CASCAL N.V. 16,705,314 Common Shares Underwriting Agreement
Exhibit 1
CASCAL N.V.
16,705,314 Common Shares
[ ], 2008
X.X. Xxxxxx Securities Inc.
Credit Suisse Securities (USA) LLC,
As Representatives of the
several Underwriters listed
in Schedule 1 hereto
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Credit Suisse Securities (USA) LLC,
As Representatives of the
several Underwriters listed
in Schedule 1 hereto
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Cascal N.V., a Dutch public limited company (naamloze vennootschap or N.V.) (the
“Company”), proposes to issue and sell to the several Underwriters listed in Schedule 1
hereto (the “Underwriters”), for whom you are acting as representatives (the
“Representatives”), and Biwater Investments Limited, a company incorporated in England and
Wales (the “Selling Shareholder”), propose to sell to the several Underwriters, an aggregate of 16,705,314 common shares, par
value EUR 0.50 per share, of the Company (the “Underwritten Shares”), of which 7,706,213
shares are to be issued and sold by the Company and 8,999,101 shares are to be sold by the Selling
Shareholder, in each case, after giving effect to the (i) split of shares from a par value of EUR 5
per share to a par value of EUR 0.50 per share, (ii) conversion from two classes of common shares
(A and B) to one class of common shares, (iii) increase of the authorized share capital from EUR
100,000 to EUR 50,000,000, (iv) issues of shares in the capital of the Company to the Selling
Shareholder and (v) conversion of Cascal B.V. into Cascal N.V. whereby the Company was renamed
Cascal N.V., all of which was effected by execution of various notarial deeds prior to the
execution and delivery of this Agreement (as defined below).
The Selling Shareholder also proposes to sell to the several Underwriters, at the option of
the Underwriters, up to an additional 2,505,797 common shares of the Company (the “Option
Shares”). The Underwritten Shares and the Option Shares are herein referred to as the
“Shares”. The common shares of the Company to be outstanding after giving effect to the
sale of the Shares are herein referred to as the “Stock”. The Company and the Selling
Shareholder are herein sometimes collectively referred to as the “Sellers.”
The Company hereby confirms its agreement with the several Underwriters concerning the
purchase and sale of the Shares, as follows:
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At or prior to the time when sales of the Shares were first made (the “Time of Sale”),
the Company had prepared the following information (collectively with the pricing information set
forth on Annex E, the “Time of Sale Information”): a Preliminary Prospectus dated January
23, 2008, and each “free-writing prospectus” (as defined pursuant to Rule 405 under the
Securities Act) listed on Annex D hereto.
2. Purchase of the Shares by the Underwriters. (a) Each Seller, severally and not jointly,
agrees to sell to the several Underwriters as provided in this Agreement, and each Underwriter, on
the basis of the representations, warranties and agreements set forth herein and subject to the
conditions set forth herein, agrees, severally and not jointly, to purchase from such Seller the
number of Underwritten Shares that bears the same proportion to the number of Underwritten Shares
to be sold by such Seller as the number of Underwritten Shares set forth in Schedule I hereto
opposite the name of such Underwriter bears to the total number of Underwritten Shares at a price
per share (the “Purchase Price”) of $[•].
In addition, the Selling Shareholder agrees to sell the Option Shares to the several
Underwriters as provided in this Agreement, and the Underwriters, on the basis of the
representations, warranties and agreements set forth herein and subject to the conditions set forth
herein, shall have the option to purchase, severally and not jointly, from the Selling Shareholder
the Option Shares at the Purchase Price.
If any Option Shares are to be purchased, the number of Option Shares to be purchased by each
Underwriter shall be the number of Option Shares which bears the same ratio to the aggregate number
of Option Shares being purchased as the number of Underwritten Shares set forth opposite the name
of such Underwriter in Schedule 1 hereto (or such number increased as set forth in Section 10
hereof) bears to the aggregate number of Underwritten Shares being
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purchased by the several Underwriters, subject, however, to such adjustments to eliminate any
fractional Shares as the Representatives in their sole discretion shall make.
The Underwriters may exercise the option to purchase the Option Shares at any time in whole,
or from time to time in part, only for the purpose of covering over-allotments that may be made in
connection with the offering and distribution of the Underwritten Shares, on or before the
thirtieth day following the date of this Agreement, by written notice from the Representatives to
the Company and the Selling Shareholder. Such notice shall set forth the aggregate number of
Option Shares as to which the option is being exercised and the date and time when the Option
Shares are to be delivered and paid for which may be the same date and time as the Closing Date (as
hereinafter defined) but shall not be earlier than the Closing Date nor later than the fifth
business day (as hereinafter defined) after the date of such notice (unless such time and date are
postponed in accordance with the provisions of Section 10 hereof). Any such notice shall be given
at least two business days prior to the date and time of delivery specified therein.
The Company, the Selling Shareholder and the Underwriters hereby agree that up to 200,000 of
the Underwritten Shares to be purchased by Xxxxxx Xxxxxxxxxx Xxxxx LLC (the “Designated
Underwriter”) under this Agreement (the “Directed Shares”) shall be reserved for sale
by such Designated Underwriter for the Company’s employees and friends (the “Directed Share
Purchasers”) as part of the distribution of the Underwritten Shares (the “Directed Share
Program”). The Underwritten Shares to be reserved and sold by the Designated Underwriter
pursuant to the Directed Share Program shall be sold by such Designated Underwriter at the public
offering price and shall be subject to the terms of this Agreement, the applicable rules,
regulations and interpretations of the Financial Industry Regulatory Authority (“FINRA”)
and all other applicable laws, rules and regulations. To the extent that such Directed Shares are
not orally confirmed for purchase by such persons by the end of the first day after this Agreement,
such Directed Shares will be offered to the public as part of the offering contemplated hereby.
