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800,000 SHARES
CONSOLIDATED WATER CO. LTD
ORDINARY SHARES
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UNDERWRITING AGREEMENT
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Philadelphia, Pennsylvania
______, 2000
XXXXXX XXXXXXXXXX XXXXX LLC
Representative of the Several
Underwriters Named in Schedule II Hereto
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
FIRST SECURITY XXX XXXXXX
Representative of the Several
Underwriters Named in Schedule II thereto
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
Consolidated Water Co. Ltd., a Cayman Island corporation
("CWCO"), proposes to sell to Xxxxxx Xxxxxxxxxx Xxxxx LLC and First Security Xxx
Xxxxxx (the "Representatives") and the several other underwriters named in
Schedule II hereto (together with the Representatives, the "Underwriters")
770,000 Ordinary Shares, par value C.I. $1.00 per share ("Ordinary Shares"), of
CWCO and the persons named in Part A of Schedule I hereto (the "Selling
Shareholders") propose to sell to the Underwriters an aggregate of 80,000
Ordinary
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Shares. The Ordinary Shares to be sold to the Underwriters by CWCO and the
Selling Shareholders are referred to herein as the "Firm Shares." The respective
amounts of the Firm Shares to be purchased by the several Underwriters are set
forth opposite their names in Schedule II hereto. The Firm Shares shall be
offered to the public at a public offering price of $____ per Firm Share (the
"Offering Price").
In order to cover over-allotments in the sale of the Firm
Shares, the Underwriters may purchase for the Underwriters' own accounts up to
127,500 additional Ordinary Shares from CWCO. Such 127,500 additional Ordinary
Shares are referred to herein as the "Optional Shares." If any Optional Shares
are purchased, the Optional Shares shall be purchased for offering to the public
at the Offering Price and in accordance with the terms and conditions set forth
herein. The Firm Shares and the Optional Shares are referred to collectively
herein as the "Shares."
1. REPRESENTATIONS AND WARRANTIES OF CWCO. CWCO represents and warrants
to, and agrees with, the several Underwriters that:
(a) CWCO has prepared, in conformity with the requirements of
the Securities Act of 1933, as amended (the "Act"), and the rules and
regulations (the "Regulations") of the Securities and Exchange Commission (the
"SEC") under the Act in effect at all applicable times, and has filed with the
SEC a registration statement on Form F-2 (File No. 333-_________) and one or
more amendments thereto for the purpose of registering the Shares under the Act.
Copies of such registration statement and any amendments thereto, and all forms
of the related prospectus contained therein, have been delivered to the
Representatives. Any preliminary prospectus included in such registration
statement or filed with the SEC pursuant to Rule 424(a) of the Regulations is
hereinafter called a "Preliminary Prospectus." The various parts of such
registration statement, including all exhibits thereto and the information
contained in the form of final prospectus filed with the SEC pursuant to Rule
424(b) of the Regulations in accordance with Section 6(a) of this Agreement and
deemed by virtue of Rule 424 of the Regulations to be part of the registration
statement at the time it was declared effective, each as amended at the time the
registration statement became effective, including the information (if any)
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A of the Regulations, are hereinafter collectively called
the "Registration Statement." The final prospectus in the form included in the
Registration Statement or first filed with the SEC pursuant to Rule 424(b) of
the Regulations and any amendments or supplements thereto, including the
information (if any) deemed to be part of that prospectus at the time of
effectiveness pursuant to Rule 430A of the Regulations, is hereinafter called
the "Prospectus." All references to the Registration Statement, the Preliminary
Prospectus and the Prospectus include all documents incorporated therein by
reference. If CWCO has filed an abbreviated registration statement to register
additional Ordinary Shares pursuant to Rule 462(b) under the Act (the "Rule 462
Registration Statement"), then any reference herein to the term "Registration
Statement" shall be deemed to include such Rule 462 Registration Statement.
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(b) The Registration Statement has become effective under the
Act, and the SEC has not issued any stop order suspending the effectiveness of
the Registration Statement or preventing or suspending the use of the
Preliminary Prospectus, nor has the SEC instituted or threatened to institute
proceedings with respect to such an order. No stop order suspending the sale of
the Shares in any jurisdiction designated by the Representatives as provided for
in Section 6(f) hereof has been issued, and no proceedings for that purpose have
been instituted or threatened. CWCO has complied in all material respects with
all requests of the SEC, or requests of which CWCO has been advised of any state
or foreign securities commission in a state or foreign jurisdiction designated
by the Representatives as provided for in Section 6(f) hereof, for additional
information to be included in the Registration Statement, any Preliminary
Prospectus or the Prospectus. Each Preliminary Prospectus conformed to all the
requirements of the Act and the Regulations as of its date in all material
respects and did not as of its date contain any untrue statement of material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, except the foregoing shall not apply to statements in
or omissions from any Preliminary Prospectus in reliance upon and in conformity
with information supplied to CWCO in writing by or on behalf of any Underwriter
through the Representatives expressly for use therein. The Registration
Statement, on the date on which it was declared effective by the SEC (the
"Effective Date") and when any post-effective amendment thereof shall become
effective, and the Prospectus, at the time it is filed with the SEC including,
if applicable, pursuant to Rule 424(b), and on the Closing Date (as defined in
Section 4 hereof) and any Option Closing Date (as defined in Section 5(b)
hereof), conformed and will conform in all material respects to all the
requirements of the Act and the Regulations, and did not and will not, on any of
such dates, include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, except that this representation and warranty does not
apply to statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information furnished to
CWCO in writing by or on behalf of any Underwriter through the Representatives
expressly for use therein.
(c) The documents incorporated by reference into the
Prospectus pursuant to Item 12 of Form F-2 under the Act, at the time they were
filed with the SEC, complied in all material respects with the requirements of
the Securities Exchange Act of 1934, as amended ("Exchange Act") and the
Exchange Act Rules and Regulations and did not contain any untrue statement of
material fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(d) CWCO is a corporation duly organized, validly existing and
in good standing under the laws of the Cayman Islands, with all necessary power
and authority, corporate and otherwise, and all required licenses, permits,
certifications, registrations, approvals, consents and franchises to own or
lease and operate its properties and to conduct its current business as
described in the Prospectus, and to execute, deliver and perform this Agreement,
except where
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the failure to obtain such licenses, permits, certifications, registrations,
approvals, consents and franchises would not have a material adverse effect on
the general affairs, properties, condition (financial or otherwise), results of
operations, shareholders' equity, business or prospects (collectively, the
"Business Conditions"). Commonwealth Water Ltd., a corporation incorporated in
the Bahamas ("Commonwealth") is a subsidiary of CWCO. Commonwealth is a
corporation duly organized, validly existing and in good standing under the laws
of the Bahamas and currently has no operations and is not conducting any
business. CWCO is duly qualified to do business as a foreign corporation, and is
in good standing, in all jurisdictions in which such qualification is required,
except where the failure to so qualify would not have a material adverse effect
on CWCO's Business Conditions.
(e) All of the outstanding shares of capital stock of CWCO
have been duly authorized and validly issued, are fully paid and non-assessable;
and no options, warrants or other rights to purchase, agreements or other
obligations to issue, or other rights to convert any obligations into, shares of
capital stock or ownership interests in CWCO or securities convertible into or
exchangeable for capital stock of, or other ownership interests in, CWCO is
outstanding except as disclosed in the Prospectus. CWCO does not own any stock
or other interest whatsoever, whether equity or debt, in any corporation,
partnership or other entity, other than CWCO's ownership of Commonwealth and
Hurricane Hideaway Marina Ltd., a Cayman Islands corporation.
(f) This Agreement has been duly authorized, executed and
delivered by CWCO and constitutes its legal, valid and binding obligation,
enforceable against CWCO in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally and subject to applicability of
general principles of equity and except, as to this Agreement, as rights to
indemnity and contribution may be limited by federal and state securities laws
or principles of public policy.
(g) The execution, delivery and performance of this Agreement
and the transactions contemplated herein, do not and will not, with or without
the giving of notice or the lapse of time, or both, (i) conflict with any term
or provision of CWCO's Memorandum of Association or Articles of Association;
(ii) result in a breach of, constitute a default under, result in the
termination or modification of, result in the creation or imposition of any
lien, security interest, charge or encumbrance upon any of the properties of
CWCO or require any payment by CWCO or impose any liability on CWCO pursuant to,
any contract, indenture, mortgage, deed of trust, commitment or other agreement
or instrument to which CWCO is a party or by which any of its properties are
bound or affected other than this Agreement, except as disclosed in the
Prospectus; (iii) assuming compliance with Blue Sky laws and the rules of the
National Association of Securities Dealers, Inc. (the "NASD") applicable to the
offer and sale of the Shares, violate any law, rule, regulation, judgment, order
or decree of any government or governmental agency, instrumentality or court,
domestic or foreign, having jurisdiction over CWCO or any of its properties or
business; or (iv) result in a breach, termination or lapse of
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CWCO's corporate power and authority to own or lease and operate its properties
and conduct its business, except as disclosed in the Prospectus.
(h) At the date or dates indicated in the Prospectus, CWCO had
the duly authorized and outstanding capitalization set forth in the Prospectus
under the caption "Capitalization" and will have, as of the issuance of the Firm
Shares on the Closing Date, the as adjusted capitalization set forth therein as
of the date indicated in the Prospectus. On the Effective Date, the Closing Date
and any Option Closing Date, there will be no options or warrants or other
outstanding rights to purchase, agreements or obligations to issue or agreements
or other rights to convert or exchange any obligation or security into, capital
stock of CWCO or securities convertible into or exchangeable for capital stock
of CWCO, except as described in the Prospectus or the grant of options after the
date of the Prospectus under option plans of the Company. The information in the
Prospectus insofar as it relates to all outstanding options and other rights to
acquire securities of CWCO as of the Effective Date and immediately prior to the
Closing Date and any Option Closing Date is true and correct in all material
respects.
(i) The currently outstanding shares of CWCO's capital stock
have been duly authorized and are validly issued, fully paid and non-assessable,
and none of such outstanding shares of CWCO's capital stock has been issued in
violation of any preemptive rights of any security holder of CWCO. The holders
of the outstanding shares of CWCO's capital stock are not subject to personal
liability solely by reason of being such holders. All previous offers and sales
of the outstanding shares of CWCO's capital stock, whether described in the
Registration Statement or otherwise, were made in conformity with applicable
federal, state and foreign securities laws. The authorized capital stock of
CWCO, including, without limitation, the outstanding Ordinary Shares, the Shares
being issued, and the outstanding options to purchase shares of the Ordinary
Shares conform in all material respects with the descriptions thereof in the
Prospectus, and such descriptions conform in all material respects with the
instruments defining the same.
