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Exhibit 1.1
EXECUTION
VERSION
$310,000,000
CENTRAL EUROPEAN DISTRIBUTION
CORPORATION
3.00% Convertible Senior
Notes due 2013
Underwriting
Agreement
March 3, 2008
J.P. Morgan Securities Inc.
277 Park Avenue
New York, New York 10172
Ladies and Gentlemen:
Central European Distribution
Corporation, a Delaware corporation (the “Company”),
proposes to issue and sell to J.P. Morgan Securities Inc. (the
“Underwriter”) $310,000,000 principal amount of its
3.00% Convertible Senior Notes due 2013 (the
“Securities”). The Securities will be convertible into
cash and, if applicable, shares (the “Underlying
Securities”) of common stock of the Company, par value $0.01
per share (the “Common Stock”), in accordance with the
Indenture (as defined herein). The Securities will be issued
pursuant to an Indenture to be dated as of the Closing Date (as
defined herein) between the Company and The Bank of New York, as
trustee (the “Trustee”), as supplemented by a first
supplemental indenture to be dated as of the Closing Date between
the Company and the Trustee (as so supplemented, the
“Indenture”).
The Company and the
Underwriter hereby confirm their agreement with each other
concerning the purchase and sale of the Securities, as
follows:
1. Registration
Statement . The Company has prepared and filed with the
Securities and Exchange Commission (the “U.S.
Commission”) under the Securities Act of 1933, as amended,
and the rules and regulations of the U.S. Commission thereunder
(collectively, the “Securities Act”), a registration
statement (File No. 333-149487) including a prospectus,
relating to the Securities. Such registration statement, as amended
at the time it becomes effective, including the information, if
any, deemed pursuant to Rule 430A, 430B or 430C under the
Securities Act to be part of the registration statement at the time
of its effectiveness (“Rule 430 Information”), is
referred to herein as the “Registration Statement”; and
as used herein, the term “Preliminary Prospectus” means
each prospectus included in such registration statement (and any
amendments thereto) before it becomes effective, any prospectus
filed with the U.S. Commission pursuant to Rule 424(a) under the
Securities Act and the prospectus included or deemed to be included
in the Registration Statement at the time of its effectiveness that
omits Rule 430 Information, and the term “Prospectus”
means the prospectus in the form first used (or made available upon
request of purchasers pursuant to Rule 173 under the Securities
Act) in
connection with confirmation of sales of
the Securities. If the Company has filed an abbreviated
registration statement pursuant to Rule 462(b) under the Securities
Act (the “Rule 462 Registration Statement”), then any
reference herein to the term “Registration Statement”
shall be deemed to include such Rule 462 Registration Statement.
Any reference in this Agreement to the Registration Statement, any
Preliminary Prospectus, the Prospectus or the Time of Sale
Information (as defined herein) shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the Securities Act, as of the
effective date of the Registration Statement or the date of such
Preliminary Prospectus, the Prospectus or the Time of Sale
Information, as the case may be and any reference to
“amend”, “amendment” or
“supplement” with respect to the Registration
Statement, any Preliminary Prospectus, the Prospectus or the Time
of Sale Information shall be deemed to refer to and include any
documents filed after such date under the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the U.S.
Commission thereunder (collectively, the “Exchange
Act”) that are deemed to be incorporated by reference
therein. Capitalized terms used but not defined herein shall have
the meanings given to such terms in the Registration Statement and
the Prospectus.
At or prior to the time when
sales of the Securities were first made (the “Time of
Sale”), the Company had prepared the following information
(collectively, the “Time of Sale Information”): a
Preliminary Prospectus dated March 3, 2008, and each
“free-writing prospectus” (as defined pursuant to Rule
405 under the Securities Act) listed on Annex B hereto.
2. Purchase of the
Securities by the Underwriter . (a) The Company agrees to
issue and sell the Securities to the Underwriter as provided in
this Agreement, and the Underwriter, on the basis of the
representations, warranties and agreements set forth herein and
subject to the conditions set forth herein, agrees to purchase from
the Company the Securities at a price equal to 98.65% of the
principal amount thereof (the “Purchase Price”) plus
accrued interest, if any, from March 7, 2008 to the Closing
Date (as defined herein).