Except as expressly provided in Section 9 hereof, under no circumstances will the Designated
Underwriter or any other Underwriter be liable to the Company or to any of the Directed Share
Purchasers for any action taken or omitted to be taken other than any such action or inaction
resulting primarily from the bad faith or willful misconduct of the Designated Underwriter in
connection with the Directed Share Program.
(b) The Sellers understand that the Underwriters intend to make a public offering of the
Shares in the United States as soon after the effectiveness of this Agreement as in the judgment of
the Representatives is advisable, and initially to offer the Shares on the terms set forth in the
Prospectus. The Sellers acknowledge and agree that the Underwriters may offer and sell Shares to
or through any affiliate of an Underwriter and that any such affiliate may offer and sell Shares
purchased by it to or through any Underwriter.
(c) Payment for the Shares to be sold by each Seller shall be made by wire transfer in
immediately available funds to the account specified by such Seller to the Representatives, in the
case of the Underwritten Shares, at the offices of Cravath, Swaine & Xxxxx LLP, New York, New York,
at 10:00 A.M. New York City time on January
[ ], 2008, or at such other time or place on the same
or such other date, not later than the fifth business day thereafter, as the Representatives and
the Sellers may agree upon in writing or, in the case of the Option Shares,
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on the date and at the time and place specified by the Representatives in the written notice
of the Underwriters’ election to purchase such Option Shares. The time and date of such payment
for the Underwritten Shares is referred to herein as the “Closing Date”, and the time and
date for such payment for the Option Shares, if other than the Closing Date, is herein referred to
as the “Additional Closing Date”.
Payment for the Shares to be purchased on the Closing Date or the Additional Closing Date, as
the case may be, shall be made against delivery to the Representatives for the respective accounts
of the several Underwriters of the Shares to be purchased on such date in definitive form
registered in such names and in such denominations as the Representatives shall request in writing
not later than two business days prior to the Closing Date or the Additional Closing Date, as the
case may be, with any transfer taxes payable in connection with the sale of the Shares duly paid by
the applicable Seller. The certificates for the Shares will be made available for inspection and
packaging by the Representatives in the City of New York not later than 1:00 P.M., New York City
time, on the business day prior to the Closing Date or the Additional Closing Date, as the case may
be.
(d) Each of the Sellers acknowledges and agrees that the Underwriters are acting solely in the
capacity of an arm’s length contractual counterparty to such Seller with respect to the offering of
Shares contemplated hereby (including in connection with determining the terms of the offering) and
not as a financial advisor or a fiduciary to, or an agent of, such Seller or any other person.
Additionally, neither the Representatives nor any other Underwriter is advising the Sellers or any
other person as to any legal, tax, investment, accounting or regulatory matters in any
jurisdiction. Each of the Sellers shall consult with its own advisors concerning such matters and
shall be responsible for making its own independent investigation and appraisal of the transactions
contemplated hereby, and the Underwriters shall have no responsibility or liability to such Seller
with respect thereto. Any review by the Underwriters of the Company, the transactions contemplated
hereby or other matters relating to such transactions will be performed solely for the benefit of
the Underwriters and shall not be on behalf of the Sellers.
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understood and agreed by the parties hereto that the Selling Shareholder Information consists
solely of the following: the use of the Selling Shareholder’s net proceeds to make a payment to
the trustees of Biwater’s U.K. defined benefit pension plan, the amount of underfunding of
Biwater’s U.K. defined benefit pension plan, information regarding the beneficial ownership of
Biwater contained in the Prospectus and the Time of Sale Information under the heading “Principal
and selling shareholders” and elsewhere in the Prospectus and the Time of Sale Information, the
information contained in the Prospectus and the Time of Sale Information under the heading
“Relationships and transactions with related parties,” including the description of Biwater’s
request for and grant of clearance by the U.K. Pensions Regulator in connection with Biwater’s
purchase of n.v. Nuon’s interest in the Company, Biwater’s plan-specific deficit as of March 31,
2007 and the agreement between Biwater and the Trustees to terminate their right to merge the Water
Company Section and the Main Section, and the fact that the Selling Shareholder expressly disclaims
status as an “underwriter” under Section 2(11) of the Securities Act as set forth in the Prospectus
and Time of Sale Information under the heading “Principal and selling shareholders.”
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material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the Company makes
no representation and warranty with respect to any statements or omissions made in each such Issuer
Free Writing Prospectus in reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by such Underwriter through the Representatives
expressly for use in any Issuer Free Writing Prospectus; and provided, further,
that the Company makes no representation and warranty with respect to any statements or omissions
made in reliance upon and in conformity with the Selling Shareholder Information.