(j) When the Shares have been duly delivered against payment
therefor as contemplated by this Agreement, the Shares will be validly issued,
fully paid and non-assessable, and the holders thereof will not be subject to
personal liability solely by reason of being such holders. The certificates
representing the Shares are in proper legal form under, and conform in all
respects to the requirements of, the Cayman Islands. Neither the filing of the
Registration Statement nor the offering or sale of Shares as contemplated by
this Agreement gives any security holder of CWCO any rights for or relating to
the registration of any Ordinary Shares or any other capital stock of CWCO or
any rights to convert or have redeemed or otherwise receive anything of value
with respect to any other security of CWCO.
(k) No consent, approval, authorization, order, registration,
license or permit of, or filing or registration with, any court, government,
governmental agency, instrumentality or other regulatory body or official is
required for the valid and legal execution, delivery and performance by CWCO of
this Agreement and the consummation of the transactions
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contemplated hereby or described in the Prospectus, except (i) such as may be
required for the registration of the Shares under the Act, the Exchange Act, and
for compliance with the applicable state securities or Blue Sky laws or the
Bylaws, rules and other pronouncements of the NASD, (ii) such as have been
obtained under the laws and regulations of jurisdictions outside the United
States which the Shares are offered and (iii) as disclosed in the Prospectus.
(l) The Ordinary Shares (including the Shares) are registered
pursuant to Section 12(g) of the Exchange Act. The issued and outstanding shares
of the Ordinary Shares are included for quotation on the Nasdaq National Market.
To CWCO's knowledge, no other person has taken any action designed to cause, or
likely to result in, the termination of the registration of the Ordinary Shares
under the Exchange Act. CWCO has not received any notification that the SEC or
the Nasdaq is contemplating terminating such registration or inclusion.
(m) The statements in the Registration Statement and
Prospectus, insofar as they are descriptions of or references to contracts,
agreements or other documents, are accurate in all material respects and present
or summarize fairly, in all material respects, the information required to be
disclosed under the Act or the Regulations, and there are no contracts,
agreements or other documents, instruments or transactions of any character
required to be described or referred to in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration Statement that have
not been so described, referred to or filed, as required.
(n) Each contract or other instrument (however characterized
or described) to which CWCO is a party or by which any of its properties or
business is bound or affected and which is material to the conduct of CWCO's
business, has been duly and validly executed by CWCO, and, to the knowledge of
CWCO, by the other parties thereto. Each such contract or other instrument is in
full force and effect and is enforceable in all material respects against the
parties thereto in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally and subject to applicability of
general principles of equity, and CWCO is not, and to the knowledge of CWCO, no
other party is, in default thereunder, and except as disclosed in the
Prospectus, no event has occurred that, with the lapse of time or the giving of
notice, or both, would constitute a default under any such contract or other
instrument. All necessary consents under such contracts or other instruments to
the disclosure in the Prospectus with respect thereto have been obtained.
(o) The consolidated financial statements of CWCO (including
the notes thereto) filed as part of any Preliminary Prospectus, the Prospectus
and the Registration Statement present fairly, in all material respects, the
financial position of CWCO as of the respective dates thereof, and the results
of operations and cash flows of CWCO for the periods indicated therein, all in
conformity with generally accepted accounting principles. The supporting notes
included in the Registration Statement fairly state in all material respects the
information required to be stated therein in relation to the financial
statements taken as a whole. The financial information included in the
Prospectus under the captions "Prospectus Summary -
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Summary Consolidated Financial Information," and "Selected Financial
Information" presents fairly the information shown therein and has been compiled
on a basis consistent with that of the audited financial statements included in
the Registration Statement. The unaudited pro forma adjustments to financial
information included in the Registration Statement have been properly applied to
the historical amounts in the compilation of that information to reflect the
sale by CWCO and the Selling Shareholders of 850,000 Ordinary Shares offered
thereby at an assumed offering or actual price set forth in the Preliminary
Prospectus or the Prospectus, as the case may be, and the application of the
estimated net proceeds to CWCO therefrom.
(p) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as otherwise
stated therein, there has not been (i) any material adverse change (including,
whether or not insured against, any material loss or damage to any material
assets), or development involving a prospective material adverse change, in the
Business Conditions of CWCO; (ii) any material adverse change, loss, reduction,
termination or non-renewal of any material contract to which CWCO is a party;
(iii) any transaction entered into by CWCO not in the ordinary course of its
business that is material to CWCO; (iv) any dividend or distribution of any kind
declared, paid or made by CWCO on its capital stock, except for and to the
extent described in the Prospectus; (v) any liabilities or obligations, direct
or indirect, incurred by CWCO that are material to CWCO; (vi) any change in the
capitalization of CWCO; or (vii) any change in the indebtedness of CWCO that is
material to CWCO. CWCO does not have any contingent liabilities or obligations
that are material and that are not expressly disclosed in the Prospectus.
(q) CWCO has not distributed, and will not distribute, any
offering material in connection with the offering and sale of the Shares other
than the Registration Statement, a Preliminary Prospectus, the Prospectus and
other material, if any, permitted by the Act and the Regulations. Neither CWCO
nor any of its officers, directors or affiliates has taken, nor shall CWCO or
such persons take, any action designed to, or that might be reasonably expected
to, cause or result in stabilization or manipulation of the price of the
Ordinary Shares.
(r) CWCO is not required to file any tax returns with any
taxing authority, foreign or domestic.
(s) PricewaterhouseCoopers, which has given its report on
certain financial statements included as part of the Registration Statement, is
a firm of independent certified public accountants as required by the Act and
the Regulations with respect to CWCO.
(t) CWCO is not in violation of, or in default under, any of
the terms or provisions of (i) its Memorandum of Association or Articles of
Association or similar governing instruments and (ii) except as disclosed in the
Prospectus (A) any indenture, mortgage, deed of trust, contract, commitment or
other agreement or instrument to which it is a party or by which it or any of
its assets or properties is bound or affected, (B) any law, rule, regulation,
judgment, order or decree of any government or governmental agency,
instrumentality or court, domestic or
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foreign, having jurisdiction over it or any of its properties or business, or
(C) any license, permit, certification, registration, approval, consent or
franchise.
(u) Except as expressly disclosed in the Prospectus, there are
no claims, actions, suits, protests, proceedings, arbitrations, investigations
or inquiries pending before, or, to CWCO's knowledge, threatened or contemplated
by, any governmental agency, instrumentality, court or tribunal, domestic or
foreign, or before any private arbitration tribunal to which CWCO is or may be
made a party that could reasonably be expected to affect the validity of any of
the outstanding Ordinary Shares, or that, if determined adversely to CWCO would,
in any case or in the aggregate, result in any material adverse change in the
Business Conditions of CWCO, nor to CWCO's knowledge is there any reasonable
basis for any such claim, action, suit, protest, proceeding, arbitration,
investigation or inquiry. There are no outstanding orders, judgments or decrees
of any court, governmental agency, instrumentality or other tribunal enjoining
CWCO from, or requiring CWCO to take or refrain from taking, any action, or to
which CWCO or its properties, assets or business are bound or subject.
(v) CWCO owns, or possesses adequate rights to use, all
patents, patent applications, trademarks, trademark registrations, applications
for trademark registration, trade names, service marks, licenses, inventions,
copyrights, know-how (including any unpatented and/or unpatentable proprietary
or confidential technology, information, systems, design methodologies and
devices or procedures developed or derived from or for CWCO's business), trade
secrets, confidential information, processes and formulations and other
proprietary information necessary for, used in, or proposed to be used in, the
conduct of the business of CWCO as described in the Prospectus (collectively,
the "Intellectual Property"). To CWCO's knowledge, CWCO has not infringed, is
not infringing and CWCO has not received any notice of conflict with, the
asserted rights of others with respect to the Intellectual Property that,
individually or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, could materially adversely affect the Business Conditions of
CWCO, and CWCO knows of no reasonable basis therefor. To the knowledge of CWCO,
no other parties have infringed upon or are in conflict with any Intellectual
Property. CWCO is not a party to, or bound by, any agreement pursuant to which
royalties, honorariums or fees are payable by CWCO to any person by reason of
the ownership or use of any Intellectual Property.
(w) CWCO has good and marketable title to all property
described in the Prospectus as being owned by it, free and clear of all
mortgages, liens, security interests, charges or encumbrances and the like,
except such as are expressly described or referred to in the Prospectus or such
as do not materially adversely affect the Business Conditions or the conduct of
the business of CWCO as described in the Prospectus. Except as disclosed in the
Prospectus, CWCO has insured its property against loss or damage by fire or
other casualty, in amounts reasonably believed by CWCO to be adequate, and
maintains insurance against such other risks as management of CWCO deems
appropriate. All real and personal property leased by CWCO as described or
referred to in the Prospectus, is held by CWCO, under valid leases which are in
full force and effect. The executive offices and facilities of CWCO (the
"Premises"), and all
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operations presently or formerly conducted thereon by CWCO or any predecessors
thereof, are now and, since CWCO began to use such Premises, always have been
and, to the knowledge of CWCO prior to when CWCO began to use such Premises,
always had been, in compliance with all federal, state and local statutes,
ordinances, regulations, rules, standards and requirements of the common law or
the law of the Cayman Islands thereof concerning or relating to industrial
hygiene and the protection of health and the environment (collectively, "the
Environmental laws"), except to the extent that any failure in such compliance
would not materially adversely affect the Business Conditions of CWCO. To the
knowledge of CWCO, the facilities of CWCO produce water of sufficient quality
and quantity to supply the current and planned customers and service areas of
CWCO, and are not subject to any restriction on groundwater withdrawal under any
federal, state or local law, regulation, rule, order or permit, except as
expressly described in the Prospectus or as provided in the Cayman Islands
allocation permits and licenses and such as do not materially adversely affect
the Business Conditions or the conduct of the business of CWCO as described in
the Prospectus. To the knowledge of CWCO, there are no conditions on, about,
beneath or arising from the Premises, in close proximity to the Premises or at
any other location that might give rise to liability, the imposition of a
statutory lien or require a removal of offensive material or clean-up, under any
of the Environmental laws, or affect the quality of the groundwater withdrawn by
CWCO, and that would materially adversely affect the Business Conditions of CWCO
except as described in the Prospectus. Except as expressly disclosed in the
Prospectus, or which will not materially adversely affect the Business
Conditions of CWCO (i) CWCO has not received notice nor has knowledge of any
claim, demand, investigation, regulatory action, suit or other action instituted
or threatened against CWCO or any portion of the Premises or any parcel in close
proximity to the Premises relating to any of the Environmental laws and (ii)
CWCO has not received any notice of material violation, citation, complaint,
order, directive, request for information or response thereto, notice letter,
demand letter or compliance schedule to or from any governmental or regulatory
agency arising out of or in connection with "hazardous substances" (as defined
by applicable Environmental laws) on, about, beneath, arising from or generated
at the Premises, near the Premises or at any other location.
