common Stock"), at the Current Warrant Price (as hereinafter
defined) in lawful money of the United States of America. The purchase price
hereunder at any time of a single share of Common Stock is referred to herein as
the "Current Warrant Price." Initially, and until adjustment in the manner
hereinafter provided, the Current Warrant Price with respect to the shares
covered by this Warrant shall be $ 0.25 per share. The number of shares of
Common Stock purchasable hereunder and the Current Warrant Price are subject to
adjustment from time to time in the manner provided in Article 4 below. Certain
terms in this Warrant are defined in Article 5 below.

                                    ARTICLE 1
                              EXERCISE OF WARRANTS

         SECTION 1.1. METHOD OF EXERCISE. Subject to the provisions of Article 3
below, to exercise this Warrant in whole or in part, Holder shall deliver to the
Company at the Warrant Office designated pursuant to Section 2.1: (i) a written
notice, in substantially the form of the Exercise Notice appearing at the end of
this Warrant, of such Holder's election to exercise this Warrant, which notice
shall specify the number of shares of Common Stock to be purchased and

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the nature of payment, whether by check or by this Warrant (pursuant to Section
1.4) or by a combination thereof; (ii) a certified or official bank check
payable to the order of the Company and/or a cancellation of a number of
warrants (pursuant to Section 1.4) (and/or any other form of consideration which
the Company and the Holder hereof may have agreed to accept in payment of the
Current Warrant Price) in the aggregate equal to the aggregate Current Warrant
Price of the number of shares of Common Stock being purchased; and (iii) this
Warrant. The Company shall as promptly as practicable, and in any event within
10 days after receipt by the Company of such notice, execute and deliver or
cause to be executed and delivered, in accordance with said notice, a
certificate or certificates representing the aggregate number of shares of
Common Stock specified in said notice. The stock certificate or certificates so
delivered shall be in the denomination as may be specified in said notice and
shall be issued in the name of such Holder or such other name as shall be
designated in said notice. Such certificate or certificates shall be deemed to
have been issued and such Holder or any other person so designated to be named
therein shall be deemed for all purposes to have become a Holder of record of
such shares as of the date the consideration specified for such shares is
received by the Company as aforesaid. If this Warrant shall have been exercised
only in part, the Company shall, at the time of delivery of said certificate or
certificates, deliver to such Holder a new Warrant evidencing the rights of such
Holder to purchase the remaining shares of Common Stock called for by this
Warrant, which new Warrant shall in all other respects be identical with this
Warrant, or, at the request of such Holder, appropriate notation may be made on
this Warrant and the same returned to such Holder. The Company shall pay all
expenses, taxes and other charges payable in connection with the preparation,
issuance and delivery of such stock certificates and any new Warrant, except
that, in case such stock certificates or new Warrant shall be registered in a
name or names other than the name of the Holder of this Warrant, funds
sufficient to pay all stock transfer taxes which shall be payable upon the
issuance of such stock certificate or certificates or any new Warrant shall be
paid by the Holder hereof at the time of delivering the notice of exercise
mentioned above or promptly upon receipt of a written request of the Company for
payment of the same.

         SECTION 1.2. WARRANT SHARES TO BE FULLY PAID AND NONASSESSABLE. All
shares of Common Stock issued upon the exercise of this Warrant shall be validly
issued, fully paid and nonassessable and, if the Common Stock is then listed on
a securities exchange, shall be duly listed thereon, subject to registration
under the Exchange Act.

         SECTION 1.3. NO FRACTIONAL SHARES TO BE ISSUED, The Company shall not
be required upon any exercise of this Warrant to issue a certificate
representing any fraction of a share of Common Stock, but, in lieu thereof,
shall pay Holder cash in an amount equal to a corresponding fraction (calculated
to the nearest 1/100 of a share) of the Current Market Price of one share of
Common Stock as of the date of receipt by the Company of notice of exercise of
this Warrant.

         SECTION 1.4. PAYMENT OF CURRENT WARRANT PRICE WITH WARRANTS. Upon any
exercise of this Warrant as provided in Section 1.1, Holder may, in lieu of
payment of the Current Warrant Price in cash, surrender this Warrant (or any
successor hereto or fraction hereof) (valued for such purpose at the Current
Market Price of the underlying Common Stock for which such Warrant is
exercisable on the date of such exercise less the Current Warrant Price then in
effect)

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and apply all or a portion of the amount so determined to the payment of the
Current Warrant Price for the number of shares of Common Stock being purchased.

         SECTION 1.5. LEGEND ON WARRANT SHARES. Each certificate for shares
initially issued upon exercise of this Warrant, unless at the time of exercise
such Warrant Shares are registered under the Act, shall bear a legend in
substantially the following form (and any additional legend required by any
securities exchange upon which such Warrant Shares may, at the time of such
exercise, be listed) on the face thereof:

         "The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or the laws of any
state and may not be sold or otherwise transferred except pursuant to an
effective registration statement or the written opinion of counsel to The
Admiralty Corporation that such registration is not required."

         Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of: (i) a public distribution pursuant to a registration statement; or (ii) an
exempt sale pursuant to Rule 144 or Rule 144A under the Act of the securities
represented thereby) shall also bear such legend unless, in the opinion of
counsel for the Holder thereof as shall be reasonably acceptable to the Company,
the securities represented thereby need no longer be subject to the restrictions
contained in Article 3 below. The provisions of Article 3 below shall be binding
upon all subsequent Holders of this Warrant.

                                    ARTICLE 2
                       WARRANT OFFICE; OWNERSHIP, TRANSFER
                                   OF WARRANT

         SECTION 2.1. WARRANT OFFICE. The Company shall maintain an office for
certain purposes specified herein (the "Warrant Office"), which office shall
initially be the Company's office at One Securities Centre, 3490 Piedmont Road,
Suite 304, Atlanta, Georgia 30305and may subsequently be any other office of the
Company or of any transfer agent of the Common Stock in the continental United
States as to which written notice has previously been given to all of the
Warrant Holders.

         SECTION 2.2. OWNERSHIP OF WARRANT. The Company may deem and treat the
person in whose name this Warrant is registered as the Holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes and shall not be affected by any notice
to the contrary, until presentation of this Warrant for registration of transfer
as provided in this Article 2.

         SECTION 2.3. TRANSFER OF WARRANT. The Company agrees to maintain books
at the Warrant Office for the registration and transfer of this Warrant, and,
subject to the provisions of Article 3 below, this Warrant and all rights
hereunder are transferable, in whole or in part, on said books at said office,
upon surrender of this Warrant at said office, together with a written
assignment of this Warrant duly executed by the Holder hereof or his duly
authorized agent or

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attorney and funds sufficient to pay any transfer taxes payable upon the making
of such transfer. Upon such surrender and payment, the Company shall execute and
deliver a new Warrant or Warrants in the name of the assignee or assignees and
in the denominations specified in such instrument of assignment, and this
Warrant shall promptly be canceled. A Warrant may be exercised by a new Holder
for the purchase of shares of Common Stock without having a new Warrant issued.
No Holder of this Warrant may divide this or any other Warrant into a Warrant
exercisable into less than 100 shares of Common Stock.

         SECTION 2.4. EXPENSES OF DELIVERY OF WARRANTS. The Company shall pay
all expenses, taxes (other than transfer taxes) and other charges payable in
connection with the preparation, issuance and delivery of this Warrant or any
new Warrant hereunder.

                                    ARTICLE 3
                     RESTRICTIONS ON EXERCISE AND TRANSFER;
                       REGISTRATION RIGHTS; CALL PROVISION

         SECTION 3.1. RESTRICTIONS ON EXERCISE AND TRANSFER. The Holder of this
Warrant, as of the date of issuance hereof, represents to the Company that it is
not acquiring the Warrant with a view to the distribution thereof.
Notwithstanding any provisions contained in this Warrant to the contrary, this
Warrant and the related Warrant Shares shall not be transferable except pursuant
to the proviso contained in the following sentence or upon the conditions
specified in this Article 3, which conditions are intended, among other things,
to insure compliance with the provisions of the Act and applicable state law in
respect of the transfer of this Warrant or such Warrant Shares. The Holder of
this Warrant, by its acceptance hereof, agrees that it will not transfer this
Warrant or the related Warrant Shares prior to delivery to the Company of an
opinion of such Holder's counsel reasonably satisfactory to the Company (as such
opinion and such counsel are described in Section 3.2 below) or until
registration of such Warrant Shares under the Act has become effective or after
a sale of such Warrant or Warrant Shares has been consummated pursuant to Rule
144 or Rule 144A under the Act.

