Exhibit 1.01
1,000,000 SHARES
AMERICAN STATES WATER COMPANY
COMMON SHARES
______________
UNDERWRITING AGREEMENT
______________
Philadelphia, Pennsylvania
May 14, 2009
JANNEY MONTGOMERY SCOTT LLC
EDWARD D. JONES & CO., L.P.
BREAN MURRAY, CARRET & CO.
As Representatives of the Several Underwriters Named in Schedule I
hereto
c/o Janney Montgomery Scott LLC
1801 Market Street
Philadelphia, PA 19103
Ladies and Gentlemen:
American States Water Company, a California
corporation (the “Company”), proposes, subject to the
terms and conditions stated herein, to sell to the several
Underwriters named in Schedule I hereto (the
“Underwriters”), for whom Janney Montgomery Scott LLC,
Edward D. Jones & Co., L.P. and Brean Murray, Carret & Co.
are serving as Representatives (the “Representatives”),
an aggregate of 1,000,000 of the Company’s Common Shares, no
par value (“Common Shares”). The 1,000,000
Common Shares to be sold to the Underwriters by the Company 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 $31.00 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 150,000 additional Common Shares from the
Company. Such 150,000 additional Common 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.”
In
consideration of the mutual agreements contained herein, the
Company and the Underwriters, intending to be legally bound,
confirm their agreement as follows:
1. Representations and
Warranties of the Company . The Company represents and warrants
to, and agrees with, the several Underwriters that:
(a)
The Company has prepared and filed
with the Securities and Exchange Commission (the
“SEC”), in accordance with the provisions of the
Securities Act of 1933, as amended (the “Act”), and the
rules and regulations thereunder (the “Regulations”), a
registration statement on Form S-3 (File No. 333-136682), including
a prospectus, relating to the Shares. The term
“Registration Statement” as used herein means the
registration statement (including all exhibits and information
incorporated by reference therein) as amended to the date of this
Agreement, and includes information (if any) contained in a form of
prospectus or prospectus supplement that is deemed retroactively to
be part of the Registration Statement, pursuant to Rule 430B under
the Act, to be part of the registration statement as of the time
specified in Rule 430B. If it is contemplated, at
the time this Agreement is executed, that a post-effective
amendment to the Registration Statement will be filed and must be
declared effective before the offering of the Shares may commence,
the term “Registration Statement” as used herein shall
mean the Registration Statement as amended by such post-effective
amendment. If the Company has filed, or files on or
after the date of this Agreement, a registration statement to
register Common Shares pursuant to Rule 462(b) under the Act (the
“Rule 462(b) Registration Statement”), then any
reference herein to the term “Registration Statement”
shall be deemed to include such Rule 462(b) Registration
Statement. The term “Base Prospectus” shall
mean the base prospectus filed as part of the Registration
Statement in the form in which it has most recently been filed with
the SEC on or prior to the date of this Agreement. The
term “Preliminary Prospectus” shall mean any
preliminary prospectus supplement relating to the Shares, together
with the Base Prospectus, and filed with the SEC pursuant to Rule
424(b) of the Regulations. The term “Statutory
Prospectus” shall mean the Preliminary Prospectus, as amended
or supplemented, immediately prior to the Initial Sale Time (as
defined below), including any document incorporated by reference
therein. The term “Prospectus” shall mean
the final prospectus supplement relating to the Shares, together
with the Base Prospectus, that is first filed pursuant to Rule
424(b) after the effective time of the Registration Statement (the
“Effective Time”). The term “Issuer
Free Writing Prospectus” shall have the meaning ascribed to
it in Rule 433 of the Regulations relating to the Shares, in the
form filed or required to be filed with the SEC or, if not required
to be filed, in the form retained in the Company’s records
pursuant to Rule 433(g) of the Regulations. The term
“Disclosure Package” shall mean (i) the Statutory
Prospectus, (ii) the Issuer Free Writing Prospectus, if any,
identified in Schedule II hereto, and (iii) any other
free writing prospectus defined in Rule 405 of the Regulations that
is required to be filed by the Company with the SEC or retained by
the Company under Rule 433 of the Regulations and that all parties
hereto expressly agree to treat as part of the Disclosure Package
(the “Other Free Writing Prospectus”). For
purposes of this Agreement, the “Initial Sale Time”
shall mean 5:00 p.m. (Eastern Time) on the date of this
Agreement. All references in this Agreement to the
Registration Statement, the Rule 462(b) Registration Statement, the
Base Prospectus, a Preliminary Prospectus, the Statutory
Prospectus, the Prospectus, the Issuer Free Writing Prospectus, the
Other Free Writing Prospectus or any amendments or supplements to
any of the foregoing, shall include any copy thereof filed with the
SEC pursuant to its Interactive Data Electronic Applications
(“IDEA”) System.