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as required by the applicable accounting requirements of the Securities Act and the Exchange
Act, in each case applied on a consistent basis throughout the periods covered thereby, and the
supporting schedules included in the Registration Statement present fairly in all material respects
the information required to be stated therein; the other financial information included in the
Registration Statement, the Time of Sale Information and the Prospectus or any wrapper or
supplement prepared in connection with the distribution of the Directed Shares has been derived
from the accounting records of the Company and its consolidated subsidiaries or Aguas de Panamá,
S.A., as the case may be, and presents fairly in all material respects the information shown
thereby; and the pro forma financial information and the related notes thereto
included in the Registration Statement, the Time of Sale Information and the Prospectus have been
prepared in accordance with the applicable requirements of the Securities Act and the Exchange Act,
as applicable, in all material respects, and the assumptions underlying such pro
forma financial information are reasonable and are set forth in the Registration Statement,
the Time of Sale Information and the Prospectus.
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indirectly, any corporation, association or other entity other than the subsidiaries listed in
Exhibit 21 to the Registration Statement.
(j) Underwriting Agreement. This Agreement has been duly authorized, executed and delivered
by the Company.
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Company or any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the Company or any of its
subsidiaries is subject; or (iii) in violation of any law or statute or any judgment, order, rule
or regulation of any court or arbitrator or governmental or regulatory authority, except, in the
case of clauses (ii) and (iii) above, for any such default or violation that would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
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be expected to have a Material Adverse Effect or materially and adversely affect the ability
of the Company to perform its obligations under this Agreement; to the knowledge of the Company, no
such investigations, actions, suits or proceedings are threatened or, contemplated by any
governmental or regulatory authority or threatened by others; and (i) there are no current or
pending legal, governmental or regulatory actions, suits or proceedings that are required under the
Securities Act to be described in the Registration Statement that are not so described in the
Registration Statement, the Time of Sale Information and the Prospectus and (ii) there are no
statutes, regulations or contracts or other documents that are required under the Securities Act to
be filed as exhibits to the Registration Statement or described in the Registration Statement or
the Prospectus that are not so filed as exhibits to the Registration Statement or described in the
Registration Statement, the Time of Sale Information and the Prospectus.
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is required by the Securities Act to be described in the Registration Statement and the
Prospectus and that is not so described in such documents and in the Time of Sale Information.
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(i) the Company and its subsidiaries (x) are in compliance with any and all applicable federal,
state, local and foreign laws, rules, regulations, requirements, decisions and orders relating to
the protection of human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants (collectively, “Environmental Laws”); (y) have received
and are in compliance with all permits, licenses, certificates or other authorizations or approvals
required of them under Environmental Laws to conduct their respective businesses; and (z) have not
received notice of any actual or potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, and
(ii) there are no costs or liabilities associated with Environmental Laws of or relating to the
Company or its subsidiaries.
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recorded as necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles that receipts and expenditures of the Company are being
made only in accordance with and authorizations of management and directors of the Company; and
(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Company’s assets that could have a material effect on the
Company’s financial statements.
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(hh) No Duties or Other Taxes. No stamp or other issuance or transfer taxes or duties and no
capital gains, income, value-added, withholding or other taxes are payable by or on behalf of the
Underwriters in The Netherlands solely in connection with (A) the issuance and delivery of the
Shares in the manner contemplated by this Agreement and the Prospectus or (B) the sale and delivery
by the Underwriters of the Shares as contemplated herein and the Prospectus.
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state a material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that such Selling
Shareholder makes no representation and warranty with respect to any statements or omissions made
in reliance upon and in conformity with information relating to any Underwriter furnished to the
Company in writing by such Underwriter through the Representatives expressly for use in such Time
of Sale Information. No statement of material fact included in the Prospectus has been omitted
from the Time of Sale Information and no statement of material fact included in the Time of Sale
Information that is required to be included in the Prospectus has been omitted therefrom.
(f) Issuer Free Writing Prospectus. Other than the Preliminary Prospectus and the Prospectus,
the Selling Shareholder (including its agents and representatives, other than the Underwriters in
their capacity as such) has not made, used, prepared, authorized, approved or referred to and will
not prepare, make, use, authorize, approve or refer to any Issuer Free Writing Prospectus, other
than (i) any document not constituting a prospectus pursuant to Section 2(a)(10)(a) of the
Securities Act or Rule 134 under the Securities Act or (ii) the documents listed on Annex D hereto
and other written communications approved in writing in advance by the Company and the
Representatives.
5. Further Agreements of the Company. The Company covenants and agrees with each Underwriter
that:
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(a) Required Filings. The Company will file the final Prospectus with the Commission within
the time periods specified by Rule 424(b) and Rule 430A, 430B or 430C under the Securities Act,
will file any Issuer Free Writing Prospectus to the extent required by Rule 433 under the
Securities Act and will furnish copies of the Prospectus and each Issuer Free Writing Prospectus
(to the extent not previously delivered) to the Underwriters in New York City prior to 10:00 A.M.,
New York City time, on the business day next succeeding the date of this Agreement in such
quantities as the Representatives may reasonably request.
(b) Delivery of Copies. The Company will deliver, without charge, (i) to the Representatives,
three signed copies of the Registration Statement as originally filed and each amendment thereto,
in each case including all exhibits and consents filed therewith; and (ii) to each Underwriter (A)
a conformed copy of the Registration Statement as originally filed and each amendment thereto
(without exhibits) and (B) during the Prospectus Delivery Period (as defined below), as many copies
of the Prospectus (including all amendments and supplements thereto) and each Issuer Free Writing
Prospectus as the Representatives may reasonably request. As used herein, the term “Prospectus
Delivery Period” means such period of time after the first date of the public offering of the
Shares as in the opinion of counsel for the Underwriters a prospectus relating to the Shares is
required by law to be delivered (or required to be delivered but for Rule 172 under the Securities
Act) in connection with sales of the Shares by any Underwriter or dealer.