         SECTION 3.2. NOTICE OF INTENTION TO TRANSFER; OPINION OF COUNSEL. The
Holder of this Warrant, by its acceptance hereof, agrees that prior to any
transfer of this Warrant or of the related Warrant Shares (other than pursuant
to a registration under the Act), such Holder will give written notice to the
Company of its intention to effect such transfer, together with an opinion of
counsel for such Holder as shall be reasonably acceptable to the Company, to the
effect that the proposed transfer of this Warrant and/or such Warrant Shares may
be effected without registration under the Act or applicable state law. Upon
delivery of such notice and opinion to the Company, the Holder of this Warrant
or such Warrant Shares shall be entitled to transfer this Warrant and/or such
Warrant Shares in accordance with the intended method of disposition specified
in the notice delivered by such Holder to the Company; provided, however, that
if such method of disposition would, in the opinion of such counsel, require
that the Company take any reasonable action and/or execute and file with the
Commission and/or any state securities authority with jurisdiction and/or
deliver to the Warrant Holder or any other person any form or document (other
than a registration statement under the Act or under any state securities laws
or any information requirements pursuant to Regulation D) in order to establish
the entitlement of the Holder of this Warrant to take advantage of such method
of

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disposition, the Company agrees, at its expense, to take any such reasonable
action and/or execute and file and/or deliver any such form or document.

         SECTION 3.3.      "PIGGYBACK REGISTRATIONS".

                  (a) If the Company at any time prior to the expiration of the
Warrants, proposes to register any of its equity securities (as defined in the
Act), other than securities which are convertible into shares of Common Stock,
under the Act on Forms S-1, S-2, S-3 or SB-1, or SB-2 (but not Form S-4 or S-8)
or on any other form upon which may be registered securities similar to the
Warrant Shares, it will at each such time give written notice at least 30 days
prior to the filing of the registration statement to all Warrant Holders of its
intention so to do. Such notice shall specify the proposed date of the filing of
the registration statement and advise each Warrant Holder of its right to
participate therein. Upon the written request of any Warrant Holder given prior
to the proposed date of filing set forth in such notice, the Company will cause
each Warrant Share which the Company has been requested to register by such
Warrant Holder to be registered under the Act, all to the extent requisite to
permit the sale or other disposition by such Warrant Holder of the Warrant
Shares so registered.

                  (b) If, in the written opinion of the underwriter or
underwriters managing the public offering which is the subject of a registration
pursuant to Section 3.3(a) above (or in the event that such distribution shall
not be underwritten, in the written opinion of an investment banking firm of
recognized standing satisfactory to the Warrant Holders), the total amount of
the securities to be so registered, when added to the total amount of Warrant
Shares which the Warrant Holders have requested to be registered pursuant to
Section 3.3(a) above, will exceed the maximum amount of securities of the
Company which can be marketed: (i) at a price reasonably related to their then
current market value; or (ii) without otherwise materially and adversely
affecting the entire offering, then the Company shall have the right to exclude
from such registration such number of Warrant Shares which it would otherwise be
required to register pursuant to Section 3.3(a) above as is necessary to reduce
the total amount of securities to be so registered to the maximum amount of
securities which can be so marketed; provided, however, that if the securities
(other than the Warrant Shares) to be so registered for sale are to be offered
for the account of the Company and others, the Company may only cut back Warrant
Shares pro rata with the securities held by such other persons (it being agreed
that in the case where such registration is to be effected as a result of the
exercise by a Holder of the Company's securities of such Holder's right to cause
such securities to be so registered, such pro rata cut back shall include the
Company).

         SECTION 3.4. COMPANY'S OBLIGATIONS IN REGISTRATION. If and whenever the
Company is obligated by the provisions of this Article 3 to effect the
registration of any Warrant Shares under the Act, as expeditiously as possible
the Company will:

                  (a) as expeditiously prepare and file with the Commission a
registration statement with respect to such Warrant Shares and use its best
efforts to cause such registration statement to become and remain effective
during the period required for the distribution of the securities covered by the
registration statement; PROVIDED, HOWEVER, that in the event that the Warrant
Shares covered by such registration statement are not to be sold to or through

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underwriters acting for the Company, the Company shall not be required to keep
such registration statement in effect, or to prepare and file any amendments or
supplements thereto, after the expiration of six months following the date on
which such registration statement becomes effective under the Act or such longer
period during which the Commission requires that such registration statement be
kept effective with respect to any of the Warrant Shares so registered;

                  (b) as expeditiously as possible, prepare and file with the
Commission such amendments and supplements to such registration statement and
the prospectus used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions of the Act
with respect to the disposition of all Warrant Shares covered by such
registration statement, whenever the Warrant Holders for whom such Warrant
Shares are registered or are to be registered shall desire to dispose of the
same, subject, however to the proviso contained in Section 3.4(a) above;
provided, however, that in any event the Company's obligations under this
Section 3.4(b) shall terminate 90 days after the effective date of any such
registration statement if none of the Warrant Shares registered thereunder shall
have been sold;

                  (c) as expeditiously as possible, furnish to the Warrant
Holders for whom such Warrant Shares are registered or are to be registered and
to any underwriter or underwriters such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as such Warrant Holders may reasonably request in
order to facilitate the disposition of such Warrant Shares;

                  (d) use its reasonable efforts to register or qualify the
Warrant Shares covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as the Warrant Holders for
whom such Warrant Shares are registered or are to be registered shall reasonably
request, and do any and all other reasonable acts and things to so register or
qualify which may be necessary or advisable to enable such Warrant Holders to
consummate the disposition in such jurisdictions of such Warrant Shares;

         SECTION 3.5. PAYMENT OF REGISTRATION EXPENSES. The costs and expenses
of all registrations under the Act and of all other actions which the Company is
required to take or effect pursuant to this Article 3 shall be paid for by the
Company (including, without limitation, all registration, qualification and
filing fees, printing expenses, expenses of distributing prospectuses and other
documents, fees and disbursements of counsel and accountants for the Company,
and expenses of any special audits incident to or required in connection with
any such registration hereof, but excluding the fees and disbursements of
special counsel for the Warrant Holders, any consultants retained by the Warrant
Holders and underwriters' or brokers' discounts or commissions applicable to the
Warrant Shares).

         SECTION 3.6. INFORMATION FROM WARRANT HOLDERS. Notices and requests
delivered by Warrant Holders to the Company pursuant to this Article 3 shall
contain such information regarding the Warrant Shares and the intended method of
disposition thereof as shall reasonably be required in connection with the
action to be taken.

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         SECTION 3.7. COMPANY'S INDEMNIFICATION. In the event of any
registration under the Act of any Warrant Shares pursuant to this Article 3, the
Company hereby agrees to indemnify and hold harmless each Warrant Holder
disposing of such Warrant Shares and each other person, if any, who controls
such Warrant Holder within the meaning of Section 15 of the Act and each other
person (including underwriters) who participates in the offering of such Warrant
Shares against any losses, claims, damages or liabilities, joint or several, to
which such Warrant Holder or controlling person or participating person may
become subject under the Act or otherwise, in so far as such losses, claims,
damages or liabilities (or proceedings in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact
contained, on the effective date thereof, in any registration statement under
which such Warrant Shares were registered under the Act, in any preliminary
prospectus or final prospectus contained therein, or in 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 such
Warrant Holder and each such controlling person or participating person for any
legal or any other expenses incurred by such Warrant Holder or such controlling
person or participating person in connection with investigating or defending any
such loss, claim, damage, liability or proceeding; provided, however, that the
Company will 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: (a) an untrue
statement or alleged untrue statement or omission or alleged omission made in
such registration statement, said preliminary or final prospectus or said
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Warrant Holder or such controlling
or participating person, as the case may be, specifically for use in the
preparation thereof; or (b) an untrue statement or alleged untrue statement,
omission or alleged omission in a prospectus if such untrue statement or alleged
untrue statement, omission or alleged omission is corrected in an amendment or
supplement to the prospectus which amendment or supplement is delivered to such
Warrant Holder and such Warrant Holder thereafter fails to deliver such
prospectus as so amended or supplemented prior to or concurrently with the sale
of Warrant Shares to the person asserting such loss, claim, damage, liability or
expense.

