Exhibit 1.1
Execution Copy
CALIFORNIA WATER SERVICE COMPANY
$100,000,000
5.500% FIRST MORTGAGE BONDS DUE 2040, SERIES PPP
UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF
PRINCIPAL, PREMIUM, IF ANY, AND INTEREST BY CALIFORNIA
WATER SERVICE GROUP
UNDERWRITING AGREEMENT
November 17, 2010
November 17, 2010
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
Ladies and Gentlemen:
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, dated as of April 17, 2009 (the Thirty-Ninth Supplemental
Indenture) and the Fifty-Eighth Supplemental Indenture by and between the Company and the Trustee
to be dated as of November 22, 2010 (the Fifty-Eighth Supplemental Indenture). The term
Mortgage Indenture as used herein includes the Base Indenture, the Thirty-Ninth Supplemental
Indenture and the Fifty-Eighth 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 became 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 November 16, 2010, 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 November 16, 2010, 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 Companys or the Parents
knowledge, no proceedings for such purpose are pending before or threatened by the Commission. For
purposes of this 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,
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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 complied 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 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).
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(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 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).
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(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 Parents 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, 2009, incorporated into the Time of Sale
Prospectus and will be at the Time of Sale as set forth in the condensed consolidated balance sheet
as of December 31, 2009, 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 Companys common stock outstanding and the Parents 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
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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
Companys or the Parents 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.
(n) There are no actions, suits, claims, investigations or proceedings pending or, to the
Companys or the Parents 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
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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 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.
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(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 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 Companys 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
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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.
(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 Subsidiarys 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 Subsidiarys 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 Parents internal control over financial reporting has been designed by the Parents 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 Parents most recent audited fiscal
year, there has been (i) no significant deficiency or material weakness in the design or operation
of the Parents internal control over financial reporting (whether or not remediated) which is
reasonably likely to adversely affect the Parents ability to record, process, summarize and report
financial information, and (ii) no change in the Parents internal control over financial reporting
that has materially affected, or is reasonably likely to materially affect, the Parents internal
control over financial reporting.
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(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 controls and procedures are
designed to ensure that material information relating to the Parent, including its consolidated
Subsidiaries, is made known to the Parents 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 Companys and Parents 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 Securities hereunder to repay any outstanding debt owed to any
affiliate of the Manager.
10
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 Managers 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 November 22, 2010, or at such other time on the same
or such other date, not later than November 24, 2010, 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 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 Managers reasonable judgment, is material and
adverse and that makes it, in the Managers reasonable judgment,
11
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 Faegre & Benson 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.
With respect to Section 5(d) and 5(g) above, Gibson, Dunn & Crutcher LLP and Faegre & Benson 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.
12
(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 Managers
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:
(a) To furnish to the Manager, without charge, two signed copies of the Registration Statement
(including exhibits thereto) and for delivery to each other Underwriter, upon request, a conformed
copy of the Registration Statement (without exhibits thereto) and to furnish to the Manager in
Milwaukee, Wisconsin, without charge, prior to 10:00 a.m. Central Time on the business day next
succeeding the date of this Agreement and during the period mentioned in Section 6(f) or 6(g)
below, as many copies of the Time of Sale Prospectus, the Prospectus and any supplements and
amendments thereto or to the Registration Statement as the Manager may reasonably request in
writing.
(b) During the period for which a prospectus relating to the Securities is required to be
delivered under the Securities Act (whether physically or through compliance with Rule 172 under
the Securities Act or any similar rule), before amending or supplementing the Registration
Statement, the Time of Sale Prospectus or the Prospectus, to furnish to the Manager a copy of each
such proposed amendment or supplement and not to file any such proposed amendment or supplement to
which the Manager reasonably objects, and to file with the Commission within the applicable period
specified in Rule 424(b) under the Securities Act any prospectus required to be filed pursuant to
such Rule.
(c) To furnish to the Manager a copy of each proposed free writing prospectus to be prepared
by or on behalf of, used by, or referred to by the Company or the Parent and not to use or refer to
any proposed free writing prospectus to which the Manager reasonably objects.
(d) Not to take any action that would result in an Underwriter, the Company or the Parent
being required to file with the Commission pursuant to Rule 433(d) under the Securities
13
Act a free writing prospectus prepared by or on behalf of the Underwriter that the Underwriter
otherwise would not have been required to file thereunder.
(e) During the period for which a prospectus relating to the Securities is required to be
delivered under the Securities Act (whether physically or through compliance with Rule 172 under
the Securities Act or any similar rule), to advise the Manager promptly of any request by the
Commission for amendments or supplements to the Registration Statement, Base Prospectus, any
Preliminary Prospectus, Prospectus Supplement or Prospectus or for additional information with
respect thereto, or of notice of institution of proceedings for, or the entry of, a 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; and if the Commission
should enter such a stop order, to use its commercially reasonable efforts to obtain the lifting or
removal of such order as soon as possible.
(f) If the Time of Sale Prospectus is being used to solicit offers to buy the Securities at a
time when the Prospectus is not yet available to prospective purchasers and any event shall occur
or condition exist as a result of which it is necessary to amend or supplement the Time of Sale
Prospectus in order to make the statements therein, in the light of the circumstances, not
misleading, or if any event shall occur or condition exist as a result of which the Time of Sale
Prospectus conflicts with the information contained in the Registration Statement then on file, or
if, in the reasonable opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Time of Sale Prospectus to comply with applicable law, forthwith to prepare, file
with the Commission and furnish, at its own expense, to the Underwriters and to any dealer upon
request, either amendments or supplements to the Time of Sale Prospectus so that the statements in
the Time of Sale Prospectus as so amended or supplemented will not, in the light of the
circumstances when delivered to a prospective purchaser, be misleading or so that the Time of Sale
Prospectus, as amended or supplemented, will no longer conflict with the Registration Statement, or
so that the Time of Sale Prospectus, as amended or supplemented, will comply with applicable law.
(g) If, during such period after the first date of the public offering of the Securities, the
Prospectus (or in lieu thereof the notice referred to in Rule 173(a) under the Securities Act) is
required by law to be delivered in connection with sales by an Underwriter or dealer, and the
Company or Parent reasonably determines, or in the reasonable opinion of counsel for the
Underwriters, any event shall occur or condition exist as a result of which it is necessary to
amend or supplement the Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) under
the Securities Act) is delivered to a purchaser, not misleading, or if the Company or the Parent
reasonably determines, or in the reasonable opinion of counsel for the Underwriters, it is
necessary to amend or supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the Underwriters and to the
dealers (whose names and addresses the Manager will furnish to the Company or the Parent) in
writing to which Securities may have been sold by the Manager on behalf of the Underwriters and to
any other dealers upon request, either amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) under
14
the Securities Act) is delivered to a purchaser, be misleading or so that the Prospectus, as
amended or supplemented, will comply with applicable law.
(h) If, at the time this Agreement is executed and delivered, the Company or the Parent
determines that it is necessary or appropriate for a post-effective amendment to the Registration
Statement to be filed with the Commission and become effective before the Securities may be sold,
the Company and the Parent will use their commercially reasonable efforts to cause such
post-effective amendment or such Registration Statement to be filed and become effective, and will
pay any applicable fees in accordance with the Securities Act, as soon as practicable; and the
Company and the Parent will advise the Manager promptly and, if requested by the Manager, will
confirm such advice in writing, (i) when such post-effective amendment or such Registration
Statement has become effective, and (ii) if Rule 430A under the Securities Act is used, when the
Prospectus is filed with the Commission pursuant to Rule 424(b) under the Securities Act (which the
Company and the Parent agree to file in a timely manner in accordance with such Rules).