(c) Amendments or Supplements, Issuer Free Writing Prospectuses. Before preparing, using,
authorizing, approving, referring to or filing any Issuer Free Writing Prospectus, and before
filing any amendment or supplement to the Registration Statement or the Prospectus, whether before
or after the time that the Registration Statement becomes effective, the Company will furnish to
the Representatives and counsel for the Underwriters a copy of the proposed Issuer Free Writing
Prospectus, amendment or supplement for review and will not prepare, use, authorize, approve, refer
to or file any such Issuer Free Writing Prospectus or file any such proposed amendment or
supplement to which the Representatives reasonably object.
(d) Notice to the Representatives. The Company will advise the Representatives promptly, and
confirm such advice in writing, (i) when the Registration Statement has become effective; (ii) when
any amendment to the Registration Statement has been filed or becomes effective; (iii) when any
supplement to the Prospectus or any Issuer Free Writing Prospectus or any amendment to the
Prospectus has been filed; (iv) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or the receipt of any
comments from the Commission relating to the Registration Statement or any other request by the
Commission for any additional information; (v) of the issuance by the Commission of any order
suspending the effectiveness of the Registration Statement or preventing or suspending the use of
any Preliminary Prospectus or the Prospectus or the initiation or threatening of any proceeding for
that purpose or pursuant to Section 8A of the Securities Act; (vi) of the occurrence of any event
within the Prospectus Delivery Period as a result of which the Prospectus, the Time of Sale
Information or any Issuer Free Writing Prospectus as then amended or supplemented would include any
untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the circumstances existing
when the Prospectus, the Time of
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Sale Information or any such Issuer Free Writing Prospectus is delivered to a purchaser, not
misleading; and (vii) of the receipt by the Company of any notice with respect to any suspension of
the qualification of the Shares for offer and sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and the Company will use its best efforts to
prevent the issuance of any such order suspending the effectiveness of the Registration Statement,
preventing or suspending the use of any Preliminary Prospectus or the Prospectus or suspending any
such qualification of the Shares and, if any such order is issued, will obtain as soon as possible
the withdrawal thereof.
(e) Ongoing Compliance. (1) If during the Prospectus Delivery Period (i) any event shall occur
or condition shall exist as a result of which the Prospectus as then amended or supplemented would
include any untrue statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in the light of the
circumstances existing when the Prospectus is delivered to a purchaser, not misleading or (ii) it
is necessary to amend or supplement the Prospectus to comply with law, the Company will immediately
notify the Underwriters thereof and forthwith prepare and, subject to paragraph (c) above, file
with the Commission and furnish to the Underwriters and to such dealers as the Representatives may
designate, such amendments or supplements to the Prospectus as may be necessary so that the
statements in the Prospectus as so amended or supplemented will not, in the light of the
circumstances existing when the Prospectus is delivered to a purchaser, be misleading or so that
the Prospectus will comply with law and (2) if at any time prior to the Closing Date (i) any event
shall occur or condition shall exist as a result of which the Time of Sale Information as then
amended or supplemented would include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of the circumstances,
not misleading or (ii) it is necessary to amend or supplement the Time of Sale Information to
comply with law, the Company will immediately notify the Underwriters thereof and forthwith prepare
and, subject to paragraph (c) above, file with the Commission (to the extent required) and furnish
to the Underwriters and to such dealers as the Representatives may designate, such amendments or
supplements to the Time of Sale Information as may be necessary so that the statements in the Time
of Sale Information as so amended or supplemented will not, in the light of the circumstances, be
misleading or so that the Time of Sale Information will comply with law.
(f) Blue Sky Compliance. The Company will qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Representatives shall reasonably request
and will continue such qualifications in effect so long as required for distribution of the Shares.
(g) Earning Statement. The Company will timely submit such reports pursuant to the Exchange
Act as are necessary to make generally available within the meaning of Section 11(a) of the
Securities Act to its security holders and the Representatives as soon as reasonably practicable an
earning statement that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158
of the Commission promulgated thereunder covering a period of at least twelve months beginning with
the first fiscal quarter of the Company occurring after the “effective date” (as defined in Rule
158) of the Registration Statement.
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(h) Clear Market. For a period of 180 days after the date of the initial public offering of
the Shares, the Company will not (i) offer, pledge, announce the intention to sell, sell, contract
to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase or otherwise transfer or dispose of, directly or
indirectly, any shares of Stock or any securities convertible into or exercisable or exchangeable
for Stock or (ii) enter into any swap or other agreement that transfers, in whole or in part, any
of the economic consequences of ownership of the Stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Stock or such other securities, in cash or
otherwise, without the prior written consent of the Representatives, other than the Shares to be
sold hereunder and any shares of Stock of the Company issued upon the exercise of options granted
under existing employee stock option plans. Notwithstanding the foregoing, if (1) during the last
17 days of the 180-day restricted period, the Company issues an earnings release or material news
or a material event relating to the Company occurs; or (2) prior to the expiration of the 180-day
restricted period, the Company announces that it will release earnings results during the 16-day
period beginning on the last day of the 180-day period, the restrictions imposed by this Agreement
shall continue to apply until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event.
