CALIFORNIA WATER SERVICE
COMPANY
5.875% FIRST MORTGAGE BONDS DUE
2019, SERIES LL
UNCONDITIONALLY GUARANTEED AS TO
PAYMENT OF
PRINCIPAL, PREMIUM, IF ANY, AND INTEREST BY CALIFORNIA
WATER SERVICE GROUP
ROBERT W. BAIRD
& CO. INCORPORATED
As Representative of the Several Underwriters
Identified in Schedule I Annexed
Hereto
c/o Robert W. Baird & Co. Incorporated
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
California Water
Service Company, a California corporation (the “
Company ”), proposes to sell to the several
Underwriters named in Schedule I hereto (the “
Underwriters ”), the principal amount of its
securities identified in Schedule II hereto (the “
Bonds ”), to be issued under the Indenture, by and
among the Company and U.S. Bank National Association, as successor
trustee (the “ Trustee ”), dated as of April,
1928, as amended and supplemented by the First through
Thirty-Eighth Supplemental Indentures (the “ Base
Indenture ”), the Thirty-Ninth Supplemental Indenture by
and between the Company and the Trustee to be dated as of
April 17, 2009 (the “Thirty-Ninth Supplemental
Indenture” ) and the Forty-First Supplemental Indenture
by and between the Company and the Trustee to be dated as of
April 17, 2009 (the “Forty-First Supplemental
Indenture” ). The term “Mortgage
Indenture” as used herein includes the Base Indenture,
the Thirty-Ninth Supplemental Indenture and the Forty-First
Supplemental Indenture. The Bonds will be unconditionally
guaranteed (the “ Guarantee ”) as to payment of
principal, premium, if any, and interest by California Water
Service Group, a Delaware corporation (the “ Parent
”). The term “ Securities ” as used herein
includes the Bonds and the Guarantee. Robert W. Baird & Co.
Incorporated (“ Baird ”) is acting as
representative of the Underwriters for the offering contemplated
hereby (the “ Manager” ).
The Company and
Parent have prepared and filed, in accordance with the Securities
Act of 1933, as amended (the “ Securities Act
”), and the rules and regulations thereunder, with the
Securities and Exchange Commission (the “ Commission
”) a registration statement on Form S-3 (file number
333-158484), including a prospectus, relating to the Securities,
which registration statement and prospectus incorporate or are
deemed to incorporate by reference documents that the Parent has
filed, or will file, with the Commission in accordance with the
Securities Exchange Act of 1934, as amended (the “
Exchange Act ”), and the rules and regulations
thereunder. The registration statement as amended at the time it
becomes effective for purposes of Section 11 of the Securities
Act (as such section applies to the Underwriters), including the
documents filed as part thereof and information contained or
incorporated by reference in the prospectus (the “
Incorporated Documents ”) or otherwise deemed to be
part of the registration statement at the time of effectiveness
pursuant to Rule 430A or Rule 430B under the Securities
Act, is hereinafter referred to as the “ Registration
Statement .” The
Company and
Parent have also filed with, or transmitted for filing to, or shall
promptly after the date of this Agreement and in any event within
the applicable period specified in Rule 424 of the Securities
Act file with or transmit for filing to, the Commission a
prospectus supplement (in the form first used to confirm sales of
the Securities (or in the form first made available to the
Underwriters by the Company and Parent to meet requests of
purchasers pursuant to Rule 173 under the Securities Act), the
“ Prospectus Supplement ”) pursuant to
Rule 424 under the Securities Act. The term “ Base
Prospectus ” means the prospectus dated April 8,
2009, relating to the Securities, in the form in which it has most
recently been filed with the Commission as part of the Registration
Statement on or prior to the date of this Agreement. The term
“ Prospectus ” means the Base Prospectus as
supplemented by the Prospectus Supplement. The term “
Preliminary Prospectus ” means any preliminary form of
Prospectus (including without limitation the preliminary Prospectus
Supplement dated April 8, 2009, filed with the Commission
pursuant to Rule 424). “ Effective Date ”
shall mean any date and time as of which any part of the
Registration Statement became, or is deemed to have become,
effective under the Securities Act in accordance with the rules and
regulations thereunder.
For purposes of
this Agreement, “ free writing prospectus ” has
the meaning set forth in Rule 405 under the Securities Act; “
Time of Sale Prospectus ” means the Base Prospectus
and the Preliminary Prospectus, together with the free writing
prospectuses, if any, each identified in Schedule III hereto
(each, a “ Permitted Free Writing Prospectus ”),
and other information conveyed to purchasers of the Securities at
or prior to the Time of Sale as set forth in Schedule III
hereto; “ Time of Sale ” means 5:00 p.m.