(x) CWCO maintains a system of internal accounting controls
sufficient to provide reasonable assurances that: (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary in order to permit preparation of
financial statements in accordance with generally accepted accounting principles
and to maintain accountability for assets; (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 existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(y) CWCO and each of its subsidiaries and affiliates (the
"Employers") have established, maintain, contribute to, are required to
contribute to, are a party to, or are bound by contractual commitments with
respect to, certain pension, retirement, or profit-sharing plans, deferred
compensation, bonus, or other incentive plans, or medical, vision, dental, or
other health
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and welfare benefit plans, or life insurance or disability plans, or any other
employee benefit plans, programs, arrangements, agreements, or understandings
(the "Plans").
With respect to each of the Plans:
(i) The terms of each of the Plans are in
writing, and each of the Plans has been maintained and administered in
accordance with its terms and any applicable collective bargaining agreements.
(ii) Each of the Plans has been maintained and
administered in compliance with all regulations, rules, standards and
requirements of the common law or the law of the Cayman Islands thereof
concerning the establishment, funding, taxation and administration of such
Plans, including without limitation any such laws governing the conduct of the
trustees, fiduciaries or administrators of such Plans (collectively, the
"Employee Benefits Laws") except to the extent any failure in such compliance
would not adversely affect the Business Conditions of CWCO. None of the Plans
are subject to the Employee Retirement Income Security Act of 1974 as amended
("ERISA").
(iii) None of the Plans is a defined benefit
pension plan, under which the Employer is obligated to fund, or contribute to
the funding of, the payment of a defined retirement benefit based on an
employee's accumulated compensation, service or other factors.
(iv) None of the Plans provides retiree life or
retiree health insurance, except as may be required by applicable Employee
Benefits laws.
(v) There are no actions, suits or claims (other
than routine claims for benefits in the ordinary course) pending or, to CWCO's
knowledge, threatened, and to CWCO's best knowledge, there are no facts which
could give rise to any such actions, suits or claims (other than routine claims
for benefits in the ordinary course).
(vi) All contributions and/or insurance premiums
required to be paid as of the Closing Date by the Employers with respect to such
Plans have been paid.
(vii) The Employers have made all disclosures to
participants and to governmental authorities, including tax filings as
applicable, with respect to such Plans as may be required by applicable Employee
Benefits law.
(z) No labor dispute exists with CWCO's employees, and to
CWCO's knowledge, no such labor dispute is threatened. CWCO has no knowledge of
any existing or threatened labor disturbance by the employees of any of the
principal suppliers, contractors or customers of CWCO that would materially
adversely affect the Business Conditions of CWCO. None of CWCO's employees is
covered by a collective bargaining agreement and no union organizing activity
exists with respect to any of such employees.
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(aa) CWCO has not incurred any liability for any finder's fees
or similar payments in connection with the transactions contemplated herein
other than as disclosed in the Prospectus.
(bb) CWCO is familiar with the Investment Company Act of 1940,
as amended (the "1940 Act"), and the rules and regulations thereunder, and has
in the past conducted, and CWCO intends to conduct, its affairs in such a manner
as to ensure that it will not be an "investment company" within the meaning of
the 1940 Act and the rules and regulations thereunder.
(cc) No statement, representation, warranty or covenant made
by CWCO in this Agreement or in any certificate or document required by this
Agreement to be delivered to the Representatives is, or as of the Closing Date
or any Option Closing Date will be, inaccurate, untrue or incorrect in any
material respect. No transaction has occurred or is proposed between or among
CWCO and any of its respective officers, directors or shareholders or any
affiliate of the foregoing, or any affiliate of the foregoing that is required
to be described in and is not described in the Registration Statement and the
Prospectus.
(dd) Neither CWCO, nor any officer, director, employee,
partner, agent or other person acting on behalf of CWCO has, directly or
indirectly, given or agreed to give any money, property or similar benefit or
consideration to any customer or supplier (including any employee or agent of
any customer or supplier) or official or employee of any agency or
instrumentality of any government (foreign or domestic) or political party or
candidate for office (foreign or domestic) or any other person who was, is or in
the future may be in a position to affect the Business Conditions of CWCO or any
actual or proposed business transaction of CWCO that (i) could subject CWCO to
any liability (including, but not limited to, the payment of monetary damages)
or penalty in any civil, criminal or governmental action or proceeding that
would have a material adverse effect on the Business Conditions of CWCO or (ii)
with respect to CWCO or any officer or director thereof, violates any law, rule
or regulation to which CWCO is subject.
Any certificate signed by any officer of CWCO in such capacity
and delivered to the Representatives or to counsel for the Underwriters pursuant
to this Agreement shall be deemed a representation and warranty by CWCO as the
case may be, to the several Underwriters as to the matters covered thereby.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS. Each
Selling Shareholder severally represents and warrants to each Underwriter that:
(a) Such Selling Shareholder now has, and on the Closing Date
and any Option Closing Date will have, good and marketable title to the Shares
to be sold by such Selling Shareholder, free and clear of any lien, claim,
security interest or other encumbrance, including, without limitation, any
restriction on transfer.
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(b) Such Selling Shareholder now has, and on the Closing Date
and any Option Closing Date will have, full legal right, power and
authorization, and any approval required by law, to sell, assign, transfer and
deliver such Shares in the manner provided in this Agreement, and upon delivery
of and payment for such Shares hereunder, the several Underwriters will acquire
good and marketable title to such Shares free and clear of any lien, claim,
security interest, or other encumbrance.
(c) This Agreement and the Custody Agreement have been duly
authorized, executed and delivered by or on behalf of such Selling Shareholder
and are the valid and binding agreements of such Selling Shareholder enforceable
against such Selling Shareholder in accordance with their terms.
(d) Neither the execution and delivery of this Agreement or
the Custody Agreement by or on behalf of such Selling Shareholder nor the
consummation of the transactions herein or therein contemplated by or on behalf
of such Selling Shareholder requires any consent, approval, authorization or
order of, or filing or registration with, any court, regulatory body,
administrative agency or other governmental body, agency or official (except
such as may be required under the Act or such as may be required under state
securities or Blue Sky laws governing the purchase and distribution of the
Shares) or conflicts or will conflict with or constitutes or will constitute a
breach of, or default under, or violates or will violate, any agreement,
indenture or other instrument to which such Selling Shareholder is a party or by
which such Selling Shareholder is or may be bound or to which any such Selling
Shareholder's property or assets is subject, or any statute, law, rule,
regulation, ruling, judgment, injunction, order or decree applicable to such
Selling Shareholder or to any property or assets of such Selling Shareholder.
(e) The Registration Statement and the Prospectus, insofar as
they relate to such Selling Shareholder, do not and will not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading.
(f) Such Selling Shareholder does not have any actual
knowledge or any reason to believe that the Registration Statement or the
Prospectus (or any amendment or supplement thereto) contains any untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading.
(g) The representations and warranties of such Selling
Shareholder in the Custody Agreement are, and on the Closing Date and any Option
Closing Date will be, true and correct.
(h) Such Selling Shareholder has not taken, directly or
indirectly, any action designed to or that might reasonably be expected to cause
or result in stabilization or
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manipulation of the price of the Common Shares to facilitate the sale or resale
of the Shares, except as described in the Prospectus.
3. PURCHASE AND SALE OF FIRM SHARES. On the basis of the
representations, warranties, covenants and agreements contained herein, but
subject to the terms and conditions set forth herein, CWCO and the Selling
Shareholders shall sell the Firm Shares to the several Underwriters at the
Offering Price less the Underwriting Discounts and Commissions shown on the
cover page of the Prospectus, and the Underwriters, severally and not jointly,
shall purchase from CWCO and the Selling Shareholders on a firm commitment
basis, at the Offering Price less the Underwriting Discounts and Commissions
shown on the cover page of the Prospectus, the respective amounts of the Firm
Shares set forth opposite their names on Schedule II hereto. In making this
Agreement, each Underwriter is contracting severally and not jointly, and except
as provided in Sections 5 and 13 hereof, the agreement of each Underwriter is to
purchase only that number of Shares specified with respect to that Underwriter
in Schedule II hereto. The Underwriters shall offer the Shares to the public as
set forth in the Prospectus.
4. PAYMENT AND DELIVERY. Payment for the Firm Shares shall be made by
certified or official bank check or checks payable to the order of CWCO and each
of the Selling Shareholders in New York Clearing House (next day) funds, at the
offices of Xxxxxx Xxxxxxxxxx Xxxxx LLC, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxxxxxxx, or in immediately available funds wired to such accounts as CWCO
may specify (with all costs and expenses incurred by the Underwriters in
connection with such settlement in immediately available funds, to be borne by
CWCO), against delivery of the Firm Shares to the Representatives at the offices
of Xxxxxx Xxxxxxxxxx Xxxxx LLC, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx
for the respective accounts of the Underwriters. Such payment and delivery will
be made at 10:00 a.m., Philadelphia, Pennsylvania time, on the third business
day after the date of this Agreement, or at such other time on the same or such
other date, not later than seven business days thereafter as shall be designated
in writing by the Representatives. Such time and date are referred to herein as
the "Closing Date." The certificates representing the Firm Shares to be sold and
delivered will be in such denominations and registered in such names as the
Representatives request not less than two full business days prior to the
Closing Date, and will be made available to the Representatives for inspection,
checking and packaging at the Philadelphia correspondent office of CWCO's
transfer agent not less than one full business day prior to the Closing Date.
5. OPTION TO PURCHASE OPTIONAL SHARES.
(a) For the purposes of covering any over-allotments in
connection with the distribution and sale of the Firm Shares as contemplated by
the Prospectus, on the basis of the representations, warranties, covenants and
agreements contained herein, but subject to the terms and conditions herein set
forth, the several Underwriters are hereby granted an option by CWCO to purchase
all or any part of the Optional Shares (the "Over-allotment Option"). The
purchase price to be paid for the Optional Shares shall be the Offering Price
less the Underwriting
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Discounts and Commissions shown on the cover page of the Prospectus. The
Over-allotment Option granted hereby may be exercised by the Representatives on
behalf of the several Underwriters as to all or any part of the Optional Shares
at any time and from time to time within 30 days after the date of the
Prospectus. No Underwriter shall be under any obligation to purchase any
Optional Shares prior to an exercise of the Over-allotment Option.
(b) The Over-allotment Option granted hereby may be exercised
by the Representatives on behalf of the several Underwriters by giving notice to
CWCO by a letter sent by registered or certified mail, postage prepaid, telex,
telegraph, telegram or facsimile (such notice to be effective when received),
addressed as provided in Section 15 hereof, setting forth the number of Optional
Shares to be purchased, the date and time for delivery of and payment for the
Optional Shares and stating that the Optional Shares referred to therein are to
be used for the purpose of covering over-allotments in connection with the
distribution and sale of the Firm Shares. If such notice is given at least two
full business days prior to the Closing Date, the date set forth therein for
such delivery and payment shall be not earlier than the Closing Date. If such
notice is given after two full business days prior to the Closing Date, the date
set forth therein for such delivery and payment shall be a date selected by the
Representatives not later than five full business days after the exercise of the
Over-allotment Option. The date and time set forth in such a notice is referred
to herein as an "Option Closing Date," and a closing held pursuant to such a
notice is referred to herein as an "Option Closing." Upon each exercise of the
Overallotment Option, and on the basis of the representations, warranties,
covenants and agreements herein contained, and subject to the terms and
conditions herein set forth, the several Underwriters shall become severally,
but not jointly, obligated to purchase from CWCO the number of Optional Shares
specified in each notice of exercise of the Over-allotment Option (allocated
among them in accordance with Section 5(c) hereof).
