$130,000,000
5% Convertible Subordinated Notes due 2002
CELLSTAR CORPORATION
PURCHASE AGREEMENT
October 7, 1997
BEAR, XXXXXXX & CO. INC.
CHASE SECURITIES INC.
as the Initial Purchasers named in
Schedule I hereto
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Dear Sirs:
CellStar Corporation, a Delaware corporation (the "COMPANY"),
proposes, subject to the terms and conditions stated in this Purchase Agreement
(this "AGREEMENT"), to issue and sell to the several Initial Purchasers named in
Schedule I hereto (the "INITIAL PURCHASERS") an aggregate of $130,000,000
principal amount of its 5% Convertible Subordinated Notes due 2002 (the "FIRM
NOTES"). In addition, the Company proposes to grant to the Initial Purchasers
an option, for the sole purpose of covering over-allotments in connection with
the sale of the Firm Notes, to purchase up to an additional $20,000,000
principal amount of its 5% Convertible Subordinated Notes due 2002 (the
"OPTIONAL NOTES") as provided in Section 2 below. The Firm Notes and any
Optional Notes purchased by the Initial Purchasers are referred to herein as the
"NOTES".
The Notes are to be issued pursuant to an indenture to be dated as of
October 14, 1997 (the "INDENTURE") between the Company and The Bank of New York,
as trustee (the "TRUSTEE"), and, except as otherwise provided in the Indenture,
will be convertible into shares of the Company's common stock, par value $.01
per share (the "COMMON STOCK"), on the terms set forth therein. The holders of
the Notes will be entitled to certain registration rights provided under a
Registration Rights Agreement to be dated October 14, 1997 (the "REGISTRATION
RIGHTS AGREEMENT") between the Company and the Initial Purchasers.
The Company has prepared a preliminary offering circular dated
September 24, 1997 (the "PRELIMINARY OFFERING CIRCULAR") and a final offering
circular dated October 7, 1997 (as supplemented or amended from time to time
with the written consent of the Company and Bear, Xxxxxxx & Co. Inc., as the
representative of the Initial Purchasers, the "REPRESENTATIVE") (the "OFFERING
CIRCULAR"), with respect to the offering of the Notes contemplated by this
Agreement (the "OFFERING"). The terms "Preliminary Offering Circular" and
"Offering Circular" as used herein shall include all documents incorporated by
reference therein.
The Notes have not been registered under the Securities Act of 1933,
as amended (the "SECURITIES ACT"), and are being offered and sold in reliance on
exemptions from or in transactions not subject to the registration requirements
of the Securities Act, including sales (i) made in the United States to
"qualified institutional buyers" ("QIBS") as defined in, and in reliance on,
Rule 144A under the Securities Act ("RULE 144A"), (ii) made in the United States
to institutional "accredited investors" ("INSTITUTIONAL ACCREDITED INVESTORS")
as defined in Rule 501(a)(1),(2), (3) and (7) of Regulation D under the
Securities Act ("REGULATION D") and (iii) made outside the United States in
reliance on Regulation S under the Securities Act ("REGULATION S").
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, the Initial Purchasers that, as of
the date hereof, the Closing Date and any Additional Closing Date:
(a) The Preliminary Offering Circular, as of September 24, 1997, and
the Offering Circular, as of the date hereof and as of the Closing Date (as
defined) and as of any Additional Closing Date (as defined), if any, is and will
be accurate in all material respects, does not and will not contain an untrue
statement of a material fact and does not and will not omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading. No representation and warranty is made in this Section 1(a),
however, with respect to any information contained in or omitted from the
Offering Circular or any amendment thereof or supplement thereto in reliance
upon and in conformity with information furnished in writing to the Company by
the Initial Purchasers expressly for use in connection with the preparation of
the Offering Circular or any amendment thereof or supplement thereto, as the
case may be.
(b) KPMG Peat Marwick LLP, who has certified the annual financial
statements included or incorporated by reference in the Offering Circular, are
independent public accountants as required by the Securities Act and the rules
and regulations
2
promulgated thereunder (the "REGULATIONS") by the Securities and Exchange
Commission (the "COMMISSION").
(c) The financial statements, including the notes thereto, included
or incorporated by reference in the Offering Circular, comply as to form in all
material respects with the requirements applicable to registration statements on
Form S-1 under the Securities Act and present fairly on the basis stated therein
the consolidated financial position of the Company and its subsidiaries as of
the dates indicated and the consolidated results of operations and changes in
financial position of the Company and its subsidiaries for the periods
specified. Such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods presented.
(d) The Company and its Significant Subsidiaries (as defined)
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that: (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect thereto.
(e) Subsequent to the respective dates as of which information is
given in the Offering Circular and through the Closing Date (or through the
Additional Closing Date, as the case may be), except as set forth in the
Offering Circular, (i) neither the Company nor any of its subsidiaries has
incurred any liabilities or obligations, direct or contingent, which are or are
reasonably likely to be material, individually or in the aggregate, to the
Company and its subsidiaries, taken as a whole, nor entered into any material
transaction not in the ordinary course of business, (ii) there has not been,
singly or in the aggregate, any change or development which could reasonably be
expected to (A) result, individually or in the aggregate, in a material adverse
effect on the properties, business, results of operations, condition (financial
or otherwise), affairs or prospects of the Company and its subsidiaries, taken
as a whole, or (B) adversely affect the validity of the Offering or the
enforceability of this Agreement, the Indenture, the Notes or the Registration
Rights Agreement (collectively, the "TRANSACTION AGREEMENTS") (any of the events
set forth in clauses (A) or (B), a "MATERIAL ADVERSE EFFECT"), and (iii) there
has been no dividend or distribution of any kind declared, paid or made by the
Company or its subsidiaries on any class of its capital stock.