(Central Time) on the date of this Agreement; and “ road
show ” has the meaning set forth in Rule 433(h)(4)
under the Securities Act. As used herein, the terms
“Registration Statement,” “Base
Prospectus,” “Preliminary Prospectus,”
“Time of Sale Prospectus” and “Prospectus”
shall include the Incorporated Documents, including, unless the
context otherwise requires, the documents, if any, filed as
exhibits to such Incorporated Documents. The terms
“supplement,” “amendment” and
“amend” as used herein with respect to the Registration
Statement, the Base Prospectus, the Time of Sale Prospectus, any
Preliminary Prospectus, the Prospectus or any free writing
prospectus shall include all documents subsequently filed by the
Parent with the Commission pursuant to the Exchange Act that are
deemed to be incorporated by reference therein.
1.
Representations and Warranties of the Company and Parent .
The Company and Parent jointly and severally represent and warrant
to and agree with each of the Underwriters on the date hereof and
on the Closing Date (as defined in Section 4) that:
(a) The
Registration Statement has become effective under the Securities
Act; no stop order suspending the effectiveness of the Registration
Statement or preventing or suspending the use of any Preliminary
Prospectus or the Prospectus is in effect, and to the
Company’s or the Parent’s knowledge, no proceedings for
such purpose are pending before or threatened by the Commission.
For purposes of this
2
Agreement,
“ knowledge ” means the actual knowledge of the
executive officers and directors of the Company or the Parent
following reasonable inquiry.
(b) The Base
Prospectus and any Preliminary Prospectus filed as part of the
registration statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the
Securities Act, complied when so filed in all material respects
with the Securities Act and the rules and regulations thereunder
(including, without limitation, Rule 430B(a) or
430A(b)).
(c) (i) Each
document, if any, filed or to be filed pursuant to the Exchange Act
and incorporated by reference in the Time of Sale Prospectus or the
Prospectus complied or will comply when so filed in all material
respects with the Exchange Act and the applicable rules and
regulations of the Commission thereunder; (ii) the
Registration Statement, on the Effective Date, did not contain and
as amended or supplemented up to the Closing Date (as defined in
Section 4) 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 not misleading;
(iii) the Registration Statement complies and, as amended or
supplemented, if applicable, will comply in all material respects
with the Securities Act and the Trust Indenture Act of 1939 (the
“ Trust Indenture Act ”) and rules and
regulations thereunder; the conditions to the use of Form S-3 in
connection with the offering and sale of the Securities as
contemplated hereby have been satisfied; the Registration Statement
meets, and the offering and sale of the Securities as contemplated
hereby complies with, the requirements of Rule 415 under the
Securities Act (including without limitation Rule 415(a)(5));
(iv) the Registration Statement is an “automatic shelf
registration statement” as defined in Rule 405 under the
Securities Act filed not earlier than three years prior to the date
hereof, and the Company has not received notice that the Commission
objects to the use of the Registration Statement as an automatic
shelf registration statement; (v) at no time during the period
that began on the earlier of the date of the Preliminary Prospectus
and the date on which the Preliminary Prospectus was filed with the
Commission and ended immediately prior to the execution of this
Agreement did any Preliminary Prospectus 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;
(vi) the Time of Sale Prospectus does not, and at the Time of
Sale and at the Closing Date (as defined in Section 4), the
Time of Sale Prospectus, as then amended or supplemented by the
Company or the Parent, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(vii) each Permitted Free Writing Prospectus does not conflict
with the information contained in the Registration Statement, the
Time of Sale Prospectus or the Prospectus; (viii) each road
show, when considered together with the Time of Sale Prospectus,
does 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; (ix) the Prospectus, as of the date it is filed
with the Commission pursuant to Rule 424 and at the Closing
Date will comply in all material respects with the Securities Act
(including without limitation Section 10(a) of the
3
Securities Act)
and the Trust Indenture Act and 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; and
(x) on the Closing Date, the Mortgage Indenture will comply in
all material respects with the Trust Indenture Act; provided,
however, that the representations and warranties set forth in this
Section 1(c) do not apply to (i) that part of the Registration
Statement which shall constitute the Statement of Eligibility and
Qualification (Form T-1) under the Trust Indenture Act of the
Trustee or (ii) statements or omissions in the Registration
Statement, the Time of Sale Prospectus, any Preliminary Prospectus,
any Permitted Free Writing Prospectus, any road show or the
Prospectus or any amendments or supplements thereto based upon
information relating to any Underwriter furnished to the Company or
the Parent in writing by such Underwriter through the Manager
expressly for use therein, it being agreed that the only
information furnished by the Underwriters to the Company or the
Parent expressly for use therein are names of the Underwriters on
the front cover, back cover and in the first paragraph of the
“Underwriting” section of the Prospectus Supplement
(and any Preliminary Prospectus) and the statements contained in
the second, sixth and seventh paragraphs of the
“Underwriting” section of the Prospectus Supplement
(and any Preliminary Prospectus).