(b) The Company understands
that the Underwriter intends to make a public offering of the
Securities as soon after the effectiveness of this Agreement as in
the judgment of the Underwriter is advisable, and initially to
offer the Securities on the terms set forth in the Prospectus. The
Company acknowledges and agrees that the Underwriter may offer and
sell Securities to or through any affiliate of an Underwriter and
that any such affiliate may offer and sell Securities purchased by
it to or through the Underwriter.
(c) Payment for the
Securities shall be made by wire transfer in immediately available
funds to the account specified by the Company to the Underwriter,
at the offices of Weil, Gotshal & Manges LLP, 767 Fifth
Avenue, New York, New York 10153 at 10:00 A.M. New York City time
on March 7, 2008, or at such other time or place on the same
or such other date, not later than the fifth business day
thereafter, as the Underwriter and the Company may agree upon in
writing. The time and date of such payment for the Securities is
referred to herein as the “Closing Date.”
Payment for the Securities to
be purchased on the Closing Date shall be made against delivery to
the nominee of The Depository Trust and Clearance Corporation
(“DTC”), for the
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account of the Underwriter of the
Securities to be purchased on such date, of one or more global
notes representing the Securities (collectively, the “Global
Note”), with any transfer taxes payable in connection with
the sale of such Securities duly paid by the Company. The Global
Note, or true copy thereof, will upon request be made available for
inspection by the Underwriter at the office set forth above not
later than 1:00 P.M., New York City time, on the business day prior
to the Closing Date.
(d) The Company acknowledges
and agrees that the Underwriter is acting solely in the capacity of
an arm’s length contractual counterparty to the Company with
respect to the offering of Securities contemplated hereby
(including in connection with determining the terms of the
offering) and not as a financial advisor or a fiduciary to, or an
agent of, the Company or any other person. Additionally, the
Underwriter is not advising the Company or any other person as to
any legal, tax, investment, accounting or regulatory matters in any
jurisdiction. The Company shall consult with its own advisors
concerning such matters and shall be responsible for making its own
independent investigation and appraisal of the transactions
contemplated hereby, and the Underwriter shall have no
responsibility or liability to the Company with respect thereto.
Any review by the Underwriter of the Company, the transactions
contemplated hereby or other matters relating to such transactions
will be performed solely for the benefit of the Underwriter and
shall not be on behalf of the Company.
3. Representations and
Warranties of the Company . The Company represents and warrants
to the Underwriter that:
(a) Preliminary
Prospectus. No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the U.S. Commission or
the Polish Financial Supervisory Commission (the “Polish
Commission”), and each Preliminary Prospectus included in the
Time of Sale Information, at the time of filing thereof with the
U.S. Commission, complied in all material respects with the
Securities Act, and no Preliminary Prospectus, at the time of
filing thereof with the U.S. Commission, contained any untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
provided that the Company makes no representation and
warranty with respect to any statements or omissions made in
reliance upon and in conformity with information relating to the
Underwriter furnished to the Company in writing by the Underwriter
expressly for use in any Preliminary Prospectus, it being
understood and agreed that the only such information furnished by
the Underwriter consists of the information described as such in
Section 7(b) hereof.
(b) Time of Sale
Information . The Time of Sale Information, at the Time of
Sale, did not, and at the Closing Date will not, contain any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
provided that the Company makes no representation and
warranty with respect to any statements or omissions made in
reliance upon and in conformity with information relating to the
Underwriter furnished to the Company in writing by the Underwriter
expressly for use in such Time of Sale Information, it being
understood and agreed that the only such information furnished by
the Underwriter consists of the information described as such in
Section 7(b) hereof. No statement of material fact
included
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in the Prospectus has been omitted from
the Time of Sale Information and no statement of material fact
included in the Time of Sale Information that is required to be
included in the Prospectus has been omitted therefrom.
(c) Issuer Free Writing
Prospectus. Other than the Registration Statement, the
Preliminary Prospectus and the Prospectus, the Company (including
its agents and representatives, other than the Underwriter in its
capacity as such) has not made, used, prepared, authorized,
approved or referred to and will not prepare, make, use, authorize,
approve or refer to any “written communication” (as
defined in Rule 405 under the Securities Act) that constitutes an
offer to sell or solicitation of an offer to buy the Securities
(each such communication by the Company or its agents and
representatives (other than a communication referred to in clause
(i) below) an “Issuer Free Writing Prospectus”)
other than (i) any document not constituting a prospectus
pursuant to Section 2(a)(10)(a) of the Securities Act or Rule
134 under the Securities Act or (ii) the documents listed on
Annex B hereto, each electronic road show and any other written
communications approved in writing in advance by the Underwriter.