2
(b)
The Registration Statement has
become effective under the Act, and, to the Company’s
knowledge, the SEC has not issued any stop order suspending the
effectiveness of the Registration Statement or preventing or
suspending the use of the Statutory Prospectus or the Prospectus,
nor, to the Company’s knowledge, has the SEC instituted or
threatened to institute proceedings with respect to such an
order. To the Company’s knowledge, (i) no stop
order suspending the sale of the Shares in any jurisdiction in
which the Underwriters may offer the Shares has been issued, and
(ii) no proceedings for that purpose have been instituted or
threatened. The Company has complied in all material
respects with all requests of the SEC for additional information to
be included in the Registration Statement, the Disclosure Package
or the Prospectus.
(c)
(i) The Registration Statement
complied at the Effective Time and, as amended or supplemented,
complies on the date hereof and will comply on the Closing Date and
any Option Closing Date, in all material respects, with the
requirements of the Act and the Regulations, (ii) the
Registration Statement, at the Effective Time, did not 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, (iii) the Disclosure
Package, at the time it was filed and as of the Initial Sale Time,
complied in all material respects with the requirements of the Act
and the Regulations, (iv) the Disclosure Package at the time
it was filed and as of the Initial Sale Time, did not contain any
untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, (v) the
Prospectus, at the time it is filed and, as amended or
supplemented, as of the Closing Date and any Option Closing Date,
will comply in all material respects with the requirements of the
Act and the Regulations, (vi) the Prospectus, at the time it is
filed and, as amended or supplemented, as of the Closing Date and
any Option Closing Date, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading; provided ,
however that the representations and warranties set forth in
this paragraph do not apply to omissions from or statements in the
Registration Statement, the Disclosure Package or the Prospectus
based upon and in conformity with written information furnished to
the Company by any Underwriter through the Representatives
specifically for use therein, it being understood and agreed that
the only information furnished by any Underwriter for use in the
Registration Statement, the Disclosure Package and the Prospectus
is the information as set forth in Section 13 of this Agreement,
and (vii) the statistical and market-related data included or
incorporated by reference in the Registration Statement, the
Disclosure Package and the Prospectus are based on or derived from
sources that the Company believes to be reliable and
accurate.
3
(d)
As of the Initial Sale Time, the
Disclosure Package complied in all material respects with the Act
and the Regulations and, if filed by electronic transmission
pursuant to IDEA (except as may be permitted by Regulation S-T
under the Act), was identical to the copy thereof delivered to the
Underwriters for use in connection with the offer and sale of the
Shares. The Disclosure Package, at the Initial Sale
Time, did not, and at the Closing Date will not, 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, in the light of the circumstances under which they were
made, not misleading. The preceding sentence does not
apply to omissions from or statements in the Disclosure Package
based upon and in conformity with written information furnished to
the Company by any Underwriter through the Representatives
specifically for use therein, it being understood and agreed that
the only such information furnished by any Underwriter for use in
the Disclosure Package is the information as set forth in Section
13 of this Agreement.
(e) The Company
(including its agents and representatives, other than the
Underwriters in their capacity as such) has not used, authorized,
approved or referred to, and will not use, authorize, approve or
refer to any Issuer Free Writing Prospectus, other than the
documents listed on Schedule II hereto. Each such
Issuer Free Writing Prospectus complied when issued in all material
respects with the Act and the Regulations and has been filed in
accordance with the Act and the Regulations (to the extent required
thereby). Each Issuer Free Writing Prospectus, as of its
issue date and at all subsequent times through the completion of
the public offer and sale of the Shares or until any earlier date
of which the Company notified or notifies the Representatives as
described in the next sentence, did not, does not and will not
include any information that, in any material respect, conflicted,
conflicts or will conflict with the information contained in the
Registration Statement. If at any time following
issuance of an Issuer Free Writing Prospectus, there occurred or
occurs an event or development as a result of which such Issuer
Free Writing Prospectus conflicted or would conflict with the
information then contained in the Registration Statement or
included or would include an untrue statement of a material fact or
omitted or would omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
prevailing at that subsequent time, not misleading, (i) the Company
has promptly notified or will promptly notify the Representatives
and (ii) the Company has promptly amended or will promptly amend or
supplement such Issuer Free Writing Prospectus to eliminate or
correct such conflict, untrue statement or omission. The
foregoing sentences do not apply to conflicts with, omissions from
or statements in any Issuer Free Writing Prospectus based upon and
in conformity with written information furnished to the Company by
any Underwriter through the Representatives specifically for use
therein, it being understood and agreed that the only such
information furnished by any Underwriter for use in any Issuer Free
Writing Prospectus is the information as set forth in Section 13 of
this Agreement.