(i) If, at any time during the period when a prospectus is required by the Securities Act to
be delivered (whether physically or through compliance with Rule 172 under the Securities Act or
any similar rule) in connection with any sale of Securities, the Registration Statement shall cease
to comply with the requirements of the Securities Act with respect to eligibility for the use of
the form on which the Registration Statement was filed with the Commission or the Registration
Statement shall cease to be an automatic shelf registration statement (as defined in Rule 405
under the Securities Act) or the Company or the Parent shall have received, from the Commission, a
notice, pursuant to Rule 401(g)(2), of objection to the use of the form on which the Registration
Statement was filed with the Commission, to (i) promptly notify the Manager, (ii) promptly file
with the Commission a new registration statement under the Securities Act, relating to the
Securities, or a post-effective amendment to the Registration Statement, which new registration
statement or post-effective amendment shall comply with the requirements of the Securities Act and
shall be in a form reasonably satisfactory to the Manager, (iii) use its commercially reasonable
efforts to cause such new registration statement or post-effective amendment to become effective
under the Securities Act as soon as practicable, (iv) promptly notify the Manager of such
effectiveness and (v) take all other reasonable action necessary or appropriate to permit the
public offering and sale of the Securities to continue as contemplated in the Prospectus; all
references herein to the Registration Statement shall be deemed to include each such new
registration statement or post-effective amendment, if any.
(j) To file in a timely manner all reports and any definitive proxy or information statements
required to be filed by the Parent with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of the Prospectus and for so long as the delivery
of a prospectus (or, in lieu thereof, the notice referred to in Rule 173(a) under the Securities
Act) is required in connection with the offering or sale of the Securities.
(k) Promptly to furnish such information or to take such action as the Manager may reasonably
request and otherwise to qualify the Securities for offer and sale under the securities or blue
sky laws of such jurisdictions as the Manager shall reasonably request, and to comply with such
laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as
long as may be necessary to complete the distribution of the Securities; provided, however,
15
that the Company and the Parent shall not be required to qualify as foreign corporations or to
file consents to service of process in any jurisdiction or so subject themselves to taxation in
respect of doing business in any jurisdiction in which they are not otherwise so subject; and to
promptly advise the Manager of the receipt by the Company or the Parent of any notification with
respect to the suspension of the qualification of the Securities for offer or sale in any
jurisdiction or the initiation or threatening of any proceeding for such purpose.
(l) To make generally available to the Companys and the Parents security holders and to the
Manager as soon as practicable an earning statement covering a period of at least twelve months
beginning after the date of this Agreement, which shall satisfy the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder.
(m) The Company or the Parent will not offer, sell, contract to sell, pledge or otherwise
dispose of, directly or indirectly, or file with the Commission a registration statement under the
Securities Act relating to debt securities issued or guaranteed by the Company or the Parent and
having a maturity of more than one year from the date of issue, or publicly disclose the intention
to make any such offer, sale, pledge, disposition or filing, without the prior written consent of
the Manager for a period beginning on the date hereof and ending 30 days after the Closing Date,
other than the securities to be sold hereunder.
(n) To prepare a final term sheet, in the form attached hereto as Annex A to Schedule III,
relating to the offering of the Securities, containing only information that describes the final
terms of the Securities and to file such final term sheet within the period required by Rule
433(d)(5)(ii) under the Securities Act following the date the final terms have been established for
the offering of the Securities.
(o) To pay the fees applicable to the Registration Statement in connection with the offering
of the Securities within the time required by Rule 456(b)(1)(i) under the Securities Act (without
reliance on the proviso to Rule 456(b)(1)(i) under the Securities Act) and in compliance with Rule
456(b) and Rule 457(r) under the Securities Act.
(p) To comply with Rule 433(d) under the Securities Act (without reliance on Rule 164(b) under
the Securities Act) and with Rule 433(g) under the Securities Act.
(q) Not to take, directly or indirectly, any action designed, or which will constitute, or 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.
(r) Not, at any time at or after the execution of this Agreement, to offer or sell any
Securities by means of any prospectus (within the meaning of the Securities Act) or use any
prospectus (within the meaning of the Securities Act) in connection with the offer or sale of the
Securities, except in each case other than the Prospectus.
(s) To apply the net proceeds from the sale of the Securities in the manner set forth under
the caption Use of Proceeds in the Prospectus Supplement.
16
7. Covenants of the Underwriters. Each Underwriter hereby severally agrees as follows:
(a) To not use or refer to, or authorize any other person to use or refer to, or participate
in the planning for use of, any free writing prospectus, as defined in Rule 405 under the
Securities Act (which term includes use of any written information furnished to the Commission by
the Company or the Parent and not incorporated by reference into the Registration Statement and any
press release issued by the Company or the Parent) other than (i) a free writing prospectus that
contains no issuer information (as defined in Rule 433(h)(2) under the Securities Act) that was
not included in the Preliminary Prospectus or a previously filed free writing prospectus, (ii) any
free writing prospectus listed on Schedule III hereto, or (iii) any free writing prospectus
prepared by such Underwriter and approved by the Company or the Parent in advance in writing (each
such free writing prospectus referred to in clauses (i) or (iii), an Underwriter Free Writing
Prospectus).
(b) To not distribute any Underwriter Free Writing Prospectus referred to in Section 7(a)(i)
in a manner reasonably designed to lead to its broad unrestricted dissemination.
(c) To not, without the prior written consent of the Company or the Parent, use any free
writing prospectus that contains the final terms of the Securities unless such terms have
previously been included in a free writing prospectus filed with the Commission.
(d) Pursuant to reasonable procedures developed in good faith, to retain copies of each free
writing prospectus used or referred to by it, in accordance with Rule 433 under the Securities Act.
(e) If at any time prior to the Closing Date any event shall occur or condition shall exist as
a result of which an Underwriter Free Writing Prospectus conflicted or would conflict with the
information then contained in the Registration Statement, the Time of Sale Prospectus or the
Prospectus, to immediately notify the Company or the Parent thereof and forthwith prepare and file
with the Commission (to the extent required) and furnish to the Company or the Parent, such
amendments or supplements to such Underwriter Free Writing Prospectus as may be necessary to
eliminate or correct such conflict.
(f) To allocate sales of the Bonds such that no person will be the beneficial owner, as that
term is defined under the Exchange Act, of more than $20,000,000 aggregate principal amount of
Bonds at the completion of the offering and distribution of the Bonds.
8. Expenses. Whether or not the transactions contemplated in this Agreement are consummated
or this Agreement is terminated, the Company and Parent, jointly and severally, agree to pay or
cause to be paid all expenses incident to the performance of their obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the Companys and Parents
counsel and the Companys and Parents accountants in connection with the registration and delivery
of the Securities under the Securities Act and all other fees or expenses in connection with the
preparation and filing of the Registration Statement, any Preliminary Prospectus, the Time of Sale
Prospectus, the Prospectus, any free writing prospectus prepared by or on behalf of, used by, or
referred to by the Company or the Parent and amendments and
17
supplements to any of the foregoing, including all printing costs associated therewith,
and the mailing and delivering of copies thereof to the Underwriters and dealers, in the quantities
hereinabove specified, (ii) all costs and expenses related to the transfer and delivery of the
Securities to the Underwriters, including any taxes payable thereon, (iii) the cost of printing or
producing any securities or blue sky memorandum in connection with the offer and sale of the
Securities under the securities laws of the jurisdictions in which the Securities may be offered or
sold and all expenses in connection with the qualification of the Securities for offer and sale
under such securities laws as provided in Section 6(k) hereof, including filing fees and the
reasonable fees and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or Legal Investment memorandum, (iv) all filing
fees and the reasonable fees and disbursements of counsel to the Underwriters incurred in
connection with the review and qualification of the offering of the Securities by Financial
Industry Regulation Association, Inc. (FINRA), (v) the fees and expenses of the Trustee, including
the reasonable fees and disbursements of counsel for the Trustee in connection with the Mortgage
Indenture and the Bonds, (vi) the cost, if any, of printing certificates representing the
Securities, (vii) any fees payable in connection with the rating of the Bonds with the ratings
agencies, (viii) all fees and expenses (including reasonable fees and expenses of counsel) of the
Company or the Parent in connection with approval of the Securities by The Depositary Trust Company
for book-entry transfer, (ix) the document production charges and expenses associated with
printing this Agreement, (x) all expenses in connection with any offer and sale of the Securities
outside of the United States, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection with offers and sales outside of the United States, and
(xi) all other costs and expenses incident to the performance of the obligations of the Company and
the Parent hereunder for which provision is not otherwise made in this Section.