         SECTION 3.8. WARRANT HOLDER'S INDEMNIFICATIONS. If the Company so
requests, each Warrant Holder for whom Warrant Shares are to be so registered
shall execute an agreement or agreements, whereby such Warrant Holder agrees to
indemnify and hold harmless the Company, each other person referred to in
subparts (1), (2) and (3) of Section 11(a) of Section 15 of the Act in respect
of such registration statement and each other person, if any, which controls the
Company within the meaning of the Act against any losses, claims, damages or
liabilities, joint or several, to which the Company or such other person or such
person controlling the Company may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or proceeding in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained, on the effective date thereof, in any
registration statement under which such Warrant Shares were registered under the
Act, in any preliminary prospectus or final prospectus contained therein or in
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,
which, in each such case, has been made in or omitted from such registration
statement, said preliminary or final prospectus or said amendment or supplement
in reliance

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upon, and in conformity with, information furnished to the Company
by such Warrant Holder specifically for use in the preparation thereof. The
Company shall be entitled to receive indemnities from underwriters, selling
brokers, dealer managers and similar securities industry professionals
participating in the distribution, to the same extent as provided above, with
respect to information with respect to such persons so furnished in writing by
such persons specifically for inclusion in any prospectus or registration
statement.

         SECTION 3.9. CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any person
entitled to indemnification hereunder will: (a) give prompt written notice to
the indemnifying party of any claim with respect to which it seeks
indemnification; and (b) unless, in such indemnified party's reasonable
judgment, a conflict of interest may exist between such indemnified and
indemnifying parties with respect to such claim, permit such indemnifying party
to assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party; provided, however, that the failure of an indemnified party
to give notice as provided herein shall not relieve the indemnifying party of
its obligations under this Section 3.9 with respect to such indemnified party,
except to the extent that the indemnifying party is actually prejudiced by such
failure. Whether or not such defense is assumed by the indemnifying party, the
indemnifying party will not be subject to any liability for any settlement made
without its consent (but such consent will not be unreasonably withheld). No
indemnifying party will consent to the entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect of such claim or litigation. An indemnifying party who is
not entitled to, or elects not to, assume the defense of the claim against the
indemnified party, will not be obligated to pay the fees and expenses of more
than one counsel for all parties indemnified by such indemnifying party with
respect to such claim, unless in the reasonable judgment of any indemnified
party a conflict of interest may exist between such indemnified party and any
other such indemnified parties with respect to such claim, in which event the
indemnifying party shall be obligated to pay the fees and expenses of such
additional counsel or counsels.

         If for any reason the indemnification provided for in the preceding
Sections 3.7 and 3.8 above is unavailable to an indemnified party as
contemplated thereby, the indemnifying party shall contribute to the amount paid
or payable by the indemnified party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect not only the relative
benefits received by the indemnified party and the indemnifying party, but also
the relative fault of the indemnified party and the indemnifying party, as well
as any other relevant equitable considerations. 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 fraudulent
misrepresentation.

         SECTION 3.10. PUBLIC INFORMATION. The Company covenants and agrees that
if and so long as the Common Stock shall be registered under Section 12 of the
Exchange Act, at any time when any Warrant Holder so entitled desires to make
sales of any Warrant Shares in reliance on Rule 144 or Rule 144A under the Act
either: (i) there will be available adequate current public information with
respect to the Company as required by said Rules; or (ii) if such information is
not available the Company will use its best efforts to make such information
available without delay.

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                                    ARTICLE 4
                            ANTI-DILUTION PROVISIONS

         SECTION 4.1. ADJUSTMENT OF CURRENT WARRANT PRICE AND NUMBER OF SHARES
PURCHASABLE. The Current Warrant Price and the number of shares of Common Stock
purchasable upon the exercise of each Warrant shall be subject to adjustment
from time to time as hereinafter provided in this Article 4. Upon each
adjustment of the Current Warrant Price, the Holder of this Warrant shall
thereafter be entitled to purchase at the Current Warrant Price resulting from
such adjustment, the number of shares (calculated to the nearest whole share) of
Common Stock calculated by multiplying the Current Warrant Price in effect
immediately prior to such adjustment by the number of shares purchasable
pursuant hereto immediately prior to such adjustment and dividing the product
thereof by the Current Warrant Price resulting from such adjustment.

         SECTION 4.2. EFFECT OF "SPLIT-UPS" AND STOCK DIVIDENDS. In case at any
time or from time to time the Company shall subdivide or combine as a whole, by
reclassification, by the issuance of a stock dividend on the Common Stock
payable in Common Stock, or otherwise, the number of shares of Common Stock then
outstanding into a greater or lesser number of shares of Common Stock, with or
without par value, the Current Warrant Price shall be reduced or increased (as
applicable) proportionately. The issuance of such a stock dividend shall be
treated as a subdivision of the whole number of shares of Common Stock
outstanding immediately prior to such dividend into a number of shares equal to
such whole number of shares so outstanding plus the number of shares issued as a
stock dividend. Upon any such adjustment, the number of shares shall be rounded
upward to the nearest whole share.

         SECTION 4.3. EFFECT OF MERGER OR CONSOLIDATION. In case the Company
shall, while this Warrant remains outstanding, enter into any consolidation with
or merger into any other corporation wherein the Company is not the surviving
corporation, or wherein securities of a corporation other than the Company are
distributable to Holders of Common Stock, or sell or convey its property as an
entirety or substantially as an entirety followed by distribution of any or all
of the proceeds thereof to shareholders, and in connection with such
consolidation, merger, sale or conveyance, shares of stock or other securities
or property shall be issuable or deliverable in exchange for the Common Stock,
then, as a condition of such consolidation, merger, sale or conveyance, lawful
and adequate provision shall be made whereby the Holder of this Warrant shall
thereafter be entitled to purchase pursuant to this Warrant (in lieu of the
number of shares of Common Stock which such Holder would have been entitled to
purchase immediately prior to such consolidation, merger, sale or conveyance)
the shares of stock or other securities or property to which such number of
shares of Common Stock would have been entitled at the time of such
consolidation, merger, sale or conveyance, at an aggregate purchase price equal
to that which would have been payable if such number of shares of Common Stock
had been purchased by exercise of this Warrant immediately prior thereto. In
case of any such consolidation, merger, sale or conveyance, an appropriate
provision shall be made with respect to the rights and interests thereafter of
any Holder of this Warrant, to the end that all the provisions of this

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Warrant (including the provisions of this Article 4) shall thereafter be
applicable, as nearly as practicable, to such stock or other securities or
property thereafter deliverable upon the exercise of this Warrant. The Company
shall not effect any such consolidation, merger, sale or conveyance unless prior
to or simultaneously with the consummation thereof the successor corporation (if
other than the Company) resulting from such consolidation or merger or
purchasing such assets shall assume by written instrument, executed and mailed
or delivered to the Holder of this Warrant, the obligation to deliver to such
Holder such shares of stock or other securities or property as, in accordance
with the foregoing provisions, such Warrant Holder may be entitled to receive,
which instrument shall contain the express assumption by such successor
corporation of the due and punctual performance and observance of every
provision of this Warrant to be performed and observed by the Company and of all
liabilities and obligations of the Company hereunder.

         SECTION 4.4. REORGANIZATION OR RECLASSIFICATION. In case of any capital
reorganization or any reclassification of the capital stock of the Company
(except as provided in Section 4.2 above) while this Warrant remains
outstanding, then, as a condition of such reorganization or reclassification,
lawful and adequate provision shall be made whereby the Holder of this Warrant
shall thereafter be entitled to purchase pursuant to this Warrant (in lieu of
the number of shares of Common Stock which such Holder would have been entitled
to purchase immediately prior to such reorganization or reclassification) the
shares of stock of any class or classes or other securities or property to which
such number of shares of Common Stock would have been entitled at the time of
such reorganization or reclassification, at an aggregate purchase price equal to
that which would have been payable if such number of shares of Common Stock had
been purchased immediately prior to such reorganization or reclassification. In
case of any such capital reorganization or reclassification, appropriate
provision shall be made with respect to the rights and interests thereafter of
the Holders of Warrants, to the end that all the provisions of the Warrants
(including the provisions of this Article 4) shall thereafter be applicable, as
nearly as practicable, to such stock or other securities or property thereafter
deliverable upon the exercise of the Warrants.