(f) The
Company has not distributed and will not distribute, prior to the
later of the last Option Closing Date (as defined below) and the
completion of the Underwriters’ distribution of the Shares,
any offering material in connection with the offering and sale of
the Shares other than the Registration Statement, the Disclosure
Package or the Prospectus.
4
(g) The documents
incorporated by reference into the Prospectus pursuant to Item 12
of Form S-3 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 (the “Exchange
Act”) and with the rules and regulations promulgated under or
pursuant to the Exchange Act, and did not 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.
(h) There are no
legal or governmental proceedings pending or, to the knowledge of
the Company, threatened to which the Company or any of the
Subsidiaries is a party or to which any of the properties of the
Company or any Subsidiary are subject that are required to be
described in the Registration Statement, the Disclosure Package 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, the Disclosure Package or
the Prospectus or to be filed as exhibits to the Registration
Statement that are not described or filed as required.
(i) The
Company is a corporation duly incorporated and validly existing
under the laws of the State of California, 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 Registration
Statement, the Disclosure Package and the Prospectus, and to
execute, deliver and perform this Agreement. Each of
Golden State Water Company, a California corporation
(“GSWC”), Chaparral City Water Company, an Arizona
corporation, and American States Utility Services, Inc., a
California corporation (“ASUS”), is a wholly owned
subsidiary of the Company and each of Fort Bliss Water Services
Company, a Texas corporation, Terrapin Utility Services,
Inc., Old Dominion Utility Services, Inc., a Virginia
corporation, Palmetto State Utility Services, Inc., a South
Carolina corporation, and Old North Utility Services, Inc., a North
Carolina corporation, is a wholly owned subsidiary of ASUS and
shall herein be referred to individually as a
“Subsidiary” and collectively as the
“Subsidiaries.” Each Subsidiary of the
Company has been duly incorporated and is a corporation validly
existing 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 as
described in the Registration Statement, the Disclosure Package and
the Prospectus, except that Terrapin Utility Services, Inc.’s
corporate charter has been revoked by the State of
Maryland. Neither the Company nor any Subsidiary is
required to be qualified to do business as a foreign corporation in
any jurisdiction in which the failure to so qualify would
reasonably be expected to have a material adverse effect on the
assets, properties, financial condition, results of operations,
shareholders’ equity, business or prospects (collectively,
the “Business Conditions”) of the Company and the
Subsidiaries taken as a whole.
(j) All of the
outstanding shares of capital stock of each of the Subsidiaries
have been duly authorized and validly issued, are fully paid and
non-assessable and are owned by the Company or ASUS, as the case
may be, free and clear of all liens, encumbrances and security
interests, except as otherwise disclosed in the Registration
Statement, the Disclosure Package and 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
Subsidiaries or securities convertible into or exchangeable for
capital stock of, or other ownership interests in any of the
Subsidiaries are outstanding. Neither the Company nor
the Subsidiaries owns any stock or other equity interest in any
corporation, partnership or other entity other than the
Company’s and ASUS’s ownership of the
Subsidiaries.
5
(k) This
Agreement has been duly authorized, executed and delivered by the
Company and constitutes its legally valid and binding obligation,
enforceable against the Company in accordance with its terms,
except as may be limited by bankruptcy, insolvency reorganization,
moratorium or other laws relating to or affecting the
creditors’ rights generally (including, without limitation,
fraudulent conveyance laws) and by general principles of equity,
including, without limitation, concepts of reasonableness, good
faith and fair dealing and the possible unavailability of specific
performance or injunctive relief, regardless of whether considered
in a proceeding in equity or at law 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.