The Underwriters will pay (a) all of their costs and expenses, including fees and
disbursements of their counsel, taxes payable on resale of any of the Securities by them and any
advertising expenses connected with any offers they may make; and (b) whether or not the
transactions contemplated in this Agreement are consummated or this Agreement is terminated, the
costs and expenses of the Company and the Parent relating to investor presentations on any road
show undertaken in connection with the marketing of the offering of the Securities, including,
without limitation, expenses associated with the preparation or dissemination of any road show,
expenses associated with the production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the prior approval of the
Company or the Parent, travel and lodging expenses of the representatives and officers of the
Company and the Parent and any such consultants, and the cost of any aircraft chartered in
connection with the road show. Notwithstanding the above, if the sale of the Securities provided
for herein is not consummated because any condition to the obligations of the Underwriters set
forth in Section 5 is not satisfied, because of any termination of this Agreement by the
Underwriters pursuant to Section 10 hereof or because of any refusal, inability or failure on the
part of the Company or the Parent to perform any obligation or covenant hereunder or comply with
any provision hereof other than by reason of a default by any of the Underwriters, the Company and
the Parent, jointly and severally, will reimburse the Underwriters or such Underwriters as have so
terminated this Agreement with respect to themselves, severally, through the Manager on demand for
all out-of- pocket expenses (including
18
reasonable fees and disbursements of counsel) reasonably incurred by such Underwriters in
connection with this Agreement or the offering contemplated hereby.
The provisions of this Section shall not supersede or otherwise affect any agreement that the
Underwriters may otherwise have for the allocation of such expenses among themselves.
9. Indemnity and Contribution. (a) The Company and the Parent, jointly and severally, agree
to indemnify and hold harmless each Underwriter, each person, if any, who controls any Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act,
and each affiliate of any Underwriter within the meaning of Rule 405 under the Securities Act from
and against any and all losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or investigating any such
action or claim) caused by, arising out of or based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any amendment thereof, or
any omission or alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (ii) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the Time of Sale
Prospectus, any issuer free writing prospectus as defined in Rule 433(h) under the Securities Act,
any issuer information that the Company or the Parent has filed, or is required to file, pursuant
to Rule 433(d) of the Securities Act, any road show not constituting a free writing prospectus, or
the Prospectus or any amendment or supplement thereto, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances in which there were made, not misleading; provided,
however, that neither the Company nor the Parent shall be liable under this Section 9(a) to
the extent that such losses, claims, damages or liabilities are caused by, arise out of or are
based upon any such untrue statement or omission or alleged untrue statement or omission made
therein in reliance upon and in conformity with information relating to any Underwriter furnished
to the Company or the Parent in writing by such Underwriter through the Manager expressly for use
therein; provided, however, that the foregoing indemnity agreement shall not inure
to the benefit of any Underwriter from whom the person asserting any such losses, claims, damages
or liabilities purchased Securities, or any person controlling such Underwriter, if a copy of the
Time of Sale Prospectus (as then amended or supplemented if the Company or the Parent shall have
furnished any amendments or supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person at or prior to the written confirmation of the sale of the Securities to
such person, and if the Time of Sale Prospectus (as so amended or supplemented), would have cured
the defect giving rise to such losses, claims, damages or liabilities, unless such failure is the
result of noncompliance by the Company or the Parent with Section 6(a) hereof.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the
Company and the Parent, the directors of the Company and the Parent, the officers of the Company
and the Parent who sign the Registration Statement and each person, if any, who controls the
Company or the Parent within the meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) caused by, arising from or based upon (i) any
untrue statement or alleged untrue statement of a material fact contained in
19
the Registration Statement or any amendment thereof or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make the statements
therein not misleading, or (ii) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Time of Sale Prospectus, any issuer free writing
prospectus as defined in Rule 433(h) under the Securities Act, any Company or Parent information
that the Company or Parent has filed, or is required to file, pursuant to Rule 433(d) of the
Securities Act, any road show not constituting a free writing prospectus, or the Prospectus or any
amendment or supplement thereto, or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein, in light of the
circumstances in which there were made, not misleading, in each case to the extent, but only to the
extent, that such untrue statement or omission or alleged untrue statement or omission was made
therein in reliance upon and in conformity with information relating to such Underwriter furnished
to the Company or the Parent in writing by such Underwriter through the Manager expressly for use
therein.
(c) In case any proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to Section 9(a) or 9(b),
such person (the indemnified party) shall promptly notify the person against whom such indemnity
may be sought (the indemnifying party) in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In
any such proceeding, any indemnified party shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both parties by the
same counsel would be inappropriate due to actual or potential differing interests between them.
It is understood that the indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for (x) the fees and expenses of more than one separate firm (in addition
to any local counsel) for all Underwriters and all persons, if any, who control any Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act or
who are affiliates of any Underwriter within the meaning of Rule 405 under the Securities Act, or
(y) the fees and expenses of more than one separate firm (in addition to any local counsel) for the
Company, the Parent, their directors, their officers who sign the Registration Statement and each
person, if any, who controls the Company or the Parent within the meaning of either such Section,
and that all such fees and expenses shall be reimbursed as they are incurred. In the case of any
such separate firm for the Underwriters and such control persons and affiliates of any
Underwriters, such firm shall be designated in writing by Baird. In the case of any such separate
firm for the Company or the Parent, and such directors, officers and control persons of the Company
or the Parent, such firm shall be designated in writing by the Company or the Parent. The
indemnifying party shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any
loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an indemnified
20
party shall have requested an indemnifying party to reimburse the indemnified party for fees
and expenses of counsel as contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (A) such settlement is entered into more than 30 days after receipt
by such indemnifying party of the aforesaid request and (B) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in 9(a) or 9(b) is unavailable to an
indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party or parties on the
one hand and the indemnified party or parties on the other hand from the offering of the Securities
or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Parent on the one hand and
the Underwriters on the other hand in connection with the offering of the Securities shall be
deemed to be in the same respective proportions as the net proceeds from the offering of the
Securities (before deducting expenses) received by the Company and the Parent and the total
underwriting discounts and commissions received by the Underwriters, in each case as set forth in
the table on the cover of the Prospectus, bear to the aggregate price of the Securities offered to
the public. The relative fault of the Company and the Parent on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company or the Parent or by the Underwriters and the
parties relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Underwriters respective obligations to contribute pursuant to
this Section 9 are several in proportion to the respective number of Securities they have purchased
hereunder, and not joint. The Companys and the Parents respective obligations to contribute
pursuant to this Section 9 are joint and several.
(e) The Company, the Parent and the Underwriters agree that it would not be just or equitable
if contribution pursuant to this Section 9 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method of allocation that
does not take account of the equitable considerations referred to in Section 9(d). The amount paid
or payable by an indemnified party as a result of the losses, claims, damages and liabilities
referred to in Section 9(d) shall be deemed to include, subject to the limitations set forth above,
any legal or other expenses reasonably incurred by such indemnified party in
21
connection with investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 9, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Securities underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages that such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this Section 9 are not
exclusive and shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this Section 9 shall remain
operative and in full force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Underwriter, any person controlling any Underwriter
or any affiliate of any Underwriter, or the Company, the Parent, their officers or directors or any
person controlling the Company or the Parent and (iii) acceptance of and payment for any of the
Securities.