3
(f) Each of the Company and its Significant Subsidiaries: (i) has
been duly incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation; (ii) is duly qualified and
in good standing as a foreign corporation, authorized to do business in each
jurisdiction in which the character or location of its properties (owned, leased
or licensed) or the nature or conduct of its business makes such qualification
necessary, except for those failures to be so qualified or in good standing that
have not had and are not in the aggregate reasonably expected to have a Material
Adverse Effect; and, (iii) has all requisite power and authority, and all
necessary consents, approvals, authorizations, orders, registrations,
qualifications, licenses and permits of and from all public, regulatory or
governmental agencies and bodies, to own, lease and operate its properties and
conduct its business as now being conducted and as described in the Offering
Circular, except for those failures to make or obtain such consents, approvals,
authorizations, orders, registrations, qualifications, licenses and permits that
have not had and are not in the aggregate reasonably expected to have a Material
Adverse Effect.
(g) The Company had, at May 31, 1997, an authorized and outstanding
capitalization as set forth in the Offering Circular. All of the outstanding
shares of capital stock of the Company have been duly and validly authorized and
issued, are fully paid and nonassessable and were not issued in violation of or
subject to any preemptive rights. Except as otherwise disclosed in the Offering
Circular, all of the outstanding shares of capital stock of each Significant
Subsidiary has been duly and validly authorized and issued, are fully paid and
nonassessable, were not issued in violation of or subject to any preemptive
rights and all of the outstanding capital stock of the Company's Significant
Subsidiaries is owned, directly or indirectly, by the Company, free and clear of
any security interest, claim, lien, limitation on voting rights or encumbrance,
security interest, restriction on transfer, shareholders' agreement, voting
trust or other preferential arrangement or defect of title whatsoever. The
capital stock of the Company conforms in all material respects to the
descriptions thereof contained in the Offering Circular.
(h) The Company does not own or control, directly or indirectly, any
corporation, association or other entity other than those reflected in Annex A
hereto. Of such entities, only those reflected in Annex B are material to the
Company's operations on a consolidated basis (each, a "SIGNIFICANT SUBSIDIARY"
and together, the "SIGNIFICANT SUBSIDIARIES").
(i) Except with regard to CellStar West, Inc., and ACC-CellStar,
Inc., and except as have been waived and except as has been disclosed in the
Offering Circular and any document incorporated by reference therein, there are
no outstanding subscriptions, rights, warrants, calls, commitments of sale or
options to acquire, or
4
instruments convertible into or exchangeable for, any capital stock or other
equity interest of the Company or any of its Subsidiaries.
(j) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Transaction Agreements
and to consummate the transactions contemplated hereby and thereby, including,
without limitation, (i) the issuance, sale and delivery of the Notes hereunder
and (ii) the filing of any registration statement with the Commission pursuant
to the Registration Rights Agreement.
(k) This Agreement and the transactions contemplated hereby have been
duly and validly authorized by the Company. This Agreement has been duly and
validly executed and delivered by the Company and, when accepted by execution
and delivery by the Initial Purchasers, will constitute the legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as such enforcement may be subject to or limited by
bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights and remedies generally, or general equitable principles,
including principles of commercial reasonableness, good faith and fair dealing
(whether considered in a proceeding in equity or at law), and except as the
enforceability of the indemnification provisions thereof may be limited by
considerations of public policy.
(l) The Indenture has been duly and validly authorized by the Company
and, when executed and delivered by the Company and assuming due authorization,
execution and delivery thereof by the Trustee, will have been duly and validly
executed and delivered by the Company and will constitute the legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as such enforcement may be subject to or limited by
bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights and remedies generally, or general equitable principles,
including principles of commercial reasonableness, good faith and fair dealing
(whether considered in a proceeding in equity or at law). The Indenture
conforms in all material respects to the description thereof contained in the
Offering Circular.
(m) The Notes have been duly and validly authorized by the Company
and, when executed by the Company and authenticated by the Trustee and issued,
sold, delivered and paid for in accordance with this Agreement and the
Indenture, will have been duly and validly executed, authenticated, issued and
delivered and will constitute the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms and
entitled to the benefits of the Indenture, except as such
5
enforcement may be subject to or limited by bankruptcy, insolvency,
fraudulent conveyance, fraudulent transfer, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights and remedies
generally, or general equitable principles, including principles of
commercial reasonableness, good faith and fair dealing (whether considered in
a proceeding in equity or at law). The Notes conform in all material respects
to the description thereof contained in the Offering Circular.
(n) The Registration Rights Agreement and the transactions
contemplated therein have been duly and validly authorized by the Company. The
Registration Rights Agreement, when executed and delivered by the Company and
assuming due authorization, execution and delivery thereof by the Initial
Purchasers, will have been duly and validly executed and delivered by the
Company and will constitute the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
such enforcement may be subject to or limited by bankruptcy, insolvency,
fraudulent conveyance, fraudulent transfer, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights and remedies generally,
or general equitable principles, including principles of commercial
reasonableness, good faith and fair dealing (whether considered in a proceeding
in equity or at law), and except as the enforceability of the indemnification
provisions may be limited by federal or state securities laws or considerations
of public policy, and the right of a Holder to receive Liquidated Damages may be
limited to the amount of actual damages suffered by such Holder. The
Registration Rights Agreement conforms in all material respects to the
description thereof contained in the Offering Circular.