         SECTION 4.5. STATEMENT OF ADJUSTMENT. Upon each adjustment of the
Current Warrant Price and the number of shares of Common Stock purchasable
hereunder, and in the event of any change in the rights of the Holder of this
Warrant by reason of other events herein set forth, then and in each such case
the Company will promptly prepare a schedule setting forth the adjusted Current
Warrant Price and the adjusted number of shares purchasable hereunder, or
specifying the other shares of stock, other securities or property and the
amount thereof receivable as a result of such change in rights, and setting
forth in reasonable detail the method of calculation and the facts upon which
such calculation is based. The Company will promptly mail a copy of such
schedule to the registered Holder of this Warrant.

         SECTION 4.6. NOTIFICATIONS BY THE COMPANY.  In case at any time the
Company proposes:

                  (a) to pay any dividend payable in stock (of any class or
classes);

                                       66
<PAGE>

                  (b) to effect any capital reorganization or reclassification
of the capital stock of the Company, or consolidation or merger of the Company
with, or sale of all or substantially all of its assets to, another corporation;
or

                  (c) to effect a voluntary or involuntary dissolution,
liquidation or winding-up of the Company; then, in any one or more such cases,
the Company shall give written notice to the registered Holder of this Warrant
of the date on which: (i) the transfer books of the Company shall close or a
record date shall be taken for such dividend; (ii) a record date shall be taken
to determine stockholders entitled to notice of and to vote at any meeting of
stockholders at which any such proposed reorganization, reclassification,
consolidation, merger, sale of assets, dissolution, liquidation or winding-up is
to be considered; or (iii) such reorganization, reclassification, consolidation,
merger, sale of assets, dissolution, liquidation or winding-up shall take place,
as the case may be. Such notice shall also specify the date as of which the
Holders of Common Stock of record shall participate in such dividend, or shall
be entitled to vote on or exchange their Common Stock for securities or other
property deliverable upon such reorganization, reclassification, consolidation,
merger, sale of assets, dissolution, liquidation or winding-up, as the case may
be. Such written notice shall be given not less than 10 days prior to such date
on which the transfer books of the Company shall close or a record date shall be
taken or any event shall occur, as the case may be, and such notice may state
that any such action will be taken only if certain events specified in such
notice (such as the clearing of proxy material by the Commission or an
affirmative vote of stockholders) occur prior thereto.

                                    ARTICLE 5
                               CERTAIN DEFINITIONS

         For all purposes of this Warrant, unless the context otherwise
requires, the following terms shall have the following respective meanings:

         "Act": the Securities Act of 1933, as amended from time to time, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.

         "Commission": the Securities and Exchange Commission, or any other
federal agency then administering the Act.

         "Current Market Price": the "Closing Price" (as defined below) of the
Common Stock on the last business day immediately preceding any date of
reference. For the purpose of determining Current Market Price, the "Closing
Price" of the Common Stock on any business day shall be: (i) if the Common Stock
is listed or admitted for trading on any United States national securities
exchange, the last reported sale price of Common Stock on such exchange; (ii) if
the Common Stock is listed or admitted for trading on any tier of The NASDAQ
Stock Market, the last reported sale price of Common Stock on such tier; or
(iii) if the Common Stock is traded in the over-the-counter market, the closing
sales price for the Common Stock as quoted on the OTC Bulletin Board.

                                       67
<PAGE>

         "Current Warrant Price": (per share of Common Stock at any date): the
price at which one share of Common Stock may be purchased hereunder at any time;
initially $ 0.25. The Current Warrant Price is subject to adjustment from time
to time pursuant to Article 4 above.

         "Exchange Act": the Securities Exchange Act of 1934, as amended from
time to time, or any successor federal statute, and the rules and regulations of
the Commission thereunder.

         "Outstanding": when used with reference to Common Stock at any date,
all issued shares of Common Stock (including, but without duplication, shares
deemed issued pursuant to Article 4 above) at such date, except shares then held
in the treasury of the Company.

         "Person": an individual, corporation, partnership, joint venture, trust
estate, unincorporated organization or government or an agency or political
subdivision thereof.

         "Total Warrants": the sum of the aggregate number of shares of: (i)
Common Stock purchasable by the Holder(s) upon exercise of the Warrant then
outstanding; and (ii) Warrant Shares which had been issued pursuant to the
exercise the Warrant.

         "Warrant Office":  see Section 2.1 above.

         "Warrant Shares": the shares of Common Stock purchasable or purchased
by the Warrant Holder upon the exercise of the Warrant. Unless otherwise
expressly stated herein, Warrant Shares shall not include shares of Common Stock
purchased upon exercise of the Warrant which have been sold by a Warrant Holder
pursuant to a registration statement under the Act.

         "Warrant Holder": the registered Holder of the Warrant or any related
Warrant Shares.

         "Warrant": the warrant issued by the Company hereunder evidencing the
right initially to purchase an aggregate of 75,000 shares of Common Stock and
all warrants issued in substitution or subdivision hereof.

                                    ARTICLE 6
                        CERTAIN COVENANTS OF THE COMPANY

         The Company represents, warrants, covenants and agrees that:

                  (a) it will reserve and set apart and have at all times, free
from preemptive rights, a number of shares of authorized but unissued Common
Stock or other securities or property deliverable upon the exercise of this
Warrant sufficient to enable it at any time to fulfill all its obligations
thereunder;

                  (b) before taking any action which would cause an adjustment
reducing the Current Warrant Price below the then par value of the shares of
Common Stock issuable upon exercise of this Warrant, it will take any corporate
action which may be necessary in order that

                                       68
<PAGE>

the Company may validly and legally issue fully paid and nonassessable shares of
such Common Stock at such adjusted Current Warrant Price;

                  (c) if any shares of Common Stock required to be reserved for
the purposes of the exercise of this Warrant require registration with or
approval of any governmental authority under any federal law (other than the
Act) or under any state law before such shares may be issued upon exercise of
this Warrant, the Company will, at its expense, as expeditiously as possible,
cause such shares to be duly registered or approved, as the case may be;

                  (d) this Warrant shall be binding upon any corporation
succeeding to the Company by merger, consolidation or acquisition of all or
substantially all of the Company's assets.

                                    ARTICLE 7
                         CERTAIN COVENANTS OF THE HOLDER

         The Holder represents, warrants, covenants and agrees that:

                  (a) this transaction is exempt from the Act and, accordingly
neither the Warrant nor the Warrant Shares have been registered under the Act;
they are acquiring the Warrant and Warrant Shares for investment purposes only
and not with a view to or for resale in connection with any distribution of the
Warrant or Warrant Shares, nor with any present intention of distribution
(within the meaning of the Act) of the Warrant or Warrant Shares; because the
Warrant and Warrant Shares will not have been registered under the Act, the
Company will not permit the transfer of such shares without registration under
the Act, or upon the issuance to the Company of a favorable opinion of its
counsel to the effect that such transfer, whether pursuant to Rule 144 of the
Act or otherwise, shall not be in violation of the Act, and any applicable state
security laws; and the share certificates representing the Warrant Shares will
be issued with a restrictive legend providing notice of such restriction;

                  (b) Holder has had an opportunity to ask questions of, and
receive answers from, appropriate officers and representatives of the Company
concerning the terms and conditions of the issuance of this Warrant and the
Warrant Shares and to obtain any additional information concerning the Company
which they have requested; and

                  (c) the Company has made available for inspection by them
various documents connected with the Company's business and has not refused in
any way to permit them to inspect any document requested to be inspected by
them.

                                    ARTICLE 8
                                     NOTICE

        Any notice or other document required to be given or delivered to the
Warrant Holder shall be delivered at, or sent by certified or registered mail
to, such Holder at the last address shown on the books of the Company maintained
at the Warrant Office for the registration and registration of transfer of the
Warrants or at any more recent address of which any Warrant

                                       69
<PAGE>

Holder shall have notified the Company in writing. Any notice or other document
required or permitted to be given or delivered to Holders of record of
outstanding Warrant Shares shall be delivered at, or sent by certified or
registered mail to, each such Holder at such Holder's address as the same
appears on the stock records of the Company. Any notice or other document
required or permitted to be given or delivered to the Company, other than such
notice or documents required to be delivered to the Warrant Office, shall be
delivered at, or sent by certified or registered mail to, the office of the
Company in Atlanta, Georgia, or such other address within the United States of
America as shall have been furnished by the Company to the Warrant Holders and
the Holders of record of Warrant Shares. Any notice or other document sent by
certified or registered mail, return receipt requested, shall be deemed to have
been delivered and received when sent if the receipt is appropriately completed
and returned. Notices or documents delivered in any other manner than as set
forth above shall be deemed to have been delivered only when and if received.