(c) The number of Optional Shares to be purchased by each
Underwriter pursuant to each exercise of the Over-allotment Option shall be the
number that bears the same ratio to the aggregate number of Optional Shares
being purchased through such Over-allotment Option exercise as the number of
Firm Shares opposite the name of such Underwriter in Schedule II hereto bears to
the total number of all Firm Shares. Notwithstanding the foregoing, the number
of Optional Shares purchased and sold pursuant to each exercise of the
Overallotment Option shall be subject to such adjustment as the Representatives
may approve to eliminate fractional shares and subject to the provisions for the
allocation of Optional Shares purchased for the purpose of covering
over-allotments set forth in the agreement entered into by and among the
Underwriters in connection herewith (the "Agreement Among Underwriters").
(d) Payment for the Optional Shares shall be made to CWCO, by
certified or official bank check payable to the order of CWCO, in New York
Clearing House (next day) funds, at the offices of Xxxxxx Xxxxxxxxxx Xxxxx LLC,
0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx, such other place as shall be
agreed upon by CWCO and the Representatives, or in immediately available funds
wired to such accounts as CWCO may specify (with all costs and expenses incurred
by the Underwriters in connection with such settlement in immediately
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available funds, to be borne by CWCO), against delivery of the Optional Shares
to the Representatives at the offices of Xxxxxx Xxxxxxxxxx Xxxxx LLC, 0000
Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx, for the respective accounts of the
Underwriters. The certificates representing the Optional Shares to be issued and
delivered will be in such denominations and registered in such names as the
Representatives request upon reasonable notice prior to such Option Closing
Date, and will be made available to the Representatives for inspection, checking
and packaging at the Philadelphia correspondent office of CWCO's transfer agent
at a reasonable time in advance of such Option Closing Date.
6. CERTAIN COVENANTS AND AGREEMENTS OF CWCO. CWCO covenants and agrees
with the several Underwriters as follows:
(a) If Rule 430A of the Regulations is employed, CWCO will
timely file the Prospectus pursuant to and in compliance with Rule 424(b) of the
Regulations and will advise the Representatives of the time and manner of such
filing.
(b) CWCO will not file or publish any amendment or supplement
to the Registration Statement, Preliminary Prospectus or Prospectus at any time
before the completion (in the opinion of the Underwriters' counsel) of the
distribution of the Shares by the Underwriters that is not (i) in compliance
with the Regulations and (ii) approved by the Representatives (such approval not
to be unreasonably withheld or delayed).
(c) CWCO will advise the Representatives immediately, and
confirm such advice in writing, (i) when any post-effective amendment to the
Registration Statement is filed with the SEC under Rule 462(c) under the Act or
otherwise, (ii) any Rule 462(b) Registration Statement is filed, (iii) of the
receipt of any comments from the SEC concerning the Registration Statement, (iv)
when any post-effective amendment to the Registration Statement becomes
effective, or when any supplement to the Prospectus or any amended Prospectus
has been filed, (v) of any request of the SEC for amendment or supplementation
of the Registration Statement or Prospectus or for additional information, (vi)
during the period when the Prospectus is required to be delivered under the Act
and Regulations, of the happening of any event as a result of which the
Registration Statement or the Prospectus would include an untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein not misleading, (vii) during the period noted in clause (vi) above, of
the need to amend the Registration Statement or supplement the Prospectus to
comply with the Act, (viii) of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, and (ix) of the suspension of the qualification of any of the Shares
for offering or sale in any jurisdiction in which the Underwriters intend to
make such offers or sales, or the initiation or threatening of any proceedings
for any of such purposes known to CWCO. CWCO will use its best efforts to
prevent the issuance of any such stop order or of any order preventing or
suspending such use, and if any such order is issued, to obtain as soon as
possible the lifting thereof.
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(d) CWCO has delivered to the Representatives, without charge,
as many copies of each Preliminary Prospectus as the Representatives have
reasonably requested. CWCO will deliver to the Representatives, without charge,
from time to time during the period when delivery of the Prospectus is required
under the Act, such number of copies of the Prospectus (as supplemented or
amended) as the Representatives may reasonably request. CWCO hereby consents to
the use of such copies of the Preliminary Prospectus and the Prospectus for
purposes permitted by the Act, the Regulations and the securities or Blue Sky
laws of the states or foreign jurisdictions in which the Shares are offered by
the several Underwriters and by all dealers to whom Shares may be sold, both in
connection with the offering and sale of the Shares and for such period of time
thereafter as the Prospectus is required by the Act to be delivered in
connection with sales by any Underwriter or dealer. CWCO has furnished or will
furnish to the Representatives at least three original signed copies of the
Registration Statement as originally filed and of all amendments and supplements
thereto, whether filed before or after the Effective Date, at least three copies
of all exhibits filed therewith and of all consents and certificates of experts,
and will deliver to the Representatives such number of conformed copies of the
Registration Statement, including financial statements and exhibits, and all
amendments thereto, as the Representatives may reasonably request.
(e) CWCO will comply with the Act, the Regulations, the
Exchange Act and the rules and regulations thereunder so as to permit the
continuance of sales of and dealings in the Shares for as long as may be
necessary to complete the distribution of the Shares as contemplated hereby.
(f) CWCO will furnish such information and pay such filing
fees and other expenses as may be required, including reasonable legal fees
which such legal fees shall not exceed $20,000, and otherwise cooperate in the
registration or qualification of the Shares, or exemption therefrom, for
offering and sale by the several Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions in which the Representatives
determine to offer the Shares, after consultation with CWCO, and will file such
consents to service of process or other documents necessary or appropriate in
order to effect such registration or qualification; provided, however, that no
such qualification shall be required in any jurisdiction where, solely as a
result thereof, CWCO would be subject to taxation or qualification as a foreign
corporation doing business in such jurisdiction where it is not now so qualified
or to take any action which would subject it to service of process in suits,
other than those arising out of the offering or sale of the Shares, in any
jurisdiction where it is not now so subject. CWCO will, from time to time,
prepare and file such statements and reports as are or may be required to
continue such qualification in effect for so long a period as is required under
the laws of such jurisdictions for such offering and sale. CWCO will furnish
such information and pay such filing fees and other expenses as may be required,
and otherwise cooperate in the listing of the Shares on the Nasdaq National
Market. CWCO will, from time to time, prepare and file such statements and
reports as are or may be required to continue such qualification in effect for a
period of three years from the Effective Date; provided, however, that CWCO may
cause the Ordinary Shares to be ineligible for registration in the name of Cede
and Co., which, among other things, acts as the nominee for
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the Depository Trust Company, solely for the purpose of complying with the terms
of CWCO's Licence to Produce Potable Water from Seawater and Distribute by Means
of Pipes issued by the Government of the Cayman Islands (the "Licence").
(g) Subject to Section 6(b) hereof, in case of any event
(occurring at any time within the period during which, in the opinion of counsel
for the Underwriters, a prospectus is required to be delivered under the Act or
the Regulations), as a result of which any Preliminary Prospectus or the
Prospectus, as then amended or supplemented, would contain, in the opinion of
counsel for the Underwriters, an untrue statement of a material fact, or omit to
state any material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading, or, if it
is necessary at any time to amend any Preliminary Prospectus or the Prospectus
to comply with the Act or the Regulations or any applicable securities or Blue
Sky laws, CWCO promptly will prepare and file with the SEC, and any applicable
state and foreign securities commission, an amendment, supplement or document
that will correct such statement or omission or effect such compliance and will
furnish to the several Underwriters such number of copies of such amendments,
supplements or documents (in form and substance satisfactory to the
Representatives and counsel for the Underwriters) as the Representatives may
reasonably request. For purposes of this Section 6(g), CWCO will provide such
information to the Representatives, the Underwriters' counsel and counsel to
CWCO as shall be necessary to enable such persons to consult with CWCO with
respect to the need to amend or supplement the Registration Statement,
Preliminary Prospectus or Prospectus or file any document, and shall furnish to
the Representatives and the Underwriters' counsel such further information as
each may from time to time reasonably request.
(h) CWCO will make generally available to its security holders
not later than 45 days after the end of the period covered thereby, an earnings
statement of CWCO (which need not be audited unless required by the Act or the
Regulations) that shall comply with Section 11(a) of the Act and Rule 158
thereunder and cover a period of at least 12 consecutive months beginning not
later than the first day of CWCO's fiscal quarter next following the Effective
Date (or, if later, the effective date of the Rule 462(b) Registration
Statement).
(i) For a period of three years from the Effective Date, CWCO
will deliver to the Representatives and, upon request, to each of the
Underwriters: (i) a copy of each report or document, including, without
limitation, reports on Forms 0-X, 0-X, 00-X, 00-X and 10-Q filed with the SEC on
the dates required and (or such similar forms as may be designated by the SEC),
registration statements and any exhibits thereto, filed or furnished to the SEC
or any securities exchange or the NASD, on the date each such report or document
is so filed or furnished; (ii) as soon as practicable, copies of any reports or
communications (financial or other) of CWCO mailed to its security holders; and
(iii) every material press release in respect of CWCO or its affairs that is
released or prepared by CWCO.
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(j) During the course of the distribution of the Shares, CWCO
will not take, directly or indirectly, any action designed to, or that could
reasonably be expected to, cause or result in stabilization or manipulation of
the price of the Ordinary Shares.
(k) CWCO has caused each person listed on Schedule III hereto
to execute an agreement (a "Lock-up Agreement") in form and substance
satisfactory to the Representatives and the Underwriters' counsel which provides
that for a period of 120 days from the date of the final Prospectus, as amended
or supplemented, such persons will not, without the prior written consent of the
Representatives, directly or indirectly, sell, offer or contract to sell or
grant any option to purchase or otherwise dispose of any shares of the Ordinary
Shares (or any securities convertible into or exercisable or exchangeable for
any shares of the Ordinary Shares). CWCO has delivered such agreements to the
Representatives prior to the date of this Agreement. Appropriate stop transfer
instructions will be issued by CWCO to the transfer agent for the Ordinary
Shares, and a copy of such instructions will be delivered to the
Representatives.
(l) For a period of 120 days after the Effective Date, CWCO
will not, without the prior written consent of the Representatives, offer, sell,
contract to sell or otherwise dispose of any Ordinary Shares or any securities
convertible into or exercisable for any Ordinary Shares or grant options to
purchase any Ordinary Shares, except (i) the issuance of Ordinary Shares upon
the exercise of currently outstanding options and warrants as described in the
Prospectus, and (ii) the grant of options to purchase Ordinary Shares under
CWCO's currently outstanding stock option plans and the issuance of the Ordinary
Shares upon the exercise thereof.