(o) None of the Company or its Significant Subsidiaries is or, after
giving effect to the Offering, will be (i) in violation of its charter or bylaws
that would result in a Material Adverse Effect, (ii) in default in the
performance of any agreement or instrument to which it is a party or by which it
is bound or to which any of its properties is subject that would result in a
Material Adverse Effect or (iii) in violation of any local, state, federal or
foreign law, statute (including without limitation the Foreign Corrupt Practices
Act of 1977, as amended), ordinance, rule, regulation, requirement, judgment or
court decree, statutes, ordinances, rules, regulations, judgments or court
decrees) applicable to it or any of its assets or properties (whether owned or
leased) that would result in a Material Adverse Effect. To the knowledge of the
Company, there exists no condition that, with notice, the passage of time or
otherwise, would constitute a default under any such document or instrument that
would result in a Material Adverse Effect.
(p) The execution, delivery, and performance of this Agreement and
the other Transaction Agreements and the consummation of the transactions
contemplated hereby and thereby do not and will not: (i) conflict with or result
in a breach of any of the
6
terms and provisions of, or constitute a default (or an event which with
notice or lapse of time, or both, would constitute a default) under, or
result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of its Significant Subsidiaries
(other than as disclosed in the Offering Circular) pursuant to, any
agreement, instrument, franchise, license or permit to which the Company or
any of its Significant Subsidiaries is a party or by which any of such
corporations or their respective properties or assets is bound, except for
such conflicts, breaches or defaults or liens, charges or encumbrances that
would not have a Material Adverse Effect; (ii) conflict with any provision of
the charter or bylaws of the Company or any of its Significant Subsidiaries
or any judgment, decree, order, statute, rule or regulation of any court or
any public, governmental or regulatory agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their respective
properties or assets, except for such violations or conflicts that would not
have a Material Adverse Effect; or (iii) require any consent, approval,
authorization, order, registration, filing, qualification, license or permit
of or with any court or any public, governmental or regulatory agency or body
having jurisdiction over the Company or any of its subsidiaries or any of
their respective properties or assets, except (in the case of clause (iii)
above) except for the registration of the Notes under the Securities Act and
qualification of the Indenture under the Trust Indenture Act or as disclosed
in the Offering Circular or except for any such consents, approvals,
authorizations, orders, registrations, filings, qualifications, licenses and
permits as have been made or obtained or as may be required under state
securities or Blue Sky laws or the securities laws of any jurisdiction
outside the United States in connection with the purchase and sale of the
Notes by the Initial Purchasers, and except where the failure to obtain or
make any such consents, approvals, authorizations, orders, registrations,
filings, qualifications, licenses and permits would not have a Material
Adverse Effect.
(q) Except as described in the Offering Circular, there is not and,
after giving effect to the Offering, will not be (i) any action, suit,
investigation or proceeding before or by any court, arbitrator or governmental
agency, body or official, domestic or foreign, now pending or, to the best
knowledge of the Company, threatened or contemplated to which the Company or its
subsidiaries is or may be a party or to which the business or property of the
Company is or, after giving effect to the Offering, may be subject, (ii) to the
Company's knowledge, any statute, rule, regulation or order that has been
enacted, adopted or issued by any governmental agency or that has been proposed
by any governmental body, or (iii) any injunction, restraining order or order of
any nature by a federal or state court or foreign court of competent
jurisdiction to which the Company or its Significant Subsidiaries is or may be
subject or to which the business, assets, or property of the Company or its
Significant Subsidiaries is or may be subject that, in the case of clauses (i),
(ii) and (iii) above, (1) is required to be disclosed in the Preliminary
7
Offering Circular and the Offering Circular and that is not so disclosed or (2)
could reasonably be expected to have a Material Adverse Effect.
(r) No action has been taken or order issued and the Company has no
knowledge of any statute, rule or regulation that has been enacted, adopted or
issued by any governmental agency that prevents the issuance of the Notes or
prevents or suspends the use of the Offering Circular; no injunction,
restraining order or order of any nature by a federal or state court of
competent jurisdiction has been issued that prevents the issuance of the Notes
or prevents or suspends the sale of the Notes in any jurisdiction referred to in
Section 4(b) hereof; and every request of any securities authority or agency of
any jurisdiction for additional information has been complied with in all
material respects.
(s) Except as is not reasonably expected to have a Material Adverse
Effect, there is (i) no significant unfair labor practice complaint pending
against the Company or its subsidiaries nor, to the best knowledge of the
Company, threatened against it, before the National Labor Relations Board, any
state or local labor relations board or any foreign labor relations board, and
no significant grievance or significant arbitration proceeding arising out of or
under any collective bargaining agreement is so pending against the Company or
its subsidiaries or, to the knowledge of the Company, threatened against the
Company or its subsidiaries, (ii) no significant strike, labor dispute, slowdown
or stoppage pending against the Company or its subsidiaries nor, to the best
knowledge of the Company, threatened against the Company or its subsidiaries and
(iii) to the knowledge of the Company, no union representation question existing
with respect to the employees of the Company or its subsidiaries. To the
knowledge of the Company, no collective bargaining organizing activities are
taking place with respect to the Company or its subsidiaries. Except as is not
reasonably expected to have a Material Adverse Effect, the Company has not
violated: (i) any federal, state or local law or foreign law relating to
discrimination in hiring, promotion or pay of employees; (ii) any applicable
wage or hour laws; or, (iii) any provision of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or the rules and regulations
thereunder.