(d) Prior to
the execution of this Agreement, neither the Company nor the Parent
has, directly or indirectly, offered or sold any Securities by
means of any “prospectus” (within the meaning of the
Securities Act) or used any “prospectus” (within the
meaning of the Securities Act) in connection with the offer or sale
of the Securities, in each case other than the Preliminary
Prospectus and/or the Permitted Free Writing Prospectuses; neither
the Company nor the Parent has, directly or indirectly, prepared,
used or referred to any free writing prospectuses, without the
prior written consent of Baird, other than the Permitted Free
Writing Prospectuses and road shows furnished or presented to the
Manager before first use. Each Permitted Free Writing Prospectus
has been prepared, used or referred to in compliance with
Rule 163 or Rules 164 and 433 under the Securities Act;
assuming that such Permitted Free Writing Prospectus is so sent or
given after the Registration Statement was filed with the
Commission (and after such Permitted Free Writing Prospectus was,
if required pursuant to Rule 433(d) under the Securities Act, filed
with the Commission), the sending or giving, by any Underwriter, of
any Permitted Free Writing Prospectus will satisfy the provisions
of Rule 164 and Rule 433 (without reliance on subsections
(b), (c) and (d) of Rule 164); the conditions set
forth in one or more of subclauses (i) through (iv),
inclusive, of Rule 433(b)(1) under the Securities Act are
satisfied, and the registration statement relating to the offering
of the Securities contemplated hereby, as initially filed with the
Commission, includes a prospectus that, other than by reason of
Rule 433 or Rule 431 under the Securities Act, satisfies
the requirements of Section 10 of the Securities Act; neither
the Company, the Parent nor the Underwriters are disqualified, by
reason of subsection (f) or (g) of Rule 164 under
the Securities Act, from using, in connection with the offer and
sale of the Securities, free writing prospectuses pursuant to
Rules 164 and 433 under the Securities Act; and each Permitted
Free Writing Prospectus that the Company or the Parent has filed,
or is required to file, pursuant to Rule 433(d) under the
Securities Act or that was used or referred to by the Company or
the Parent
4
complies or
will comply in all material respects with the requirements of the
Securities Act.
(e) The
Parent was a “well-known seasoned issuer” (as defined
in Rule 405 under the Securities Act) as of the most recent
determination date determined pursuant to Rule 405 under the
Securities Act. Neither the Parent nor the Company was an
“ineligible issuer” (as defined in Rule 405 under
the Securities Act) as of the eligibility determination date for
purposes of Rules 164 and 433 under the Securities Act with
respect to the offering of the Securities contemplated by the
Registration Statement.
(f) Each of
the Company and the Parent has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as
described in the Time of Sale Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not
(i) have a material adverse effect on the assets, business,
condition (financial or otherwise), results of operation or
prospects of the Company or of the Parent and its Subsidiaries (as
defined below), taken as a whole or (ii) prevent or materially
interfere with consummation of the transactions contemplated hereby
(the occurrence of any such effect, prevention, interference or
result described in the foregoing clauses (i) or
(ii) being herein referred to as a “ material adverse
effect ”).
(g) Each
significant subsidiary (as defined in Rule 405 of the
Securities Act)(each a “ Subsidiary ” and
together, the “ Subsidiaries ”) of the Company
or the Parent has been duly organized, is validly existing as a
corporation or limited liability company in good standing under the
laws of the jurisdiction of its organization, has the corporate
power and authority to own its property and to conduct its business
as described in the Time of Sale Prospectus and is duly qualified
to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a
material adverse effect; all of the issued shares of capital stock
of each Subsidiary of the Company or the Parent have been duly and
validly authorized and issued, are fully paid and non-assessable
and are owned directly by the Company or the Parent, as applicable,
free and clear of all liens, encumbrances, equities or claims. The
Company is the Parent’s sole Subsidiary, and the Company has
no Subsidiaries.
