EXHIBIT 1.1
FORM OF UNDERWRITING AGREEMENT
1,767,662 SHARES
CONSOLIDATED WATER CO. LTD.
ORDINARY SHARES
-------------------
UNDERWRITING AGREEMENT
-------------------
Philadelphia, Pennsylvania
________ __, 0000
XXXXXX XXXXXXXXXX XXXXX LLC
XXXXX FARGO SECURITIES, LLC
As Representatives of the Several Underwriters Named in Schedule I hereto
c/o Janney Xxxxxxxxxx Xxxxx LLC
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Ladies and Gentlemen:
Consolidated Water Co. Ltd., a Cayman Islands corporation
("CWCO"), proposes, subject to the terms and conditions stated herein, to sell
to the several Underwriters named in Schedule I hereto (the "Underwriters"), for
whom Xxxxxx Xxxxxxxxxx Xxxxx LLC and Xxxxx Fargo Securities, LLC are serving as
Representatives (the "Representatives"), an aggregate of 1,200,000 Ordinary
Shares, par value CI$1.00 per share (the "Ordinary Shares") of CWCO, and the
person named in Schedule II hereto (the "Selling Shareholder") proposes, subject
to the terms and conditions stated herein, to sell to the Underwriters an
aggregate of 567,662 Ordinary Shares. The Ordinary Shares to be sold to the
Underwriters by CWCO and the Selling Shareholder 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 I 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, at the Underwriters' election and subject to the
terms and conditions stated herein, purchase ratably in proportion to the
amounts set forth opposite their respective names in Schedule I
hereto, for the Underwriters' own accounts up to 265,150 additional shares of
Ordinary Shares from CWCO. Such 265,150 additional shares of 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."
CWCO, the Selling Shareholder and the Underwriters, intending
to be legally bound, hereby confirm their agreement as follows:
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. _______) 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 a 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.
(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, to the knowledge of CWCO,
threatened to institute proceedings with respect to such an order. For purposes
of this Agreement, "to the knowledge of CWCO," means the actual knowledge of
CWCO and/or any executive officer or director of CWCO, and an individual shall
be deemed to have "knowledge" of a particular fact, circumstance or other matter
if: (i) such person is actually aware of such fact or matter, or (ii) an
individual could have obtained such fact, circumstance or
2
other matter through a due inquiry concerning the truth or existence of such
fact, circumstance or other matter. 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, to the knowledge of CWCO, 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 not
misleading. 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, contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading. The two preceding sentences do not
apply to statements in or omissions from the Registration Statement or the
Prospectus based upon written information furnished to CWCO by or on behalf of
any Underwriter through the Representatives expressly for use therein or the
omission of any information regarding the Underwriters.
(c) Any documents incorporated by reference into the
Prospectus pursuant to Item 6 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 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 not misleading.
(d) There are no legal or governmental proceedings
pending or, to the knowledge of CWCO, threatened to which CWCO or any of its
subsidiaries is a party or to which any of the properties of CWCO or any
subsidiary are subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or any statutes,
regulations, contracts or other documents that are required to be described in
the Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(e) CWCO is a corporation duly organized, validly
existing and in good standing under the laws of the Cayman Islands, and has the
corporate power and authority 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. Belize Water Limited, a corporation
incorporated in Belize ("Belize Water"), is a wholly owned subsidiary of CWCO.
Belize Water has been duly incorporated and is an existing corporation in good
standing under the laws of the jurisdiction of its incorporation, and has the
corporate power and authority to own or lease and operate its properties and to
conduct its current business. CWCO and Belize Water
3
are duly qualified to do business, and are 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 the general affairs,
properties, condition (financial or otherwise), results of operations,
shareholders' equity, business or prospects (collectively, the "Business
Conditions") of CWCO, Belize Water or, as applicable, the Acquired Companies (as
hereinafter defined).
(f) DesalCo Limited ("DesalCo") is a company duly
organized, validly existing and in good standing under the laws of the Cayman
Islands, and has the corporate power and authority to own or lease and operate
its properties and to conduct its current business as described in the
Prospectus. Ocean Conversion (Cayman) Limited ("OCC") is a company duly
organized, validly existing and in good standing under the laws of the Cayman
Islands, and has the corporate power and authority to own or lease and operate
its properties and to conduct its current business as described in the
Prospectus. Ocean Conversion (BVI) Ltd. ("OCBVI") is a company duly organized,
validly existing and in good standing under the laws of the British Virgin
Islands, and has the corporate power and authority to own or lease and operate
its properties and to conduct its current business as described in the
Prospectus. DesalCo (Barbados) Ltd. ("DesalCo Barbados") is a company duly
organized, validly existing and in good standing under the laws of the Barbados,
and has the corporate power and authority to own or lease and operate its
properties and to conduct its current business as described in the Prospectus.
Waterfields Company Limited ("Waterfields," and together with DesalCo, DesalCo
Barbados, OCC and OCBVI, the "Acquired Companies") is a company duly organized,
validly existing and in good standing under the laws of the Bahamas, and has the
corporate power and authority to own or lease and operate its properties and to
conduct its current business as described in the Prospectus. The Acquired
Companies are each duly qualified to do business as foreign corporations, and
are 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 the Business Conditions of any Acquired Company. CWCO, Belize
Water and the Acquired Companies are hereinafter sometimes collectively referred
to as the "CWCO Group."