Each such Issuer Free Writing Prospectus complied in all material
respects with the Securities Act, has been or will be (within the
time period specified in Rule 433) filed in accordance with the
Securities Act (to the extent required thereby) and, when taken
together with the Preliminary Prospectus accompanying, or delivered
prior to delivery of, such Issuer Free Writing Prospectus, did not,
and at the Closing Date will not, contain any untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that
the Company makes no representation and warranty with respect to
any statements or omissions made in each such Issuer Free Writing
Prospectus or Preliminary Prospectus in reliance upon and in
conformity with information relating to the Underwriter furnished
to the Company in writing by the Underwriter expressly for use in
such Issuer Free Writing Prospectus or Preliminary Prospectus, it
being understood and agreed that the only such information
furnished by the Underwriter consists of the information described
as such in Section 7(b) hereof. Each such 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
Securities or until any earlier date that the Company notified or
notifies the Underwriter as described in Section 4(e), did
not, does not and will not include any information that conflicted,
conflicts or will conflict with the information contained in the
Registration Statement or the Prospectus, including any document
incorporated by reference therein and any Preliminary Prospectus
deemed to be a part thereof that has not been superseded or
modified.
(d) Registration Statement
and Prospectus. The Registration Statement is an
“automatic shelf registration statement” as defined
under Rule 405 of the Securities Act that has been filed with the
U.S. Commission not earlier than three years prior to the date
hereof; and no notice of objection of the U.S. Commission to the
use of such registration statement or any post-effective amendment
thereto pursuant to Rule 401(g)(2) under the Securities Act has
been received by the Company. No order suspending the effectiveness
of the Registration Statement has been issued by the U.S.
Commission, and no proceeding for that purpose or pursuant to
Section 8A of the Securities Act against the Company or
related to the offering has been initiated or threatened by the
U.S. Commission; as of the applicable effective date of the
Registration Statement and any post-effective amendment thereto,
the Registration Statement complied and
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will comply in all material respects
with the Securities Act and the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the U.S. Commission
thereunder (collectively, the “Trust Indenture Act”),
and did not and will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein not
misleading; and as of the date of the Prospectus and any amendment
or supplement thereto, and as of the Closing Date, the Prospectus
does not and will not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading; provided that the
Company makes no representation and warranty with respect to
(i) that part of the Registration Statement that constitutes
the Statement of Eligibility and Qualification (Form T-1) of the
Trustee under the Trust Indenture Act or (ii) any statements
or omissions made in reliance upon and in conformity with
information relating to the Underwriter furnished to the Company in
writing by the Underwriter expressly for use in the Registration
Statement and the Prospectus and any amendment or supplement
thereto, it being understood and agreed that the only such
information furnished by the Underwriter consists of the
information described as such in Section 7(b)
hereof.
(e) Incorporated
Documents. The documents incorporated by reference in the
Registration Statement, the Prospectus or the Time of Sale
Information, when they became effective or were filed with the U.S.
Commission, as the case may be, conformed in all material respects
to the requirements of the Securities Act or the Exchange Act, and
none of such documents contained any untrue statement of a material
fact or omitted 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 any further documents so filed
and incorporated by reference in the Registration Statement, the
Prospectus or the Time of Sale Information, when such documents
become effective or are filed with the U.S. Commission, as the case
may be, will conform in all material respects to the requirements
of the Securities Act or the Exchange Act, as applicable, 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.