10. Termination. The Underwriters may terminate this Agreement by notice given by the Manager
to the Company and the Parent, if after the execution and delivery of this Agreement and prior to
the Closing Date (a) trading generally shall have been suspended or materially limited or minimum
prices shall have been established on, or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange, or the NASDAQ Global Market, (b) trading of any securities
in the Parent shall have been materially limited on any exchange or in any over-the-counter market,
(c) a material disruption in securities settlement, payment or clearance services in the United
States shall have occurred, (d) any moratorium on commercial banking activities shall have been
declared by federal, California or New York state authorities, (e) there shall have occurred any
outbreak or escalation of hostilities, act of terrorism involving the United States or declaration
by the United States of a national emergency or war, or (f) any other calamity or crisis or any
change in financial, political or economic conditions in the United States or elsewhere, if the
effect of any such event specified in clause (e) or (f), in the Managers judgment, is material and
adverse and makes it, in the Managers good faith judgment, impracticable or inadvisable to proceed
with the offer, sale or delivery of the Securities on the terms and in the manner contemplated in
the Time of Sale Prospectus or the Prospectus (exclusive of any supplement thereto).
11. Effectiveness; Defaulting Underwriters. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
If, on the Closing Date, any one or more of the Underwriters shall fail or refuse to purchase
Securities that it has or they have agreed to purchase hereunder on such date, and the aggregate
principal amount of Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase is not more than one-tenth of the aggregate principal amount of Securities
to be purchased on such date, the other Underwriters shall be obligated severally in the
proportions that the aggregate principal amount of Securities set forth opposite their respective
names in Schedule I bears to the aggregate principal amount of Securities set forth opposite the
names of all such non-defaulting Underwriters, or in such other proportions as
22
the Manager may specify, to purchase the Securities which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided that in no event shall
the aggregate principal amount of Securities that any Underwriter has agreed to purchase pursuant
to this Agreement be increased pursuant to this Section 11 by an amount in excess of one-ninth of
such aggregate principal amount of Securities without the written consent of such Underwriter. If,
on the Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase the aggregate
principal amount of Securities set forth opposite such Underwriter or Underwriters and the
aggregate principal amount of Securities with respect to which such default occurs is more than
one-tenth of the aggregate principal amount of Securities to be purchased on such date, and
arrangements satisfactory to the Manager and the Company and the Parent for the purchase of such
Securities are not made within 36 hours after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter or the Company and the Parent. In any such
case either the Manager or the Company and the Parent shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required changes, if any, in
the Registration Statement, in the Time of Sale Prospectus, in the Prospectus or in any other
documents or arrangements may be effected. Any action taken under this paragraph shall not relieve
any defaulting Underwriter from liability in respect of any default of such Underwriter under this
Agreement.
12. Representations and Indemnities to Survive. The respective agreements, representations,
warranties, indemnities and other statements of the Company, the Parent and the Underwriters set
forth or made pursuant to this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter, the Company or the Parent or any of the
officers, directors, employees, agents or controlling persons referred to in Section 9 hereof, and
will survive delivery of and payment for the Securities. The provisions of Sections 8 and 9 hereof
shall survive the termination or cancellation of this Agreement.
13. Entire Agreement. (a) This Agreement, together with any contemporaneous written
agreements and any prior written agreements (to the extent not superseded by this Agreement) that
relate to the offering of the Securities, represents the entire agreement between the Company and
the Parent, on the one hand, and the Underwriters, on the other, with respect to the preparation of
any Preliminary Prospectus, the Time of Sale Prospectus, the Prospectus, the conduct of the
offering, and the purchase and sale of the Securities.
(b) The Company and the Parent acknowledge that in connection with the offering of the
Securities: (i) the Underwriters have acted at arms length, are not agents of, and owe no
fiduciary duties to, the Company, the Parent or any other person; (ii) the Underwriters owe the
Company and the Parent only those duties and obligations set forth in this Agreement and prior
written agreements (to the extent not superseded by this Agreement), if any; and (iii) the
Underwriters may have interests that differ from those of the Company and the Parent. The Company
and the Parent waive to the full extent permitted by applicable law any claims it may have against
the Underwriters arising from an alleged breach of fiduciary duty in connection with the offering
of the Securities.
14. Counterparts. This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and hereto were upon the
same instrument.
23
15. Applicable Law. This Agreement shall be governed by and construed in accordance with the
internal laws of the State of Delaware.
16. Headings. The headings of the sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed a part of this Agreement.
17. Notices. All communications hereunder shall be in writing and effective only upon receipt
and if to the Underwriters shall be delivered, mailed, faxed or sent to the Manager in care of
Robert W. Baird & Co. Incorporated, 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202, Fax:
(414) 298-7800, Attention: John Lanza, with a copy to the Legal Department, Robert W. Baird & Co.
Incorporated, 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202, Fax: (414) 298-7800; and if to
the Company or the Parent shall be delivered, mailed, faxed or sent to California Water Service
Group, 1720 North First Street, San Jose, California 95112, Attention: Chief Financial, Officer
(Fax: (408) 367-8430), with a copy to Gibson, Dunn & Crutcher LLP (Fax: (415) 393-8306) Attention:
Peter T. Heilmann.
[Remainder of Page Intentionally Left Blank]
24
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Very truly yours,
California Water Service Company
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By: |
/s/
Martin A. Kropelnicki |
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Name: |
Martin A. Kropelnicki |
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Title: |
Vice President,
Chief Financial Officer |
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California Water Service Group
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By: |
/s/ Martin A. Kropelnicki
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Name: |
Martin A. Kropelnicki |
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Title: |
Vice President,
Chief Financial Officer |
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Accepted as of the date hereof
ROBERT W. BAIRD & CO. INCORPORATED
Acting severally on behalf of itself and
the several Underwriters named in
Schedule I hereto
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By: |
Robert W. Baird & Co. Incorporated
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By: |
/s/
Benjamin A. Brown |
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Name: |
Benjamin A. Brown |
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Title: |
Director |
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SCHEDULE I
5.500% First Mortgage Bonds due 2040, Series PPP
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Principal Amount |
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Underwriter |
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of Securities |
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Robert W. Baird & Co. Incorporated |
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$ |
75,000,000 |
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Blaylock Robert Van, LLC |
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$ |
25,000,000 |
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Total |
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$ |
100,000,000 |
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SCHEDULE II
Underwriting Agreement dated November 17, 2010
Registration Statement No. 333-158484
Manager: Robert W. Baird
Title, Purchase Price and Brief Description of Securities:
Title: 5.500% First Mortgage Bonds due 2040, Series PPP
Principal Amount: $100,000,000
Issue Price: 99.416%
Gross Spread: 0.875%
All-in Purchase Price (include accrued interest or amortization, if any): 99.541%
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Sinking Fund Provisions:
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None |
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Optional Redemption:
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Redeemable at the Companys option in whole or in
part at any time within six months of the
maturity date at a redemption price equal to 100%
of the principal amount of the bonds being
redeemed, plus accrued but unpaid interest |
Guarantee: Fully and unconditionally guaranteed by California Water Service Group
SCHEDULE III
Free Writing Prospectuses
Final Term Sheet, dated November 17, 2010, a copy of which is attached hereto as Annex A.
Annex A
Issuer Free Writing Prospectus
Filed Pursuant to Rule 433
Registration No. 333-158484
November 17, 2010
CALIFORNIA WATER SERVICE COMPANY
$100,000,000 5.500% FIRST MORTGAGE BONDS DUE 2040, SERIES PPP
FULLY AND UNCONDITIONALLY GUARANTEED BY
CALIFORNIA WATER SERVICE GROUP
FINAL TERMS AND CONDITIONS
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Issuer: |
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California Water Service Company (the Company) |
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Issue Format: |
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SEC Registered |
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Note Type |
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First Mortgage Bonds |
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Guarantee: |
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Fully and unconditionally
guaranteed by California Water Service Group |
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Total Principal Amount: |
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$100,000,000 |
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Pricing Date: |
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November 17, 2010 |
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Settlement Date: |
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November 22, 2010 |
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Maturity Date: |
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December 1, 2040 |
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Interest Payment Dates: |
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Each June 1 and December 1, commencing on June 11, 2011 |
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Coupon: |
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5.500% |
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Gross Spread: |
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0.875% |
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Issue Price: |
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99.416% |
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All-in Price: |
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98.541% |
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Optional Redemption: |
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Redeemable at the Companys option in whole or in part
at any time within six months of the maturity date at
a redemption price equal to 100% of the principal
amount of the bonds being redeemed, plus accrued but
unpaid interest |
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Minimum Denominations: |
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$1,000 |
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CUSIP: |
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130789 AF7 |
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Bookrunners: |
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Robert W. Baird & Co. |
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Blaylock Robert Van, LLC |
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Use of Proceeds |
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The Company estimates that it will receive approximately $98,041,000
in net proceeds from the sale of the bonds, after deducting an aggregate of approximately $875,000 in underwriting discounts and
commissions and $500,000 in estimated offering expenses. |
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The Company intends to use the net proceeds of the offering to repay the balance on its syndicated
unsecured revolving line of credit. As of September 30, 2010, there was an outstanding balance of $34.0
million on the syndicated line of credit and the
interest rate on these borrowings was 2.26%. The Company used these borrowings for general corporate
purposes. The Company also intends to use the net proceeds of the offering for general corporate
purposes, such as increasing our working capital,
making capital expenditures, acquiring assets and taking advantage of other business opportunities.