(g) All of the outstanding shares of capital stock of
Belize Water have been duly authorized and validly issued, are fully paid and
non-assessable and are owned by CWCO free and clear of all liens, encumbrances
and security interests, except as otherwise disclosed in the Prospectus; 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 Belize Water or securities convertible into or
exchangeable for capital stock of, or other ownership interests in Belize Water
are outstanding, except as disclosed in the Prospectus. Neither CWCO, the
Acquired Companies nor Belize Water owns any stock or other interest whatsoever,
whether equity or debt, in any corporation, partnership or other entity other
than (i) CWCO's ownership of Belize Water, Cayman Water Company Limited,
Hurricane Hideaway Marine Ltd., Belize Water Services Ltd., Waterfields, OCC
and DesalCo; (ii) DesalCo's ownership of OCC, DesalCo Barbados and
Waterfields; and (iii) OCBVI's ownership of JVD Ocean Desalination Ltd.
(h) All of the outstanding shares of capital stock of the
Acquired Companies have been duly authorized and validly issued, are fully paid
and non-assessable, and none of the outstanding shares of the Acquired
Companies' capital stock has been issued in violation of any preemptive rights
of any security holder of any of the Acquired Companies. All shares of the
4
Acquired Companies, that have been acquired by CWCO, are owned by CWCO free and
clear of all liens, encumbrances and security interests, except as otherwise
disclosed in the Prospectus; 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 any of
the Acquired Companies or securities convertible into or exchangeable for
capital stock of, or other ownership interests in any of the Acquired Companies
are outstanding, except as disclosed in the Prospectus.
(i) There are no legal or governmental proceedings
pending or, to the knowledge of CWCO, threatened to which any of the Acquired
Companies are a party or to which any of the properties of the Acquired
Companies are subject that are required to be described in the Registration
Statement or the Prospectus and are not so described, and there are no statutes,
regulations, contracts or other documents concerning the Acquired Companies that
are required to be described in the Registration Statement or the Prospectus or
to be filed as exhibits to the Registration Statement that are not described or
filed as required.
(j) 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.
(k) 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 or Belize Water's respective Amended and
Restated Memorandum of Association or Amended and Restated Articles of
Association or similar governing instruments; (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 Belize Water or require any
payment by CWCO or Belize Water or impose any liability on CWCO or Belize Water
pursuant to, any contract, indenture, mortgage, deed of trust, commitment or
other agreement or instrument to which CWCO or Belize Water is a party or by
which any of their respective properties are bound or affected other than this
Agreement, except where such breach, default, modification, termination, lien,
security interest, charge, encumbrance, payment or liability could not
reasonably be expected to have a material adverse effect on the Business
Conditions of CWCO or Belize Water, taken as a whole; (iii) assuming compliance
with 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
Belize Water or any of their respective properties or businesses, except where
such violation could not reasonably be expected to have a material adverse
effect on the Business Conditions of CWCO or Belize Water, taken as a whole; or
(iv) result in a breach, termination or lapse of CWCO's or Belize Water's
corporate power and authority to own or lease and operate their respective
properties and conduct their respective businesses, except as disclosed in the
Prospectus.
5
(l) 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 the Acquired Companies' respective governing documents;
(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 the
Acquired Companies or require any payment by any of the Acquired Companies or
impose any liability on any of the Acquired Companies pursuant to, any contract,
indenture, mortgage, deed of trust, commitment or other agreement or instrument
to which any of the Acquired Companies is a party or by which any of their
respective properties are bound or affected, except where such breach, default,
modification, termination, lien, security interest, charge, encumbrance, payment
or liability could not reasonably be expected to have a material adverse effect
on the Business Conditions of CWCO or any of the Acquired Companies; (iii)
violate any law, rule, regulation, judgment, order or decree of any government
or governmental agency, instrumentality or court, domestic or foreign, having
jurisdiction over the Acquired Companies or any of their respective properties
or businesses, except where such violation could not reasonably be expected to
have a material adverse effect on the Business Conditions of CWCO or any of the
Acquired Companies; or (iv) result in a breach, termination or lapse of any of
the Acquired Companies' corporate power and authority to own or lease and
operate their respective properties and conduct their respective businesses,
except where such breach, termination or lapse could not reasonably be expected
to have a material adverse effect on the Business Conditions of CWCO or any of
the Acquired Companies.
(m) 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, except as described in the Prospectus, 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 CWCO. The information in the Prospectus insofar
as it relates to all outstanding options and other rights to acquire securities
of CWCO as of the dates referred to in the Prospectus is true and correct in all
material respects.
(n) 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 made
by or on behalf of CWCO, 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 Ordinary Shares conform in all material respects
with the
6
descriptions thereof in the Prospectus, and such descriptions conform in all
material respects with the instruments defining the same.
(o) 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 laws of the Cayman Islands. Except
for the registration rights granted to R. Xxxxx Xxxxxxx ("Xxxxxxx") pursuant to
that certain Stock Option Agreement dated December 15, 1998 between CWCO and
Xxxxxxx, 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.
(p) 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 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 laws or the Bylaws, rules and
other pronouncements of the NASD, and (ii) as disclosed in the Prospectus.
(q) The Ordinary Shares (including the Shares) are
registered pursuant to Section 12(g) of the Exchange Act. The issued and
outstanding Ordinary Shares are included for quotation on the Nasdaq National
Market. Neither CWCO nor, to CWCO's knowledge, any 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 NASD is contemplating terminating
such registration or inclusion.
(r) 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.
(s) Each contract or other instrument (however
characterized or described) to which CWCO, Belize Water and each Acquired
Company is a party or by which any of their respective properties or businesses
is bound or affected and which is material to the conduct of the CWCO Group's
business has been (i) duly and validly executed by CWCO, Belize Water and each
Acquired Company and, (ii) 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
7
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 neither CWCO, Belize Water nor any Acquired
Company is, and to the knowledge of CWCO, no other party thereto is, in default
thereunder, except where such default would not have a material adverse effect
on the Business Conditions of the CWCO Group, and 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.