(f) Financial
Statements. The financial statements and the related notes
thereto of the Company and its consolidated subsidiaries included
or incorporated by reference in the Registration Statement, the
Time of Sale Information and the Prospectus comply in all material
respects with the applicable requirements of the Securities Act and
the Exchange Act, as applicable, and present fairly the financial
position of the Company and its consolidated subsidiaries as of the
dates indicated and the results of their operations and the changes
in their cash flows for the periods specified; such financial
statements have been prepared in conformity with U.S. generally
accepted accounting principles applied on a consistent basis
throughout the periods covered thereby, and the supporting
schedules included or incorporated by reference in the Registration
Statement present fairly the information required to be stated
therein; and the other financial information included or
incorporated by reference in the Registration Statement, the Time
of Sale Information and the Prospectus has been derived from the
accounting records of the Company and its consolidated subsidiaries
and presents fairly the information shown thereby.
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(g) No Material Adverse
Change. Since the date of the most recent financial statements
of the Company included or incorporated by reference in the
Registration Statement, the Time of Sale Information and the
Prospectus, (i) there has not been any change in the capital
stock (other than the issuance of shares of Common Stock upon
exercise of stock options and warrants disclosed as outstanding in,
and the grant of options and awards under existing equity incentive
plans described in, the Registration Statement, the Time of Sale
Information and the Prospectus), long-term debt, notes payable or
current portion of long-term debt of the Company or any of its
subsidiaries, or any dividend or distribution of any kind declared,
set aside for payment, paid or made by the Company on any class of
capital stock, or any material adverse change, or any development
involving a prospective material adverse change, in or affecting
the business, properties, management, financial position,
stockholders’ equity or results of operations of the Company
and its subsidiaries taken as a whole; (ii) neither the
Company nor any of its subsidiaries has entered into any
transaction or agreement that is material to the Company and its
subsidiaries taken as a whole or incurred any liability or
obligation, direct or contingent, that is material to the Company
and its subsidiaries taken as a whole; and (iii) neither the
Company nor any of its subsidiaries has sustained any loss or
interference with its business that is material to the Company and
its subsidiaries taken as a whole and that is either from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor disturbance or dispute or any action,
order or decree of any court or arbitrator or governmental or
regulatory authority, except, in the case of each of the foregoing
clauses (i), (ii) and (iii), as otherwise disclosed in the
Registration Statement, the Time of Sale Information and the
Prospectus.
(h) Organization and Good
Standing. The Company and each of its subsidiaries have been
duly organized and are validly existing and in good standing under
the laws of their respective jurisdictions of organization, are
duly qualified to do business and are in good standing in each
jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires
such qualification, and have all power and authority necessary to
own or hold their respective properties and to conduct the
businesses in which they are engaged, except where the failure to
be so qualified or in good standing or have such power or
authority, or, in the case of the subsidiaries, the failure to be
duly organized, validly existing and in good standing, would not,
individually or in the aggregate, reasonably be expected to have a
material adverse effect on the business, properties, management,
financial position, stockholders’ equity, results of
operations or prospects of the Company and its subsidiaries taken
as a whole or on the performance by the Company of its obligations
under the Transaction Documents (as hereinafter defined) (a
“Material Adverse Effect”). The Company does not have
any “significant subsidiaries” (as defined in Rule
1-02(w) of Regulation S-X under the Exchange Act) that are not
listed in Exhibit 21 to the most recent Annual Report of the
Company on Form 10-K that is incorporated by reference in the
Registration Statement (such significant subsidiaries, the
“Significant Subsidiaries”).
(i) Capitalization.
The Company has an authorized capitalization as set forth in the
Registration Statement, the Time of Sale Information and the
Prospectus under the heading “Capitalization”; all the
outstanding shares of capital stock of the Company have been duly
and validly authorized and issued and are fully paid and
non-assessable and are not subject to any pre-emptive or similar
rights; except as described in or expressly contemplated by the
Time of Sale
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Information and the Prospectus, there
are no outstanding rights (including, without limitation,
pre-emptive rights), warrants or options to acquire, or instruments
convertible into or exchangeable for, any shares of capital stock
or other equity interest in the Company or any of its subsidiaries,
or any contract, commitment, agreement, understanding or
arrangement of any kind relating to the issuance of any capital
stock of the Company or any such subsidiary, any such convertible
or exchangeable securities or any such rights, warrants or options;
the capital stock of the Company conforms in all material respects
to the description thereof contained in the Registration Statement,
the Time of Sale Information and the Prospectus; and all the
outstanding shares of capital stock or other equity interests of
each Significant Subsidiary owned, directly or indirectly, by the
Company have been duly and validly authorized and issued, are fully
paid and non-assessable.