(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 Company’s or any
Subsidiary’s respective Certificate or Articles of
Incorporation, as the case may be, or Bylaws; (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 Company or the Subsidiaries or require any payment by the
Company or any of the Subsidiaries or impose any liability on the
Company or any of the Subsidiaries pursuant to, any contract,
indenture, mortgage, deed of trust, commitment or other agreement
or instrument to which the Company or any of the Subsidiaries is a
party or by which any of their respective properties are bound or
affected other than this Agreement; (iii) assuming compliance
with Blue Sky laws and the rules of the Financial Industry
Regulatory Authority (“FINRA”) 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 the Company or the Subsidiaries or any of their respective
properties or businesses; or (iv) result in a breach,
termination or lapse of the Company’s or the
Subsidiaries’ corporate power and authority to own or lease
and operate their respective properties and conduct their
respective businesses, except in the cases of clauses (iii) and
(iv), any violation, breach, termination or lapse that would not,
individually or in the aggregate, result in or reasonably be
expected to result in or have a material adverse effect on the
Business Conditions of the Company and the Subsidiaries taken as a
whole.
(m) At the date or
dates indicated in the Registration Statement, the Disclosure
Package or the Prospectus, the Company had or will have the
capitalization set forth in the Registration Statement, the
Disclosure Package and 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 Registration
Statement, the Disclosure Package and the Prospectus. At
the Effective Time and on 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 the Company or securities
convertible into or exchangeable for capital stock of the Company,
except as described in the Registration Statement, the Disclosure
Package or the Prospectus or the grant of options, restricted stock
or restricted stock units after the date of the Registration
Statement, the Disclosure Package or the Prospectus under stock
incentive plans or other stock plans of the Company and the sale of
Common Shares pursuant to the Company’s 401(k) plan or common
share purchase and dividend reinvestment plan. The
information in the Registration Statement, the Disclosure Package
and the Prospectus, insofar as it relates to all outstanding
options and restricted stock units and other rights to acquire
securities of the Company as of the dates referred to in the
Registration Statement, the Disclosure Package and the Prospectus,
is true and correct in all material respects.
6
(n) The
currently outstanding shares of the Company’s capital stock
have been duly authorized and are validly issued, fully paid and
non-assessable, and none of such outstanding shares of the
Company’s capital stock has been issued in violation of any
preemptive rights or similar rights of any security holder of the
Company. The holders of the outstanding shares of the
Company’s capital stock are not subject to personal liability
solely by reason of being such holders. The authorized
capital stock of the Company, including, without limitation, the
outstanding Common Shares and the Shares being issued, conform in
all material respects with the descriptions thereof in the
Registration Statement, the Disclosure Package and the Prospectus,
and such descriptions conform in all material respects with the
instruments defining the same. The description of the
Company’s stock plans, equity compensation plans and other
equity arrangements, and the rights granted thereunder, set forth
in the Registration Statement, the Disclosure Package and the
Prospectus accurately and fairly presents, in all material
respects, the information required to be shown with respect to such
plans, arrangements and rights.
(o) There are
no contracts, agreements or understandings between the Company or
any of the Subsidiaries and any person granting such person the
right to require the Company to file a registration statement under
the Act with respect to any securities of the Company owned or to
be owned by such person or to require the Company to include such
securities in the securities registered pursuant to the
Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the Company
under the Act.
(p) The Shares
have been duly and validly authorized, and, when issued and
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.
(q) 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 the Company of this Agreement and the
consummation of the transactions contemplated hereby, except
(i) such as may be required for the registration of the Shares
under the Act and the listing of the Shares on the New York Stock
Exchange (the “NYSE”), (ii) filings under the
Exchange Act, and (iii) filings required for compliance with the
applicable state securities or Blue Sky laws or the bylaws and
rules of FINRA.
(r) The
Common Shares (including the Shares) are registered pursuant to
Section 12(b) of the Exchange Act. The issued and
outstanding Common Shares are listed on the
NYSE. Neither the Company nor, to the knowledge of the
Company, any other person has taken any action designed to cause,
or likely to result in, the termination of the registration of the
Common Shares under the Exchange Act. The Company has
not received any notification that the SEC, the NYSE or FINRA is
contemplating terminating such registration or
inclusion.