                                    ARTICLE 9
                            LIMITATIONS OF LIABILITY;
                                NOT STOCKHOLDERS

        No provision of this Warrant shall be construed as conferring upon the
Holder hereof the right to vote, consent, receive dividends or receive notice
other than as herein expressly provided in respect of meetings of stockholders
for the election of directors of the Company or any other matter whatsoever as a
stockholder of the Company. No provision hereof, in the absence of affirmative
action by the Holder hereof to purchase shares of Common Stock, and no mere
enumeration herein of the rights or privileges of the Holder hereof, shall give
rise to any liability of such Holder for the purchase price of any Warrant
Shares or as a stockholder of the Company, whether such liability is asserted by
the Company or by creditors of the Company.

                                   ARTICLE 10
                       LOSS, DESTRUCTION, ETC. OF WARRANTS

        Upon receipt of evidence satisfactory to the Company of the loss, theft,
mutilation or destruction of any Warrant, and in the case of any such loss,
theft or destruction upon delivery of a bond of indemnity in such form and
amount as shall be reasonably satisfactory to the Company, or in the event of
such mutilation upon surrender and cancellation of the Warrant, the Company will
make and deliver a new Warrant, of like tenor, in lieu of such lost, stolen,
destroyed or mutilated Warrant. Any Warrant issued under the provisions of this
Article 9 in lieu of any Warrant alleged to be lost, destroyed or stolen, or in
lieu of any mutilated Warrant, shall constitute an original contractual
obligation on the part of the Company.

                                   ARTICLE 10
                                  LAW GOVERNING

         This Warrant shall be governed by, and construed and enforced in
accordance with, the law of the State of Georgia, without reference to its
choice of law principles.

                                       70
<PAGE>

                                   ARTICLE 11
                             SUCCESSORS AND ASSIGNS

         The rights and obligations of the parties hereunder shall be binding
upon and inure to the benefit of their respective successors and assigns.

         IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in
its name effective as of the 11th day of June, 2004.

                                            RUBY MINING COMPANY

                                            By: /s/ G. Howard Collingwood

                                            Its: ___________CEO__________

                                       71
<PAGE>

                                 EXERCISE NOTICE

RUBY MINING COMPANY

        The undersigned, the Holder of the foregoing Warrant, hereby elects to
exercise purchase rights represented by said Warrant for, and to purchase
thereunder, ________ shares of the Common Stock covered by said Warrant and (a)
herewith (1) makes payment in full therefor of $___________ by certified or
official bank check payable to the order of Ruby Mining Company, or (2)
surrenders to the Company that number of warrants required for full payment of
the shares to be purchased; and (b) requests (1) that certificates for such
shares (and any securities or other property issuable upon such exercise) be
issued in the name of and delivered to _______________________________, whose
address is ______________________________ and (2) if such shares shall not
include all of the shares issuable as provided in said Warrant, that a new
Warrant of like tenor and date for the balance of the shares issuable thereunder
be delivered to the undersigned.

                                            ------------------------------------
                                            Signature Medallion Guaranteed:

Dated:
       ---------------------------

                                       72
<PAGE>

                                 ASSIGNMENT FORM

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________ the rights represented by the foregoing Warrant of Ruby
Mining Company and appoints ______________________________ attorney to transfer
said rights on the books of said corporation, with full power of substitution in
the premises.

                                            ------------------------------------
                                            Signature Medallion Guaranteed:

Dated:
       ---------------------------

                                       73
<PAGE>exv10w1

 

Exhibit 10.1

Advanced Energy Industries, Inc.

Underwriting Agreement

New York, New York

August 11, 2005

To the Representatives

   named in Schedule I

   hereto of the Under-

   writers named in

   Schedule II hereto

Ladies and Gentlemen:

     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

 

 

2

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)

 

 

3

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.

 

 

4

     (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

 

 

5

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

 

 

6

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

 

 

7

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

 

 

8

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

 

 

9

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

 

 

10

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) to the Company’s best knowledge, there is no
material infringement by third parties of any such Intellectual Property; (iii) there is
no pending or, to the Company’s best knowledge, threatened action, suit, proceeding or
claim by others challenging the Company’s rights in or to any

 

 

11

such Intellectual Property, and the Company is unaware of any facts which would
form a reasonable basis for any such claim; (iv) to the Company’s best knowledge, there
is no pending or threatened action, suit, proceeding or claim by others challenging the
validity or scope of any such Intellectual Property, and the Company is unaware of any
facts which would form a reasonable basis for any such claim; (v) there is no pending
or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others
that the Company infringes or otherwise violates any patent, trademark, copyright, trade
secret or other proprietary rights of others, and the Company is unaware of any other
fact which would form a reasonable basis for any such claim; (vi) to the Company’s
knowledge, there is no U.S. patent or published U.S. patent application which contains
claims that dominate or may dominate any Intellectual Property described in the
Prospectus as being owned by or licensed to the Company or that interferes with the
issued or pending claims of any such Intellectual Property; and (vii) there is no prior
art of which the Company is aware that may render any U.S. patent held by the Company
invalid or any U.S. patent application held by the Company unpatentable which has not
been disclosed to the U.S. Patent and Trademark Office.

     (hh) The statements contained in the Final Prospectus (exclusive of any supplement
thereto) under the caption described above in subsection (gg) and the statements in the
Quarterly Report under the caption “Legal Proceedings”, 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.

     (ii) Except as disclosed in the Registration Statement and the Final Prospectus,
the Company (i) does not have any material lending or other relationship with any bank
or lending affiliate of any of the Representatives and (ii) does not intend to use any
of the proceeds from the sale of the Securities hereunder to repay any outstanding debt
owed to any affiliate of any of the Representatives.

     Any certificate signed by any officer of the Company and delivered to the Representatives or
counsel for the Underwriters in connection with the offering of the Securities shall be deemed a
representation and warranty by the Company, as to matters covered thereby, to each Underwriter.

 

 

12

     2. Purchase and Sale. (a) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Company agrees to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase from the Company,
at a purchase price of $9.2625 per share, the amount of the Underwritten Securities set forth
opposite such Underwriter’s name in Schedule II hereto.

     (b) Subject to the terms and conditions and in reliance upon the representations and
warranties herein set forth, the Company hereby grants an option to the several Underwriters to
purchase, severally and not jointly, up to Option Securities at the same purchase price per share
as the Underwriters shall pay for the Underwritten Securities. Such option may be exercised only
to cover over-allotments in the sale of the Underwritten Securities by the Underwriters. Such
option may be exercised in whole or in part at any time on or before the 30th day after the date of
the Final Prospectus upon written or telegraphic notice by the Representatives to the Company
setting forth the number of shares of the Option Securities as to which the several Underwriters
are exercising the option and the settlement date. The number of shares of the Option Securities
to be purchased by each Underwriter shall be the same percentage of the total number of shares of
the Option Securities to be purchased by the several Underwriters as such Underwriter is purchasing
of the Underwritten Securities, subject to such adjustments as you in your absolute discretion
shall make to eliminate any fractional shares.

     3. Delivery and Payment. Delivery of and payment for the Underwritten Securities and
the Option Securities (if the option provided for in Section 2(b) hereof shall have been exercised
on or before the third Business Day prior to the Closing Date) shall be made on the date and at
the time specified in Schedule I hereto or at such time on such later date not more than three
Business Days after the foregoing date as the Representatives shall designate, which date and time
may be postponed by agreement between the Representatives and the Company or as provided in Section
9 hereof (such date and time of delivery and payment for the Securities being herein called the
“Closing Date”). Delivery of the Securities shall be made to the Representatives for the
respective accounts of the several Underwriters against payment by the several Underwriters through
the Representatives of the purchase price thereof to or upon the order of the Company by wire
transfer payable in same-day funds to an account specified by the Company. Delivery of the
Underwritten Securities and the Option Securities shall be made through the facilities of The
Depository Trust Company unless the Representatives shall otherwise instruct.