(t) None of the Company or its subsidiaries has violated any foreign,
federal, state or local law or regulation relating to the protection of human
health and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("ENVIRONMENTAL LAWS") which might have a Material
Adverse Effect.
(u) There is no alleged liability, or to the knowledge of the
Company, potential liability (including, without limitation, alleged or
potential liability or investigatory costs, cleanup costs, governmental response
costs, natural resource damages, property damages, personal injuries or
penalties) of the Company or its subsidiaries arising
8
out of, based on or resulting from the presence or release into the
environment of any Hazardous Material (as defined below) at any location,
whether or not owned by the Company or its subsidiaries, which alleged or
potential liability is required to be disclosed in the Offering Circular or
could have a Material Adverse Effect. The term "HAZARDOUS MATERIAL" means
(i) any "hazardous substance" as defined by the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, (ii) any
"hazardous waste" as defined by the Resource Conservation and Recovery Act,
as amended, (iii) any petroleum or petroleum product, (iv) any
polychlorinated biphenyl and (v) any pollutant or contaminant or hazardous,
dangerous or toxic chemical, material, waste or substance regulated under or
within the meaning of any other law relating to protection of human health or
the environment or imposing liability or standards of conduct concerning any
such chemical material, waste or substance.
(v) Except as described in the Offering Circular, the Company and its
subsidiaries have good and marketable title to all of the properties and assets
described in the Offering Circular as owned by them, free and clear of all
liens, charges, encumbrances and restrictions, except for such as do not
materially effect the value of such property or materially interfere with the
Company's use of such property. All leases to which any of the Company or its
subsidiaries is a party are valid and binding with respect to the Company and
its subsidiaries and no material default by the Company or its subsidiaries has
occurred and is continuing thereunder and, to the best knowledge of the Company,
no material default by the landlord is existing under any such lease, except as
could not reasonably be expected to have a Material Adverse Effect.
(w) The properties of the Company and its subsidiaries, are insured
in accordance with industry practice and are suitable for their uses.
(x) Except as is not reasonably expected to have a Material Adverse
Effect, the Company or its subsidiaries own, possess, have the right to employ
or can obtain on reasonable terms all material patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, software, systems
or procedures), trademarks, service marks and trade names, computer programs,
technical data and information (collectively, the "INTELLECTUAL PROPERTY")
presently employed by them in connection with the businesses now operated by
them and, except as disclosed in the Offering Circular, the Company and its
subsidiaries have not received any notice of infringement of or conflict with
asserted rights of others with respect to any of the foregoing. The use of the
Intellectual Property in connection with the business and operations of the
Company does not infringe on the rights of any person, except as could not
reasonably be expected to have a Material Adverse Effect.
9
(y) All material tax returns required to be filed by the Company and
its Significant Subsidiaries in all jurisdictions have been so filed. All
taxes, including withholding taxes, penalties and interest, assessments, fees
and other charges due or claimed to be due from the Company or its Significant
Subsidiaries or that are due and payable have been paid, other than those being
contested in good faith and for which adequate reserves have been provided or
those currently payable without penalty or interest or except where the failure
to so pay would not have a Material Adverse Effect. To the knowledge of the
Company, there are no material proposed additional tax assessments against the
Company or its Significant Subsidiaries or the assets or property of the Company
or its Significant Subsidiaries.
(z) As of the date hereof, no event has occurred nor has any
circumstance arisen which, had the Notes been issued on the date hereof, would
constitute a default or Event of Default (as defined in the Indenture).
(aa) Neither the Company nor any of its affiliates has not taken and
will not take, directly or indirectly, any action designed to cause or result
in, or which constitutes or that might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Notes to facilitate the sale
or resale of the Notes in contravention of Regulation M under the Securities Act
and the Exchange Act.
(bb) Other than as disclosed in the Offering Circular, there are no
holders of securities of the Company who, by reason of the execution by the
Company of this Agreement or any other Transaction Agreement or the consummation
by the Company of the transactions contemplated hereby and thereby, have the
right to request or demand that the Company register under the Act or analogous
foreign laws and regulations securities held by them that have not been waived.
(cc) When the Notes are issued and delivered pursuant to this
Agreement, the Notes will not be of the same class (within the meaning of Rule
144A of the Securities Act) as securities of the Company that are listed on a
national securities exchange registered under Section 6 of the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT") or that are quoted in a
United States automated inter-dealer quotation system.
(dd) (i) None of the Company or any of its "affiliates" (as such term
is defined in Rule 501(b) under the Securities Act) or any person acting on
behalf of any such person (excluding the Initial Purchasers and their respective
affiliates, as to whom this representation shall not apply) has engaged in any
directed selling efforts (as such term is defined in Regulation S) in the United
States with respect to the Notes, and (ii) each of the
10
Company, its affiliates and each person acting on behalf of any of them
(other than the Initial Purchasers and their respective affiliates, as to
which no representation made) has complied with the offering restrictions
requirement of Regulation S.
(ee) None of the Company or any of its affiliates or any person acting
on behalf of any of them (excluding the Initial Purchasers and their respective
affiliates, as to whom this representation shall not apply) has sold, offered
for sale, solicited offers to buy or otherwise negotiated in respect of any
security (as such term is defined in the Securities Act) that is or may be
integrated with the sale of the Notes in a manner that would require
registration under the Securities Act.
(ff) The Company is subject to section 13 or 15(d) of the Exchange Act
and is in compliance in all material respects with the provisions of such
section.