7
(s) The
statements in the Registration Statement, the Disclosure Package
and the 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, the Disclosure Package or the Prospectus or
to be filed as exhibits to the Registration Statement that have not
been so described, referred to or filed, as required.
(t) Each
contract or other instrument (however characterized or described)
to which the Company or any of the Subsidiaries 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 business of
the Company and the Subsidiaries taken as a whole has been duly and
validly executed by the Company or the Subsidiaries, as applicable,
and, to the knowledge of the Company, by the other parties
thereto. Each such contract or other instrument is in
full force and effect and is enforceable against the parties
thereto in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or affecting creditors’ rights generally
(including, without limitation, fraudulent conveyance laws) and by
general principles of equity, including, without limitation,
concepts of reasonableness, good faith and fair dealing and the
possible unavailability of specific performance or injunctive
relief, regardless of whether considered in a proceeding in equity
or at law, and neither the Company nor any of the Subsidiaries is,
and no other party thereto is, in default thereunder, 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.
(u) The
consolidated financial statements of the Company (including the
notes thereto) filed as part of or incorporated by reference in,
the Registration Statement, the Disclosure Package and the
Prospectus present fairly, in all material respects, the financial
position of the Company as of the respective dates thereof, and the
results of operations and cash flows of the Company for the periods
indicated therein, and have been prepared in conformity with
generally accepted accounting principles. The financial
information included in the Registration Statement, the Disclosure
Package and the Prospectus under the captions “Prospectus
Summary - Summary Consolidated Financial Information,”
“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
incorporated by reference in the Registration Statement, the
Disclosure Package and the Prospectus. The unaudited
pro forma adjustments to financial information in the
Registration Statement, the Disclosure Package and the Prospectus
have been properly applied to the historical amounts in the
compilation of that information to reflect the sale by the Company
of the Shares offered thereby at an assumed offering or actual
price set forth in the Registration Statement, the Disclosure
Package or the Prospectus, as the case may be, and the application
of the estimated net proceeds therefrom.
8
(v) Since
the respective dates as of which information is given, or
incorporated by reference, in the Registration Statement, the
Disclosure Package and the Prospectus, except as otherwise stated
therein, there has not been (i) any material adverse change, or
development involving a prospective material adverse change in the
Business Conditions of the Company and the Subsidiaries taken as a
whole; (ii) any adverse change, loss, reduction, termination or
non-renewal of any contract to which the Company or any
Subsidiary is a party that is material to the Company and the
Subsidiaries taken as a whole; (iii) any transaction entered into
by the Company or any of the Subsidiaries not in the ordinary
course of its business that is material to the Company the
Subsidiaries taken as a whole; (iv) any dividend or distribution of
any kind declared, paid or made by the Company on its capital
stock, except for and to the extent described in the Registration
Statement, the Disclosure Package and the Prospectus; (v) any
liabilities or obligations, direct or indirect, incurred by the
Company or any of the Subsidiaries that are material to the Company
and the Subsidiaries taken as a whole; (vi) any change in the
equity capitalization of the Company or any of the Subsidiaries,
except for issuances of the Common Shares pursuant to the
Company’s stock incentive plans or other stock
plans, 401(k) plan and common share purchase and dividend
reinvestment plan; or (vii) any change in the indebtedness of the
Company or any of the Subsidiaries that is material to the Company
and the Subsidiaries taken as a whole. Neither the
Company nor any of the Subsidiaries has any contingent liabilities
or obligations that are material to the Company and the
Subsidiaries taken as a whole and that are not expressly disclosed
in the Registration Statement, the Disclosure Package and the
Prospectus.
(w) Neither
the Company nor, to the knowledge of the Company, any of its
officers, directors or affiliates (i) has taken, nor shall the
Company 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 Common
Shares, or (ii) since the filing of the Prospectus (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
compensation for soliciting another to purchase any other
securities of the Company, other than payments to the Underwriters
as provided in this Agreement.