(h) This
Agreement has been duly authorized, executed and delivered by the
Company and the Parent; the Mortgage Indenture has been duly
authorized and, at the Closing Date will be executed and delivered
by the Company; and the Guarantee has been duly authorized and, at
the Closing Date, will be executed and delivered by the
Parent.
(i) The
authorized and outstanding capitalization of the Parent is as set
forth in its condensed consolidated balance sheet as of
December 31, 2008,
5
incorporated
into the Time of Sale Prospectus and will be as set forth in the
condensed consolidated balance sheet as of December 31, 2008,
subject, in each case, to the issuance of shares of common stock of
the Parent upon exercise of stock options and warrants disclosed as
outstanding in the Time of Sale Prospectus or the Prospectus, as
the case may be, and the grant of options under existing stock
option plans described in the Time of Sale Prospectus or the
Prospectus. The authorized capital stock of the Parent conforms and
will conform as to legal matters to the description thereof
contained in the Time of Sale Prospectus and the
Prospectus.
(j) The
shares of the Company’s common stock outstanding and the
Parent’s common stock outstanding have been duly authorized,
are validly issued, fully paid and non-assessable, have been issued
in compliance with applicable securities laws and were not issued
in violation of any preemptive or similar rights.
(k) Neither
the execution and delivery by the Company of, nor the performance
by the Company of its obligations under, this Agreement or the
Mortgage Indenture, nor the execution and delivery by the Parent,
nor the performance by the Parent of its obligations under, this
Agreement or the Guarantee, will conflict with, contravene, result
in a breach or violation of, or imposition of any lien, charge or
encumbrance upon any assets of the Company, the Parent or any of
their respective Subsidiaries pursuant to, or constitute a default
under (i) any statute, law, rule, regulation, judgment, order
or decree of any governmental body, regulatory or administrative
agency or court having jurisdiction over the Company, the Parent or
any of their respective Subsidiaries; (ii) the certificate of
incorporation or bylaws of the Company, the Parent or any of their
respective Subsidiaries; or (iii) any other contract,
agreement, obligation, covenant or instrument to which the Company,
the Parent or any of their respective Subsidiaries (or any of their
respective assets) is subject or bound, except in the case of
clauses (i) or (iii) to the extent such conflicts,
contraventions, breaches, violations, liens, charges and
encumbrances, if any, would not have a material adverse
effect.
(l) No
approval, authorization, consent or order of or filing with any
federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency, or of or with any
self-regulatory organization or other non-governmental regulatory
authority, or approval of the Company’s or the Parent’s
stockholders, is required in connection with the issuance and sale
of the Securities or the consummation of the transactions
contemplated hereby, other than (i) registration of the
Securities under the Securities Act, which has been effected,
(ii) any necessary qualification under the securities or blue
sky laws of the various jurisdictions in which the Securities are
being offered by the Underwriters or (iii) applicable
regulatory requirements (including the approval of the California
Public Utilities Commission (the “ CPUC
”).
(m) The CPUC
has issued an order authorizing the issuance and sale by the
Company of the Bonds, and such order is in full force and effect
and sufficient for the issuance and sale of the Bonds to the
Underwriters.
6
(n) There are
no actions, suits, claims, investigations or proceedings pending
or, to the Company’s or the Parent’s knowledge,
threatened to which the Company, the Parent or any of their
respective Subsidiaries or any of their respective directors or
officers (in their capacity as a director or officer of the
Company, the Parent or a Subsidiary) is a party or of which any of
their respective properties is or would be subject at law or in
equity, before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority or
agency, or before or by any self-regulatory organization or other
non-governmental regulatory authority (i) other than any such
action, suit, claim, investigation or proceeding accurately
described in the Time of Sale Prospectus or which, if resolved
adversely to the Company, the Parent or any of their respective
Subsidiaries, would not, individually or in the aggregate, have a
material adverse effect or (ii) that are required to be
described in the Time of Sale Prospectus and are not so described.
There are no 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.
(o) Neither
the Company nor the Parent is, and after giving effect to the
offering and sale of the Securities and the application of the
proceeds thereof as described in the Time of Sale Prospectus and
the Prospectus neither the Company nor the Parent will be, required
to register as an “investment company” as such term is
defined in the Investment Company Act of 1940, as
amended.