(j) Stock Options.
With respect to the stock options (the “Stock Options”)
granted pursuant to the stock-based compensation plans of the
Company and its subsidiaries (the “Company Stock
Plans”), (i) each Stock Option intended to qualify as an
“incentive stock option” under Section 422 of the
Code so qualifies, (ii) each grant of a Stock Option was duly
authorized no later than the date on which the grant of such Stock
Option was by its terms to be effective (the “Grant
Date”) by all necessary corporate action, including, as
applicable, approval by the board of directors of the Company (or a
duly constituted and authorized committee thereof) and the award
agreement governing such grant (if any) was duly executed and
delivered by each party thereto, (iii) each such grant was
made in accordance with the terms of the Company Stock Plans, the
Exchange Act and all other applicable laws and regulatory rules or
requirements, including the rules of The NASDAQ Global Select
Market and the Warsaw Stock Exchange (together, the
“Exchanges”) and any other exchange on which Company
securities are traded, (iv) each such grant was properly
accounted for in accordance with GAAP in the financial statements
(including the related notes) of the Company and disclosed in the
Company’s filings with the U.S. Commission in accordance with
the Exchange Act and all other applicable laws. The Company has not
knowingly granted, and there is no and has been no policy or
practice of the Company of granting, Stock Options prior to, or
otherwise coordinate the grant of Stock Options with, the release
or other public announcement of material information regarding the
Company or its subsidiaries or their results of operations or
prospects.
(k) Due Authorization.
The Company has full right, power and authority to execute and
deliver this Agreement, the Indenture and the Securities
(collectively, the “Transaction Documents”) and to
perform its obligations hereunder and thereunder; and all action
required to be taken for the due and proper authorization,
execution and delivery by it of each of the Transaction Documents
and the consummation by it of the transactions contemplated thereby
or by the Time of Sale Information and the Prospectus has been duly
and validly taken.
(l) The Indenture .
The Indenture has been duly authorized by the Company and upon
effectiveness of the Registration Statement and on the Closing Date
was or will have been duly qualified under the Trust Indenture Act
and, when duly executed and delivered in accordance with its terms
by each of the parties thereto, will constitute a valid and legally
binding agreement of the Company enforceable against the Company in
accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, fraudulent conveyance,
moratorium, reorganization, receivership or similar laws affecting
creditors’ rights generally or by equitable principles
relating to enforceability, regardless of whether considered in a
proceeding in equity or at law (collectively, the
“Enforceability Exceptions”).
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(m) Underwriting
Agreement. This Agreement has been duly authorized, executed
and delivered by the Company.
(n) The Securities.
The Securities have been duly authorized by the Company and, when
duly executed, authenticated, issued and delivered as provided in
the Indenture and paid for as provided herein, will be duly and
validly issued and outstanding and will constitute valid and
legally binding obligations of the Company enforceable against the
Company in accordance with their terms, subject to the
Enforceability Exceptions, and will be entitled to the benefits of
the Indenture.
(o) The Underlying
Securities . Upon issuance and delivery of the Securities in
accordance with this Agreement and the Indenture, the Securities
will be convertible at the option of the holder thereof into cash
and, if applicable, the Underlying Securities in accordance with
the terms of the Indenture and the Securities; the Underlying
Securities reserved for issuance upon conversion of the Securities
have been duly authorized and reserved and, when issued upon
conversion of the Securities in accordance with the terms of the
Indenture and the Securities, will be validly issued, fully paid
and non assessable, and the issuance of the Underlying Securities
will not be subject to any preemptive or similar rights.
(p) Descriptions of the
Transaction Documents. Each Transaction Document conforms in
all material respects to the description thereof contained in the
Registration Statement, the Time of Sale Information and the
Prospectus.