(x) The
Company and the Subsidiaries have filed with the appropriate
federal, state and local governmental agencies and political
subdivisions thereof, all tax returns that are required to be filed
or have duly obtained extensions of time for the filing thereof,
except where the failure to file or to obtain an extension would
not reasonably be expected to materially adversely affect the
Business Conditions of the Company and the Subsidiaries taken as a
whole. The Company and the Subsidiaries have paid all
taxes shown on returns that have been filed or otherwise due and
all assessments received by them to the extent that the same have
become due, except for such taxes or assessments currently being
contested in good faith or taxes and assessments that are not
material to the Business Conditions of the Company and the
Subsidiaries taken as a whole. Neither the Company nor any of the
Subsidiaries has 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 the Company or any of the Subsidiaries that
might reasonably be expected to materially adversely affect the
Business Conditions of the Company and the Subsidiaries taken as a
whole.
(y) PricewaterhouseCoopers
LLP, which has given its report on certain financial statements
included as part of, or incorporated by reference in, the
Registration Statement, the Disclosure Package and the Prospectus,
is an independent registered public accounting firm.
9
(z) Neither
the Company nor any of the Subsidiaries is in violation of, or in
default under, any of the terms or provisions of (i) its
Certificate or Articles of Incorporation, as the case may be, or
Bylaws or similar governing instruments (other than Terrapin
Utility Services, Inc., whose corporate charter has been revoked),
and (ii) except as expressly disclosed in the Registration
Statement, the Disclosure Package and the Prospectus or where any
such default would not reasonably be expected to have a material
adverse effect on the Business Conditions of the Company and the
Subsidiaries taken as a whole, (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 Registration Statement, the Disclosure
Package and the Prospectus, there are no claims, actions, suits,
protests, proceedings, arbitrations, investigations or inquiries
pending before, or, to the Company’s knowledge, threatened or
contemplated by, any governmental agency, instrumentality, court or
tribunal, domestic or foreign, or before any private arbitration
tribunal to which the Company or any of the Subsidiaries is or may
be made a party that could reasonably be expected to affect the
validity of any of the outstanding Common Shares, or that, if
determined adversely to the Company or any of the Subsidiaries
would, in any case or in the aggregate, result in any material
adverse change in the Business Conditions of the Company and the
Subsidiaries taken as a whole, nor, to the knowledge of the
Company, is there any reasonable basis for any such claim, action,
suit, protest, proceeding, arbitration, investigation or
inquiry. Except as expressly disclosed in the
Registration Statement, the Disclosure Package and the Prospectus,
there are no outstanding orders, judgments or decrees of any court,
governmental agency, instrumentality or other tribunal enjoining
the Company or any of the Subsidiaries from, or requiring the
Company or any of the Subsidiaries to take or refrain from taking,
any action, or to which the Company or any of the Subsidiaries or
their properties, assets or businesses are bound or subject, which
would reasonably be expected to have a material adverse effect on
the Company and the Subsidiaries taken as a whole .
(bb) Each of
the Company and the Subsidiaries own, or possess 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 the Company’s or the
Subsidiaries’ 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 the Company and the Subsidiaries as
described in the Registration Statement, the Disclosure Package and
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
Company and the Subsidiaries, taken as a whole. Neither
the Company nor any of the Subsidiaries has infringed, is
infringing or has received any written 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 the Company and the Subsidiaries
taken as a whole, and the Company knows of no reasonable basis
therefor. To the knowledge of the Company, no other
parties have infringed upon or are in conflict with any
Intellectual Property of the Company or any of the
Subsidiaries.
10
(cc) Each of
the Company and the Subsidiaries has good title to all real
properties described in the Registration Statement, the Disclosure
Package and 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
Registration Statement, the Disclosure Package or the Prospectus or
such as do not materially adversely affect the Business Conditions
or the conduct of the business of the Company and the Subsidiaries
taken as a whole as described in the Registration Statement, the
Disclosure Package and the Prospectus. Each of the
Company and the Subsidiaries has insured its property against loss
or damage by fire or other casualty, in amounts reasonably believed
by the Company to be adequate, and maintains insurance against such
other risks as management of the Company deems
appropriate. All real leased by the Company and the
Subsidiaries, as described or referred to in the Registration
Statement, the Disclosure Package and the Prospectus, is held by
the Company or the Subsidiaries, as applicable, under valid and
enforceable leases, with only such exceptions as would not
reasonably be expected to have a material adverse effect on the
Company and the Subsidiaries taken as whole.