(i) Use of Proceeds. The Company will apply the net proceeds from the sale of the Shares to
be issued by the Company as described in the Registration Statement, the Time of Sale Information
and the Prospectus under the heading “Use of Proceeds”.
(j) No Stabilization. The Company will not take, directly or indirectly, any action designed
to or that would reasonably be expected to cause or result in any stabilization or manipulation of
the price of the Shares.
(k) Exchange Listing. The Company will use its best efforts to list, subject to notice of
issuance, the Shares on the New York Stock Exchange (the “Exchange”).
(l) Reports. So long as the Shares are outstanding, the Company will furnish to the
Representatives, as soon as they are available, copies of all reports or other communications
(financial or other) furnished to holders of the Shares generally, and copies of any reports and
financial statements furnished to or filed with the Commission or any national or foreign
securities exchange or automatic quotation system.
(m) Record Retention. The Company will, pursuant to reasonable procedures developed in good
faith, retain copies of each Issuer Free Writing Prospectus that is not filed with the Commission
in accordance with Rule 433 under the Securities Act.
(n) Filings. The Company will file with the Commission such reports as may be required by
Rule 463 under the Securities Act.
(o) Tax Indemnity. The Company will indemnify and hold harmless the Underwriters against any
documentary, stamp, registration or similar tax, including any interest and penalties, on the
creation, issue and sale of the Shares by the Company to the Underwriters and on the execution and
delivery of this Agreement. All indemnity payments to be made by the Company
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hereunder in respect
of this Section 5(o) shall be made without withholding or deduction for or
on account of any present or future taxes, duties or governmental charges whatsoever unless
the Company is compelled by law to deduct or withhold such taxes, duties or charges. In that
event, the Company shall pay such additional amounts as may be necessary in order to ensure that
the net amounts received after such withholding or deduction shall equal the amounts that would
have been received if no withholding or deduction had been made. The indemnity obligations set
forth in this Section 5(o) shall be exclusive of, and in addition to, the obligations of indemnity
and contribution set forth in Section 9 of this Agreement and any other obligation of the Company
to pay any sum or amount set forth in this Agreement.
(p) PFIC Status. For the period of five years from the Closing Date, the Company will monitor
its PFIC status and conduct its affairs so as not to become a PFIC.
(q) Restriction of Directed Shares. In connection with the Directed Share Program, the
Company will ensure that the Directed Shares will be restricted to the extent required by the
FINRA. The Designated Underwriter will notify the Company as to which potential Directed Share
Purchasers, if any, will need to be so restricted.
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purpose of securing credit facilities and that is referred to in footnote (5) to
the table contained in
“Principal and selling shareholders” in the Prospectus and the Time of Sale Information or (B)
any pledge in respect of bona fide credit facilities incurred following the execution and delivery
of this Agreement in any amount, the proceeds of which are to be used in connection with the
business of Biwater (as defined in the Prospectus); provided, however, that it
shall be a condition to the continued exclusion of any such pledge that no filing by any party
(pledgor or pledgee) with the Commission shall be required or shall be voluntarily made in
connection with such pledge during the lock-up period, as such may be extended; and
provided, further, that it shall be a condition to any pledge described in (B) in
respect of such credit facilities that do not represent the refinancing or replacement of credit
facilities referred to in (A) up to the maximum amount of such credit facilities so refinanced or
replaced, that any pledgee who acquires such pledge agrees in writing to be bound by the
restrictions set forth in clauses (i) through (iii) of this Section 6(a).
(a) It has not used and will not use, authorize use of, refer to, or participate in the
planning for use of, any “free writing prospectus”, as defined in Rule 405 under the Securities Act
(which term includes use of any written information furnished to the Commission by the Company and
not incorporated by reference into the Registration Statement and any press release issued by the
Company) other than (i) a free writing prospectus that contains no “issuer information” (as defined
in Rule 433(h)(2) under the Securities Act) that was not included (including through incorporation
by reference) in the Preliminary Prospectus or a previously
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filed Issuer Free Writing Prospectus,
(ii) any Issuer Free Writing Prospectus listed on Annex D
or prepared pursuant to Section 3(c) or Section 5(c) above, or (iii) any free writing
prospectus prepared by such underwriter and approved by the Company in advance in writing (each
such free writing prospectus referred to in clauses (i) or (iii), an “Underwriter Free Writing
Prospectus”).
(b) It has not distributed and will not distribute any Underwriter Free Writing Prospectus
referred to in clause (a)(i) in a manner reasonably designed to lead to its broad unrestricted
dissemination.
(c) It has not used and will not, without the prior written consent of the Company, use any
free writing prospectus that contains the final terms of the Shares unless such terms have
previously been included in a free writing prospectus filed with the Commission; provided
that Underwriters may use a term sheet substantially in the form of Annex E hereto without the
consent of the Company; provided further that any Underwriter using such term sheet
shall notify the Company, and provide a copy of such term sheet to the Company, prior to, or
substantially concurrently with, the first use of such term sheet.
(d) It will, pursuant to reasonable procedures developed in good faith, retain copies of each
free writing prospectus used or referred to by it, in accordance with Rule 433 under the Securities
Act.
(e) It is not subject to any pending proceeding under Section 8A of the Securities Act with
respect to the offering (and will promptly notify the Company if any such proceeding against it is
initiated during the Prospectus Delivery Period).