(p) The
financial statements included in the Registration Statement, the
Time of Sale Prospectus and the Prospectus, together with the
related notes and schedules, present fairly the consolidated
financial position of the Parent and its Subsidiaries as of the
dates indicated and the consolidated results of operations, cash
flows and changes in stockholders’ equity of the Parent for
the periods specified and have been prepared in compliance with the
requirements of the Securities Act and Exchange Act and in
conformity with U.S. generally accepted accounting principles
applied on a consistent basis during the periods involved; the
other financial and statistical data contained in the Registration
Statement, the Time of Sale Prospectus and the Prospectus are
accurately and fairly presented and prepared on a basis consistent
with the financial statements and books and records of the Company
and the Parent; there are no financial statements (historical or
pro forma) that are required to be included or incorporated by
reference in the Registration Statement, the Time of Sale
Prospectus or the Prospectus that are not included or incorporated
by reference as required; neither the Company, the Parent nor any
of their respective Subsidiaries has any material liabilities or
obligations, direct or contingent (including any off-balance sheet
obligations), not described in the Time of Sale Prospectus or the
Prospectus.
(q) All
statistical or market-related data included in the Time of Sale
Prospectus, the Prospectus and the Permitted Free Writing
Prospectuses are based on or derived from sources that the Parent
reasonably believes to be reliable and accurate, and the Company
and the Parent have obtained the written consent to the use of such
data from such sources to the extent required. Each
“forward-looking statement” (within the meaning of
Section 27A of the Securities Act or
Section 21E
7
of the Exchange
Act) contained in the Registration Statement, the Time of Sale
Prospectus, the Prospectus and the Permitted Free Writing
Prospectuses has been made or reaffirmed with a reasonable basis
and in good faith.
(r) The
Company, the Parent and each of their respective Subsidiaries
(i) are in compliance with any and all applicable federal,
state and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (“
Environmental Laws ”), (ii) have received all
permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where
such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply
with the terms and conditions of such permits, licenses or
approvals would not have a material adverse effect. There are no
costs or liabilities associated with Environmental Laws (including,
without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities
to third parties) which would have a material adverse
effect.
(s) Subsequent
to the respective dates as of which information is given in each of
the Registration Statement, the Time of Sale Prospectus, and the
Prospectus, (i) there has not occurred any material adverse
change, or any development involving a prospective material adverse
change, in the assets, business, condition (financial or
otherwise), management, operations or earnings of the Company, the
Parent and each of their respective Subsidiaries, taken as a whole
(the occurrence of any such change being herein referred to as a
material adverse change ); (ii) the Company, the Parent
and each of their respective Subsidiaries has not incurred any
material liability or obligation, direct or contingent, nor entered
into any material transaction; (iii) neither the Company nor
the Parent has purchased any of its outstanding capital stock, nor
declared, paid or otherwise made any dividend or distribution of
any kind on its capital stock other than ordinary and customary
dividends; and (iv) there has not been any material change in
the capital stock, short-term debt or long-term debt of the
Company, the Parent and each of their respective Subsidiaries,
except in each case as described in each of the Registration
Statement, the Time of Sale Prospectus, and the
Prospectus.
(t) The Bonds
have been duly authorized and executed by the Company and, when
authenticated in accordance with the provisions of the Mortgage
Indenture and delivered to and paid for by the Underwriters in
accordance with the provisions of this Agreement, will constitute
valid and legally binding obligations of the Company, secured by
the lien of, and entitled to the benefits provided by, the Mortgage
Indenture, equally and ratably with all other bonds of the Company
duly issued and outstanding under the Mortgage Indenture, and will
be enforceable against the Company in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors’ rights and
to general equity
8
principals
(regardless of whether enforcement is considered in a proceeding in
equity or law); the Bonds conform in all material respects to the
description thereof contained in the Registration Statement, Time
of Sale Prospectus and Prospectus.
(u) The
Company, the Parent and each of their respective Subsidiaries has
good and marketable title in fee simple to all real property and
good and marketable title to all personal property owned by it
which is material to the business of such entity (in each case,
taken as a whole), in each case free and clear of all liens,
encumbrances and defects except such as are described in the Time
of Sale Prospectus, or such as do not materially affect the value
of such property and do not materially interfere with the use made
and proposed to be made of such property by such entity (in each
case, taken as a whole); and any real property and buildings held
under lease by the Company, the Parent or any of their respective
Subsidiaries are held by such entity under valid, subsisting and
enforceable leases with such exceptions as are not material and do
not interfere with the use made and proposed to be made of such
property and buildings by such entity, in each case except as
described in the Time of Sale Prospectus. The Real Property (as
defined in Schedule VI) constitutes all the real property
presently owned by the Company described in the Granting Clauses of
the Mortgage Indenture as subject to the lien of the Mortgage
Indenture other than certain parcels that are not required as an
integral part of the Company’s properties (taken as a whole)
or are not indispensable to its operations (taken as a
whole).