(m) For a period of three years from the Effective Date, CWCO
will use all reasonable efforts to maintain the listing of the Ordinary Shares
(including, without limitation, the Shares) on the Nasdaq National Market or on
a national securities exchange; provided, however, that CWCO may cause the
Ordinary Shares to be ineligible for registration in the name of Cede and Co.,
which, among other things, acts as the nominee for the Depository Trust Company,
solely for the purpose of complying with the terms of the Licence.
(n) CWCO will, at its sole cost and expense, supply and
deliver to the Representatives and the Underwriters' counsel, within a
reasonable period from the Closing Date, transaction binders in such number and
in such form and content as the Representatives reasonably request.
(o) CWCO will use the net proceeds from the sale of the Shares
to be sold by it hereunder substantially in accordance with the description set
forth in the Prospectus.
(p) As of the Closing Date, CWCO will file or cause to be
filed reports on Form 10-Q and Form 10-K with the SEC on the dates required. As
of the Closing Date, CWCO will also prepare or cause to be prepared proxy
statements in compliance with applicable rules and regulations of the SEC,
except for the filing requirements. CWCO shall provide copies of
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such reports and proxy statements to the Representatives upon request for a
period of three years from the Closing Date.
(q) Prior to the next general meeting of the shareholders of
CWCO, the Board of Directors will adopt a resolution recommending an amendment
to the Articles of Association to allow the Directors of CWCO to decline to
register a transfer of shares only in the event that such transfer would violate
the terms of the Licence. At the next general meeting of shareholders, the Board
of Directors of CWCO will propose and recommend such amendment to the Articles
of Association of CWCO permitting the Board of Directors to decline to register
a transfer of shares only in the event that such transfer would violate the
terms of the Licence.
(r) If at any time within two years after the Closing Date,
CWCO plans to effect a public offering of the Ordinary Shares by CWCO or any
shareholder, CWCO shall provide written notice (the "Notice") of such plan to
Xxxxxx Xxxxxxxxxx Xxxxx LLC ("Xxxxxx"). Xxxxxx has ten (10) business days after
receipt of the Notice to advise CWCO in writing (the "Response") of its
willingness to act as underwriter. If within 20 business days after CWCO's
receipt of the Response, Janney and CWCO are unable to agree upon the
compensation to be paid by CWCO to Janney and/or the terms and conditions of the
public offering, CWCO may engage a third party to act as underwriter in
connection with the public offering; provided, however, that CWCO shall not
agree to pay such underwriter compensation substantially similar to or greater
than that proposed by Janney and/or agree to terms and conditions of the public
offering that are substantially similar to or more favorable to the underwriter
than those proposed by Janney.
(s) As of the Effective Date, CWCO will issue all option
grants at no less than the market price of the Ordinary Shares.
(t) After the Effective Date, CWCO intends to maintain a
dividend pay-out ratio of 50-60%, provided that CWCO's Board of Directors
determines that such dividend pay-out ratio is in the best interests of the
company.
7. AGREEMENTS OF THE SELLING SHAREHOLDERS. Each of the Selling
Shareholders severally agrees with the several Underwriters as follows:
(a) Such Selling Shareholder will cooperate to the extent
reasonably necessary to cause the registration statement or any post-effective
amendment thereto to become effective at the earliest possible time.
(b) Such Selling Shareholder will pay all Federal and other
taxes, if any, on the transfer or sale of the Shares being sold by the Selling
Shareholder to the Underwriters.
(c) Such Selling Shareholder will do or perform all things
reasonably required to be done or performed by the Selling Shareholder prior to
the Closing Date or any Option
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Closing Date, as the case may be, to satisfy all conditions precedent to the
delivery of his or its Shares pursuant to this Agreement.
(d) Such Selling Shareholder has executed or will execute a
Lock-up Agreement as provided in Section 6(k) above and will not sell, contract
to sell or otherwise dispose of any Ordinary Shares, except for the sale of
Shares to the Underwriters pursuant to this Agreement and except as otherwise
provided in such Lock-up Agreement, prior to the expiration of 120 days after
the date of the Prospectus, without the prior written consent of the
Representatives.
(e) Except as stated in this Agreement and in the Preliminary
Prospectus and the Prospectus, such Selling Shareholder will not take, directly
or indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Ordinary
Shares to facilitate the sale or resale of the Shares.
(f) Such Selling Shareholder will advise the Representatives
promptly, and if requested by the Representatives, will confirm such advice in
writing, within the period of time referred to in Section 6(g) hereof, of any
change in CWCO's condition (financial or other), business, prospects,
properties, net worth or results of operations or of any change in information
relating to such Selling Shareholder or CWCO or any new information relating to
CWCO or relating to any matter stated in the Prospectus or any amendment or
supplement thereto which comes to the attention of such Selling Shareholder that
suggests that any statement made in the Registration Statement or the Prospectus
(as then amended or supplemented, if amended or supplemented) is or may be
untrue in any material respect or that the Registration Statement or Prospectus
(as then amended or supplemented, if amended or supplemented) omits or may omit
to state a material fact or a fact necessary to be stated therein in order to
make the statements therein not misleading in any material respect, or of the
necessity to amend or supplement the Prospectus (as then amended or
supplemented, if amended or supplemented) in order to comply with the Act or any
other law.
8. PAYMENT OF FEES AND EXPENSES.
(a) Whether or not the transactions contemplated by this
Agreement are consummated and regardless of the reason this Agreement is
terminated in accordance with its terms, CWCO will pay or cause to be paid, and
bear or cause to be borne, all costs and expenses incident to the performance of
the obligations of CWCO and the Selling Shareholders under this Agreement,
including: (i) the fees and expenses of the accountants and counsel for CWCO
incurred in the preparation of the Registration Statement and any post-effective
amendments thereto (including financial statements and exhibits), Preliminary
Prospectuses and the Prospectus and any amendments or supplements thereto; (ii)
printing and mailing expenses associated with the Registration Statement and any
post-effective amendments thereto, any Preliminary Prospectus, the Prospectus,
this Agreement, the Agreement Among Underwriters and related documents as may be
required in connection with the offering, purchase, sale,
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issuance or delivery of the Shares and the Preliminary Blue Sky Memorandum (and
any supplement thereto); (iii) the costs and expenses (other than fees and
expenses of the Underwriters' counsel, except such fees incurred in connection
with Blue Sky and NASD filings or exemptions as provided herein) incident to the
authentication, issuance, sale and delivery of the Shares to the Underwriters;
(iv) the fees, expenses and all other costs of qualifying the Shares for sale
under the securities or Blue Sky laws of those states or foreign jurisdictions
in which the Shares are to be offered or sold, including the reasonable fees and
expenses of Underwriters' counsel and such local counsel as may have been
reasonably required and retained for such purpose; (v) the fees, expenses and
other costs of, or incident to, securing any review or approvals by or from the
NASD, including the reasonable fees and expenses of the Underwriters' counsel;
(vi) the filing fees of the SEC; (vii) the cost of furnishing to the
Underwriters copies of the Registration Statement, Preliminary Prospectuses and
Prospectuses as herein provided; (viii) CWCO's travel expenses in connection
with meetings with the brokerage community and institutional investors; (ix) the
costs and expenses associated with settlement in same day funds (including, but
not limited to, interest or cost of funds expenses), if desired by CWCO; (x) any
fees or costs payable to the Nasdaq National Market as a result of the offering;
(xi) the cost of printing certificates for the Shares; (xii) the costs and
charges of any transfer agent; (xiii) the reasonable costs of advertising the
offering, including, without limitation, with respect to the placement of
"tombstone" advertisements in publications selected by the Representatives;
(xiv) all taxes, if any, on the issuance, delivery and transfer of the Shares
sold by CWCO; and (xv) all other costs and expenses reasonably incident to the
performance of CWCO's obligations hereunder that are not otherwise specifically
provided for in this Section 8(a); provided, however, that, except as
specifically set forth in Section 8(c) hereof, the Underwriters shall be
responsible for their out-of-pocket expenses, including those associated with
meetings with the brokerage community and institutional investors, other than
CWCO's travel expenses, and the fees and expenses of their counsel for other
than with respect to Blue Sky and NASD matters.
(b) CWCO shall pay as due any state or foreign registration,
qualification and filing fees and any accountable out-of-pocket disbursements in
connection with such registration, qualification or filing in the states and
foreign jurisdictions in which the Representatives determine to offer or sell
the Shares.
(c) As of the Closing Date, CWCO shall have paid to Xxxxxx
Xxxxxxxxxx Xxxxx LLC and First Security Xxx Xxxxxx a non-accountable expense
allowance in the amount of $50,000 and $25,000, respectively.
(d) If (i) the Underwriters are willing to proceed with the
offering, and the transactions contemplated by this Agreement are not
consummated because CWCO elects not to proceed with the offering for any reason
or (ii) the Representatives terminate this Agreement pursuant to Section 12(b)
hereof, then CWCO will pay to the Representatives the amount provided in Section
8(c).
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9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligation of each
Underwriter to purchase and pay for the Firm Shares that it has agreed to
purchase hereunder on the Closing Date, and to purchase and pay for any Optional
Shares as to which it exercises its right to purchase under Section 5 on an
Option Closing Date, is subject at the date hereof, the Closing Date and any
Option Closing Date to the continuing accuracy and fulfillment of the
representations and warranties of CWCO and the Selling Shareholders, to the
performance by CWCO and the Selling Shareholders of their covenants and
obligations hereunder, and to the following additional conditions:
(a) If required by the Regulations, the Prospectus shall have
been filed with the SEC pursuant to Rule 424(b) of the Regulations within the
applicable time period prescribed for such filing by the Regulations. On or
prior to the Closing Date or any Option Closing Date, as the case may be, no
stop order or other order preventing or suspending the effectiveness of the
Registration Statement (including any document incorporated by reference
therein) or the sale of any of the Shares shall have been issued under the Act
or any state or foreign securities law, and no proceedings for that purpose
shall have been initiated or shall be pending or, to the Representatives'
knowledge or the knowledge of CWCO, shall be contemplated by the SEC or by any
authority in any jurisdiction designated by the Representatives pursuant to
Section 6(f) hereof. Any request on the part of the SEC or any state or foreign
securities authority for additional information shall have been complied with to
the reasonable satisfaction of counsel for the Underwriters.
(b) All corporate proceedings and other matters incident to
the authorization, form and validity of this Agreement, the Shares and the form
of the Registration Statement and the Prospectus, and all other legal matters
relating to this Agreement and the transactions contemplated hereby shall be
satisfactory in all material respects to counsel for the Underwriters. CWCO
shall have furnished to such counsel all documents and information that they may
have reasonably requested to enable them to pass upon such matters. The
Representatives shall have received from the Underwriters' counsel, Xxxxxxx
Xxxxx Xxxxxxx & Xxxxxxxxx, LLP an opinion, dated as of the Closing Date and any
Option Closing Date, as the case may be, and addressed to the Representatives
individually and as Representatives of the several Underwriters, which opinion
shall be satisfactory in all respects to the Representatives.