Pending application of the net proceeds as described above, the Company may invest the proceeds in short-term securities. |
The issuer has filed a registration statement (including a prospectus) with the SEC for the
offering to which this communication relates. Before you invest, you should read the prospectus in
that registration statement and other documents the issuer has filed with the SEC for more complete
information about the issuer and this offering. You may get these documents for free by visiting
EDGAR on the SECs Website at www.sec.gov. Alternatively, Robert W. Baird & Co., the lead
bookrunner for the offering, will arrange to send you the prospectus if you request it by calling
Robert W. Baird & Co., Fixed Income Department, at 1-800-RWBAIRD (1-800-792-2473); or through your
usual contact at Robert W. Baird & Co.
SCHEDULE IV
(i) each of the Company and the Parent is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, and has the corporate power and authority
to execute and deliver this Agreement and to perform its obligations hereunder; Parent is duly
qualified to transact business and is in good standing in California;
(ii) the execution, delivery and performance of the Mortgage Indenture has been duly
authorized by all necessary corporate action. The Mortgage Indenture has been duly executed and
delivered by the Company and constitutes a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms;
(iii) the execution, delivery and performance of the Bonds have been duly authorized by all
necessary corporate action. The Bonds, when executed and authenticated in accordance with the
provisions of the Mortgage Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will be legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms;
(iv) the execution, delivery and performance of the Guarantee have been duly authorized by all
necessary corporate action. The Guarantee has been duly executed and delivered and, assuming the
due authorization, execution and delivery of the Mortgage Indenture and authentication of the Bonds
by the Trustee, when the Guarantee and Bonds are delivered to and paid for by the Underwriters in
accordance with this Agreement, the Guarantee will be a valid and legally binding obligation of the
Parent, enforceable against the Parent in accordance with its terms;
(v) the execution, delivery and performance of this Agreement has been duly authorized by all
necessary corporate action. This Agreement has been duly executed and delivered by the Company and
the Parent;
(vi) the execution and delivery by the Company and the Parent of this Agreement, the execution
and delivery by the Company of the Mortgage Indenture and the issuance by the Company of the Bonds,
and the issuance by the Parent of the Guarantee, to the Underwriters: (x) do not and will not
violate the charter or bylaws of the Company or the Parent; and (y) do not and will not breach the
terms of (a) any agreement or instrument identified to Gibson, Dunn & Crutcher by the Company and
the Parent that purports to list all agreements that are material to the Company and the Parent,
which agreements and instruments are set forth on Annex A, or (b) any order, judgment or decree of
any court or other agency of government identified to Gibson, Dunn & Crutcher of the Company or the
Parent that purports to list all orders, judgments or decrees binding on the Company or the Parent,
in each case based solely on Gibson, Dunn & Crutchers review of such agreements, orders, judgments
or decrees;
(vii) the execution and delivery by the Company and the Parent of this Agreement, the
execution and delivery by the Company of the Mortgage Indenture and the issuance by the Company of
the Bonds, and the issuance by the Parent of the Guarantee, to the Underwriters (x) do not and will
not violate any law, rule or regulation currently in effect of the State of Delaware, the State of
California or the United States of America applicable to the Company, the
Parent or their respective Subsidiaries that, in Gibson, Dunn & Crutchers experience, is generally
applicable to transactions in the nature of those contemplated by this Agreement; and (y) do not
and will not require any filing with or approval of any governmental authority or regulatory body
of the State of Delaware or the United States of America under any law or regulation of the State
of Delaware or the United States of America applicable to the Company or the Parent or the Delaware
General Corporation Law, except for such filings or approvals as already have been made or obtained
under the Securities Act; and other than the last clause of the preceding sentence, Gibson, Dunn &
Crutcher expresses no opinion in this paragraph regarding federal or state securities laws; and
(viii) the Company and the Parent are not, and after giving effect to the offering and sale of
the Securities, will not be an investment company that is required to be registered under in the
Investment Company Act of 1940, as amended (the Investment Company Act). For purposes of this
paragraph (viii), the term investment company has the meanings ascribed to such term in the
Investment Company Act.
Annex A
1. |
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Thirty-Ninth Supplemental Indenture dated as of April 17, 2009, between California Water
Service Company and U.S. Bank National Association, as Trustee (Exhibit 4.1 to Current Report
on Form 8-K filed April 21, 2009) |
2. |
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Fortieth Supplemental Indenture dated as of April 17, 2009, between California Water Service
Company and U.S. Bank National Association, as Trustee, covering 9.86% First Mortgage Bonds
due 2020, Series CC. (Exhibit 4.2 to Current Report on Form 8-K filed April 21, 2009) |
3. |
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Forty-First Supplemental Indenture dated as of April 17, 2009, between California Water
Service Company and U.S. Bank National Association, as Trustee, covering 5.875% First Mortgage
Bonds due 2019, Series LL. (Exhibit 4.3 to Current Report on Form 8-K filed April 21, 2009) |
4. |
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Forty-Second Supplemental Indenture dated as of April 17, 2009, between California Water
Service Company and U.S. Bank National Association, as Trustee, covering 6.94% First Mortgage
Bonds due 2012, Series KK. (Exhibit 4.4 to Current Report on Form 8-K filed April 21, 2009) |
5. |
|
Forty-Third Supplemental Indenture dated as of April 17, 2009, between California Water
Service Company and U.S. Bank National Association, as Trustee, covering 7.28% First Mortgage
Bonds due 2025, Series AAA. (Exhibit 4.5 to Current Report on Form 8-K filed April 21, 2009) |
6. |
|
Forty-Fourth Supplemental Indenture dated as of April 17, 2009, between California Water
Service Company and U.S. Bank National Association, as Trustee, covering 6.77% First Mortgage
Bonds due 2028, Series BBB. (Exhibit 4.6 to Current Report on Form 8-K filed April 21, 2009) |
7. |
|
Forty-Fifth Supplemental Indenture dated as of April 17, 2009, between California Water
Service Company and U.S. Bank National Association, as Trustee, covering 8.15% First Mortgage
Bonds due 2030, Series CCC. (Exhibit 4.7 to Current Report on Form 8-K filed April 21, 2009) |
8. |
|
Forty-Sixth Supplemental Indenture dated as of April 17, 2009, between California Water
Service Company and U.S. Bank National Association, as Trustee, covering 7.13% First Mortgage
Bonds due 2031, Series DDD. (Exhibit 4.8 to Current Report on Form 8-K filed April 21, 2009) |
9. |
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Forty-Seventh Supplemental Indenture dated as of April 17, 2009, between California Water
Service Company and U.S. Bank National Association, as Trustee, covering 7.11% First Mortgage
Bonds due 2032, Series EEE. (Exhibit 4.9 to Current Report on Form 8-K filed April 21, 2009) |
10. |
|
Forty-Eighth Supplemental Indenture dated as of April 17, 2009, between California Water
Service Company and U.S. Bank National Association, as Trustee, covering 5.90% First Mortgage
Bonds due 2017, Series FFF. (Exhibit 4.10 to Current Report on Form 8-K filed April 21, 2009) |
11. |
|
Forty-Ninth Supplemental Indenture dated as of April 17, 2009, between California Water
Service Company and U.S. Bank National Association, as Trustee, covering 5.29% First Mortgage
Bonds due 2022, Series GGG. (Exhibit 4.11 to Current Report on Form 8-K filed April 21, 2009) |
12. |
|
Fiftieth Supplemental Indenture dated as of April 17, 2009, between California Water Service
Company and U.S. Bank National Association, as Trustee, covering
5.29% First Mortgage Bonds due 2022, Series HHH. (Exhibit 4.12 to Current Report on Form 8-K filed April
21, 2009) |
13. |
|
Fifty-First Supplemental Indenture dated as of April 17, 2009, between California Water
Service Company and U.S. Bank National Association, as Trustee, covering 5.54% First Mortgage
Bonds due 2023, Series III. (Exhibit 4.13 to Current Report on Form 8-K filed April 21, 2009) |
14. |
|
Fifty-Second Supplemental Indenture dated as of April 17, 2009, between California Water
Service Company and U.S. Bank National Association, as Trustee, covering 5.44% First Mortgage
Bonds due 2018, Series JJJ. (Exhibit 4.14 to Current Report on Form 8-K filed April 21, 2009) |
15. |
|
Fifty-Third Supplemental Indenture dated as of April 17, 2009, between California Water