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use a “cut-off” date no more than three business days prior to such Closing Date or such
Additional Closing Date, as the case may be.
(g) Opinions of Counsel for the Company. The Representatives shall have received, at the
Company’s request, in each case dated the Closing Date or the Additional Closing Date, as the case
may be, and in each case addressed to the Underwriters and in form and substance reasonably
satisfactory to the Representatives, (i) the written opinion of Squire, Xxxxxxx & Xxxxxxx L.L.P.,
special U.S. securities counsel to the Company, to the effect set forth in Annex A and (ii) the
written opinion of Xxxxxx New York B.V. P.C., Dutch counsel to the Company, to the effect set forth
in Annex B.
26
certain other dispositions of shares of Stock or certain other securities, delivered to you on
or before the date hereof, shall be in full force and effect on the Closing Date or Additional
Closing Date, as the case may be.
All opinions, letters, certificates and evidence mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Underwriters.
27
any Time of Sale
Information or any wrapper or supplement prepared in connection with the distribution of the
Directed Shares, it being understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in subsection (c) below;
provided, however, that the liability of the Selling Shareholder under this Section
9 shall not exceed the product of the number of Shares sold by the Selling Shareholder and the
initial public offering price of the Shares as set forth in the Prospectus.
28
asserted against an Indemnified Person and it shall have notified the Indemnifying Person
thereof, the Indemnifying Person shall retain counsel reasonably satisfactory to the Indemnified
Person (who shall not, without the consent of the Indemnified Person, be counsel to the
Indemnifying Person) to represent the Indemnified Person in such proceeding and shall pay the fees
and expenses of such counsel related to such proceeding, as incurred. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person
and the Indemnified Person shall have mutually agreed to the contrary or (ii) the Indemnifying
Person has failed within a reasonable time to retain counsel reasonably satisfactory to the
Indemnified Person. It is understood and agreed that the Indemnifying Person shall not, in
connection with any proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local counsel) for all
Indemnified Persons, and that all such fees and expenses shall be paid or reimbursed as they are
incurred. Any such separate firm for any Underwriter, its affiliates, directors and officers and
any control persons of such Underwriter shall be designated in writing by X.X. Xxxxxx Securities
Inc., any such separate firm for the Company, its directors, its officers who signed the
Registration Statement and any control persons of the Company shall be designated in writing by the
Company and any such separate firm for the Selling Shareholder shall be designated in writing by
the Selling Shareholder. The Indemnifying Person shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such consent or if there be a
final judgment for the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified
Person from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested
that an Indemnifying Person reimburse the Indemnified Person for fees and expenses of counsel as
contemplated by this paragraph, the Indemnifying Person shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is entered into more than 30
days after receipt by the Indemnifying Person of such request and (ii) the Indemnifying Person
shall not have reimbursed the Indemnified Person in accordance with such request prior to the date
of such settlement. No Indemnifying Person shall, without the written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnification could have been sought
hereunder by such Indemnified Person, unless such settlement (x) includes an unconditional release
of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified
Person, from all liability on claims that are the subject matter of such proceeding and (y) does
not include any statement as to or any admission of fault, culpability or a failure to act by or on
behalf of any Indemnified Person.
29
fault of the Company and the Selling Shareholder, on the one hand, and the Underwriters, on
the other, in connection with the statements or omissions that resulted in such losses, claims,
damages or liabilities, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Shareholder, on the one hand, and the
Underwriters, on the other, shall be deemed to be in the same respective proportions as the net
proceeds (before deducting expenses) received by the Company and the Selling Shareholder from the
sale of the Shares and the total underwriting discounts and commissions received by the
Underwriters in connection therewith, in each case as set forth in the table on the cover of the
Prospectus, bear to the aggregate offering price of the Shares. The relative fault of the Company
and the Selling Shareholder, on the one hand, and the Underwriters, on the other, shall be
determined by reference to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact relates to information
supplied by the Company and the Selling Shareholder or by the Underwriters and the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such
statement or omission.
30
materially
limited on or by any of the New York Stock Exchange, the American Stock
Exchange, the National Association of Securities Dealers, Inc., the Chicago Board Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade; (ii) trading of any
securities issued or guaranteed by the Company shall have been suspended on any exchange or in any
over-the-counter market; (iii) a general moratorium on commercial banking activities shall have
been declared by federal or New York State authorities or by authorities in the United Kingdom or
The Netherlands; or (iv) there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis, either within or outside the United States,
that, in the judgment of the Representatives, is material and adverse and makes it impracticable or
inadvisable to proceed with the offering, sale or delivery of the Shares on the Closing Date or the
Additional Closing Date, as the case may be, on the terms and in the manner contemplated by this
Agreement, the Time of Sale Information and the Prospectus.