(c) The Representatives shall have received a copy of an
executed Lock-up Agreement from each person listed on Schedule III hereto.
(d) The Representatives shall have received at or prior to the
Closing Date from the Underwriters' counsel a memorandum or summary, in form and
substance satisfactory to the Representatives, with respect to the qualification
for offering and sale by the Underwriters of the Shares under the securities or
Blue Sky laws of such jurisdictions designated by the Representatives pursuant
to Section 6(f) hereof.
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(e) On the Closing Date and any Option Closing Date, there
shall have been delivered to the Representatives signed opinions of Steel Xxxxxx
& Xxxxx LLP and Xxxxx & Xxxxxxx, counsel for CWCO and the Selling Shareholders,
dated as of each such date and addressed to the Representatives individually and
as Representatives of the several Underwriters to the effect set forth in
EXHIBITS A AND B hereto or to such effect as is otherwise reasonably
satisfactory to the Representatives.
(f) At the Closing Date and any Option Closing Date: (i) the
Registration Statement and any post-effective amendment thereto and the
Prospectus and any amendments or supplements thereto shall contain all
statements that are required to be stated therein in accordance with the Act and
the Regulations and in all material respects shall conform to the requirements
of the Act and the Regulations, and neither the Registration Statement nor any
post-effective amendment thereto nor the Prospectus and any amendments or
supplements thereto shall contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading; (ii) since the respective dates as
of which information is given in the Registration Statement and any
post-effective amendment thereto and the Prospectus and any amendments or
supplements thereto, except as otherwise stated therein, there shall have been
no material adverse change in the Business Conditions of CWCO from that set
forth therein, whether or not arising in the ordinary course of business; (iii)
since the respective dates as of which information is given in the Registration
Statement and the Prospectus or any amendment or supplement thereto, there shall
have been no event or transaction, contract or agreement entered into by CWCO
other than in the ordinary course of business and as set forth in the
Registration Statement or Prospectus, that has not been, but would be required
to be, set forth in the Registration Statement or Prospectus; (iv) since the
respective dates as of which information is given in the Registration Statement
and any post-effective amendment thereto and the Prospectus and any amendments
or supplements thereto, there shall have been no material adverse change, loss,
reduction, termination or non-renewal of any contract to which CWCO is a party,
that has not been, but would be required to be set forth in the Registration
Statement or Prospectus; and (v) no action, suit or proceeding at law or in
equity shall be pending or threatened against CWCO that would be required to be
set forth in the Prospectus, other than as set forth therein, and no proceedings
shall be pending or threatened against or directly affecting CWCO before or by
any federal, state or other commission, board or administrative agency wherein
an unfavorable decision, ruling or finding would materially adversely affect the
Business Conditions of CWCO.
(g) The Representatives shall have received at the Closing
Date and any Option Closing Date certificates of the Chief Executive Officer and
the Chief Financial Officer of CWCO dated as of the date of the Closing Date or
Option Closing Date, as the case may be, and addressed to the Representatives,
individually and as Representatives of the several Underwriters, to the effect
that (i) the representations and warranties of CWCO in this Agreement are true
and correct, as if made at and as of the Closing Date or the Option Closing
Date, as the case may be, and that CWCO has complied with all the agreements,
fulfilled all the covenants and satisfied all the conditions on its part to be
performed, fulfilled or satisfied at or
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prior to the Closing Date or the Option Closing Date, as the case may be, and
(ii) the signers of the certificate have carefully examined the Registration
Statement and the Prospectus and any amendments or supplements thereto, and the
conditions set forth in Section 9(g) hereof have been satisfied.
(h) At the time this Agreement is executed and at the Closing
Date and any Option Closing Date the Representatives shall have received a
letter, dated the date of delivery thereof, addressed to the Representatives,
individually and as Representatives of the several Underwriters, in form and
substance satisfactory to the Representatives in all respects (including,
without limitation, the non-material nature of the changes or decreases, if any,
referred to in clause (iii) below) from PricewaterhouseCoopers:
(i) confirming they are independent certified
public accountants within the meaning of the Act and the Regulations, and
stating that the section of the Registration Statement under the caption
"Experts" is correct insofar as it relates to them;
(ii) stating that, in their opinion, the
consolidated financial statements, schedules and notes of CWCO audited by them
and included in the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Regulations;
(iii) stating that, on the basis of specified
procedures, which included a reading of the latest available unaudited interim
consolidated financial statements of CWCO (with an indication of the date of the
latest available unaudited interim financial statements), a reading of the
minutes of the meetings of the shareholders and the Board of Directors of CWCO
and the Audit Committee of the Board and inquiries to certain officers and other
employees of CWCO responsible for operational, financial and accounting matters
and other specified procedures and inquiries, nothing has come to their
attention that would cause them to believe that (A) the unaudited consolidated
financial statements of CWCO included in the Registration Statement and related
schedules, if any, (I) do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the Regulations, or (II)
were not fairly presented in conformity with generally accepted accounting
principles or statutory accounting practices on a basis substantially consistent
with that of the audited Consolidated Financial Statements and related schedules
included in the Registration Statement; or (B) at a specified date not more than
five business days prior to the date of such letter, there was any change in the
capital stock (other than the issuance of Ordinary Shares upon the exercise of
options in the Prospectus, the Ordinary Shares of CWCO's outstanding, increase
in long-term debt of CWCO or any decrease in consolidated net current assets or
shareholders equity of CWCO as compared with the amounts shown in the December
31, 1999 audited balance sheets of CWCO included in the Registration Statement
or that for the periods from December 31, 1999 to the date of the latest
available unaudited financial statements of CWCO, if any, and to a specified
date not more than five days prior to the date of the letter, there were any
decreases, as compared to the corresponding periods in the prior year, in
operating income or total or per share
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amounts of net income, except in all instances for changes, decreases or
increases that the Registration Statement discloses have occurred or may occur
and except for such other changes, decreases or increases which the Underwriters
shall in their sole discretion accept.
(iv) stating that they have compared specific
dollar amounts (or percentages derived from such dollar amounts), numbers of
shares and other numerical data and financial information set forth in the
Registration Statement that have been specified by the Representatives prior to
the date of this Agreement (in each case to the extent that such dollar amounts,
percentages and other information is derived from the general accounting records
subject to the internal controls of CWCO's accounting system, or has been
derived directly from such accounting records by analysis or comparison or has
been derived from other records and analyses maintained or prepared by CWCO)
with the results obtained from the application of readings, inquiries and other
appropriate procedures set forth in the letter, and found them to be in
agreement.
All financial statements and schedules included in material
incorporated by reference into the Prospectus shall be deemed included in the
Registration Statement for purposes of this subsection.
(i) There shall have been duly tendered to the Representatives
for the respective accounts of the Underwriters, certificates representing all
of the Shares to be purchased by the Underwriters on the Closing Date or Option
Closing Date, as the case may be.
(j) The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(k) All corporate and other proceedings and other matters
incident to the authorization, form and validity of this Agreement, the Custody
Agreement and the form of the Registration Statement and Prospectus and all
other legal matters related to this Agreement and the transactions contemplated
hereby shall be reasonably satisfactory in all respects to counsel to the
Underwriters. CWCO and the Selling Shareholders shall have furnished to such
counsel all documents and information that they shall have reasonably requested
to enable them to pass upon such matters.
(l) At the Closing Date and any Option Closing Date, the
Representatives shall have been furnished such additional documents, information
and certificates as they shall have reasonably requested.
All such opinions, certificates, letters and documents shall
be in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to the Representatives and the Underwriters'
counsel. CWCO and the Selling Shareholders shall furnish the Representatives
with such conformed copies of such opinions, certificates, letters and other
documents as they shall reasonably request. If any condition to the
Underwriters'
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obligations hereunder to be fulfilled prior to or at the Closing Date or any
Option Closing Date, as the case may be, is not fulfilled, the Representatives
may on behalf of the several Underwriters, terminate this Agreement with respect
to the Closing Date or such Option Closing Date, as applicable, or, if they so
elect, waive any such conditions which have not been fulfilled or extend the
time for their fulfillment. Any such termination shall be without liability of
the Underwriters to CWCO or the Selling Shareholders.
10. INDEMNIFICATION AND CONTRIBUTION.
(a) CWCO and each Selling Shareholder, jointly and severally,
shall indemnify and hold harmless each Underwriter, and each person, if any, who
controls each Underwriter within the meaning of the Act, against any and all
loss, liability, claim, damage and expense whatsoever, including, but not
limited to, any and all reasonable expenses incurred in investigating, preparing
or defending against any litigation, commenced or threatened, or any claim
whatsoever or in connection with any investigation or inquiry of, or action or
proceeding that may be brought against, the respective indemnified parties,
arising out of or based upon any breach of CWCO's or any Selling Shareholder's
representations and warranties made in this Agreement or any untrue statements
or alleged untrue statements of material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, any application or
other document filed in any jurisdiction in order to qualify all or any part of
the Shares under the securities laws thereof or filed with the SEC or the NASD
(in this Section 10 collectively called "application"), or the omission or
alleged omission from any of the foregoing of a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that the foregoing indemnity shall not apply in respect of
any statement or omission made in reliance upon and in conformity with written
information furnished to CWCO by any Underwriter through the Representatives
expressly for use in any Preliminary Prospectus, the Registration Statement or
Prospectus, or any amendment or supplement thereto, or in any application or in
any communication to the SEC, as the case may be; and further provided, however,
that the indemnification contained in this Section 10(a) with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter (or to
the benefit of any person controlling such Underwriter) on account of any such
loss, claim, liability or expense arising from the sale of the Shares by such
Underwriter to any person if a copy of the Prospectus shall not have been
delivered or sent to such person within the time required by the Act and the
regulations thereunder, and the untrue statement or alleged untrue statement or
omission or alleged omission of a material fact contained in such Preliminary
Prospectus was corrected in the Prospectus, provided that CWCO has delivered the
Prospectus to the several Underwriters in requisite quantity on a timely basis
to permit such delivery or sending. The obligations of CWCO and the Selling
Shareholders under this Section 10(a) will be in addition to any liability CWCO
and the Selling Shareholders may otherwise have.
(b) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless CWCO, each of the directors of CWCO, each of the
officers of CWCO who shall have signed the Registration Statement, each Selling
Shareholder, and each other person, if any, who
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controls CWCO or a Selling Shareholder within the meaning of the Act to the same
extent as the foregoing indemnities from CWCO and the Selling Shareholders to
the several Underwriters, but only with respect to any and all loss, liability,
claim, damage or expense resulting from statements or omissions, or alleged
statements or omissions, if any, made in any Preliminary Prospectus,
Registration Statement or Prospectus or any amendment or supplement thereof or
any application in reliance upon, and in conformity with written information
furnished to CWCO by any Underwriter through the Representatives expressly for
use in any Preliminary Prospectus, the Registration Statement or Prospectus or
any amendment or supplement thereof or any application, as the case may be. The
obligations of each Underwriter under this Section 10(b) will be in addition to
any liability which such Underwriter may otherwise have.