(v) Each of
the Company, the Parent and each of their respective Subsidiaries
owns or possesses all inventions, patent applications, patents,
trademarks (both registered and unregistered), trade names, service
names, copyrights, trade secrets and other proprietary information
described in the Registration Statement, the Time of Sale
Prospectus and the Prospectus as being owned or licensed by it or
which is necessary for the conduct of, or material to, its
businesses (collectively, the “ Intellectual Property
”), and neither the Company nor the Parent have knowledge of
any claim to the contrary or any challenge by any other person to
the rights of the Company, the Parent or any of their respective
Subsidiaries with respect to the Intellectual Property. To the
knowledge of the Company or the Parent, neither the Company, the
Parent nor any of their respective Subsidiaries has infringed or is
infringing the intellectual property of a third party, and neither
the Company, the Parent nor any of their respective Subsidiaries
has received notice of a claim by a third party to the
contrary.
(w) No
material labor dispute with the employees of the Company, the
Parent or any of their respective Subsidiaries exists, except as
described in the Time of Sale Prospectus, or, to the knowledge of
the Company or the Parent, is threatened; and the Company and the
Parent have no knowledge of any existing or threatened labor
disturbance by the employees of any of its principal suppliers,
contractors or vendors that could have a material adverse effect.
Neither the Company, the Parent nor any of their respective
Subsidiaries is in violation of any provision of the Employee
Retirement Income Security Act of 1974, as amended, or the rules
and regulations promulgated thereunder, except for such violations
as would not have a material adverse effect.
9
(x) The
Company, the Parent and each of their respective Subsidiaries are
insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as are prudent and
customary in the businesses in which they are engaged; other than
as described in the Time of Sale Prospectus, neither the Company,
the Parent nor any of their respective Subsidiaries has been
refused any insurance coverage sought or applied for, except such
as would not have a material adverse effect; and neither the
Company, the Parent nor any of their respective Subsidiaries has
knowledge that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a material adverse
effect.
(y) The
Company, the Parent and their respective Subsidiaries possess all
material certificates, authorizations and permits issued by the
appropriate federal, state or regulatory authorities necessary to
conduct their respective businesses, and neither the Company, the
Parent nor any of their respective Subsidiaries has received any
notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a material adverse effect.
(z) Except as
otherwise would not have a material adverse effect, no Subsidiary
of the Company or the Parent is subject to any material direct or
indirect prohibition on paying any dividends to the Company or the
Parent, on making any other distribution on such Subsidiary’s
capital stock, on repaying to the Company or the Parent any loans
or advances to such Subsidiary from the Company or the Parent or on
transferring any of such Subsidiary’s property or assets to
the Company or the Parent or any other Subsidiary of the Company or
the Parent, except as described in the Time of Sale
Prospectus.
(aa) The
Parent maintains “internal control over financial
reporting” (as defined in Rules 13a-15 and 15d-15 under the
Exchange Act) in compliance with the requirements of the Exchange
Act. The Parent’s internal control over financial reporting
has been designed by the Parent’s principal executive officer
and principal financial officer, or under their supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with U.S. generally accepted accounting
principles and is effective in performing the functions for which
it was established. Except as described in the Time of Sale
Prospectus, since the end of the Parent’s most recent audited
fiscal year, there has been (i) no significant deficiency or
material weakness in the design or operation of the Parent’s
internal control over financial reporting (whether or not
remediated) which is reasonably likely to adversely affect the
Parent’s ability to record, process, summarize and report
financial information, and (ii) no change in the
Parent’s internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect,
the Parent’s internal control over financial
reporting.
(bb) The
Parent maintains “disclosure controls and procedures”
(as such term is defined in Rules 13a-15 and 15d-15 under the
Exchange Act); such disclosure
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controls and
procedures are designed to ensure that material information
relating to the Parent, including its consolidated Subsidiaries, is
made known to the Parent’s Chief Executive Officer and Chief
Financial Officer by others within those entities, and such
disclosure controls and procedures are effective in performing the
functions for which they were established; the principal executive
officers (or their equivalents) and principal financial officers
(or their equivalents) of the Parent have made all certifications
required by the Sarbanes-Oxley Act of 2002 and any related rules
and regulations promulgated by the Commission (the “
Sarbanes-Oxley Act ”), and the statements made in each
such certification are accurate; the Parent, its Subsidiaries and,
to its knowledge, its directors and officers are each in compliance
in all material respects with the applicable provisions of the
Sarbanes-Oxley Act.