(q) No Violation or
Default. Neither the Company nor any of its subsidiaries is
(i) in violation of its charter or by-laws or similar
organizational documents; (ii) in default, and no event has
occurred that, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of
any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is bound
or to which any of the property or assets of the Company or any of
its subsidiaries is subject; or (iii) in violation of any law
or statute or any judgment, order, rule or regulation of any court
or arbitrator or governmental or regulatory authority, except, in
the case of clauses (ii) and (iii) above, for any such
default or violation that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
(r) No Conflicts. The
execution, delivery and performance by the Company of each of the
Transaction Documents, the issuance and sale of the Securities
(including the issuance of the cash and, if applicable, Underlying
Securities upon conversion thereof) and the consummation by the
Company of the transactions contemplated by the Transaction
Documents or the Time of Sale Information and the Prospectus will
not (i) conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under,
or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of
its subsidiaries pursuant to, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the
property or assets of the
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Company or any of its subsidiaries is
subject, (ii) result in any violation of the provisions of the
charter or by-laws or similar organizational documents of the
Company or any of its subsidiaries or (iii) result in the
violation of any law or statute or any judgment, order, rule or
regulation of any court or arbitrator or governmental or regulatory
authority, except, in the case of clause (iii) above, for any
such conflict, breach, violation, default, lien, charge,
encumbrance that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse
Effect.
(s) No Consents
Required. No consent, approval, authorization, order,
registration or qualification of or with any court or arbitrator or
governmental or regulatory authority is required for the execution,
delivery and performance by the Company of each of the Transaction
Documents, the issuance and sale of the Securities (including the
issuance of the cash and, if applicable, Underlying Securities upon
conversion thereof) and the consummation by the Company of the
transactions contemplated by the Transaction Documents or the Time
of Sale Information and the Prospectus, except for (i) the
registration of the Securities under the Securities Act;
(ii) the qualification of the Indenture under the Trust
Indenture Act; (iii) such consents, approvals, authorizations,
orders and registrations or qualifications as may be required under
applicable state securities laws, or equivalent foreign laws, in
connection with the purchase and distribution of the Securities by
the Underwriter; and (iv) under the Conduct Rules of the
Financial Industry Regulatory Authority, Inc.
(“FINRA”).
(t) Legal Proceedings.
Except as described in the Registration Statement, the Time of Sale
Information and the Prospectus, there are no legal, governmental or
regulatory investigations, actions, suits or proceedings pending to
which the Company or any of its subsidiaries is or may be a party
or to which any property of the Company or any of its subsidiaries
is or may be the subject that, individually or in the aggregate, if
determined adversely to the Company or any of its subsidiaries,
would reasonably be expected to have a Material Adverse Effect;
except as described or contemplated in the Registration Statement,
the Time of Sale Information and the Prospectus, no such
investigations, actions, suits or proceedings are threatened or, to
the best knowledge of the Company, contemplated by any governmental
or regulatory authority or threatened by others; and (i) there
are no current or pending legal, governmental or regulatory
actions, suits or proceedings that are required under the
Securities Act to be described in the Registration Statement or the
Prospectus that are not so described in the Registration Statement,
the Time of Sale Information and the Prospectus and (ii) there
are no statutes, regulations or contracts or other documents that
are required under the Securities Act to be filed as exhibits to
the Registration Statement or described in the Registration
Statement, the Time of Sale Information or the Prospectus that are
not so filed as exhibits to the Registration Statement or described
in the Registration Statement, the Time of Sale Information and the
Prospectus.
(u) Independent
Accountants. PricewaterhouseCoopers Sp. z o.o.
(“PWC”), which has certified certain financial
statements of the Company and its subsidiaries, is an independent
registered public accounting firm with respect to the Company and
its subsidiaries within the meaning of the applicable rules and
regulations adopted by the U.S. Commission, the Polish Commission
and the Public Company Accounting Oversight Board (United States)
and as required by the Securities Act.
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(v) Title to Real and
Personal Property. The Company and its subsidiaries have good
and marketable title in fee simple to, or have valid rights to
lease or otherwise use, all items of real and personal property
that are material to the respective businesses of the Company and
its subsidiaries, in each case free and clear of all liens,
encumbrances, claims and defects and imperfections of title except
those that (i) do not materially interfere with the use made
and proposed to be made of such property by the Company and its
subsidiaries or (ii) would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse
Effect.