(b) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting
Underwriter or Underwriters by the non-defaulting Underwriters, the Company and the Selling
Shareholder as provided in paragraph (a) above, the aggregate number of Shares that remain
unpurchased on the Closing Date or the Additional Closing Date, as the case may be, does not exceed
one-eleventh of the aggregate number of Shares to be purchased on such date, then the Company and
the Selling Shareholder shall have the right to require each non-defaulting Underwriter to purchase
the number of Shares that such Underwriter agreed to purchase hereunder on such date plus such
Underwriter’s pro rata share (based on the number of Shares that such Underwriter agreed to
purchase on such date) of the Shares of such defaulting Underwriter or Underwriters for which such
arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting
Underwriter or Underwriters by the non-defaulting Underwriters and the Company
31
and the Selling
Shareholder as provided in paragraph (a) above, the aggregate number of Shares
that remain unpurchased on the Closing Date or the Additional Closing Date, as the case may
be, exceeds one-eleventh of the aggregate amount of Shares to be purchased on such date, or if the
Company and the Selling Shareholder shall not exercise the right described in paragraph (b) above,
then this Agreement or, with respect to any Additional Closing Date, the obligation of the
Underwriters to purchase Shares on the Additional Closing Date, as the case may be, shall terminate
without liability on the part of the non-defaulting Underwriters. Any termination of this
Agreement pursuant to this Section 12 shall be without liability on the part of the Company and the
Selling Shareholder, except that the Company will continue to be liable for the payment of expenses
as set forth in Section 13 hereof and except that the provisions of Section 9 hereof shall not
terminate and shall remain in effect.
(d) Nothing contained herein shall relieve a defaulting Underwriter of any liability it may
have to the Company, the Selling Shareholder or any non-defaulting Underwriter for damages caused
by its default.
(b) If (i) this Agreement is terminated pursuant to Section 11, (ii) the Company or the
Selling Shareholder for any reason fails to tender the Shares for delivery to the Underwriters or
(iii) the Underwriters decline to purchase the Shares for any reason permitted under this
Agreement, the Company agrees to reimburse the Underwriters for all out-of-pocket costs and
expenses (including the fees and expenses of their counsel (including foreign counsel)) reasonably
incurred by the Underwriters in connection with this Agreement and the offering contemplated
hereby.
32
and
directors and any controlling persons referred to in Section 9 hereof. Nothing in this
Agreement is intended or shall be construed to give any other person any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision contained herein. No
purchaser of Shares from any Underwriter shall be deemed to be a successor merely by reason of such
purchase.
33
exclusive jurisdiction
of such courts in any suit, action or proceeding. Each of the Company and
the Selling Shareholder has appointed CT Corporation System as its authorized agent (the
“Authorized Agent”) upon whom process may be served in any suit, action or proceeding
arising out of or based upon this Agreement or the transactions contemplated herein which may be
instituted in any New York Court, by any Underwriter, the directors, officers and employees of any
Underwriter, or by any person who controls any Underwriter, and expressly accepts the non-exclusive
jurisdiction of any such court in respect of any such suit, action or proceeding. Each of the
Company and the Selling Shareholder hereby represents and warrants that the Authorized Agent has
accepted such appointment and has agreed to act as said agent for service of process, and each of
the Company and the Selling Shareholder agrees to take any and all action, including the filing of
any and all documents that may be necessary to continue such appointment in full force and effect
as aforesaid. Service of process upon the Authorized Agent shall be deemed, in every respect,
effective service of process upon the Company or the Selling Shareholder, as applicable.
Notwithstanding the foregoing, any action arising out of or based upon this Agreement may be
instituted by any Underwriter, the directors, officers and employees of any Underwriter, or by any
person who controls any Underwriter, in any court of competent jurisdiction in The Kingdom of the
Netherlands. The provisions of this Section 17(d) shall survive any termination of this Agreement,
in whole or in part.
34
If the foregoing is in accordance with your understanding, please indicate your acceptance of
this Agreement by signing in the space provided below.
| Very truly yours, | ||||
| CASCAL N.V. | ||||
| By: | ||||
| Title: | ||||
| BIWATER INVESTMENTS LIMITED | ||||
| By: | ||||
| Title: | ||||
Accepted: , 2008
X.X. XXXXXX SECURITIES INC.
CREDIT SUISSE SECURITIES (USA) LLC
CREDIT SUISSE SECURITIES (USA) LLC
For themselves and on behalf of the
several Underwriters listed
in Schedule 1 hereto.
several Underwriters listed
in Schedule 1 hereto.
| X.X. XXXXXX SECURITIES INC. | ||||
By:
|
||||
Title:
|
||||
| CREDIT SUISSE SECURITIES (USA) LLC | ||||
By:
|
||||
Title:
|
||||
Schedule 1
| Underwriter | Number of Shares | |||
X.X. Xxxxxx Securities Inc. |
7,183,285 | |||
Credit Suisse Securities (USA) LLC |
5,679,806 | |||
Xxxxxx Xxxxxxxxxx Xxxxx LLC |
2,004,638 | |||
HSBC Securities (USA) Inc. |
1,837,585 | |||
Total |
16,705,314 | |||
Annex D
Not applicable.
Annex E
Cascal N.V.
Pricing Terms
| 1. | Public offering price of [Underwritten] Shares: $[ ] per share | |
| 2. | Number of [Underwritten] Shares sold by the Company: [ ] shares | |
| 3. | Number of [Underwritten] Shares sold by the Selling Shareholder [ ] shares |
Annex F
List of Individuals Subject to Lock-Up Agreements
| Name | Position | |
Xxxxx Xxxxx
|
Director, Chairman | |
Xxxxxxxx Xxxxxx
|
Chief Executive Officer and Director | |
Xxxxx Xxxxxxxxxxx
|
Chief Financial Officer | |
Xxxxx Xxxxxx
|
Chief Commercial Officer | |
Xxxxx Xxxxxxxx
|
Chief Growth Officer | |
Xxxxxxx Xxxxxx
|
Director nominee | |
Willy Biewinga
|
Director nominee | |
Xxxxxxxx Xxxxxx
|
Director nominee | |
Xxxxxxx Xxxxx
|
Director nominee |
Exhibit A
FORM OF LOCK-UP AGREEMENT
[•], 2008
X.X. Xxxxxx Securities Inc.