(cc) Neither
the Company, the Parent nor any of their respective Subsidiaries
has sent or received any communication regarding termination of, or
intent not to renew, any of the material contracts or agreements
referred to or described in the Time of Sale Prospectus or the
Prospectus, or referred to or described in, or filed as an exhibit
to, the Registration Statement, and no such termination or
non-renewal has been threatened by the Company, the Parent or any
of their respective Subsidiaries or, to the Company’s and
Parent’s knowledge, any other party to any such contract or
agreement, except as would not have a material adverse
effect.
(dd) All tax
returns required to be filed by the Company, the Parent or any of
their respective Subsidiaries have been timely filed, and all taxes
and other assessments of a similar nature (whether imposed directly
or through withholding) including any interest, additions to tax or
penalties applicable thereto due or claimed to be due from such
entities have been timely paid, other than those being contested in
good faith and for which adequate reserves have been
provided.
(ee) Neither
the Company, the Parent nor any of their respective Subsidiaries
nor, to the knowledge of the Company or the Parent, any director,
officer, agent, employee or affiliate of the Company, the Parent or
any of their respective Subsidiaries is aware of or has taken any
action, directly or indirectly, that would result in a violation by
such persons of the Foreign Corrupt Practices Act of 1977, as
amended, and the rules and regulations thereunder.
(ff) Neither
the Company, the Parent nor any of their respective Subsidiaries
nor, to their knowledge, any of their respective directors,
officers, affiliates or controlling persons has taken, directly or
indirectly, any action designed, or which has constituted or might
reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company or the
Parent to facilitate the sale or resale of the
Securities.
(gg) Except
as described in the Registration Statement, the Time of Sale
Prospectus and the Prospectus, the Company and the Parent
(i) do not have any material lending or other relationship
with any bank or lending affiliate of the Manager and
(ii) does not intend to use any of the proceeds from the sale
of the
11
Securities
hereunder to repay any outstanding debt owed to any affiliate of
any Manager.
2.
Agreements to Sell and Purchase . The Company hereby agrees
to sell to the several Underwriters at the price as set forth in
Schedule II hereto (the “ Purchase Price
”), and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the
conditions herein set forth, agrees, severally and not jointly, to
purchase from the Company at the Purchase Price the aggregate
principal amount of the Securities set forth opposite the name of
such Underwriter set forth in Schedule I hereto.
3. Terms
of Public Offering . The Company is advised by the Manager that
the Underwriters propose to make a public offering as set forth in
the Time of Sale Prospectus and Prospectus Supplement of their
respective portions of the Securities as soon after this Agreement
has become effective as in the Manager’s judgment is
advisable.
4.
Payment and Delivery . Payment for the Securities shall be
made to the Company in Federal (same day funds) by wire transfer to
an account at a bank acceptable to the Company and the Underwriters
against delivery of the Securities for the respective accounts of
the several Underwriters at 10:00 a.m., Central Time, on
April 17, 2009, or at such other time on the same or such
other date, not later than April 20, 2009, as the Underwriters
and the Company or the Parent determine. The time and date of such
payment are hereinafter referred to as the “ Closing
Date .” The Securities shall be registered in such names
and in such denominations as the Manager shall request in writing
not later than two full business days prior to the Closing Date.
The Securities shall be delivered to the Manager on the Closing
Date for the respective accounts of the several Underwriters, with
any taxes payable in connection with the transfer of the Securities
to the Underwriters duly paid, against payment of the Purchase
Price therefor.
5.
Conditions to the Underwriters’ Obligations .
The several obligations of the Underwriters are subject to the
condition that all representations and warranties on the part of
the Company and the Parent contained in this Agreement are, on the
date hereof and on the Closing Date, true and correct in all
material respects (except that if a representation and warranty is
made as of a specific date, and such date is expressly referred to
therein, such representation and warranty shall be true and correct
in all material respects as of such date), the condition that the
Company and the Parent have performed their obligations required to
be performed on or prior to the Closing Date and the following
further conditions:
(a) Subsequent
to the execution and delivery of this Agreement and prior to the
Closing Date:
(i) there shall
not have occurred any downgrading, nor shall any notice have been
given of any intended or potential downgrading or of any review for
a possible change that does not indicate the direction of the
possible change, in the rating accorded any of the debt securities
of the
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Company, the
Parent or any of their respective Subsidiaries by any
“nationally recognized statistical rating
organization,” as such term is defined for purposes of
Rule 436(g)(2) under the Securities Act; and
(ii) there shall
not have occurred any material adverse change from that set forth
in the Time of Sale Prospectus that, in the Manager’s
reasonable judgment, is material and adverse and that makes it, in
the Manager’s reasonable judgment, impracticable or
inadvisable to offer or sell the Securities on the terms and in the
manner contemplated in this Agreement and the Time of Sale
Prospectus.