Service Company and U.S. Bank National Association, as Trustee, covering 4.58% First Mortgage
Bonds due 2010, Series KKK. (Exhibit 4.15 to Current Report on Form 8-K filed April 21, 2009) |
16. |
|
Fifty-Fourth Supplemental Indenture dated as of April 17, 2009, between California Water
Service Company and U.S. Bank National Association, as Trustee, covering 5.48% First Mortgage
Bonds due 2018, Series LLL. (Exhibit 4.16 to Current Report on Form 8-K filed April 21, 2009) |
17. |
|
Fifty-Fifth Supplemental Indenture dated as of April 17, 2009, between California Water
Service Company and U.S. Bank National Association, as Trustee, covering 5.52% First Mortgage
Bonds due 2013, Series MMM. (Exhibit 4.17 to Current Report on Form 8-K filed April 21, 2009) |
18. |
|
Fifty-Sixth Supplemental Indenture dated as of April 17, 2009, between California Water
Service Company and U.S. Bank National Association, as Trustee, covering 5.55% First Mortgage
Bonds due 2013, Series NNN. (Exhibit 4.18 to Current Report on Form 8-K filed April 21, 2009) |
19. |
|
Fifty-Seventh Supplemental Indenture dated as of April 17, 2009, between California Water
Service Company and U.S. Bank National Association, as Trustee, covering 6.02% First Mortgage
Bonds due 2031, Series OOO. (Exhibit 4.19 to Current Report on Form 8-K filed April 21, 2009) |
20. |
|
Water Supply Contract between Cal Water and County of Butte relating to Cal Waters Oroville
District; Water Supply Contract between Cal Water and the Kern County Water Agency relating to
Cal Waters Bakersfield District; Water Supply Contract between Cal Water and Stockton East
Water District relating to Cal Waters Stockton District. (Exhibits 5(g), 5(h), 5(i), 5(j),
Registration Statement No. 2-53678, which exhibits are incorporated by reference to Annual
Report on Form 10-K for the year ended December 31, 1974) |
21. |
|
Water Supply Contract between the City and County of San Francisco and wholesale customers in
Alameda County, San Mateo County and Santa Clara County for a term of twenty-five years
beginning on July 1, 2009 and ending on June 30, 2034. The agreement was dated June 24, 2009.
Water Supply Contract dated July 1, 2009 between the City and County of San Francisco and
California Water Service Company to provide water to Bear Gulch and Bayshore service areas for
a term of twenty-five years beginning July 1, 2009 and ending June 30, 2034. (Exhibit 10.3 and
10.4 to Quarterly Report on Form 10-Q for the quarter ending September 30, 2009) |
22. |
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Water Supply Contract dated January 27, 1981, between Cal Water and the Santa Clara Valley
Water District relating to Cal Waters Los Altos District (Exhibit 10.3 to Annual Report on
Form 10-K for the year ended December 31, 1992) |
23. |
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Amendments No. 3, 6 and 7 and Amendment dated June 17, 1980, to Water Supply Contract between
Cal Water and the County of Butte relating to Cal Waters Oroville District. (Exhibit 10.5 to
Annual Report on Form 10-K for the year ended December 31, 1992) |
24. |
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Amendment dated May 31, 1977, to Water Supply Contract between Cal Water and Stockton East
Water District relating to Cal Waters Stockton District. (Exhibit 10.6 to Annual Report on
Form 10-K for the year ended December 31, 1992) |
25. |
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Second Amended Contract dated September 25, 1987, among Stockton East Water District,
California Water Service Company, the City of Stockton, the Lincoln Village Maintenance
District, and the Colonial Heights Maintenance District Providing for the Sale of Treated
Water. (Exhibit 10.7 to Annual Report on Form 10-K for the year ended December 31, 1987) |
26. |
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Water Supply Contract dated April 19, 1927, and Supplemental Agreement dated June 5, 1953,
between Cal Water and Pacific Gas and Electric Company relating to Cal Waters Oroville
District. (Exhibit 10.9 to Annual Report on Form 10-K for the year ended December 31, 1992) |
27. |
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Agreement between the City of Hawthorne and California Water Service Company for the 15-year
lease of the Citys water system. (Exhibit 10.17 to Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996) |
28. |
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Water Supply Agreement dated September 25, 1996, between the City of Bakersfield and
California Water Service Company. (Exhibit 10.18 to Quarterly Report on Form 10-Q for the
quarter ended September 30, 1996) |
29. |
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Water Supply Contract dated November 16, 1994, between California Water Service Company and
Alameda County Flood Control and Water Conservation District relating to Cal Waters Livermore
District (Exhibit 10.15 to Annual Report on Form 10-K for the year ended December 31, 1994) |
30. |
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California Water Service Group Directors Retirement Plan (As amended and restated on
February 22, 2006) (Exhibit 10.14 to the Annual Report on Form 10-K for the year ended
December 31, 2005) |
31. |
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Unsecured Credit Agreement dated as of October 27, 2009 among California Water Service Group
and certain of it subsidiaries from time to time, as borrowers, Bank of America, N.A., as
administrative agent, swing line lender and letter of credit issuer, Banc of America
Securities LLC, as sole lead arranger and sole book manager, CoBank, ACB and Bank of China,
Los Angeles Branch, as co-syndication agents, Compass Bank and U.S. Bank National Association,
as co-documentation agents, and the other lender parties thereto |
32. |
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Unsecured Credit Agreement dated as of October 27, 2009 among California Water Service
Company, as borrower, Bank of America, N.A., as administrative agent, swing line lender and
letter of credit issuer, Banc of America Securities LLC, as sole lead arranger and sole book
manager, CoBank, ACB and Bank of China, Los Angeles Branch, as co-syndication agents, Compass
Bank and U.S. Bank National Association, as co-documentation agents, and the other lender
parties thereto |
33. |
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Water Supply Contract 99-73 between the City of Bakersfield and California Water Service
Company, dated March 31, 1999 (Exhibit 10.25 to Quarterly Report on Form 10-Q for the quarter
ended September 30, 2003) |
34. |
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Amendment No. 1 to Water Supply Contract between the City of Bakersfield and California Water
Service Company, dated October 3, 2001 (Exhibit 10.26 to Quarterly Report on Form 10-Q for the
quarter ended September 30, 2003) |
35. |
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Water Supply Contract dated September 21, 2005, between Cal Water and the Kern County Water
Agency. (Exhibit 10.1 to Current Report on Form 8-K filed on September 21, 2005) |
SCHEDULE V
Except for the financial statements and schedules, statistical information that is purported
to have been provided on the authority of an expert or public official and other information of an
accounting or financial nature and the Statement of Eligibility on Form T-1 of the Trustee included
or incorporated by reference therein, as to which such counsel need not express any belief, no
facts have come to such counsels attention that led it to believe: (i) that the Registration
Statement, at the time it became effective (which, for purposes of such letter, shall mean April 8,
2009), or the Prospectus, as of the date of the Prospectus Supplement, were not appropriately
responsive in all material respects to the requirements of the Trust Indenture Act and the
Securities Act and the applicable rules and regulations of the Commission thereunder; or (ii) (A)
that the Registration Statement, at the time it became effective, contained an untrue statement of
a material fact or omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; or (B) that the Time of Sale Prospectus, at the Time of
Sale, included an 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, or (iii) that the Prospectus, as of its date or as of the Closing Date included or
includes an untrue statement of a material fact or omitted or omits 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. Such counsel believes that insofar as the statements in the
Prospectus under the captions Description of First Mortgage Bonds and Guarantees and Plan of
Distribution purport to summarize the documents referred to therein, such statements fairly
present in all material respects the information required to be disclosed under the Securities Act
and the rules and regulations of the Commission relating to registration statements on Form S-3 and
prospectuses. Based solely on a certificate of the Company, that such counsel is of the view that
the Registration Statement is effective under the Securities Act. To such counsels knowledge,
based solely upon telephonic confirmation from the Staff of the Commission, as of the time of such
confirmation no stop order suspending the effectiveness of the Registration Statement has been
issued under the Securities Act and no proceedings for that purpose have been instituted or are
pending or threatened by the Commission.