(c) If any action, inquiry, investigation or proceeding is
brought against any person in respect of which indemnification may be sought
pursuant to Section 10(a) or (b) hereof, such person (hereinafter called the
"indemnified party") shall, promptly after notification of, or receipt of
service of process for, such action, inquiry, investigation or proceeding,
notify in writing the party or parties against whom indemnification is to be
sought (hereinafter called the "indemnifying party") of the institution of such
action, inquiry, investigation or proceeding. The indemnifying party, upon the
request of the indemnified party, shall assume the defense of such action,
inquiry, investigation or proceeding, including, without limitation, the
employment of counsel (reasonably satisfactory to such indemnified party) and
payment of expenses. No indemnification provided for in this Section 10 shall be
available to any indemnified party who shall fail to give such notice if the
indemnifying party does not have knowledge of such action, inquiry,
investigation or proceeding to the extent that such indemnifying party has been
materially prejudiced by the failure to give such notice, but the omission to so
notify the indemnifying party shall not relieve the indemnifying party otherwise
than under this Section 10. Such indemnified party shall have the right to
employ its or their own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of such indemnified party unless the
employment of such counsel shall have been authorized in writing by the
indemnifying party in connection with the defense of such action or if the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party or if such indemnified party or parties shall have been
advised by counsel that there may be a conflict between the positions of the
indemnifying party or parties and of the indemnified party or parties or that
there may be legal defenses available to such indemnified party or parties
different from or in addition to those available to the indemnifying party or
parties, in any of which events the indemnified party or parties shall be
entitled to select counsel to conduct the defense to the extent determined by
such counsel to be necessary to protect the interests of the indemnified party
or parties, and the reasonable fees and expenses of such counsel shall be borne
by the indemnifying party. The indemnifying party shall be responsible for the
fees and disbursements of only one such counsel so engaged by the indemnified
party or parties. Expenses covered by the indemnification in this Section 10
shall be paid by the indemnifying party as they are incurred by the indemnified
party. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action in
respect of which any indemnified party is or could have been a party and
indemnity could have been sought
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hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action and does not include a statement as
to or an admission of fault, culpability or a failure to act by or on behalf of
any indemnified party. Anything in this Section 10 to the contrary
notwithstanding an indemnifying party shall not be liable for any settlement of
a claim effected without its written consent, which consent shall not be
unreasonably withheld.
(d) If the indemnification provided for in this Section 10 is
unavailable or insufficient to hold harmless an indemnified party under Section
10(a) or (b) hereof in respect of any losses, liabilities, claims, damages or
expenses (or actions, inquiries, investigations or proceedings in respect
thereof) referred to therein, except by reason of the failure to give notice as
required in Section 10(c) hereof (provided that the indemnifying party does not
have knowledge of the action, inquiry, investigation or proceeding and to the
extent such party has been materially prejudiced by the failure to give such
notice), then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, liabilities,
claims, damages or expenses (or actions, inquiries, investigations or
proceedings in respect thereof in such proportion as is appropriate to reflect
the relative benefits received by CWCO and the Selling Shareholders on the one
hand and the Underwriters on the other from the offering of the Shares. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of CWCO and the Selling Shareholders on the one hand and the Underwriters
on the other in connection with the statements or omissions which resulted in
such losses, liabilities, claims or expenses (or actions, inquiries,
investigations or proceedings in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by CWCO and the Selling
Shareholders on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by CWCO and the Selling Shareholders bears to the
total underwriting discount and commissions received by the Underwriters, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
CWCO or the Selling Shareholders on the one hand or the Underwriters on the
other hand and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
CWCO, the Selling Shareholders and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section
10(d) were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to above in
this Section 10(d). The amount paid or payable by an indemnified party as a
result of the losses, liabilities, claims, damages or expenses (or actions,
inquiries, investigations or proceedings in respect thereof) referred to above
in this Section 10(d) shall be deemed to include
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any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 10(d), (i) the provisions of the
Agreement Among Underwriters shall govern contribution among Underwriters, (ii)
no Underwriter (except as provided in the Agreement Among Underwriters) shall be
required to contribute any amount in excess of the underwriting discounts and
commissions applicable to the Shares purchased by such Underwriter, and (iii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this Section 10(d) to contribute are several in proportion to their individual
underwriting obligations and not joint.
11. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. Except as
the context otherwise requires, all representations, warranties and agreements
contained in this Agreement shall be deemed to be representations, warranties
and agreements at the Closing Date and any Option Closing Date. All such
representations, warranties and agreements of the Underwriters, CWCO and the
Selling Shareholders, including, without limitation, the indemnity and
contribution agreements contained in Section 10 hereof and the agreements
contained in Sections 8, 11 and 12 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
Underwriter, the Company and each Selling Shareholder or any controlling person
thereof, and shall survive delivery of the Shares and termination of this
Agreement, whether before or after the Closing Date or any Option Closing Date.
12. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION HEREOF.
(a) This Agreement shall become effective at 10:00 a.m.,
Philadelphia, Pennsylvania time, on the first business day following the
Effective Date or at the time of the public offering by the Underwriters of the
Shares, whichever is earlier, except that the provisions of Sections 8, 10, 11
and 12 hereof shall be effective upon execution hereof. The time of the public
offering, for the purpose of this Section 12, shall mean the time when any of
the Shares are first released by the Underwriters for offering by dealers. The
Representatives, CWCO and the Selling Shareholders may prevent the provisions of
this Agreement (other than those contained in Sections 8, 10, 11 and 12) hereof
from becoming effective without liability of any party to any other party,
except as noted below, by giving the notice indicated in Section 12(c) hereof
before the time the other provisions of this Agreement become effective.
(b) The Representatives shall have the right to terminate this
Agreement at any time prior to the Closing Date or any Option Closing Date as
provided in Sections 9 and 13 hereof or if any of the following have occurred:
(i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change or any
development involving a prospective material adverse change in or affecting the
Business Conditions of CWCO, whether or not arising in the ordinary course of
business, that would, in the Representatives' reasonable opinions, make the
offering or delivery of the Shares
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impracticable; (ii) any outbreak of hostilities or other national or
international calamity or crisis or material change in economic, political or
financial market conditions if the effect on the financial markets of the United
States of such outbreak, calamity, crisis or change would, in the
Representatives' reasonable opinions, make the offering or delivery of the
Shares impracticable; (iii) any suspension or limitation of trading generally in
securities on the New York Stock Exchange, the American Stock Exchange, the
Nasdaq National Market or the over-the-counter market or any setting of minimum
prices for trading or the promulgation of any federal or state statute,
regulation, rule or order of any court or other governmental authority that in
the Representatives' reasonable opinions materially and adversely affects
trading on such exchange or the over-the-counter market; (iv) the enactment,
publication, decree or other promulgation of any federal or state statute,
regulation, rule or order of any court or other governmental authority which in
the Representatives' reasonable opinions materially and adversely affects or
will materially or adversely affect the business or operations of CWCO; (v)
declaration of a banking moratorium by the United States, New York or
Pennsylvania authorities; (vi) the taking of any action by any federal, state or
local government or agency in respect of its monetary or fiscal affairs that in
the Representatives' reasonable opinions has a material adverse effect on the
securities markets in the United States; or (vii) trading in any securities of
CWCO shall have been suspended or halted by NASD or the SEC.
(c) If the Representatives elect to prevent this Agreement
from becoming effective or to terminate this Agreement as provided in this
Section 12, the Representatives shall notify CWCO and the Selling Shareholders
hereof promptly by telephone, telex, telegraph, telegram or facsimile, confirmed
promptly by letter. Such notice shall specify the sections of this Agreement
relied upon by the Representatives to terminate this Agreement.
13. DEFAULT BY AN UNDERWRITER.
(a) If any Underwriter or Underwriters shall default in its or
their obligation to purchase Firm Shares or Optional Shares hereunder, and if
the Firm Shares or Optional Shares with respect to which such default relates do
not exceed in the aggregate 10% of the number of Firm Shares or Optional Shares,
as the case may be, that all Underwriters have agreed to purchase on the
relevant Closing Date or Option Closing Date, then the Representatives may make
arrangements satisfactory to CWCO for the purchase of such Firm Shares by other
persons, including any of the Underwriters, but if no such arrangements are made
by the relevant Closing Date or Option Closing Date, such Firm Shares or
Optional Shares to which the default relates shall be purchased severally by the
non-defaulting Underwriters in proportion to their respective commitments
hereunder.
(b) If such default relates to more than 10% of the Firm
Shares or Optional Shares, as the case may be, the Representatives may in their
discretion arrange for another party or parties (including a non-defaulting
Underwriter) to purchase such Firm Shares or Optional Shares to which such
default relates, on the terms contained herein. In the event that the
Representatives do not arrange for the purchase of the Firm Shares or Optional
Shares to which a
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default relates as provided in this Section 13, this Agreement may be terminated
by the Representatives or by CWCO without liability on the part of the
non-defaulting several Underwriters (except as provided in Section 10 hereof) or
CWCO (except as provided in Sections 8 and 10 hereof); provided that if such
default occurs with respect to Optional Shares after the Closing Date, this
Agreement will not terminate as to the Firm Shares or any Optional Shares
purchased prior to such termination. Nothing herein shall relieve a defaulting
Underwriter of its liability, if any, to the other several Underwriters, to CWCO
and to Selling Shareholders for damages occasioned by its default hereunder.
(c) If the Firm Shares or Optional Shares to which the default
relates are to be purchased by the non-defaulting Underwriters, or are to be
purchased by another party or parties, the Representatives or CWCO shall have
the right to postpone the Closing Date or any Option Closing Date, as the case
may be, for a reasonable period but not in any event exceeding seven days, in
order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus or in any other documents and
arrangements, and CWCO agrees to file promptly any amendment to the Registration
Statement or supplement to the Prospectus that in the opinion of counsel for the
Underwriters may thereby be made necessary. The terms "Underwriters" and
"Underwriter" as used in this Agreement shall include any party substituted
under this Section 13 with like effect as if it had originally been a party to
this Agreement with respect to such Firm Shares and/or Optional Shares.
14. INFORMATION FURNISHED BY UNDERWRITERS. The statement set forth on
the last paragraph at the bottom of the cover page of the Prospectus regarding
the terms of the Offering by the Underwriters, the legends below the table of
contents on page ___ of the Prospectus regarding stabilization and passive
market making, the identity of the Underwriters set forth in the first paragraph
under the heading "Underwriting", the concession and reallowance figures
appearing in the _______ paragraph under the caption "Underwriting", the
representations with respect to stabilization activities in the _______
paragraph under the heading "Underwriting," the _______ paragraph under the
caption "Underwriting" regarding passive market making and discretionary
authority in the _______ paragraph under the heading "Underwriting" constitute
the only written information furnished by reference or on behalf of any
Underwriter referred to in Sections 1(b) and 10 hereof.