(gg) Subject to (i) compliance by the Initial Purchasers with the
procedures set forth in Section 3 hereof, (ii) the accuracy of the
representations and warranties of the Initial Purchasers in Section 3 hereof,
(iii) the accuracy of the representations and warranties made in accordance with
this Agreement and the Offering Circular by purchasers to whom the Initial
Purchasers initially resell Notes, and (iv) receipt by the purchasers to whom
the Initial Purchasers initially resell Notes of a copy of the Offering Circular
prior to such resale, it is not necessary, in connection with the offer, sale
and delivery of the Notes to the Initial Purchasers in the manner contemplated
by this Agreement and the Offering Circular, to register the Notes under the
Securities Act or to qualify the Indenture under the Trust Indenture Act of
1939, as amended.
(hh) The shares of Common Stock issuable upon conversion of the Notes
have been duly authorized and, when issued in accordance with the terms of the
Notes and the Indenture, will be validly issued, fully paid and nonassessable
and will conform in all material respects to the description thereof contained
in the Offering Circular. The shares of Common Stock issuable on conversion of
the Notes at the initial conversion price set forth in the Indenture have been
reserved for issuance and no further approval or authority of the shareholders
or the Board of Directors of the Company will be required for such issuance of
Common Stock.
(ii) The Company is not, and upon consummation of the transactions
contemplated hereby will not be, subject to registration as an "investment
company" under the Investment Company Act of 1940, as amended.
(jj) The execution and delivery of this Agreement and the other
Transaction Agreements will not result in any prohibited transaction within the
meaning of
11
Section 406 of ERISA or Section 4975 of the Internal Revenue Code of 1986, as
amended. No employee benefit plan (as defined in Section 3(3) of ERISA) will
be an obligor with respect to the Notes after taking into account the
applicability, if at all, of Labor Regulation Section 2510.3-101.
(kk) None of the execution, delivery and performance of this
Agreement, the issuance and sale of the Notes, the application of the proceeds
from the issuance and sale of the Notes and the consummation of the transactions
contemplated thereby as set forth in the Offering Circular, will violate
Regulations G, T, U or X promulgated by the Board of Governors of the Federal
Reserve System or analogous foreign laws and regulations.
2. PURCHASE, SALE AND DELIVERY OF THE NOTES.
(a) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to sell to the Initial Purchasers, and the Initial
Purchasers, severally and not jointly, agree to purchase from the Company, the
principal amount of the Firm Notes set forth opposite their respective names in
Schedule I hereto at a purchase price equal to 100% of such principal amount
LESS a discount of 2.825% of such principal amount. Payment of the purchase
price for, and delivery of, the Firm Notes will be made at the offices of Xxxxxx
and Xxxxx, LLP, 0000 XxxxxxxXxxx Xxxxx, 000 Xxxx Xxxxxx, Xxxxxx, Xxxxx
00000-0000, at 8:00 a.m. (Dallas time) on October 14, 1997, unless postponed
in accordance with Section 9 hereof, or at such other place, time and date as
may be mutually agreed in writing between the Representative and the Company
(the time and date of such payment and delivery being herein called the
"CLOSING DATE").
(b) In addition, on the basis of the representations, warranties,
covenants and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company hereby grants to the Initial Purchasers
the option to purchase, severally and not jointly, up to $20,000,000 aggregate
principal amount of Optional Notes, for the sole purpose of covering
over-allotments in the sale of Firm Notes by the Initial Purchasers, at the
same purchase price to be paid by the Initial Purchasers to the Company for
the Firm Notes as set forth in Section 2(a). This option may be exercised,
in whole or in part, at any time and from time to time on or before the 30th
day following the date of the Offering Circular, by written notice to the
Company by the Representative on behalf of the Initial Purchasers. Such
notice shall set forth the aggregate principal amount of Optional Notes to be
purchased pursuant to such exercise of the option and the date and time, as
reasonably determined by the Representative, when the Optional Notes are to
be delivered (each such date and time being herein sometimes referred to as
an "ADDITIONAL CLOSING DATE");
12
PROVIDED that no additional Closing Date shall be earlier than (i) the
Closing Date or (ii) the second full business day after the date on which the
option shall have been exercised, nor later than the eighth full business day
after the date on which the option shall have been exercised (unless such
date and time are postponed in accordance with Section 9 hereof). The
principal amount of the Optional Notes to be purchased by each Initial
Purchaser upon such exercise shall bear the same ratio to the aggregate
principal amount of Optional Notes being purchased upon such exercise as the
principal amount of Firm Notes set forth opposite the name of such Initial
Purchaser in Schedule I hereto (or such number increased as set forth in
Section 9 hereof) bears to the aggregate principal amount of Firm Notes,
subject to such adjustments to eliminate fractional amounts as the
Representative in its sole discretion may make.
(c) At or prior to the Closing Date and the Additional Closing Date
(if any) hereunder, the Company shall execute and deliver for authentication the
Notes to be purchased and sold on such date and shall deposit such Notes with
The Depositary Trust Company ("DTC") for the account or accounts of participants
in DTC (including Euroclear and CEDEL, as the case may be) purchasing beneficial
interests therein. The Initial Purchasers shall pay or cause the purchase price
for such Notes to be paid to or upon the order of the Company by wire transfer
of same day funds against delivery of such Notes to or for the respective
accounts of the Initial Purchasers. Certificates evidencing the Notes shall be
registered in the name of Cede & Co. as nominee for DTC or such other name or
names and in such authorized denominations as the Representative may request in
writing at least two full business days prior to the Closing Date or the
Additional Closing Date, as the case may be. The Company will permit the
Representative to inspect such certificates at the offices of the Representative
at least one full business day prior to the Closing Date and the Additional
Closing Date, if any.