[CALWATER LETTERHEAD]
November ___, 2010
[Baird]
[Address]
[Address]
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Re:
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Thirty-Ninth Supplemental Indenture, made by and between
California Water Service Company, a California corporation (the
Company) and U.S. Bank National Association, as Trustee (the
Trustee) and dated as of April 17, 2009 (the Supplemental
Indenture) as well as the Fifty-Eighth Supplemental Indenture,
made by and between the Company and the Trustee and dated on or
about the date hereof. |
Ladies and Gentlemen:
I am corporate counsel to the Company. All initially capitalized terms not otherwise defined
herein shall have the meanings ascribed to them in the Indenture referred to below.
In rendering the opinions expressed below, I (or others at my direction) have examined copies
or forms of the documents set forth below and such other certificates, documents and materials as I
have deemed necessary as a basis for such opinions. All of the following documents, except where
noted otherwise in this letter, are dated as of the date hereof:
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1. |
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Indenture, made by and among the Company and American Trust Company and Los
Angeles-First National Trust & Savings Bank (predecessor to U.S. Bank National
Association), as Trustees, and dated as of April 1, 1928 (as amended, modified and
supplemented prior to the execution and delivery of the Supplemental Indenture, the
Original Indenture and, as amended by the Supplemental Indenture, the Indenture); |
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2. |
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Supplemental Indenture; |
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3. |
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Each of the title policies and preliminary title reports referenced on Schedule
A attached hereto (each, individually, a Title Document and, collectively, the Title
Documents), issued by the title companies and/or authorized agents set forth opposite
each such Title Document (each, individually, a Title Company and, collectively, the
Title Companies) for the benefit of the Company (or its predecessors in interest as
owner) on the date set forth opposite each such Title Document, in respect of the
applicable real property(ies) set forth opposite each such Title Document (each,
individually, an Individual Property and, collectively, the Real Property) each
indicating that the lien of the Original Indenture encumbers such Real Property; |
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4. |
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The financing statements on Form UCC1 naming the Company as debtor, and the
Trustee as secured party, filed in the governmental offices listed on Schedule B hereto
(the Financing Statements); |
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5. |
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The UCC search reports indicating that the Financing Statements have been filed
in the respective offices and in the respective states listed on Schedule B, which
reports state that they reflect filings in such offices through the as of dates
listed on Schedule B (the Search Reports); and |
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6. |
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The Decision Authorizing California Water Service Company to Issue Debt and
Equity Securities Dated September 23, 2010 issued by the Public Utilities Commission of
the State of California in favor of the Company with respect to Application 10-01-013
(Filed January 7, 2010). |
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The Companys right, title and interest in the personal property and fixtures collateral
described in the Indenture is referred to herein collectively as the UCC Collateral. The
Uniform Commercial Code as enacted and in effect in the State of California is referred to
herein as the CUCC. All terms defined in the CUCC are used herein as defined therein. |
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I have assumed, with your permission, but without independent investigation or analysis,
that: |
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a) |
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The signatures on all documents examined by me are genuine, all
individuals executing such documents had all requisite legal capacity and
competency and were duly authorized, the documents submitted to me as originals
are authentic and the documents submitted to me as certified or reproduction
copies conform to the originals; |
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b) |
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Each of the parties to the Indenture (i) is, or was at the time
of the execution of such documents, duly formed, validly existing and in good
standing both in its state of incorporation or formation, as applicable, and in
all other jurisdictions in which it either conducts business or is required to
qualify to do business, and (ii) has, or had at the time of the execution of
such documents, all requisite power and corporate, partnership or limited
liability company authority to execute, deliver and perform its respective
obligations under the Indenture. Each of the parties to the Indenture has duly
executed and delivered the Indenture. The individual executing the Indenture
on behalf of each party thereto was duly authorized, on behalf of such party,
to execute the Indenture and did in fact duly execute and deliver the
Indenture. The execution and delivery of the Indenture by each party and the
performance by such party of its obligations thereunder have been duly
authorized by all necessary corporate, partnership, limited liability company
or other action and do not violate any law, regulation, order, judgment or
decree applicable to such party; |
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Except with respect to the opinions I am giving, the Indenture
constitutes the legal, valid and binding obligation of the parties thereto,
enforceable against each such party in accordance with its respective terms; |
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d) |
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The Company has received adequate consideration for the
Indenture and the attachment of the liens and security interests described
therein; and all conditions precedent to the effectiveness of the Indenture
have been satisfied or waived; |
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e) |
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All applicable recording, stamp or similar taxes have been paid
in respect of the Supplemental Indenture; |
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f) |
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The Company has, and will have at all times relevant to this
opinion, rights in the UCC Collateral within the meaning of Section 9203(b)(2)
of the CUCC; and |
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g) |
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The Financing Statements have been filed effectively in the
respective filing offices and in the respective states listed on Schedule B
hereto, as indicated in the Search Reports that I have reviewed in connection
with the preparation of this opinion; and the Financing Statements have not
been terminated or amended since the respective as of dates listed on
Schedule B. |
I express no opinion with respect to any personal property (other than the UCC Collateral) or
real property (other than the Real Property) referenced in the Indenture. No examination of title
covering rights-of-way or easements in connection with distribution and water facilities has been
made inasmuch as the Company has been advised that the expense incident to the obtaining of
policies of title insurance and of examinations of title in respect thereto would be in excess of
the cost of reacquiring by condemnation or purchase, possession and use of such parts of such
rights-of-way or easements as might be held under defective titles, and accordingly, this opinion
does not cover such rights-of-way or easements.
In rendering this opinion, I have made such inquiries and examined, among other things,
originals or copies, certified or otherwise identified to my satisfaction, of such records,
agreements, certificates, instruments and other documents as I have considered necessary or
appropriate for purposes of this opinion. As to certain factual matters, I have relied to the
extent I deemed appropriate, and without independent investigation, upon the representations and
warranties of the parties in the Indenture, certificates of officers of such parties, or
certificates obtained from public officials and others.
Based on the foregoing and in reliance thereon, and subject to the assumptions, exceptions,
qualifications and limitations set forth herein, I am of the opinion that:
1. The Supplemental Indenture has been properly recorded, in the official records (the
Official Records) of each county in which the Real Property is situated (each, a County)
in accordance with applicable law.
2. The Original Indenture constitutes a valid and perfected security interest in, and
lien upon, the Real Property. The Supplemental Indenture preserves and
continues the valid and perfected security interest in, and the perfected lien upon,
the Real Property created by the Original Indenture (the Security Interest).