     If the option provided for in Section 2(b) hereof is exercised after the third Business Day
prior to the Closing Date, the Company will deliver the Option Securities (at the expense of the
Company) to the Representatives, at 388 Greenwich Street, New York, New York, on the date specified
by the Representatives (which shall be within three Business Days after exercise of such option)
for the respective accounts of the several Underwriters, against payment by the several
Underwriters through the

 

 

13

Representatives of the purchase price thereof to or upon the order of the Company by wire
transfer payable in same-day funds to an account specified by the Company. If settlement for the
Option Securities occurs after the Closing Date, the Company will deliver to the Representatives on
the settlement date for the Option Securities, and the obligation of the Underwriters to purchase
the Option Securities shall be conditioned upon receipt of, supplemental opinions, certificates and
letters confirming as of such date the opinions, certificates and letters delivered on the Closing
Date pursuant to Section 6 hereof.

     4. Offering by Underwriters. It is understood that the several Underwriters propose to
offer the Securities for sale to the public as set forth in the Final Prospectus.

     5. Agreements. The Company agrees with the several Underwriters that:

     (a) The Company will use its best efforts to cause the Registration Statement, if
not effective at the Execution Time, and any amendment thereof, to become effective.
Prior to the termination of the offering of the Securities, the Company will not file
any amendment of the Registration Statement or supplement (including the Final
Prospectus or any Preliminary Final Prospectus) to the Basic Prospectus or any Rule
462(b) Registration Statement unless the Company has furnished you a copy for your
review prior to filing and will not file any such proposed amendment or supplement to
which you reasonably object. Subject to the foregoing sentence, if the Registration
Statement has become or becomes effective pursuant to Rule 430A, or filing of the Final
Prospectus is otherwise required under Rule 424(b), the Company will cause the Final
Prospectus, properly completed, and any supplement thereto to be filed in a form
approved by the Representatives with the Commission pursuant to the applicable paragraph
of Rule 424(b) within the time period prescribed and will provide evidence satisfactory
to the Representatives of such timely filing. The Company will promptly advise the
Representatives (1) when the Registration Statement, if not effective at the Execution
Time, shall have become effective, (2) when the Final Prospectus, and any supplement
thereto, shall have been filed (if required) with the Commission pursuant to Rule 424(b)
or when any Rule 462(b) Registration Statement shall have been filed with the
Commission, (3) when, prior to termination of the offering of the Securities, any
amendment to the Registration Statement shall have been filed or become effective, (4)
of any request by the Commission or its staff for any amendment of the Registration
Statement, or any Rule 462(b) Registration Statement, or for any supplement to the Final
Prospectus or for any additional information, (5) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (6) of the receipt by
the Company of any notification with respect to the suspension of the qualification of
the Securities for sale in any jurisdiction or the institution or threatening of any
proceeding for such purpose. The

 

 

14

Company will use its best efforts to prevent the issuance of any such stop order or
the suspension of any such qualification and, if issued, to obtain as soon as possible
the withdrawal thereof.

     (b) If, at any time when a prospectus relating to the Securities is required to be
delivered under the Act, any event occurs as a result of which the Final Prospectus as
then supplemented would include any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall be necessary to
amend the Registration Statement or supplement the Final Prospectus to comply with the
Act or the Exchange Act or the respective rules thereunder, the Company promptly will
(1) notify the Representatives of such event, (2) prepare and file with the Commission,
subject to the second sentence of paragraph (a) of this Section 5, an amendment or
supplement which will correct such statement or omission or effect such compliance and
(3) supply any supplemented Final Prospectus to you in such quantities as you may
reasonably request.

     (c) As soon as practicable, the Company will make generally available to its
security holders and to the Representatives an earnings statement or statements of the
Company and its subsidiaries which will satisfy the provisions of Section 11(a) of the
Act and Rule 158 under the Act.

     (d) The Company will furnish to the Representatives and counsel for the
Underwriters, without charge, signed copies of the Registration Statement (including
exhibits thereto) and to each other Underwriter a copy of the Registration Statement
(without exhibits thereto) and, so long as delivery of a prospectus by an Underwriter or
dealer may be required by the Act, as many copies of each Preliminary Final Prospectus
and the Final Prospectus and any supplement thereto as the Representatives may
reasonably request. The Company will pay the expenses of printing or other production
of all documents relating to the offering.

     (e) The Company will arrange, if necessary, for the qualification of the Securities
for sale under the laws of such jurisdictions as the Representatives may designate, will
maintain such qualifications in effect so long as required for the distribution of the
Securities and will pay any fee of the NASD, Inc., in connection with its review of the
offering; provided that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take any action that
would subject it to service of process in suits, other than those arising out of the
offering or sale of the Securities, in any jurisdiction where it is not now so subject.

     (f) The Company will not, without the prior written consent of Citigroup Global
Markets Inc., offer, sell, contract to sell, pledge, or otherwise

 

 

15

dispose of, (or enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition (whether by actual disposition or
effective economic disposition due to cash settlement or otherwise) by the Company or
any affiliate of the Company) directly or indirectly, including the filing (or
participation in the filing) of a registration statement with the Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Exchange Act, any other
shares of Common Stock or any securities convertible into, or exercisable, or
exchangeable for, shares of Common Stock; or publicly announce an intention to effect
any such transaction, until the Business Day set forth on Schedule I hereto,
provided, however, that the Company may issue and sell Common Stock
pursuant to any employee stock option plan, stock ownership plan or dividend
reinvestment plan of the Company in effect at the Execution Time and the Company may
issue Common Stock issuable upon the conversion of securities or the exercise of
warrants outstanding at the Execution Time.

     (g) The Company will comply with all applicable securities and other applicable
laws, rules and regulations, including, without limitation, the Sarbanes Oxley Act, and
to use its best efforts to cause the Company’s directors and officers, in their
capacities as such, to comply with such laws, rules and regulations, including, without
limitation, the provisions of the Sarbanes Oxley Act.

     (h) The Company will not take, 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.

     (i) The Company will use the proceeds from the sale of the Securities in the manner
disclosed in the Final Prospectus under the caption “Use of Proceeds”.

     6. Conditions to the Obligations of the Underwriters. The obligations of the
Underwriters to purchase the Underwritten Securities and the Option Securities, as the case may be,
shall be subject to the accuracy of the representations and warranties on the part of the Company
contained herein as of the Execution Time, the Closing Date and any settlement date pursuant to
Section 3 hereof, to the accuracy of the statements of the Company made in any certificates
pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder
and to the following additional conditions:

     (a) If the Registration Statement has not become effective prior to the Execution
Time, unless the Representatives agree in writing to a later time, the Registration
Statement will become effective not later than (i) 6:00 PM New

 

 

16

York City time on the date of determination of the public offering price, if such
determination occurred at or prior to 3:00 PM New York City time on such date or (ii)
9:30 AM on the Business Day following the day on which the public offering price was
determined, if such determination occurred after 3:00 PM New York City time on such
date; if filing of the Final Prospectus, or any supplement thereto, is required pursuant
to Rule 424(b), the Final Prospectus, and any such supplement, will be filed in the
manner and within the time period required by Rule 424(b); and no stop order suspending
the effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or threatened.

     (b) The Company shall have requested and caused Hogan & Hartson L.L.P., counsel for
the Company, to have furnished to the Representatives their opinion, dated the Closing
Date and any settlement date and addressed to the Representatives, to the effect set
forth in Annex B hereto.

     (c) The Company shall have requested and caused Hatasawa, Wakai & Yasunaga, counsel
for Advanced Energy Japan, K.K., to have furnished to the Representatives their opinion,
dated the Closing Date and any settlement date and addressed to the Representatives, to
the effect set forth in Annex C hereto.

     (d) The Company shall have requested and caused J. D. Pirnot, internal counsel for
the Company, to have furnished to the Representatives his opinion, dated the Closing
Date and any settlement date and addressed to the Representatives, to the effect set
forth in Annex D hereto.

     (e) The Representatives shall have received from Davis Polk & Wardwell, counsel for
the Underwriters, such opinion or opinions, dated the Closing Date and any settlement
date and addressed to the Representatives, with respect to the issuance and sale of the
Securities, the Registration Statement, the Final Prospectus (together with any
supplement thereto) and other related matters as the Representatives may reasonably
require, and the Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.