(w) Title to Intellectual
Property. The Company and its subsidiaries own or possess
adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations,
service mark registrations, copyrights, licenses and know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures)
necessary for the conduct of their respective businesses; and the
conduct of their respective businesses will not conflict in any
material respect with any such rights of others, and the Company
and its subsidiaries have not received any notice of any claim of
infringement of or conflict with any such rights of others, except
disclosed in the Registration Statement and the Prospectus or as
would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
(x) No Undisclosed
Relationships. No relationship, direct or indirect, exists
between or among the Company or any of its subsidiaries, on the one
hand, and the directors, officers, stockholders, customers or
suppliers of the Company or any of its subsidiaries, on the other,
that is required by the Securities Act to be described in the
Registration Statement and the Prospectus and that is not so
described in such documents and in the Time of Sale
Information.
(y) Investment Company
Act. The Company is not and, after giving effect to the
offering and sale of the Securities and the application of the
proceeds thereof as described in the Registration Statement, the
Time of Sale Information and the Prospectus, will not be required
to register as an “investment company” or an entity
“controlled” by an “investment company”
within the meaning of the Investment Company Act of 1940, as
amended, and the rules and regulations of the U.S. Commission
thereunder (collectively, the “Investment Company
Act”).
(z) Taxes. The Company
and its subsidiaries have paid all Polish and U.S. federal, state
and local taxes, as well as other foreign taxes and filed all tax
returns required to be paid or filed through the date hereof,
except for any taxes that are being disputed in good faith and for
which adequate reserves have been set aside, and except as would
not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect; and except as otherwise disclosed
in the Registration Statement, the Time of Sale Information and the
Prospectus, there is no material tax deficiency that has been, or
would reasonably be expected to be, asserted against the Company or
any of its subsidiaries or any of their respective properties or
assets.
(aa) Licenses and
Permits. The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by, and have
made all declarations and filings with, the appropriate federal,
state, local or foreign governmental or regulatory authorities that
are necessary for the ownership or lease of their respective
properties or the conduct of their respective businesses as
described in the Registration Statement, the Time of Sale
Information and the
10
Prospectus, except where the failure to
possess or make the same would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect; and except as described in the Registration Statement, the
Time of Sale Information and the Prospectus, neither the Company
nor any of its subsidiaries has received notice of any revocation
or modification of any such license, certificate, permit or
authorization or has any reason to believe that any such license,
certificate, permit or authorization will not be renewed in the
ordinary course.
(bb) No Labor
Disputes. No labor disturbance by or dispute with employees of
the Company or any of its subsidiaries exists or, to the best
knowledge of the Company, is contemplated or threatened, and the
Company is not aware of any existing or imminent labor disturbance
by, or dispute with, the employees of any of its or its
subsidiaries’ principal suppliers, contractors or customers,
except as would not have a Material Adverse Effect.
(cc) Compliance With
Environmental Laws. (i) The Company and its subsidiaries
(x) are, and at all prior times were, in compliance with any
and all applicable federal, state, local and foreign laws, rules,
regulations, requirements, decisions and orders relating to the
protection of human health or safety, the environment, natural
resources, hazardous or toxic substances or wastes, pollutants or
contaminants (collectively, “Environmental Laws”),
(y) have received and are in compliance with all permits,
licenses, certificates or other authorizations or approvals
required of them under applicable Environmental Laws to conduct
their respective businesses, and (z) have not received notice
of any actual or potential liability under or relating to any
Environmental Laws, including for the investigation or remediation
of any disposal or release of hazardous or toxic substances or
wastes, pollutants or contaminants, and have no knowledge of any
event or condition that would reasonably be expected to result in
any such notice, and (ii) there are no costs or liabilities
associated with Environmental Laws of or relating to the Company or
its subsidiaries, except in the case of each of (i) and
(ii) above, for any such failure to comply, or failure to
receive required permits, licenses or approvals, or cost or
liability, as would not, individually or in the aggregate, have a
Material Adverse Effect; and (iii) except as described in each
of the Time of Sale Information and the Prospectus or as would not,
individually or in the aggregate, have a Material Adverse Effect,
(x) there are no proceedings that are pending, or that are
known to be contemplated, against the Company or any of its
subsidiaries under any Environmental Laws in which a governmental
entity is also a party, (y) the Company and its subsidiaries
are not aware of any issues regarding compliance with Environmental
Laws, or liabilities or other obligations under Environmental Laws
or concerning hazardous or toxic substances or wastes, pollutants
or contaminants, and (z) none of the Company and its
subsidiaries anticipates any capital expenditures relating to any
Environmental Laws.