3. The Security Interest is subject to no liens, charges or other encumbrances prior to
or on a parity with the lien of the Indenture except for (a) certain possible claims of a
trustee in bankruptcy and any possible claims, taxes and/or assessments of any governmental
or quasi-governmental agency having jurisdiction over any portion of the Real Property, (b)
any Permitted Lien, as defined in the Indenture, or other permitted encumbrance otherwise
described in the Indenture, and/or (c) such exceptions, defects and qualifications as in my
opinion do not materially and adversely affect the security for the Indenture or the
Companys title to or its right to use such properties in the conduct of its business
(Permitted Encumbrances). Real Property hereafter acquired by the Company and located in
counties in which the Indenture shall be of record will, upon acquisition, become subject to
the lien of the Indenture, subject, however, to Permitted Encumbrances, any liens existing
or placed thereon at acquisition and any liens which might intervene prior to the filing or
recording of the instrument containing a sufficient legal description confirming of record
that such property is subject to the lien of the Indenture, except as the existence or
validity of the lien of the Indenture may be affected by the application of Sections 547
and/or 552 of the United States Bankruptcy Code or by any analogous provisions of applicable
state insolvency laws.
4. The Indenture has been duly recorded or filed of record in each County where any
Real Property described in the Indenture is located and in all other places required by law
in order to perfect the lien upon the Real Property described in the Indenture.
5. The Company has granted a valid security interest (the UCC Security Interest) in
favor of the Trustee in the UCC Collateral described in the Indenture securing the
performance of the obligations purported to be secured thereby, to the extent a security
interest can be created therein under Division 9 of the CUCC. Such security interest in the
UCC Collateral of the Company listed on Schedule B is perfected to the extent security
interests therein can be perfected by the filing of UCC1 financing statements under Division
9 of the CUCC.
6. The UCC Collateral constitute all the personal property presently owned by the
Company described in the Granting Clauses of the Indenture as subject to the lien of the
Indenture.
The foregoing opinions are subject to the following exceptions, qualifications and
limitations:
A. I render no opinion herein as to matters involving the laws of any jurisdiction
other than the State of California and the United States of America. This opinion is
limited to the effect of the present state of the laws of the State of California and the
United States of America and the facts as they currently exist. I assume no obligation to
revise or supplement this opinion in the event of future changes in such laws or the
interpretations thereof or such facts.
B. The opinions above are further subject to (i) the effect of any bankruptcy,
insolvency, reorganization, moratorium, arrangement or similar laws affecting the rights and
remedies of creditors generally (including, without limitation, the effect of statutory or
other laws regarding fraudulent transfers or preferential transfers), (ii) general
principles of equity, including without limitation concepts of materiality, reasonableness,
good faith and fair dealing and the possible unavailability of specific performance,
injunctive relief or other equitable remedies, regardless of whether enforceability is
considered in a proceeding in equity or at law and (iii) the qualification that certain
default remedies provided in the Indenture may not be enforceable.
C. I express no opinion with respect to (i) the Companys corporate power and authority
to execute and deliver the Indenture or to perform its obligations thereunder, (ii) the due
authorization, execution, and delivery by the Company of the Indenture, or (iii) the
legality, validity, binding nature or enforceability of the Indenture.
D. I have not made or undertaken to make any investigation concerning the factual and
technical aspects of any portion of the Real Property and/or any improvements thereon or the
obtaining or necessity of obtaining any licenses or permits therefor, whether in the event
of sale or disposition of such real property by the trustee under any deed of trust or
otherwise.
E. I have not made or undertaken to make any investigation concerning, and express no
opinion with respect to, compliance by any portion of the Real Property with the
requirements of the California Subdivision Map Act, as in effect from time to time, or the
compliance by any portion of the Real Property with the requirements of federal, State of
California, or local governmental agencies for specific uses of such portions of the Real
Property.
F. I express no opinion as to the applicability to, or the effect of noncompliance by,
the Trustee with any state or federal laws applicable to the transactions contemplated by
the Indenture because of the nature of the business of the Trustee.
G. This opinion is subject to the effect of Section 552 of the United States Bankruptcy
Code (limiting security interests in property acquired after the commencement of a case
under the United States Bankruptcy Code). I call to your attention that under the
provisions of the CUCC certain third parties, such as buyers and lessees of goods in the
ordinary course of business, protected purchasers of securities or certain purchasers of
security entitlements or financial assets, could acquire an interest in the UCC Collateral
free of the security interests of the Trustee, even though such security interests are
perfected.
H. I express no opinion with respect to (i) the existence, non-existence or value of
any UCC Collateral, and (ii) any part of the UCC Collateral that is or may be such that a
security interest therein is not covered by Division 9 of the CUCC by virtue of Section 9109
and (iii) the perfection of the Security Interests in any portion of the UCC
Collateral, and money, to the extent that filing of a financing statement is not or may
not be sufficient to perfect a security interest therein.
I. I express no opinion with respect to (i) the sufficiency of the descriptions of the
UCC Collateral contained in the Indenture, in the Financing Statements or in any document
prepared in connection therewith except for the legal adequacy of descriptions of UCC
Collateral (A) to the extent that such descriptions consist of the collateral types defined
in the CUCC (other than commercial tort claims) and (B) contained in Financing Statements to
the extent such descriptions consist of all assets or all personal property, (ii) the
enforceability or perfection of any security interest in the proceeds of any UCC Collateral
other than pursuant to Section 9315 of the CUCC, (iii) any security interest in consumer
goods or commercial tort claims or (iv) perfection (or the law governing perfection) of any
security interest in timber to be cut or as-extracted collateral (including oil, gas and
other minerals).
J. I express no opinion with respect to the priority (and therefore no opinion as to
the respective rights of any creditor, encumbrancer or other third party as against the
rights of the Trustee) of any security interest in the UCC Collateral.
K. Perfection of the Security Interests generally will be terminated under the
circumstances described in Sections 9316, 9507, 9508 and 9515 of the CUCC, unless
appropriate action is taken as provided therein. Without limitation, (i) all the financing
statements filed must be continued at prescribed intervals by the timely filing of
continuation statements and (ii) a new or amended financing statement may be required to be
filed to retain any perfected UCC Security Interest in the event the Company changes its
name, identity or location (as determined under the CUCC).
This opinion is rendered to you in connection with that certain Underwriting Agreement dated
on or about the date hereof between the Company and the several underwriters named in Schedule I
thereto (the Underwriting Agreement) and may not be relied upon by any person in any other
context (except that U.S. Bank National Association, in its capacity as Trustee under the
Indenture, may rely on this opinion as if the opinion was addressed to it). You may not furnish
this opinion or copies hereof to any other person except: (i) regulatory authorities should they so
request in connection with their normal examinations, (ii) to your independent auditors and
attorneys, (iii) pursuant to order or legal process of any court or governmental agency or (iv) in
connection with any legal action to which you are a party arising out of the transactions
contemplated by the Underwriting Agreement. This opinion may not be quoted without my prior
written consent.
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Very truly yours,
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California Water Service Company
Corporate Counsel
2632 W. 237th St.
Torrence, CA 90505 |
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SCHEDULE B
FINANCING STATEMENTS & SEARCH REPORTS
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Company |
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Perfection State |
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Filing Office |
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Search Report as of |
California Water
Service Company
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California
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California Secretary of State
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[____________] |
SCHEDULE VII
1. Solely with respect to any approval required from the Public Utilities Commission of the State
of California pursuant to the California Public Utilities Code, the Company has been duly
authorized to execute and deliver the Mortgage Indenture.
2. Solely with respect to any approval required from the Public Utilities Commission of the State
of California pursuant to the California Public Utilities Code, the execution and delivery by the
Company of the Mortgage Indenture: (i) does not violate any law, rule or regulation currently in
effect of the State of California applicable to the Company that, in my experience, is generally
applicable to transactions in the nature of those contemplated by the Mortgage Indenture, and (ii)
does not require any filing with or approval of any governmental authority or regulatory body of
the State of California under any law or regulation of the State of California applicable to the
Company, except for such filings or approval as already have been made or obtained.