(b) The
Underwriters shall have received on the Closing Date two
certificates, dated the Closing Date, with one signed by the Chief
Executive Officer and Chief Financial Officer of the Company and
the other signed by the Chief Executive Officer and Chief Financial
Officer of the Parent, to the effect that, to the knowledge of such
officers, the respective representations and warranties of the
Company and the Parent contained in this Agreement are true and
correct as of the Closing Date and that the Company and the Parent,
respectively, have complied with all of the agreements and
satisfied all of the conditions on their part to be performed or
satisfied hereunder on or before the Closing Date and as to such
other matters as the Manager may reasonably request. The delivery
of the certificates provided for in this Section 5(b) shall
constitute a representation and warranty of the Company and the
Parent as to the statements made in such certificate.
(c) The
Underwriters shall have received on the Closing Date an opinion of
Gibson Dunn & Crutcher LLP, outside counsel for the Company and
the Parent, dated the Closing Date, to the effect set forth in
Schedule IV.
(d) In
addition, the Underwriters shall have received on the Closing Date
a letter of Gibson, Dunn & Crutcher LLP, outside counsel for
the Company and the Parent, dated the Closing Date, to the effect
set forth in Schedule V.
(e) The
Underwriters shall have received on the Closing Date an opinion of
John S. Tootle, Corporate Counsel for the Company, dated the
Closing Date, to the effect set forth in
Schedule VI.
(f) The
Underwriters shall have received on the Closing Date an opinion of
Nossaman LLP, special regulatory counsel for the Company, dated the
Closing Date, to the effect set forth in
Schedule VII.
(g) The
Underwriters shall have received from Foley & Lardner LLP,
counsel for the Underwriters, such opinion or opinions and
statements of belief, dated the Closing Date and addressed to the
Manager, with respect to the issuance and sale of the Securities,
the Mortgage Indenture, the Registration Statement, the Time of
Sale Prospectus, the Prospectus (together with any supplement
thereto) and other related matters as the Manager may reasonably
require, and the Company and the Parent shall have furnished or
made available to such counsel such documents as they request for
the purpose of enabling them to pass upon such matters.
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With respect to
Section 5(d) and 5(g) above, Gibson, Dunn & Crutcher LLP and
Foley & Lardner LLP may state that their beliefs are based upon
their participation in the preparation of the Registration
Statement, the Time of Sale Prospectus and the Prospectus and any
amendments or supplements thereto and review and discussion of the
contents thereof, but are without independent check or
verification, except as specified.
The opinions of
Gibson, Dunn & Crutcher LLP described in Section 5(c), of
John S. Tootle described in Section 5(f), and of Nossaman LLP
described in Section 5(e) shall be rendered to the Underwriters at
the request of the Company and the Parent and shall so state
therein.
(h) The
Underwriters shall have received, on the date hereof and the
Closing Date, a letter dated the date hereof and the Closing Date
in form and substance satisfactory to the Underwriters, from each
of KPMG LLP, independent public accountants, and Deloitte &
Touche LLP, independent public accountants, containing statements
and information of the type ordinarily included in
accountants’ “comfort letters” to underwriters
with respect to the financial statements and certain financial
information contained in the Registration Statement, the Time of
Sale Prospectus and the Prospectus; provided that the letters
delivered on the Closing Date shall use a “cut-off
date” not earlier than the date hereof.
(i) No stop
order suspending the effectiveness of the Registration Statement or
preventing or suspending the use of any Preliminary Prospectus, the
Time of Sale Prospectus or the Prospectus shall have been issued,
and no proceedings for such purpose shall have been instituted or,
to the knowledge of the Company or the Parent, threatened by the
Commission; no notice of objection of the Commission to the use of
the Registration Statement shall have been received; and all
requests for additional information on the part of the Commission
shall have been complied with to the Manager’s reasonable
satisfaction.
(j) The
Mortgage Indenture and Guarantee shall have been duly executed and
delivered, and the Underwriters shall have received copies,
conformed and executed thereof.
6.
Covenants of the Company . The Company and the Parent
covenant with each Underwriter as follows:
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