(t) 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, except
as disclosed therein. 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 - Summary Consolidated Financial Information," "Prospectus Summary -
Summary Pro Forma Financial Data," "Selected Consolidated Financial
Information," "Summary Pro Forma Financial Data," "Use of Proceeds" and
"Capitalization" presents fairly the information shown therein and has been
compiled on a basis consistent with that of the 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 Shareholder of 1,767,662 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 therefrom.
(u) The combined financial statements of DesalCo, DesalCo
Barbados, OCC and OCCBVI (including the notes thereto) and the financial
statements of Waterfields (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 each such Acquired
Company as of the respective dates thereof, and the results of operations and
cash flows of each such Acquired Company for the periods indicated therein, all
in conformity with generally accepted accounting principles, except as disclosed
therein. 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
relating to each Acquired Company included in the Prospectus under the captions
"Prospectus Summary - Summary Consolidated Financial Information," "Prospectus
Summary - Summary Pro Forma Financial Data," "Selected Consolidated Financial
Information," and "Summary Pro Forma Financial Data," presents fairly the
information shown therein and has been compiled on a basis consistent with that
of the financial statements included in the Registration Statement.
(v) 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,
8
in the Business Conditions of CWCO, Belize Water or the business conditions of
the Acquired Companies; (ii) any material adverse change, loss, reduction,
termination or non-renewal of any material contract to which CWCO, Belize Water
or any Acquired Company is a party; (iii) any transaction entered into by CWCO,
Belize Water or any Acquired Company not in the ordinary course of its business
that is material to CWCO, Belize Water or any Acquired Company; (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, Belize Water
or any Acquired Company that are material to CWCO, Belize Water or any Acquired
Company other than the issuance of shares pursuant to the exercise of options or
the grant of options under CWCO's stock option plans; (vi) any change in the
capitalization of CWCO, Belize Water or any Acquired Company; or (vii) any
change in the indebtedness of CWCO, Belize Water or any Acquired Company that is
material to the CWCO Group. CWCO, Belize Water and the Acquired Companies have
no contingent liabilities or obligations that are material to the CWCO Group
that are not expressly disclosed in the Prospectus.
(w) 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. Except for
the letter agreement dated March 21, 2002 between CWCO and Xxxxxx Xxxxxxxxxx
Xxxxx LLC, neither CWCO nor any of its officers, directors or affiliates has
(i)taken, nor shall CWCO or such persons take, directly or indirectly, 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, or (ii) since
the filing of the Registration Statement (A) sold, bid for, purchased or paid
anyone any compensation for soliciting purchases of, the Shares or (B) paid or
agreed to pay to any person any compensation for soliciting another to purchase
any other securities of CWCO.
(x) CWCO, Belize Water and each Acquired Company has
filed with the appropriate federal, state and local governmental agencies, and
all foreign countries and political subdivisions thereof, all material tax
returns that are required to be filed or have duly obtained extensions of time
for the filing thereof and have paid all taxes shown on such returns or
otherwise due and all material assessments received by them to the extent that
the same have become due, other than those being contested in good faith and for
which adequate reserves have been provided. CWCO, Belize Water and each Acquired
Company has not executed or filed with any taxing authority, foreign or
domestic, any agreement extending the period for assessment or collection of any
income or other tax and none of them is a party to any pending action or
proceeding by any foreign or domestic governmental agency for the assessment or
collection of taxes, and no claims for assessment or collection of taxes have
been asserted against CWCO, Belize Water or any Acquired Company that might
materially adversely affect the Business Conditions of the CWCO Group.
(y) To the knowledge of CWCO, KPMG Cayman Islands
("KPMG") 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.
9
(z) None of CWCO, Belize Water or any Acquired Company is
in violation of, or in default under, any of the terms or provisions of (i) its
Amended and Restated Memorandum of Association or Amended and Restated Articles
of Association or similar governing instruments and (ii) except where any such
default would not reasonably be expected to have a material adverse effect on
the Business Conditions of the CWCO Group, (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 foreign, having
jurisdiction over it or any of its properties or business, or (C) any license,
permit, certification, registration, approval, consent or franchise.
(aa) 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,
Belize Water or any Acquired Company 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, Belize Water or any Acquired
Company would, in any case or in the aggregate, result in any material adverse
change in the Business Conditions of the CWCO Group, 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, Belize Water or any Acquired Company from, or
requiring CWCO, Belize Water or any Acquired Company to take or refrain from
taking, any action, or to which CWCO, Belize Water or any Acquired Company or
their properties, assets or businesses are bound or subject, except for such
orders, judgments or decrees which would not have a material adverse effect on
the Business Conditions of the CWCO Group.
(bb) Each of CWCO, Belize Water and the Acquired Companies
owns, or possesses adequate rights to use, or can acquire on reasonable terms,
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,
Belize Water's or each Acquired Company'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, Belize Water and each Acquired Company as described in the Prospectus
(collectively, the "Intellectual Property"), except where the failure to own or
possess or otherwise be able to acquire such Intellectual Property would not
have a material adverse effect on the Business Conditions of the CWCO Group. To
CWCO's knowledge, none of CWCO, Belize Water or any Acquired Company has
infringed, is infringing nor have 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, Belize Water or any Acquired Company, and CWCO knows of no reasonable
basis therefor. To the actual knowledge of CWCO, no other parties have infringed
upon or are in conflict with any Intellectual Property. None of CWCO, Belize
Water or any Acquired Company is a party to, or
10
bound by, any agreement pursuant to which royalties, honorariums or fees are
payable by CWCO, Belize Water or any Acquired Company as the case may be to any
person by reason of the ownership or use of any Intellectual Property.