(dd) Except as
expressly disclosed in the Registration Statement, the Disclosure
Package and the Prospectus, the Company and each of the
Subsidiaries are (i)(A) in compliance with any and all applicable
federal, state and local laws and regulations relating to the use,
disposal or release of hazardous or toxic substances or wastes,
restoration of the environment or human exposure to hazardous or
toxic substances, pollutants or contaminants (“Environmental
Laws”), (ii) (B) have received and are in compliance with all
permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective
businesses, and (iii)(C) have not received notice of any actual or
potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, except where such non-compliance with
Environmental Laws, failure to receive required permits, licenses
or other approvals, or liability would not, individually or in the
aggregate, be reasonably expected to have a material adverse affect
on the Business Conditions of the Company and the Subsidiaries
taken as whole. To the knowledge of the Company, there
are no conditions on, about, beneath or arising from the Premises,
in close proximity to the Premises or at any other location that
(i) might give rise to liability, the imposition of a statutory
lien upon the Company or any of the Subsidiaries, (ii) require a
“Response,” “Removal” or “Remedial
Action,” as defined herein, under any of the Environmental
Laws by the Company or any of the Subsidiaries or (iii) affect the
quality of the groundwater withdrawn by the Company or the
Subsidiaries, and that in any such case described in (i), (ii) or
(iii) would materially adversely affect the Business Conditions of
the Company and the Subsidiaries taken as a whole, except as
described in the Registration Statement, the Disclosure Package or
the Prospectus. Except as expressly disclosed in the
Registration Statement, the Disclosure Package or the Prospectus,
or which will not materially adversely affect the Business
Conditions of the Company and the Subsidiaries taken as a whole,
(i) the Company has no knowledge of any claim, demand,
investigation, regulatory action, suit or other action instituted
or threatened against the Company or any of the Subsidiaries, and
(ii) neither the Company nor any of the Subsidiaries 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 regulatory agency arising out of or in connection
with “hazardous substances” (as defined by applicable
Environmental Laws) at or relating to any properties owned or
operated by the Company or any of the Subsidiaries. As
used in this subsection, the terms “Response,”
“Removal” and “Remedial Action” shall have
the respective meanings assigned to such terms under Sections
101(23)-101(25).
11
(ee) Each of
the Company and GSWC maintains a system of internal accounting
controls sufficient to provide reasonable assurances
that: (i) transactions are executed in accordance with
management’s general or specific authorization; (ii)
transactions are recorded as necessary in order to permit
preparation of financial statements in accordance with the
generally accepted accounting principles of the United States 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.
(ff) The
Company is in compliance in all material respects with all
currently effective provisions of the Sarbanes-Oxley Act of 2002
and the rules and regulations promulgated thereunder that are
applicable, or will be applicable as of the Closing Date, to the
Company.
(gg) The
Company, the Subsidiaries and any Related Employer (which for
purposes of this Paragraph means any entity that with the Company
or any of the Subsidiaries is a member of a controlled group of
corporations within the meaning of Section 414(b) of the Internal
Revenue Code of 1986, as amended (the “Code”), is,
individually or collectively, a trade or business under common
control within the meaning of Section 414(c) of the Code, or is a
member of the same affiliated service group within the meaning of
Section 414(m) of the Code) have established, maintain, contribute
to, are required to contribute to, are a party to, or are bound by
certain pension, retirement, profit-sharing plans, deferred
compensation, bonus, or other incentive plans, or medical, vision,
dental, or other health plans, or life insurance or disability
plans, or any other employee benefit plans, programs, arrangements,
agreements, or understandings, some of which are subject to the
Employee Retirement Income Security Act of 1974, as amended
(“ERISA”) and the rules and regulations thereunder
(“Plans”). Any disclosure regarding the
Plans required under the Act or the Exchange Act has been made in
the Registration Statement, the Disclosure Package or the
Prospectus and the documents incorporated therein. All
Plans that are subject to ERISA are in compliance with ERISA, in
all material respects, and, to the extent a Plan is intended to be
tax-qualified within the meaning of Section 401(a) of the Code,
such Plan is in compliance with the Code in all material respects
and is the subject of a current favorable determination letter,
opinion letter or advisory letter from the Internal Revenue Service
as to its tax qualification, or such Plan has been submitted to the
Internal Revenue Service for an updated determination letter,
opinion letter or advisory letter and the Company expects that the
Internal Revenue Service will issue a favorable determination
letter, opinion letter or advisory letter with respect to the
Plan. Neither the Company nor any of the Subsidiaries
has any multiemployer plans. Except as expressly
disclosed in the Registration Statement, the Disclosure Package or
the Prospectus, no plan is an employee pension benefit plan that is
subject to Part 3 of Subtitle B of Title I of ERISA, a defined
benefit plan subject to Title IV of ERISA, or a multiemployer
plan. Except as expressly disclosed in the Registration
Statement, the Disclosure Package or the Prospectus, none of the
Company, the Subsidiaries or any Related Employer maintains or has
maintained retiree life or retiree health insurance plans that are
employee welfare benefit plans providing for continuing benefit or
coverage for any employee or any beneficiary of any employee after
such employee’s termination of employment, except as required
by Section 4980B of the Code. No fiduciary or other
party in interest with respect to any of the Plans has caused any
of such Plans to engage in a prohibited transaction as defined in
Section 406 of ERISA and Section 4975 of the Code. As
used in this subsection, the terms “defined benefit
plan,” “employee benefit plan,” “employee
pension benefit plan,” “employee welfare benefit
plan,” “fiduciary” and “multiemployer
plan” shall have the respective meanings assigned to such
terms in Section 3 of ERISA.