3. SUBSEQUENT OFFERS AND RESALES OF THE NOTES. The Initial
Purchasers and the Company hereby establish and agree to observe the following
procedures in connection with the offer and sale of the Notes:
(a) Each Initial Purchaser will offer the Notes for resale ("EXEMPT
RESALES") only upon the terms and conditions set forth in this Agreement and the
Offering Circular. Except as contemplated by the Registration Rights Agreement,
the Notes have not been and will not be registered under the Securities Act.
Each Initial Purchaser agrees that neither it nor any of its affiliates nor any
person acting on behalf of it or any such affiliate will take, and acknowledges
that the Company has not taken, any action that would constitute a public
offering of the Notes in any jurisdiction and further agrees that, with respect
to the offer or sale of any Notes or the delivery or distribution of any
Offering
13
Circular, it will comply with applicable laws and regulations in such
jurisdictions or to which it is otherwise subject.
(b) Each Initial Purchaser represents and warrants that (i) it is a
QIB or an Institutional Accredited Investor and (ii) that neither it nor any of
its affiliates nor any person acting on behalf of it or any such affiliate has
engaged or will engage in any general solicitation or general advertising, as
such terms are defined in Rule 502(c) under the Securities Act, in connection
with the offer or sale of the Notes.
(c) In connection with sales outside the United States, each Initial
Purchaser agrees that it will not offer, sell or deliver Notes (i) as part of
the distribution thereof at any time or (ii) otherwise until 40 days (subject to
extension as required by Regulation S in the event that Regulation S is amended
and such amendment is deemed applicable to the Notes) (the "RESTRICTED PERIOD")
after completion of the distribution, as determined by the Representative, to or
for the account or benefit of U.S. Persons (as defined in Regulation S). Each
Initial Purchaser confirms that neither it nor any of its affiliates nor any
person acting on behalf of it or any such affiliate has engaged, and agrees that
neither it nor any of its affiliates will engage, in any "directed selling
efforts" (as such term is defined in Regulation S) with respect to the Notes or
the underlying Common Stock and that it, its affiliates and each such other
person has complied and will comply with the offering restrictions required by
Regulation S with respect to the Notes and the underlying Common Stock.
(d) Each of the Initial Purchasers acknowledges and agrees that it
has not and will not offer, sell or deliver the Notes in the United States or to
or for the account of any U.S. Person other than (i) distributors (as defined in
Regulation S), (ii) institutional buyers that are reasonably believed to be QIBs
and (iii) purchasers that are reasonably believed by the Initial Purchasers to
be Institutional Accredited Investors and that have executed and delivered to
the Representative a letter in the form of Annex A to the Offering Circular.
(e) Each Initial Purchaser agrees that, at or prior to confirmation
of a sale of Notes (other than a sale pursuant to Rule 144A), it will send to
each distributor, dealer or person receiving a selling concession, fee or other
remuneration that purchases Notes from the Initial Purchasers during the
Restricted Period a confirmation or notice to substantially the following
effect:
"The Notes covered hereby have not been registered
under the United States Securities Act of 1933, as amended
(the "Securities Act") and may not be offered or sold within
14
the United States or to, or for the account or benefit of,
"U.S. persons" (as defined in Regulation S under the
Securities Act ("Regulation S")) (i) as part of their
distribution at any time or (ii) otherwise until 40 days
(subject to extension as required by Regulation S in the
event that Regulation S is amended and such amendment is
deemed applicable to the Notes) after the later of [the
commencement of the offering of the Notes] and the [closing
date], except in either case, for sales made (i) in
accordance with Regulation S; (ii) to institutional buyers
that are reasonably believed to be "qualified institutional
buyers," as defined in, and in accordance with, Rule 144A
under the Securities Act; or (iii) to purchasers that are
reasonably believed to be institutional "accredited
investors" as defined in Rule 501(a)(1), (2), (3) and (7) of
Regulation D under the Securities Act."
(f) Each Initial Purchaser represents, warrants and agrees that (i)
it has not offered or sold and will not offer or sell Notes in the United
Kingdom, other than to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (whether as principal
or agent) for the purposes of their businesses or otherwise in circumstances
that will not result in an offer to the public within the meaning of the Public
Offers of Securities Regulations 1995, (ii) it has complied and will comply with
all applicable provisions of the Public Offers of Securities Regulations 1995
and the Financial Services Act of 1986 with respect to anything done by it in
relation to the Notes in, from or otherwise involving the United Kingdom, and
(iii) it has only issued or passed on, and will only issue or pass on, to any
person in the United Kingdom any documents received by it in connection with the
issue of the Notes if the person is of a kind described in Article 11(c) of the
Financial Services Act of 1986 (Investment Advertisements) (Exemptions) Order
1988 or is a person to whom the documents may lawfully be issued or passed on.
Each Initial Purchaser further agrees that it will not offer or sell any Notes
directly or indirectly in Japan or to any resident of Japan except (i) pursuant
to an exemption from the registration requirements of the Securities and
Exchange Law of Japan and (ii) in compliance with any applicable requirements of
Japanese law. Each Initial Purchaser further agrees that it will not offer or
sell any Notes directly or indirectly in any province of Canada except in
compliance with all requirements of applicable securities laws and that it will
not offer or sell any Notes in the Republic of France.