(cc) Each of CWCO, Belize Water and the Acquired Companies
has good and marketable title to all property described in the Prospectus as
being owned by it, free and clear of all 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, Belize Water and the Acquired
Companies, as described in the Prospectus. Each of CWCO, Belize Water and the
Acquired Companies has insured its property against loss or damage by fire,
hurricane 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, Belize Water
and the Acquired Companies as described or referred to in the Prospectus, is
held by CWCO, Belize Water and the Acquired Companies, as applicable, under
valid leases, except where the invalidity of any lease would have a material
adverse effect on the Business Conditions of the CWCO Group. The executive
offices and facilities of CWCO, Belize Water and the Acquired Companies (the
"Premises"), and all operations presently or formerly conducted thereon by CWCO,
Belize Water or the Acquired Companies or any predecessors thereof, are now and,
since CWCO or Belize Water began to use such Premises, always have been and, to
the knowledge of CWCO prior to when CWCO or Belize Water began to use such
Premises, always had been, in compliance with all statutes, ordinances,
regulations, rules, standards and requirements of common law applicable to the
areas in which CWCO, Belize Water and the Acquired Companies provide service
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, Belize Water or the Acquired Companies. To the
knowledge of CWCO, the facilities of CWCO, Belize Water and the Acquired
Companies produce water of sufficient quality and quantity to supply the current
and planned customers and service areas of CWCO, Belize Water and the Acquired
Companies, and are not subject to any restriction on water processing under any
law, regulation, rule, order or permit, except as expressly described in the
Prospectus and such as do not materially adversely affect the Business
Conditions or the conduct of the business of CWCO, Belize Water or the Acquired
Companies, 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 or the imposition of a statutory lien under any of the Environmental
Laws, or affect the quality of the water processed by CWCO, Belize Water or the
Acquired Companies, and that would materially adversely affect the Business
Conditions of CWCO, Belize Water or the Acquired Companies, 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) none of
CWCO, Belize Water or any Acquired Company has received notice or has knowledge
of any claim, demand, investigation, regulatory action, suit or other action
instituted or threatened against CWCO, Belize Water or any Acquired Company or
any portion of the Premises or any parcel in close proximity to the Premises
relating to any of the Environmental Laws and (ii) none of CWCO, Belize Water or
any Acquired Company has 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
11
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.
(dd) Each of CWCO, Belize Water and the Acquired Companies
maintain 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.
(ee) CWCO, Belize Water, and the Acquired Companies and
their respective 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 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, the Bahamas,
Belize, Barbados and the British Virgin 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, Belize Water or any of the
Acquired Companies. 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).
12
(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 governmental authorities, including tax filings as applicable,
with respect to such Plans as may be required by applicable Employee Benefits
law.
(ff) No labor dispute exists with CWCO's, Belize Water's
or the Acquired Companies' 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, Belize Water or the Acquired Companies that would materially
adversely affect the Business Conditions of CWCO Group. None of CWCO's, Belize
Water's or the Acquired Companies' employees is covered by a collective
bargaining agreement and no union organizing activity exists with respect to any
of such employees.
(gg) Neither CWCO, Belize Water nor any one of the
Acquired Companies has 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.
(hh) 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" or an entity "
controlled" by an investment company within the meaning of the 1940 Act and the
rules and regulations thereunder.
(ii) CWCO, Belize Water and each Acquired Company has
received all permits, licenses, franchises, authorizations, registrations,
qualifications and approvals (collectively, "Permits") of governmental or
regulatory authorities as may be required of them to own their properties and
conduct their businesses in the manner described in the Prospectus, subject to
such qualifications as may be set forth in the Prospectus, except to the extent
that failure to receive such Permits would not have a material adverse effect on
the Business Conditions of CWCO Group; and CWCO, Belize Water and each Acquired
Company has fulfilled and performed all of their material obligations with
respect to such Permits, and no event has occurred which allows or, after notice
or lapse of time or both, would allow revocation or termination thereof or
result in any other material impairment of the rights of the holder of any such
Permit, subject in each case to such qualifications as may be set forth in the
Prospectus; and, except as described in the Prospectus, such Permits contain no
restrictions that materially affect the ability of CWCO, Belize Water and each
Acquired Company to conduct their businesses.
(jj) 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 officers, directors or stockholders or any affiliate of the
foregoing, or any affiliate of the
13
foregoing that is required to be described in and is not described in the
Registration Statement and the Prospectus.
(kk) None of CWCO, Belize Water or any officer, director,
employee, partner, agent or other person acting on behalf of CWCO or Belize
Water or any Acquired Company or any officer, director, employee, partner, agent
or other person acting on behalf of such Acquired Company 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 the CWCO
Group, or any actual or proposed business transaction of CWCO, Belize Water or
any Acquired Company, as the case may be that (i) could subject CWCO, Belize
Water or any Acquired Company 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 the CWCO Group, or (ii) with respect to CWCO, Belize
Water or any Acquired Company or any officer or director thereof, violates any
law, rule or regulation to which CWCO, Belize Water or any Acquired Company is
subject.
Any certificate signed by any officer of CWCO, Belize Water or
any Acquired Company 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, Belize Water or such Acquired Company as
the case may be, to the several Underwriters as to the matters covered thereby.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDER. The
Selling Shareholder represents and warrants to each Underwriter that:
(a) The 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 the Selling Shareholder, free and clear of any lien, claim,
security interest or other encumbrance, including, without limitation, any
restriction on transfer.
(b) The 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 has been duly authorized, executed and
delivered by or on behalf of the Selling Shareholder and is the valid and
binding agreement of the Selling Shareholder enforceable against the Selling
Shareholder in accordance with its terms.
(d) Neither the execution and delivery of this Agreement
by or on behalf of the Selling Shareholder nor the consummation of the
transactions herein or therein contemplated
14
by or on behalf of the 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 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 the Selling Shareholder is a party or by which the Selling
Shareholder is or may be bound or to which the Selling Shareholder's property or
assets is subject, or any statute, law, rule, regulation, ruling, judgment,
injunction, order or decree applicable to the Selling Shareholder or to any
property or assets of the Selling Shareholder.