12
(hh) Except as
expressly disclosed in the Prospectus, no labor dispute exists with
the Company’s or the Subsidiaries’ employees, and, to
the knowledge of the Company, no such labor dispute is
threatened. The Company has no knowledge of any existing
or threatened labor disturbance by the employees of any of the
principal suppliers, contractors or customers of the Company or the
Subsidiaries that would materially adversely affect the Business
Conditions of the Company and the Subsidiaries taken as a
whole.
(ii) Except as
expressly disclosed in the Registration Statement, the Disclosure
Package and the Prospectus, there are no contracts, agreements or
understandings between the Company and/or any person that would
give rise to a valid claim against the Company and/or any
Underwriter for a brokerage commission, finder’s fee or other
like payment in connection with the transactions contemplated
herein, or in any contracts, agreements, understandings, payments,
arrangements or issuances with respect to the Company or, to the
knowledge of the Company, any of its officers, directors,
shareholders, employees or affiliates that may affect any
Underwriter’s compensation as determined by FINRA.
(jj) The
Company is not, and after giving effect to the offering and sale of
the Shares and the application of the proceeds therefor described
in the Registration Statement, the Disclosure Package and the
Prospectus will not be an “investment company” or an
entity “controlled” by an “investment
company,” as such terms are defined in the Investment Company
Act of 1940, as amended. None of the Subsidiaries is an
“investment company” as defined in the Investment
Company Act of 1940, as amended.
(kk) (i) The
Company and the Subsidiaries have received all permits, licenses,
franchises, authorizations, registrations, qualifications and
approvals (collectively, “Permits”) of governmental or
regulatory authorities as may be required to own their properties
and conduct their businesses in the manner described in the
Registration Statement, the Disclosure Package and the Prospectus,
subject to such qualifications as may be set forth in the
Registration Statement, the Disclosure Package and the Prospectus,
except to the extent that the failure to receive such Permits would
not have a material adverse effect on the Business Conditions of
the Company and the Subsidiaries taken as a whole; (ii) the Company
and the Subsidiaries have fulfilled and performed all of their
material obligations with respect to such Permits, except where the
failure to fulfill or perform such obligations would have a
material adverse affect on the business of the Company and the
Subsidiaries taken as a whole, 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 material
to the business of the Company and the Subsidiaries taken as a
whole, subject in each case to such qualifications as may be set
forth in the Registration Statement, the Disclosure Package and the
Prospectus; and (iii) except as described in the Registration
Statement, the Disclosure Package and the Prospectus, any such
Permits material to the business of the Company and the
Subsidiaries taken as a whole contain no restrictions that
materially affect the ability of the Company or the Subsidiaries to
conduct their businesses in the manner described in the
Registration Statement, the Disclosure Package and the
Prospectus.
13
(ll) No
transaction has occurred or is proposed between or among the
Company or any of the Subsidiaries and any of their respective
officers, directors or shareholders or any affiliate of the
foregoing, that is required to be described in and is not described
in the Registration Statement, the Disclosure Package or the
Prospectus.
(mm) None of the Company, the
Subsidiaries or, to the knowledge of the Company, any officer,
director, employee, partner, agent or other person acting on behalf
of the Company or the Subsidiaries 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 Cond