4. COVENANTS OF THE COMPANY. The Company covenants and agrees with
the Initial Purchasers that:
15
(a) If at any time prior to the Closing Date or the Additional
Closing Date, if any, any event shall have occurred as a result of which the
Offering Circular as then amended or supplemented would in the reasonable
judgment of the Initial Purchasers or the Company include an untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, the Company will notify the
Representative promptly and prepare and deliver to the Representative on behalf
of the Initial Purchasers an amendment or supplement (in form and substance
satisfactory to the Initial Purchasers) which will correct such statement or
omission.
(b) To cooperate with the Initial Purchasers and their counsel for
the Initial Purchaser in connection with the qualification or registration of
the Notes under the securities or Blue Sky laws of such jurisdictions as the
Initial Purchasers may reasonably request and to continue such qualification in
effect so long as required for the Exempt Resales; provided, however, that the
Company shall not be required in connection therewith to register or qualify as
a foreign corporation in any jurisdiction where it is not now so qualified or to
take any action that would subject it to general service of process or taxation,
or to take action, in each case, in any jurisdiction where it is not now so
subject.
(c) The Company will promptly deliver to the Initial Purchasers such
number of copies of the Offering Circular and all amendments thereof and
supplements thereto as the Representative reasonably may request.
(d) The Company will apply the net proceeds from the sale of the
Notes substantially as set forth under "Use of Proceeds" in the Offering
Circular.
(e) The Company will cooperate with the Initial Purchasers in
arranging for the Notes to be designated Private Offerings, Resales and Trading
through Automated Linkage ("PORTAL") Market securities in accordance with the
rules and regulations of the National Association of Securities Dealers, Inc.,
relating to trading in the PORTAL Market.
(f) For a period of 90 days from the date of this Agreement, the
Company will not offer to sell, issue, sell, contract to sell, grant any option
for the sale of, or otherwise dispose of, directly or indirectly, any shares of
Common Stock or any securities convertible into or exchangeable or exercisable
for Common Stock (other than the Notes and other than pursuant to the exercise
of outstanding options and warrants, grants of options in the ordinary course of
business, and issuances in connection with acquisitions) or any rights to
acquire Common Stock, without the prior written consent of the Representative.
In addition, the Company will obtain and deliver to the Representative
16
a letter from each of its directors and executive officers confirming the
agreement of such person not to engage in any of the aforementioned
transactions on his or her own behalf during such 90-day period; PROVIDED,
HOWEVER, that the foregoing restrictions shall not apply with respect to
approximately 38,500 shares of Common Stock issuable upon the exercise of
employee stock options held by Xxxxxxx Xxxxx, Xxxxxxx Xxxxx and A.S. Horng.
(g) So long as any of the Notes are "restricted securities" within
the meaning of Rule 144(a)(3) under the Securities Act, the Company will provide
to any holder of the Notes or to any prospective purchaser of the Notes
designated by any holder, upon request of such holder or prospective purchaser,
information required to be provided by Rule 144A(d)(4) of the Securities Act if
at the time of such request, the Company is not subject to the reporting
requirements under Section 13 or 15(d) of the Exchange Act.
(h) Except following the effectiveness of the Registration Statement,
None of the Company, its subsidiaries, its affiliates or any person acting on
behalf of any of them (other than the Initial Purchasers and their respective
affiliates, as to whom this undertaking by the Company shall not be deemed to
apply) will solicit any offer to buy or offer or sell the Notes by means of any
form of general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a public
offering within the meaning of the Securities Act.
(i) None of the Company, its subsidiaries, its affiliates or any
person acting on behalf of any of them (other than the Initial Purchasers and
their respective affiliates, as to whom this undertaking by the Company shall
not be deemed to apply) will offer to sell, sell or solicit offers to buy or
otherwise negotiate in respect of the sale of any security (as defined in the
Securities Act) that would be integrated with the sale of the Notes so as to
require the registration of the Notes under the Securities Act.
(j) During the period of two years from and after the Closing Date,
none of the Company, its subsidiaries or its or their affiliates will resell any
Notes that may have been purchased or otherwise acquired by them, except in a
transaction registered or exempt from registration under the Securities Act.
(k) None of the Company, its subsidiaries, its affiliates or any
person acting on behalf of any of them (other than the Initial Purchasers and
their respective affiliates, as to whom this undertaking shall not be deemed to
apply) will engage in any directed selling efforts (as that term is defined in
Regulation S) with respect to the Notes offered and sold pursuant to Regulation
S, and the Company, its subsidiaries, its affiliates and each person acting on
behalf of any of them (other than the Initial Purchasers and their
17
respective affiliates, as to whom this undertaking by the Company shall not
be deemed to apply) will comply with the offering restrictions of Regulation
S with respect to those Notes offered and sold pursuant thereto.
(l) The Company will cooperate with the Initial Purchasers in
arranging for the Notes to be accepted for clearance and settlement through
Euroclear, CEDEL and DTC.
(m) Each of the Notes will bear, to the extent applicable, the legend
contained under the heading "Transfer Restrictions" in the Offering Circular for
the time period and upon the other terms stated therein, except after the Notes
are resold in a transaction registered under the Securities Act.
(n) Following the Closing, the Company will use its reasonable
commercial efforts to obtain a rating of the Notes by such rating agencies as
identified by the Representative and will provide to such organization such
information as such rating agencies reasonably shall require in order to issue a
rating of the Notes.
(o) The Company will not voluntarily claim, and will actively resist
any attempts to claim, the benefit of any usury laws against the holders of any
Notes.