(e) The Registration Statement and the Prospectus,
insofar as they relate to the 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) The 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 the Selling
Shareholder in this Agreement are, and on the Closing Date and any Option
Closing Date will be, true and correct.
(h) The 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 manipulation of the price of the Ordinary 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
Shareholder 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 Shareholder 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 I hereto. 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 I
hereto. The Underwriters shall offer the Shares to the public as set forth in
the Prospectus.
4. PAYMENT AND DELIVERY. The Firm Shares shall be issued in the
form of one or more fully registered global securities (the "Global Securities")
in book-entry form in such denominations and registered in the name of the
nominee of The Depository Trust Company ("DTC") or in such names as the
Representatives may request upon at least 48 hours' prior notice to CWCO, and
shall be delivered by or on behalf of CWCO and the Selling Shareholder to
15
the Representatives for the account of such Underwriter, against payment by such
Underwriter on its behalf of the purchase price therefor by wire transfer of
immediately available funds to such accounts as CWCO and the Selling Shareholder
shall designate in writing (with all costs and expenses incurred by the
Underwriters in connection with such settlement in immediately available funds,
including, but not limited to, interest or cost of funds and expenses, to be
borne by CWCO and the Selling Shareholder). The closing of the sale and purchase
of the Firm Shares shall be held at the offices of Xxxxxxx Xxxxx Xxxxxxx &
Xxxxxxxxx, LLP, 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." CWCO and the Selling Shareholder shall make the Global
Securities representing the Firm Shares available for examination by the
Representatives and counsel for the Underwriters 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, 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 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 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 Over-allotment 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
16
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 I 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
Over-allotment 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) The Optional Shares shall be issued in the form of
one or more Global Securities in book-entry form in such denominations and
registered in the name of the nominee of DTC or in such names as the
Representatives may request upon at least 48 hours' prior notice to CWCO, and
shall be delivered by or on behalf of CWCO to the Representatives for the
account of such Underwriter, against payment by such Underwriter on its behalf
of the purchase price therefor by wire transfer of immediately available funds
to such accounts as CWCO shall designate in writing (with all costs and expenses
incurred by the Underwriters in connection with such settlement in immediately
available funds, including, but not limited to, interest or cost of funds and
expenses, to be borne by CWCO). The closing of the sale and purchase of the
Optional Shares shall be held at the offices of Xxxxxxx Xxxxx Xxxxxxx &
Ingersoll, LLP, 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 Option Closing Date. CWCO
shall make the Global Securities representing the Optional Shares available for
examination by the Representatives and counsel for the Underwriters at the
Philadelphia correspondent office of CWCO's transfer agent not less than one
full business day prior to the 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 with the SEC, the Prospectus, any
amendment or supplement to the Prospectus or any amendment to the Registration
Statement, unless the Representatives have been advised or to which the
Representatives shall reasonably object after being so advised, and will use its
best efforts to cause any such amendment to the Registration Statement to be
declared effective as promptly as possible. Upon reasonable request of the
Representatives or counsel for the Underwriters, CWCO will promptly prepare and
file with the SEC, in accordance with the Regulations of the SEC, any amendments
to the Registration Statement or amendments or supplements to the Prospectus
that may be necessary or advisable in connection with the distribution of the
Shares by the several Underwriters and will use its best
17
efforts to cause any such amendment to the Registration Statement to be declared
effective as promptly as possible. If required, CWCO will file any amendment or
supplement to the Prospectus with the SEC in the manner and within the time
period required by Rule 424(b) under the Act. CWCO will advise the
Representatives, promptly after receiving notice thereof, of the time when the
Registration Statement or any amendment thereof has been filed or declared
effective or the Prospectus or any amendment or supplement thereto has been
filed and will provide evidence to the Representatives of each filing or
effectiveness.
(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.
(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 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 one original signed copy of the Registration Statement
as originally filed and of all amendments and supplements thereto, whether filed
before or after the Effective Date, at least one copy 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.
18
(e) CWCO will comply with the Act, the Regulations, the
Exchange Act and the Exchange Act Regulations 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 $____________ 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 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 inclusion of the Shares for quotation 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.
(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 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 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 fiscal quarter first
occurring after the first anniversary of the
19
Effective Date, 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.
(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 (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,
promptly after 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.