15. NOTICE. All communications hereunder, except as herein otherwise
specifically provided, shall be in writing and, (i) if sent to any Underwriter,
shall be mailed, delivered, telexed, telegrammed, telegraphed or telecopied and
confirmed to such Underwriter, c/o Janney Xxxxxxxxxx Xxxxx LLC, 0000 Xxxxxx
Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xx. Xxxxxxx X.
Xxxxx-Xxxxxx, facsimile number (000) 000-0000 and c/o First Security Xxx Xxxxxx,
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, attention:
____________________, facsimile number __________, with a copy to Xxxxxxx Xxxxx
Xxxxxxx & Ingersoll, LLP, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000,
Attention: Xxxxxx X. Xxxxx, Esquire, facsimile number (000) 000-0000; (ii) if
sent to CWCO, shall be mailed, delivered, telexed, telegrammed, telegraphed or
telecopied and confirmed to Consolidated Water
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Co. Ltd, Trafalgar Place, West Bay Road, P.O. Box 1114GT, Grand Cayman, B.W.I.,
Attention: Xxxxxxx X. Xxxxxx, facsimile number (000) 000-0000, with a copy to
Steel Xxxxxx & Xxxxx LLP, 0000 Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxx, Xxxxxxx
00000-0000, Attention: Xxxxxx X. Xxxxxxx, P.A., facsimile number (000) 000-0000;
and (iii) if sent to the Selling Shareholders, shall be mailed, delivered,
telexed, telegrammed, telegraphed or telecopied and confirmed to
________________________.
16. PARTIES. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the several Underwriters, CWCO, the Selling Shareholders
and the controlling persons, directors and officers thereof, and their
respective successors, assigns, heirs and legal representatives, and no other
person shall have or be construed to have any legal or equitable right, remedy
or claim under or in respect of or by virtue of this Agreement or any provision
herein contained. The terms "successors" and "assigns" shall not include any
purchaser of the Shares merely because of such purchase.
17. DEFINITION OF BUSINESS DAY. For purposes of this Agreement,
"business day" means any day on which the Nasdaq National Market is opened for
trading.
18. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and all such counterparts will constitute one and the same
instrument.
19. CONSTRUCTION. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania applicable to
agreements made and performed entirely within such Commonwealth.
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If the foregoing correctly sets forth your understanding of
our agreement, please sign and return to CWCO the enclosed duplicate hereof,
whereupon it will become a binding agreement in accordance with its terms.
Very truly yours,
CONSOLIDATED WATER CO. LTD
By:
---------------------------------------
Xxxxxxx X. Xxxxxx
Chairman, Chief Executive Officer
Each of the Selling Shareholders named in
Schedule I hereto
By:
---------------------------------------
Attorney-in-Fact
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
XXXXXX XXXXXXXXXX XXXXX LLC
As Representative of the Several Underwriters
named in Schedule II hereto
By: XXXXXX XXXXXXXXXX XXXXX LLC
By:
------------------------------
Authorized Representative
FIRST SECURITY XXX XXXXXX
As Representative of the Several Underwriters
named in Schedule II hereto
By: FIRST SECURITY XXX XXXXXX
By:
------------------------------
Authorized Representative
33
34
SCHEDULE I
PART A - FIRM SHARES NUMBER OF
SELLING SHAREHOLDERS FIRM SHARES
-------------------- -----------
Mogal Corporation 80,000
-------
Total 80,000
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SCHEDULE II
NUMBER OF FIRM SHARES
UNDERWRITER TO BE PURCHASED
----------- ----------------------
Xxxxxx Xxxxxxxxxx Xxxxx LLC _________
First Security Xxx Xxxxxx _________
Total _________
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SCHEDULE III
Persons Who Are to Deliver Lock-Up Agreements
Lock-Up Agreements are to be delivered by the following persons and
entities immediately prior to the time the SEC declares the Registration
Statement effective:
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxx
Xxxxxxxxx X. Xxxxxx
Xxxxxxx XxXxxxxxx
J. Xxxxx Xxxx, Xx.
Xxxxx Xxxxxx
Xxx X. Xxxx
Xxxxxxx Xxxxxx
Xxxxxxxx Xxxxxxx, Xx.
Xxxxxxxxx XxXxxxxxx
Xxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxxx
Mechanical Equipment Company, Inc.
Mogal Corporation
Argyle/Cay-Water, Ltd.
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EXHIBIT A
Matters to be Covered in the Opinions of
Steel Xxxxxx & Xxxxx LLP and Xxxxx & Xxxxxxx
Counsel for CWCO
1. CWCO has been duly organized and is validly existing as a
corporation in good standing under the laws of the Cayman Islands with corporate
power and authority to own its properties and conduct its business as described
in the Prospectus; CWCO is qualified to transact business in all jurisdictions
where the failure to qualify would have a material adverse effect upon the
business of CWCO.
2. CWCO has authorized and outstanding capital stock as set
forth under the caption "Capitalization" in the Prospectus; the authorized
shares of the Ordinary Shares have been duly authorized and validly issued and
are fully paid and non-assessable; all of the Firm Shares and the Optional
Shares (together, the "Shares") conform to the description thereof contained in
the Prospectus; certificates for the Shares are in due and proper form; the
Shares to be sold by CWCO pursuant to this Agreement have been duly authorized
and will be validly issued, fully paid and non-assessable when issued and paid
for as contemplated by this Agreement; and no preemptive rights of shareholders,
by operation of law, or to the knowledge of such counsel, by contract exists
with respect to any of the Shares or the issue and sale thereof.
3. The Registration Statement has become effective under the
Act, and no stop order proceedings with respect thereto have been instituted or
are pending or, to the best knowledge of such counsel, threatened under the Act.
4. The Registration Statement, the Preliminary Prospectus, the
Prospectus and each amendment or supplement thereto and each document
incorporated by reference therein, comply as to form in all material respects
with the requirements of the Act and the Exchange Act, as applicable, and the
applicable rules and regulations thereunder (except that such counsel need
express no opinion as to the financial statements, schedules and other financial
information included or incorporated by reference therein).
5. The statements under the caption "Description of Capital
Stock" in the Prospectus, insofar as such statements constitute a summary of
documents referred to therein or matters of law, are accurate summaries in all
material respects and fairly present the information called for with respect to
such documents and matters.
6. Such counsel does not know of any contracts or documents
required to be filed as exhibits to, or incorporated by reference in, the
Registration Statement or described in the Registration Statement or the
Prospectus which are not so filed, incorporated by reference or described as
required, and such required contracts and documents as are summarized in the
Registration Statement or the Prospectus are fairly summarized in all material
respects.
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7. There are no material legal proceedings pending or to the
best knowledge of such counsel, threatened against CWCO except as set forth in
the Prospectus.
8. This Agreement has been duly authorized, executed and
delivered by CWCO. The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated do not and will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, the Memorandum of Association or Articles of
Association of CWCO, or any agreement or instrument known to such counsel to
which CWCO is a party or by which it may be bound, and it will not create a lien
or encumbrance upon any property of CWCO or violate any law or governmental
ordinance, order or regulation, except to the extent that such conflict, lien,
encumbrance or violation would have no material adverse effect on CWCO.
9. No approval, consent, order or authorization by any
regulatory, administrative or other governmental body is necessary in connection
with the execution and delivery of this Agreement and the consummation of the
transactions herein contemplated (other as may be required by the NASD or by
State securities and Blue Sky laws as to which such counsel need express no
opinion).
10. To the knowledge of such counsel, CWCO has all requisite
licenses, permits, certifications, registrations, approvals, consents,
franchises required for the conduct of their respective businesses and except as
disclosed in the Prospectus with respect to the license, and is in compliance
with the foregoing in all material respects.
11. CWCO is not an "investment company" or an entity
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, and the rules and regulations thereunder.
* * * * * * * * * * * * * *
In addition to the matters set forth above, such opinion shall
also include a statement to the effect that such counsel has participated in the
preparation of the Registration Statement and the Prospectus, including review
and discussion of the contents thereof, and while such counsel (for the purposes
of this paragraph) in not passing upon the accuracy or completeness of the
statements contained in the Registration Statement or the Prospectus, in the
course of such review and discussion, no facts came to the attention of such
counsel that would cause such counsel to have reason to believe that (a) the
Registration Statement or any post-effective amendment thereto on the date it
became effective, contained any untrue statement of a material fact or omitted
to state any material fact necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading, or that (b) the
Prospectus on the Effective Date, on the date it was filed pursuant to Rule
424(b) and on the Closing Date or Option Closing Date, as the case may be,
contains any untrue statement of material fact or omits to state any material
fact necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading; except that with respect to both clause
(a) and (b)
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39
above such counsel need express no opinion with respect to the financial
statements, schedules and the notes thereto included in the Registration
Statement or the Prospectus.
The foregoing opinion may be limited to the laws of the United
States and the laws of the Cayman Islands. Such counsel may rely as to questions
of fact upon the representations of CWCO set forth in this Agreement and upon
certificates of officers of CWCO and of government officials, all of which
certificates must be satisfactory in form and scope to counsel for the
Underwriters.
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EXHIBIT B
Matters to be Covered in the Opinion of
Steel Xxxxxx & Xxxxx LLP
Counsel for the Selling Shareholders
1. This Agreement and the Custody Agreement have each been
duly executed and delivered by or on behalf of each of the Selling Shareholders
and are valid, legal and binding agreements of each Selling Shareholder
enforceable against each Selling Shareholder in accordance with their terms,
except as enforcement of rights to indemnity and contribution hereunder may be
limited by Federal or state securities laws or principles of public policy and
subject to the qualification that the enforceability of each Selling
Shareholder's obligations hereunder and thereunder may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium, and other laws
relating to or affecting creditors' rights generally and by general equitable
principles.
2. To the best knowledge of such counsel, each Selling
Shareholder has full legal right, power and authorization, and any approval
required by applicable federal and __________________ law (other than any
approval required under the applicable state securities or blue sky laws, as to
which such counsel need express no opinion), to sell, assign, transfer and
deliver valid title to the Shares to be sold by such Selling Shareholder in the
manner provided by this Agreement.
3. To the best knowledge of such counsel, the execution and
delivery of this Agreement and the Custody Agreement by the Selling Shareholders
and the consummation of the transactions contemplated hereby and thereby will
not conflict with, violate, result in a breach of or constitute a default under
the terms or provisions of any agreement, indenture, mortgage or other
instrument to which any Selling Shareholder is a party or by which any of them
or any of their assets or property is bound, or any court order or decree or any
law, rule, or regulation applicable to any Selling Shareholder or to any of the
property or assets of any Selling Shareholder.
4. Upon delivery to the Underwriters of the Shares to be sold
by each of the Selling Shareholders pursuant to this Agreement against payment
therefor as contemplated herein, the Underwriters, assuming they have purchased
the Shares in good faith and without notice of any adverse claim and assuming
that there are no events or circumstances peculiar to any individual Underwriter
which might result in any adverse claim, will acquire such Shares free and clear
of any adverse claim.
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