(dd) Hazardous
Substances. There has been no storage, generation,
transportation, handling, treatment, disposal, discharge, emission,
or other release of any kind of toxic wastes or hazardous
substances, including, but not limited to, any naturally occurring
radioactive materials, brine, drilling mud, crude oil, natural gas
liquids and other petroleum materials, by, due to or caused by the
Company or any of its subsidiaries (or, to the best of the
Company’s knowledge, any other entity (including any
predecessor) for whose acts or omissions the Company or any of its
subsidiaries is or would reasonably be expected to be liable) upon
any of the property now or previously owned or leased by the
Company or any of its subsidiaries, or upon any other property, in
violation of any Environmental Laws or in a manner or to a location
that would reasonably be
11
expected to give rise to any liability
under the Environmental Laws, except for any violation or liability
which would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(ee) Compliance With
ERISA. except as disclosed in the Registration Statement, the
Time of Sale Information and the Prospectus or as would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, the Company is not in violation of any
federal, state, local or foreign law relating to discrimination in
the hiring, promotion or pay of employees, any applicable wage or
hour laws or any provision of the Employee Retirement Income
Security Act of 1974, as amended, or the rules and regulations
promulgated thereunder concerning the employees of the
Company.
(ff) Disclosure
Controls. The Company and its subsidiaries maintain an
effective system of “disclosure controls and
procedures” (as defined in Rule 13a-15(e) of the Exchange
Act) that is designed to ensure that information required to be
disclosed by the Company in reports that it files or submits under
the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the U.S. Commission’s
rules and forms, including controls and procedures designed to
ensure that such information is accumulated and communicated to the
Company’s management as appropriate to allow timely decisions
regarding required disclosure. The Company and its subsidiaries
have carried out evaluations of the effectiveness of their
disclosure controls and procedures as required by Rule 13a-15 of
the Exchange Act.
(gg) Accounting
Controls. The Company and its subsidiaries maintain systems of
“internal control over financial reporting” (as defined
in Rule 13a-15(f) of the Exchange Act) that comply with the
requirements of the Exchange Act and have been designed by, or
under the supervision of, their respective principal executive and
principal financial officers, or persons performing similar
functions, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles, including, but not limited to
internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset
accountability; (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 the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. Based
on the Company’s most recent evaluation of its internal
controls over financial reporting pursuant to Rule 13a-15(c), there
are no material weaknesses in the Company’s internal controls
that are not disclosed in the Registration Statement, the Time of
Sale Information and the Prospectus. The Company’s auditors
and the Audit Committee of the board of directors of the Company
have been advised of: (i) all significant deficiencies and
material weaknesses in the design or operation of internal controls
over financial reporting which are reasonably likely to adversely
affect the Company’s ability to record, process, summarize
and report financial information; and (ii) any fraud, whether
or not material, that involves management or other employees who
have a significant role in the Company’s internal controls
over financial reporting.
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(hh) Insurance. The
Company and its subsidiaries have insurance covering their
respective properties, operations, personnel and businesses,
including business interruption insurance, which insurance is in
amounts and insures against such losses and risks as are reasonably
believed by the Company to be adequate to protect the Company and
its subsidiaries and their respective businesses; and neither the
Company nor any of its subsidiaries has (i) received notice
from any insurer or agent of such insurer that capital improvements
or other expenditures are required or necessary to be made in order
to continue such insurance or (ii) any reason to believe that
it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage at
reasonable cost from similar insurers as may be necessary to
continue its business.
(ii) No Unlawful
Payments. Neither the Company nor any of its subsidiaries nor,
to the best knowledge of the Company, any director, officer, agent,
employee or other person associated with or acting on behalf of the
Company or any of its subsidiaries has (i) used any corporate
funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; (ii) made any
direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds;
(iii) violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977; or (iv) made any bribe,
rebate, payoff, influence payment, kickback or other unlawful
payment.
(jj) Compliance with Money
Laundering Laws. The operations of the Company and its
subsidiaries are and have been conducted at all times in compliance
in all material respects with applicable financial recordkeeping
and reporting requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, and analogous laws of the
European Union, including the Republic of Poland, the money
laundering statutes of all other jurisdictions, the rules and
regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any
governmental agency (collecti
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