(j) During the course of the distribution of the Shares,
CWCO and its Subsidiaries will not and CWCO shall cause its officers and
directors not to, (i) 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 Common Stock or ((ii) sell, bid for, purchase
or pay anyone any compensation for soliciting purchases of, the 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 from the date of the Lock-up Agreement and for a period of 120 days from
the Effective Date, such persons will not, without the prior written consent of
the Representatives, directly or indirectly, sell, offer or contract to sell,
pledge, grant any option for sale or purchase of, agree to sell or otherwise
dispose of (collectively, "Disposition") any Ordinary Shares (or any securities
convertible into or exercisable or exchangeable for any shares of Ordinary
Shares) beneficially owned by such persons now or on the Effective Date, or with
respect to which such persons now or on the Effective Date has the power of
Disposition, or enter into a transaction which would have the same effect, or
enter into any swap, hedge or other arrangement that transfers, in whole or in
part, any of the economic consequences of ownership of Common Stock, whether any
such aforementioned transaction is to be settled by delivery of Common Stock or
such other securities, in cash or otherwise, or publicly disclose the intention
to make any such Disposition, or enter into any such transaction, swap, hedge or
other arrangement. The foregoing agreement shall not apply to (i) bona fide
gifts of securities provided, the recipient of such gift or contribution agrees
in writing as a condition precedent to such gift or contribution to be bound by
the terms thereof, or (ii) transfers of securities to affiliates of the
transferor if the transfers do not involve a public distribution or public
offering and provided, the transferee agrees in writing as a condition precedent
to such transfer to be bound by the terms thereof. 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) As of the date of the Lock-up Agreement and for a
period of 120 days after the Effective Date, CWCO will not, without the prior
written consent of the Representatives, issue or make a Disposition of any
Ordinary Shares or any securities convertible
20
into or exercisable or exchangeable for any Ordinary Shares or enter into a
transaction which would have the same effect or enter into any swap, hedge or
other arrangement that transfers, in whole or in part, any of the economic
consequences of ownership of Ordinary Shares, whether any such aforementioned
transaction is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, or publicly disclose the intention to issue or
make any such Disposition or enter into any such transaction, swap, hedge or
other arrangement, except ((i) the issuance of Ordinary Shares upon the exercise
of currently outstanding options and warrants as described in the Registration
Statement and (ii) the grant of options to purchase Ordinary Shares under CWCO's
currently outstanding stock option plans and the issuance of Ordinary Shares
upon the exercise thereof and (iii) the issuance of redeemable preferred stock
under CWCO's Employee Share Incentive Plan. The foregoing agreement shall not
apply to (i) bona fide gifts of securities provided, the recipient of such gift
or contribution agrees in writing as a condition precedent to such gift or
contribution to be bound by the terms thereof, or (ii) transfers of securities
to affiliates of the transferor if the transfers do not involve a public
distribution or public offering and provided, the transferee agrees in writing
as a condition precedent to such transfer to be bound by the terms 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.
(n) CWCO shall, 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.
7. AGREEMENTS OF THE SELLING SHAREHOLDER. The Selling Shareholder
severally agrees with the several Underwriters as follows:
(a) The 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) The 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) The 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 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) The 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
21
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, the 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) The 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 the 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 the 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, 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
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, the Underwriters' Questionnaire, the power of attorney executed by
each of the Underwriters and the Selected Dealer Agreement and related
documents; (iii) 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, provided that the aggregate fees and
expenses for Underwriters' counsel under this clause (iii) shall not exceed
[$10,000]; (iv) the filing fees of the SEC; (v) the cost of furnishing to the
Underwriters copies of the Registration Statement, Preliminary Prospectuses and
Prospectuses as herein provided; (vi) CWCO's travel expenses in connection with
meetings with the brokerage community and institutional investors; (vii) 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; (viii)
any fees or costs payable to the Nasdaq National Market as a result of the
offering; (ix) the cost of preparing, issuing and delivery to the Underwriters
of any certificates evidencing the Shares; (x) the costs and charges
22
of any transfer agent; (xi) the reasonable costs of advertising the offering;
(xii) all taxes, if any, on the issuance, delivery and transfer of the Shares
sold by CWCO; and (xiii) 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 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 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.
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 Shareholder, to the
performance by CWCO and the Selling Shareholder of their respective 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.
23
(c) The Representatives shall have received a copy of an
executed Lock-up Agreement from CWCO, the Selling Shareholder and each of the
persons listed on Schedule III hereto.
(d) On the Closing Date and any Option Closing Date,
there shall have been delivered to the Representatives signed opinions of
Xxxxxxx & Xxxxxx, LLP and Xxxxxxx Xxxxx, Xxxxxxx and Xxxxxxxxx, counsels for
CWCO and Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P., counsel for the Selling
Shareholder, 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 Exhibit A and Exhibit B hereto or to such effect as is otherwise
reasonably satisfactory to the Representatives.
(e) 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 the CWCO Group from
that set forth therein, whether or not arising in the ordinary course of
business; ((iii) 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, Belize Water or any of the Acquired Companies 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, Belize
Water or any of the Acquired Companies 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, Belize Water or any of the Acquired Companies 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, Belize Water or any of the Acquired Companies 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, Belize Water or any of the Acquired Companies.
(f) 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
24
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 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(f) hereof have been satisfied.
(g) 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 KPMG:
(i) confirming they are independent certified
public accountants within the meaning of the Act and the Regulations;
(ii) stating that, in their opinion, the
consolidated financial statements, schedules and notes of CWCO 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 Boards of Directors of CWCO
and Belize Water and the Audit and Executive and Compensation Committees of such
Boards 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 at a specified date not more than five business days prior to the
date of such letter, there was any: (A) change in the capital stock other than
(1) the issuance of Ordinary Shares upon the exercise of currently outstanding
options and warrants as described in the Prospectus, (2) the grant of options to
purchase Ordinary Shares under CWCO's currently outstanding stock options plans
and the issuance of Ordinary Shares upon the exercise thereof, and (3) the
issuance of redeemable preferred stock under CWCO's Employee Share Incentive
Plan, (B) increase in long-term debt of CWCO, which is currently $18,985,000 or
(C) any decrease in consolidated net current assets or shareholders equity of
CWCO as compared with the amounts shown in the December 31, 2002 audited balance
sheets of CWCO included in the Registration Statement or that for the periods
from December 31, 2002 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 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.
25
(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 reasonably 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
systems, 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.
(v) stating that, on the basis of specified
procedures, which included (A) a reading of the unaudited pro forma condensed
consolidated balance sheet as of December 31, 2002 and the unaudited pro forma
condensed consolidated statement of income for the year ended December 31, 2002,
included in the Registration Statement; (B) inquiry of management of each of the
Acquired Companies who have responsibility for financial and accounting matters;
(C) proving the arithmetic accuracy of the application of the pro forma
adjustments to the historical amounts in the unaudited pro forma condensed
consolidated financial statements, that nothing came to their attention as a
result of the above procedures, however, that caused them to believe that the
unaudited pro forma condensed consolidated financial statements included in the
Registration Statement do not comply as to form in all material respects with
the applicable accounting requirements of Rule 11-02 of Regulation S-X and that
the pro forma adjustments have not been properly applied to the historical
amounts in the compilation of those statements.