     (f) The Company shall have furnished to the Representatives a certificate of the
Company, signed by the Chairman of the Board or the President and the principal
financial or accounting officer of the Company, dated the Closing Date and any
settlement date, to the effect that the signers of such certificate have carefully
examined the Registration Statement, the Final Prospectus, any supplements to the Final
Prospectus and this Agreement and that:

     (i) the representations and warranties of the Company in this Agreement are
true and correct on and as of the Closing Date and any settlement date with the
same effect as if made on the Closing Date and

 

 

17

any settlement date and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied at or prior
to the Closing Date and any settlement date;

     (ii) no stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been instituted or, to the
Company’s knowledge, threatened; and

     (iii) since the date of the most recent financial statements included or
incorporated by reference in the Final Prospectus (exclusive of any supplement
thereto), there has been no 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).

     (g) The Company shall have requested and caused Grant Thornton LLP to have
furnished to the Representatives, at the Execution Time and at the Closing Date and any
settlement date, letters, dated respectively as of the Execution Time and as of the
Closing Date and any settlement date, in form and substance satisfactory to the
Representatives, to the effect set forth in Annex E hereto.

     (h) The Company shall have requested and caused KPMG LLP to have furnished to the
Representatives, at the Execution Time and at the Closing Date and any settlement date,
letters, dated respectively as of the Execution Time and as of the Closing Date and any
settlement date, in form and substance satisfactory to the Representatives, to the
effect set forth in Annex F hereto.

     (i) Subsequent to the Execution Time or, if earlier, the dates as of which
information is given in the Registration Statement (exclusive of any amendment thereof)
and the Final Prospectus (exclusive of any supplement thereto), there shall not have
been (i) any change or decrease specified in the letter or letters referred to in
paragraph (e) of this Section 6 or (ii) any change, or any development involving a
prospective change, in or affecting the condition (financial or otherwise), 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) the effect
of which, in any case referred to in clause (i) or (ii) above, is, in the sole judgment
of the Representatives, so material and adverse as to make it impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by the
Registration Statement (exclusive of any

 

 

18

amendment thereof) and the Final Prospectus (exclusive of any supplement thereto).

     (j) Prior to the Closing Date and any settlement date, the Company shall have
furnished to the Representatives such further information, certificates and documents as
the Representatives may reasonably request.

     (k) Subsequent to the Execution Time, there shall not have been any decrease in the
rating of any of the Company’s debt securities by any “nationally recognized statistical
rating organization” (as defined for purposes of Rule 436(g) under the Act) or any
notice given of any intended or potential decrease in any such rating or of a possible
change in any such rating that does not indicate the direction of the possible change.

     (l) The Securities shall have been listed and admitted and authorized for trading
on the Nasdaq National Market, and satisfactory evidence of such actions shall have been
provided to the Representatives.

     (m) At the Execution Time, the Company shall have furnished to the Representatives
a letter substantially in the form of Exhibit A hereto from each officer and director of
the Company addressed to the Representatives.

     If any of the conditions specified in this Section 6 shall not have been fulfilled when and as
provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere
in this Agreement shall not be in reasonably satisfactory in form and substance to the
Representatives and counsel for the Underwriters, this Agreement and all obligations of the
Underwriters hereunder may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Company in writing or by
telephone or facsimile confirmed in writing.

     The documents required to be delivered by this Section 6 shall be delivered at the office of
Davis Polk & Wardwell, counsel for the Underwriters, at 1600 El Camino Real, Menlo Park, CA 94025,
on the Closing Date.

 

 

19

     7. Reimbursement of Underwriters’ Expenses. If the sale of the Securities provided
for herein is not consummated because any condition to the obligations of the Underwriters set
forth in Section 6 hereof is not satisfied, because of any termination pursuant to Section 10
hereof or because of any refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a default by any of
the Underwriters, the Company will reimburse the Underwriters severally through Citigroup Global
Markets Inc. on demand for all out-of-pocket expenses (including reasonable fees and disbursements
of counsel) that shall have been incurred by them in connection with the proposed purchase and sale
of the Securities.

     8. Indemnification and Contribution. (a) The Company agrees to indemnify and hold
harmless each Underwriter, the directors, officers, employees and agents of each Underwriter and
each person who controls any Underwriter within the meaning of either the Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the registration statement for the registration of
the Securities as originally filed or in any amendment thereof, or in the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, or in any amendment thereof 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 agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the Company will
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 any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written information furnished
to the Company by or on behalf of any Underwriter through the Representatives specifically for
inclusion therein. This indemnity agreement will be in addition to any liability which the Company
may otherwise have.

     (b) Each Underwriter severally and not jointly agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who signs the Registration Statement, and each
person who controls the Company within the meaning of either the Act or the Exchange Act, to the
same extent as the foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the Company by or on
behalf of such Underwriter through the Representatives specifically for inclusion in the documents
referred to in the foregoing indemnity. This indemnity agreement will be in addition to any
liability which any Underwriter may otherwise have. The Company acknowledges that the statements
set forth in the last paragraph of the cover page regarding delivery of the Securities and,

 

 

20

under the heading “Underwriting” or “Plan of Distribution”, (i) the list of Underwriters and
their respective participation in the sale of the Securities, (ii) the sentences related to
concessions and reallowances, (iii) the paragraph related to stabilization, syndicate covering
transactions and penalty bids and (iv) the information relating to the availability and delivery of
the electronic prospectus, in any Preliminary Final Prospectus and the Final Prospectus constitute
the only information furnished in writing by or on behalf of the several Underwriters for inclusion
in any Preliminary Final Prospectus or the Final Prospectus,.

     (c) Promptly after receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect thereof is to be
made against the indemnifying party under this Section 8, notify the indemnifying party in writing
of the commencement thereof; but the failure so to notify the indemnifying party (i) will not
relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the indemnifying party
of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party
from any obligations to any indemnified party other than the indemnification obligation provided in
paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party’s choice at the indemnifying party’s expense to represent the indemnified party
in any action for which indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel retained by the
indemnified party or parties except as set forth below); provided, however, that
such counsel shall be satisfactory to the indemnified party. Notwithstanding the indemnifying
party’s election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel
if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would
present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel satisfactory to
the indemnified party to represent the indemnified party within a reasonable time after notice of
the institution of such action or (iv) the indemnifying party shall authorize the indemnified party
to employ separate counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or compromise or consent
to the entry of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought hereunder (whether or
not the indemnified parties are actual or potential parties to such claim or action) unless such
settlement, compromise or consent includes an unconditional release of each indemnified party from
all liability arising out of such claim, action, suit or proceeding.

 

 

21

     (d) In the event that the indemnity provided in paragraph (a) or (b) of this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party for any reason, the Company
and the Underwriters severally agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection with investigating
or defending same) (collectively “Losses”) to which the Company and one or more of the Underwriters
may be subject in such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and by the Underwriters on the other from the offering of the
Securities; provided, however, that in no case shall any Underwriter (except as may
be provided in any agreement among underwriters relating to the offering of the Securities) be
responsible for any amount in excess of the underwriting discount or commission applicable to the
Securities purchased by such Underwriter hereunder. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company and the Underwriters severally shall
contribute 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 of the Underwriters on the other in
connection with the statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company shall be deemed to be equal to
the total net proceeds from the offering (before deducting expenses) received by it, and benefits
received by the Underwriters shall be deemed to be equal to the total underwriting discounts and
commissions, in each case as set forth on the cover page of the Final Prospectus. Relative fault
shall be determined by reference to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to state a material fact relates
to information provided by the Company on the one hand or the Underwriters on the other, the intent
of the parties and their relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The Company and the Underwriters agree that it would
not be just and equitable if contribution were determined by pro rata allocation or any other
method of allocation which does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), 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. For purposes
of this Section 8, each person who controls an Underwriter within the meaning of either the Act or
the Exchange Act and each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who controls the Company within
the meaning of either the Act or the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable terms and conditions of this
paragraph (d).