Credit Suisse Securities (USA) LLC,
As Representatives of
the several Underwriters listed in
Schedule 1 to the Underwriting
Agreement referred to below
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Credit Suisse Securities (USA) LLC,
As Representatives of
the several Underwriters listed in
Schedule 1 to the Underwriting
Agreement referred to below
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
The undersigned understands that you, as Representatives of the several Underwriters, propose
to enter into an Underwriting Agreement (the “Underwriting Agreement”) with Cascal N.V., a
Dutch public limited company (naamloze vennootschap or N.V.) (the “Company”), and Biwater
Investments Limited, a company incorporated in England and Wales, providing for the public offering
(the “Public Offering”) by the several Underwriters named in Schedule 1 to the Underwriting
Agreement (the “Underwriters”) of the common shares of the Company (the
“Securities”). Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Underwriting Agreement.
In consideration of the Underwriters’ agreement to purchase and make the Public Offering of
the Securities, and for other good and valuable consideration receipt of which is hereby
acknowledged, the undersigned hereby agrees that, without the prior written consent of X.X. Xxxxxx
Securities Inc. (“JPMorgan”) and Credit Suisse Securities (USA) LLC (“Credit
Suisse”) on behalf of the Underwriters, the undersigned will not, during the period ending 180
days after the date of the prospectus relating to the Public Offering (the “Prospectus”),
(1) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option, right or warrant
to purchase, or otherwise transfer or dispose of, directly or indirectly, any of the common shares,
$[•] per share par value, of the Company (the “Common Shares”) or any securities
convertible into or exercisable or exchangeable for Common Shares (including without limitation,
Common Shares that may be deemed to be beneficially owned by the undersigned in accordance with the
2
rules and regulations of the Securities and Exchange Commission and securities which may be issued
upon exercise of a stock option or warrant) or (2) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of ownership of the Common Shares,
whether any such transaction described in clause (1) or (2) above is to be settled by delivery of
Common Shares or such other securities, in cash or otherwise. In addition, the undersigned agrees
that, without the prior written consent of JPMorgan and Credit Suisse, it will not, during the
period ending 180 days after the date of the Prospectus, make any demand for or exercise any right
with respect to, the registration of any shares of Common Shares or any security convertible into
or exercisable or exchangeable for Common Shares. Notwithstanding the foregoing, if (1) during the
last 17 days of the 180-day restricted period, the Company issues an earnings release or material
news or a material event relating to the Company occurs; or (2) prior to the expiration of the
180-day restricted period, the Company announces that it will release earnings results during the
16-day period beginning on the last day of the 180-day period, the restrictions imposed by this
Letter Agreement shall continue to apply until the expiration of the 18-day period beginning on the
issuance of the earnings release or the occurrence of the material news or material event.
Notwithstanding the foregoing, the undersigned may transfer the Undersigned’s Shares (i) by
bona fide gift, will or intestacy, provided that the donee or donees thereof agree to be bound in
writing by the restrictions set forth herein, (ii) to any trust for the direct or indirect benefit
of the undersigned or the immediate family of the undersigned or, if the undersigned is a trust, to
the undersigned’s beneficiaries, provided that the trustee of the trust or the undersigned,
respectively, agrees to be bound in writing by the restrictions set forth herein, and provided
further that any such transfer shall not involve a disposition for value, (iii) if the undersigned
is a corporation, partnership or a limited liability company, to its shareholders, subsidiaries,
partners, members or affiliates, provided that the recipient agrees to be bound in writing by the
restrictions set forth herein, and provided further that any such transfer shall not involve a
disposition for value; or (iv) with the prior written consent of JPMorgan and Credit Suisse on
behalf of the Underwriters; provided, however, that for any transfer or
distribution in each of clauses (i) through (iv) above it shall be a condition to any such transfer
or distribution that no filing by any party (transferor or transferee) with the Commission shall be
required or shall be voluntarily made in connection with such transfer during the lock-up period,
as such may be extended. For purposes of this Lock-Up Agreement, “immediate family” shall mean any
relationship by blood, marriage or adoption, not more remote than first cousin.
In furtherance of the foregoing, the Company, and any duly appointed transfer agent for the
registration or transfer of the securities described herein, are hereby authorized to decline to
make any transfer of securities if such transfer would constitute a violation or breach of this
Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has full power and
authority to enter into this Letter Agreement. All authority herein conferred or agreed to be
conferred and any obligations of the undersigned shall be binding upon the successors, assigns,
heirs or personal representatives of the undersigned.
The undersigned understands that, if the Underwriting Agreement does not become effective, or
if the Underwriting Agreement (other than the provisions thereof which survive
3
termination) shall terminate or be terminated prior to payment for and delivery of the Common
Shares to be sold thereunder, the undersigned shall be released form all obligations under this
Letter Agreement. The undersigned understands that the Underwriters are entering into the
Underwriting Agreement and proceeding with the Public Offering in reliance upon this Letter
Agreement.
This Letter Agreement shall be governed by and construed in accordance with the laws of the
State of New York, without regard to the conflict of laws principles thereof.
| Very truly yours, |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||