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.
(h) All corporate and other proceedings and other matters
incident to the authorization, form and validity of this 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 shall have
furnished to such counsel all documents and information that they shall have
reasonably requested to enable them to pass upon such matters.
(i) The Shares shall have been included for quotation on
the Nasdaq National Market.
(j) 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.
(k) The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
26
(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 Shareholder 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' 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 Shareholder.
10. INDEMNIFICATION AND CONTRIBUTION.
(a) CWCO 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 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 Nasdaq National Market (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 under this Section 10(a) will be in addition to
any liability CWCO may otherwise have.
27
(b) The Selling Shareholder shall indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of the Act from and 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 the Selling Shareholder's representations and
warranties made in this Agreement or any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or Prospectus, any application, or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading; provided, however,
that the foregoing indemnity shall only apply with reference to information
relating to the Selling Shareholder furnished in writing by or on behalf of the
Selling Shareholder 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(b) 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 the Selling Shareholder under this Section 10(b) will be in
addition to any liability the Selling Shareholder may otherwise have.
(c) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless CWCO, each of the directors of CWCO, each of the
officers of CWCO or the Selling Shareholder who shall have signed the
Registration Statement, the Selling Shareholder and each other person, if any,
who controls CWCO or the Selling Shareholder within the meaning of the Act to
the same extent as the foregoing indemnities from CWCO and the Selling
Shareholder 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 or in any communication to the SEC 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 or in any communication to the SEC, as the case may be. The
obligations of each Underwriter under this Section 10(c) will be in addition to
any liability which such Underwriter may otherwise have.
(d) 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), (b) or (c) hereof, such person (hereinafter called
the "indemnified party") shall, promptly after notification
28
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 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 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 Section 10, as the case may be, 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 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. Notwithstanding
anything in Section 8 or Section 9 to the contrary, 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.
(e) If the indemnification provided for in this Section
10 is unavailable or insufficient to hold harmless an indemnified party under
Section 10(a), (b) or (c) 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(d) 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 Shareholder on the one
hand and the Underwriters on the other from the offering
29
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 Shareholder 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
Shareholder 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 Shareholder 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 Shareholder 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 Shareholder and the Underwriters agree that
it would not be just and equitable if contributions to this Section 10(e) 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(e).
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(e) shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 10(e), (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(e) 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 Shareholder, including, without limitation, the indemnity and
contribution agreements contained in Section 10 hereof and the agreements
contained in Sections 6, 7, 8, 12 and 13 hereof, shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
any Underwriter or any controlling person, and shall survive delivery of the
Shares and termination of this Agreement, whether before or after the Closing
Date or any Option Closing Date.
30
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 and CWCO 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, Belize Water or any of the Acquired Companies,
whether or not arising in the ordinary course of business, that would, in the
Representatives' opinion, make the offering or delivery of the Shares
impracticable; (ii) any outbreak of hostilities or other national or
international calamity or crisis or 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 opinion, make the offering or delivery of the Shares impracticable;
(iii) any suspension or limitation of trading generally in securities on the
Nasdaq National 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
opinion 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
opinion materially and adversely affects or will materially or adversely affect
the business or operations of CWCO, Belize Water or any of the Acquired
Companies; (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 opinion 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 the Nasdaq National Market 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
Shareholder hereof promptly by telephone, telex, telegraph, telegram or
facsimile, confirmed by letter.
31
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 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 and to CWCO 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 third paragraph from the bottom of the cover page of the Prospectus
regarding the terms of the Offering by the Underwriters, the identity of the
Underwriters set forth in the first paragraph under the heading "Underwriting,"
the concession and reallowance figures appearing in the third paragraph under
the heading "Underwriting," the representations with respect to stabilization
activities in the tenth paragraph under the heading "Underwriting," the seventh,
eighth, ninth and tenth paragraphs under the heading "Underwriting" regarding
stabilization, passive market making, syndicate covering transactions, penalty
bids and discretionary authority under
32
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, 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 on c/x Xxxxx Fargo Securities,
LLC, 000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X.
Xxxx, facsimile number (000) 000-0000 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; if sent to CWCO,
shall be mailed, delivered, telexed, telegrammed, telegraphed or telecopied and
confirmed to Consolidated Water Co. Ltd., Trafalgar Place, West Bay Road, P.O.
Box 1114GT, Grand Cayman, Cayman Islands, B.W.I., Attention: Xxxxxxx X. Xxxxxx,
facsimile number (000) 000-0000, with a copy to Xxxxxxx & Xxxxxx, LLP, 000 Xxxx
Xxx Xxxx Xxxxxxxxx, Xxxxx 0000, Xxxx Xxxxxxxxxx, Xxxxxxx 00000-0000, Attention:
Xxxxxx X. Xxxxxxx, P.A., facsimile number (000) 000-0000; if sent to the Selling
Shareholder, shall be mailed, delivered, telexed, telegrammed, telegraphed or
telecopied and confirmed to J. Xxxxx Xxxx, Xx. _______________________, with a
copy to _______________________.
16. PARTIES. This Agreement shall inure solely to the benefit of,
and shall be binding upon, the several Underwriters, CWCO, the Seller
Shareholder 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.