     9. Default by an Underwriter. If any one or more Underwriters shall fail to purchase
and pay for any of the Securities agreed to be purchased by such Underwriter or Underwriters
hereunder and such failure to purchase shall constitute a default in the performance of its or
their obligations under this Agreement, the remaining Underwriters

 

 

22

shall be obligated severally to take up and pay for (in the respective proportions which the
amount of Securities set forth opposite their names in Schedule II hereto bears to the aggregate
amount of Securities set forth opposite the names of all the remaining Underwriters) the Securities
which the defaulting Underwriter or Underwriters agreed but failed to purchase; provided,
however, that in the event that the aggregate amount of Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of the aggregate amount
of Securities set forth in Schedule II hereto, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the Securities, and if such
nondefaulting Underwriters do not purchase all the Securities, this Agreement will terminate
without liability to any nondefaulting Underwriter or the Company. In the event of a default by
any Underwriter as set forth in this Section 9, the Closing Date or any settlement date shall be
postponed for such period, not exceeding five Business Days, as the Representatives shall determine
in order that the required changes in the Registration Statement and the Final Prospectus or in any other documents or arrangements may be effected. Nothing contained
in this Agreement shall relieve any defaulting Underwriter of its liability, if any, to the Company
and any nondefaulting Underwriter for damages occasioned by its default hereunder.

     10. Termination. This Agreement shall be subject to termination in the absolute
discretion of the Representatives, by notice given to the Company prior to delivery of and payment
for the Securities, if at any time prior to such time (i) trading in the Company’s Common Stock
shall have been suspended by the Commission or the Nasdaq National Market or trading in securities
generally on the New York Stock Exchange or the Nasdaq National Market shall have been suspended or
limited or minimum prices shall have been established on the Exchange or the Nasdaq National
Market, (ii) a banking moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war, or other calamity or crisis the
effect of which on financial markets is such as to make it, in the sole judgment of the
Representatives, impractical or inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Final Prospectus (exclusive of any supplement thereto).

     11. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Company or its officers and of
the Underwriters set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter or the Company or
any of the officers, directors, employees, agents or controlling persons referred to in Section 8
hereof, and will survive delivery of and payment for the Securities. The provisions of Sections 7
and 8 hereof shall survive the termination or cancellation of this Agreement.

     12. Notices. All communications hereunder will be in writing and effective only on
receipt, and, if sent to the Representatives, will be mailed, delivered or

 

 

23

telefaxed to the Citigroup Global Markets Inc. General Counsel (fax no.: (212) 816-7912) and
confirmed to the General Counsel, Citigroup Global Markets Inc., at 388 Greenwich Street, New York,
New York, 10013, Attention: General Counsel; or, if sent to the Company, will be mailed, delivered
or telefaxed to (fax no.: (970) 221-5583) and confirmed to it at Advanced Energy Industries, Inc.,
1625 Sharp Point Drive, Fort Collins, CO 80525, attention of the Legal Department.

     13. Successors. This Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors and the officers, directors, employees, agents and
controlling persons referred to in Section 8 hereof, and no other person will have any right or
obligation hereunder.

     14. Applicable Law. This Agreement will be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made and to be performed within the
State of New York.

     15. Counterparts. This Agreement may be signed in one or more counterparts, each of
which shall constitute an original and all of which together shall constitute one and the same
agreement.

     16. Headings. The section headings used herein are for convenience only and shall not
affect the construction hereof.

     17. Definitions. The terms which follow, when used in this Agreement, shall have the
meanings indicated.

     “Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations
of the Commission promulgated thereunder.

     “Basic Prospectus” shall mean the prospectus referred to in paragraph 1(a) above
contained in the Registration Statement at the Effective Date including any Preliminary
Final Prospectus.

     “Business Day” shall mean any day other than a Saturday, a Sunday or a legal holiday
or a day on which banking institutions or trust companies are authorized or obligated by
law to close in New York City.

     “Commission” shall mean the Securities and Exchange Commission.

     “Effective Date” shall mean each date and time that the Registration Statement, any
post-effective amendment or amendments thereto and any Rule 462(b) Registration Statement
became or become effective.

     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission promulgated thereunder.

 

 

24

     “Execution Time” shall mean the date and time that this Agreement is executed and
delivered by the parties hereto.

     “Final Prospectus” shall mean the prospectus supplement relating to the Securities
that was first filed pursuant to Rule 424(b) after the Execution Time, together with the
Basic Prospectus.

     “Preliminary Final Prospectus” shall mean any preliminary prospectus supplement to the
Basic Prospectus which describes the Securities and the offering thereof and is used prior
to filing of the Final Prospectus, together with the Basic Prospectus.

     “Registration Statement” shall mean the registration statement referred to in
paragraph 1(a) above, including exhibits and financial statements, as amended at the
Execution Time (or, if not effective at the Execution Time, in the form in which it shall
become effective) and, in the event any post-effective amendment thereto or any Rule 462(b)
Registration Statement becomes effective prior to the Closing Date, shall also mean such
registration statement as so amended or such Rule 462(b) Registration Statement, as the
case may be. Such term shall include any Rule 430A Information deemed to be included
therein at the Effective Date as provided by Rule 430A.

     “Rule 415”, “Rule 424”, “Rule 430A” and “Rule 462” refer to such rules under the Act.

     “Rule 430A Information” shall mean information with respect to the Securities and the
offering thereof permitted to be omitted from the Registration Statement when it becomes
effective pursuant to Rule 430A.

     “Rule 462(b) Registration Statement” shall mean a registration statement and any
amendments thereto filed pursuant to Rule 462(b) relating to the offering covered by the
registration statement referred to in Section 1(a) hereof.

     “Significant Subsidiary” shall have the meaning set forth in Rule 1-02 of Regulation
S-X.

     18. No fiduciary duty. The Company hereby acknowledges that (a) the Underwriters are
acting as principal and not as an agent or fiduciary of the Company and (b) its engagement of the
Underwriters in connection with the offering is as independent contractors and not in any other
capacity. Furthermore, the Company agrees that it is solely responsible for making its own
judgments in connection with the offering (irrespective of whether any of the Underwriters has
advised or is currently advising the Company on related or other matters).

     If the foregoing is in accordance with your understanding of our agreement, please sign and
return to us the enclosed duplicate hereof, whereupon this

 

 

25

letter and your acceptance shall represent a binding agreement among the Company and the
several Underwriters.

	 	 	 	 	 
	 	Very truly yours,

Advanced Energy Industries, Inc.

 	 
	 	By:  	/s/ Michael El-Hillow
 	 
	 	 	Name:  	Michael El-Hillow	 
	 	 	Title:  	Chief Financial Officer 	 

 

 

26

	 	 	 	 	 

The foregoing Agreement is

hereby confirmed and accepted

as of the date specified in

Schedule I hereto.

Citigroup Global Markets Inc.

Lehman Brothers Inc.

Adams Harkness, Inc.

Needham & Company, LLC

By: Citigroup Global Markets Inc.

By: /s/ Laurence Braham

 

   Name: Laurence Braham

   Title: Managing Director

 

For themselves and the other

several Underwriters

named in Schedule II to the

foregoing Agreement.

 

 

SCHEDULE I

Underwriting Agreement dated August 11, 2005

Registration Statement No. 333-110534

Representatives: Citigroup Global Markets Inc., Lehman Brothers Inc., Adams Harkness, Inc., and
Needham & Company, LLC

Title, Purchase Price and Description of Securities:

Title: Common Stock, par value $0.001

Number of Shares to be sold by the Company: 10,000,000

Price to Public per Share (include accrued dividends, if any): $9.75

Price to Public — total: $97,500,000

Underwriting Discount per Share: $0.4875

Underwriting Discount — total: $4,875,000

Proceeds to Company per Share: $9.2625

Proceeds to Company — total: $92,625,000

Other provisions:

	 	 	 
	Closing Date, Time and Location:

	 	August 17, 2005 at 10:00 a.m. at the
offices of Davis Polk & Wardwell, 1600
El Camino Real, Menlo Park, CA 94025

Type of Offering: Non-Delayed

Date referred to in Section 5(f) after which the Company may offer or sell securities issued or
guaranteed by the Company without the consent of the Representatives: November 9, 2005

 

 

SCHEDULE II

	 	 	 	 	 
	 	 	Number of Underwritten
	Underwriters	 	Securities to be Purchased
	Citigroup Global Markets Inc.
	 	 	4,750,000	 
	Lehman Brothers Inc.
	 	 	2,850,000	 
	Adams Harkness, Inc.
	 	 	950,000	 
	Needham & Company, LLC
	 	 	950,000	 
	The Williams Capital Group, L.P.
	 	 	166,667	 
	Susquehanna Financial Group, Inc.
	 	 	166,667	 
	Barrington Research Associates, Inc.
	 	 	166,666	 
	 
	 	 	 	 
	Total
	 	 	10,000,000

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