33
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
Selling Shareholder named in Schedule II
hereto
By:
--------------------------------------
Attorney-in-Fact
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
-------------------------------
As Representative of the several Underwriters
named on Schedule I
By: XXXXXX XXXXXXXXXX XXXXX LLC
By:
-----------------------------
Name:
Title:
XXXXX FARGO SECURITIES, LLC
As Representative of the several Underwriters
named on Schedule I
By: XXXXX FARGO SECURITIES, LLC
By:
-----------------------------
Name:
Title:
34
SCHEDULE I
Schedule of Underwriters
Number of Firm Shares
Underwriter to be Purchased
----------- ---------------------
Xxxxxx Xxxxxxxxxx Xxxxx LLC...................................
----------
Xxxxx Fargo Securities, LLC...................................
----------
Total.........................................................
==========
SCHEDULE II
Firm Shares Number of
Selling Shareholder Firm Shares
------------------- -----------
Argyle/Cay-Water, Ltd...................................................... 567,662
Total...................................................................... 567,662
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
Xxxxxxxxx X. XxXxxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxxx X. XxXxxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxxx Xxxxxxx
Xxxxx X. Xxxxxxx
Xxxxx Xxxxxx
Xxxxxxx X. Xxxxxxx
J. Xxxxx Xxxx, Xx.
Xxxxx X. Xxxxxx
Xxxxxxx X. Xxxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxxx X. Xxxxxxx, Xx.
Xxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxxx
Argyle/Cay-Water, Ltd.
North American Mortgage & Finance Corporation
EXHIBIT A
Matters to be Covered in the Opinions of
Counsels for CWCO, Belize Water
and the Acquired Companies
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.
2. Belize Water and each Acquired Company has been duly
organized and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to own its properties and conduct its current business. The
outstanding shares of capital stock of Belize Water and each Acquired Company
have been duly authorized and validly issued, are fully paid and non-assessable
and are owned by CWCO, either directly or indirectly; and to the best of such
counsel's knowledge, the outstanding shares of capital stock of Belize Water and
each Acquired Company are owned by CWCO, either directly or indirectly, free and
clear of all liens, encumbrances and security interests. To the best knowledge
of such counsel, no options, warrants or other rights to purchase any shares of
capital stock of CWCO are outstanding.
3. CWCO has authorized and outstanding capital stock as
set forth under the caption "Capitalization" in the Prospectus and the
authorized Ordinary Shares have been duly authorized. The outstanding shares of
Ordinary Shares have been duly authorized and validly issued and are fully paid
and non-assessable. The Ordinary Shares conform as to legal matters to the
description thereof contained in the Prospectus. Certificates for the Ordinary
Shares to be sold by CWCO pursuant to this Agreement (the "Shares") are in due
and proper form and the 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 stockholders, 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.
4. Based on the oral advice of a member of the Division
of Corporation Finance of the SEC, 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.
5. The Registration Statement, 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 and notes thereto, schedules and other financial and
statistical information included or incorporated by reference therein).
6. 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
A-1
matters of law, are accurate and fairly present the information called for with
respect to such documents and matters.
7. 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 that 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.
8. There are no material legal proceedings pending or to
the knowledge of such counsel, threatened against CWCO, Belize Water or any
Acquired Company, except as set forth in the Prospectus.
9. This Agreement has been duly authorized, executed and
delivered by CWCO, and, assuming due execution by the Representatives of the
Underwriters, constitutes the valid and binding agreement of CWCO, enforceable
against CWCO, in accordance with its terms, subject, as to enforcement, to
applicable bankruptcy, insolvency, reorganization and moratorium laws and other
laws relating to or affecting the enforcement of creditors' rights generally and
to general equitable principles and except as the enforceability of rights to
indemnity and contribution under this Agreement may be limited under applicable
securities laws or the public policy underlying such laws. The execution and
delivery of this Agreement and the consummation of the transactions herein
contemplated does 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 respective
Amended and Restated Memorandum of Association and Amended and Restated Articles
of Association or other governing documents of CWCO, Belize Water or any
Acquired Company, or to such counsel's knowledge, any agreement or instrument to
which CWCO, Belize Water or any Acquired Company is a party or by which any of
them may be bound that is material to CWCO, Belize Water and the Acquired
Companies, taken as a whole.
10. 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 than as may be required by the NASD or
by state securities and Blue Sky laws as to which such counsel need express no
opinion).
11. Neither CWCO nor any of its subsidiaries is 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.
12. In addition to the matters set forth above, although
such counsel has not undertaken, except as otherwise indicated in this opinion,
to determine independently, and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, such counsel has participated in the
preparation of the Registration Statement and the Prospectus, including review
and discussion of the contents thereof, and nothing has come 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
A-2
fact or omitted to state any material fact necessary to make the statements
therein 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 under which they were made, not misleading; except
that with respect to both clause (a) and (b) above such counsel need express no
opinion with respect to the financial statements and notes thereto, financial
schedules and financial and statistical information included in the Registration
Statement or the Prospectus.
The foregoing opinion may be limited to the laws of the United
States, the laws of the Cayman Islands, the British Virgin Islands, Barbados and
the Bahamas. 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.
A-3
EXHIBIT B
Matters to be Covered in the Opinion of
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
Counsel for the Selling Shareholder
1. This Agreement has been duly executed and delivered
by or on behalf of the Selling Shareholder and is a valid, legal and binding
agreement of the Selling Shareholder enforceable against the Selling Shareholder
in accordance with its 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 the, 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, the Selling
Shareholder has full legal right, power and authorization, and any approval
required by applicable federal and Cayman Islands 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 the Selling Shareholder in the manner
provided by this Agreement.
3. To the best knowledge of such counsel, the execution
and delivery of this Agreement by the, Selling Shareholder 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
the Selling Shareholder is a party or by which it or any of its assets or
property is bound, or any court order or decree or any law, rule, or regulation
applicable to the Selling Shareholder or to any of the property or assets of the
Selling Shareholder.
4. Upon delivery to the Underwriters of the Shares to be
sold by the Selling Shareholder 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.
B-1