(p) The Company will not take, directly or indirectly, any action
designed to, or that might reasonably be expected to, cause or result in
stabilization or manipulation of the price of any security of the Company or to
facilitate the sale or resale of the Notes in contravention of Regulation M
under the Securities Act and the Exchange Act. Except as permitted by the
Securities Act, the Company shall not distribute (i) any preliminary offering
circular, including, without limitation, the Preliminary Offering Circular, (ii)
offering memorandum, including, without limitation, the Offering Circular or
(iii) other offering material in connection with the offering and sale of the
Notes.
(q) Prior to the Closing Date, the Company will furnish to the Initial
Purchasers copies of any unaudited interim financial statements for any period
subsequent to the periods covered by the financial statements appearing in the
Offering Circular, as soon as such financial statements have been prepared in
the ordinary course by the Company.
(r) Subject to receiving official notice of the effectiveness of the
first Registration Statement, the Company will cause such Common Stock
underlying the Notes to be approved for listing on the Nasdaq Stock Market or on
such securities exchange on which the Common Stock is then listed.
18
(s) Prior to the Closing Date, the Company will file with the
Commission a current report on Form 10-Q as required under the Exchange Act
with respect to its fiscal quarter ended August 31, 1997 (the "Third Quarter
From 10-Q"), in substantially the same form as provided to the Initial
Purchasers prior to the execution of this Agreement.
5. PAYMENT OF EXPENSES. Whether or not the transactions
contemplated in this Agreement are consummated or this Agreement is
terminated, the Company agrees to pay all costs, expenses fees and taxes
incident to the performance of its obligations hereunder, including those in
connection with; (i) preparing, printing, duplicating, filing and
distributing the Preliminary Offering Circular and the Offering Circular and
any amendments or supplements thereto (including, without limitation, fees
and expenses of the Company's accountants and counsel), and all other
documents related to the offering of the Notes (including those supplied to
the Initial Purchasers in quantities provided for herein), in each case
excluding any fees of counsel to the Initial Purchasers; (ii) the issuance,
transfer and delivery by the Company of the Notes to the Initial Purchasers,
including any transfer or other taxes payable thereon; (iii) the cost of
printing the Notes; (iv) all expenses and listing fees in connection with the
application for quotation of the Notes in the PORTAL Market; (v) all fees and
expenses (including fees and expenses of counsel) of the Company in
connection with the approval of the Notes by DTC for "book-entry" transfer;
(vi) all fees and expenses in connection with the rating of the Notes by
rating agencies; (vii) the cost and charges of any transfer agent, registrar,
Trustee (or successor trustee) or fiscal paying agent and conversion agent;
(viii) the costs and charges of DTC, Euroclear and CEDEL; and, (ix)
"roadshow" travel and other expenses incurred by the Company in connection
with the marketing and sale of the Notes.
6. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The obligation
of the Initial Purchasers to purchase and pay for the Firm Notes and the
Optional Notes, as provided herein, shall be subject to the satisfaction of
the following conditions:
(a) All of the representations and warranties of the Company
contained in this Agreement, as of the date hereof and as of the Closing Date
(for purposes of this Section 6 "Closing Date" shall refer to the Closing
Date and the Additional Closing Date, if any) shall be true and correct with
the same force and effect as if made on and as of the date hereof and the
Closing Date, respectively. All certificates, opinions, written statements
or letters furnished to the Initial Purchasers pursuant to this Section 6
shall be free of any material misstatement or omission. The Company shall
have performed or complied with all of the agreements herein contained and
required to be performed or complied with by it at or prior to the Closing
Date.
19
(b) At the Closing Date, the Initial Purchasers shall have received
the opinion of Xxxxxx and Xxxxx, LLP, counsel for the Company, dated the
Closing Date, addressed to the Initial Purchasers and in form and scope
reasonably satisfactory to Weil, Gotshal & Xxxxxx LLP ("COUNSEL FOR THE
INITIAL PURCHASERS"), to the effect that:
(i) The Company and each Significant Subsidiary, other than
(a) NAC Holdings, Inc., as to which such counsel expresses no opinion and
(b) CellStar, Ltd., a Texas limited partnership (the "Partnership"), has
been duly incorporated and is validly existing and in good standing as a
corporation under the laws of the jurisdiction of its incorporation and has
full corporate power and authority to own, lease and operate its properties
and conduct its business as described in the Offering Circular.
(ii) The Partnership has been duly organized and is validly
existing under the laws of the State of Texas. The Partnership has full
partnership power and authority to own, lease and operate its properties
and conduct its business as described in the Offering Circular.
(iii) The authorized capital stock of the Company conforms as
to legal matters in all material respects to the description thereof
contained in the Offering Circular under the heading "Description of
Capital Stock." The outstanding shares of the Company's Common Stock have
been duly authorized and validly issued and are fully paid and
nonassessable. The shares of Common Stock initially issuable upon
conversion of the Notes have been duly authorized and reserved for issuance
upon such conversion and, when issued and delivered upon such conversion in
accordance with the provisions of the Indenture (assuming payment for and
delivery of the Notes in accordance with this Agreement), will be validly
issued, fully paid and nonassessable and no further approval or authority
of the shareholders or the Board of Directors of the Company will be
required for such issuance.
(iv) Except as disclosed in the Offering Circular and any
document incorporated by reference therein, and except for stock options
outstanding under the Company's existing stock option plans, to the
knowledge of such counsel there are no outstanding options, warrants or
other rights calling for the issuance of, and no commitments or obligations
on the part of the Company to issue, any shares of capital stock of the
Company or any security convertible into or exchangeable for capital stock
of the Company.
20
(v) Except for those rights which have been waived in
connection with the transactions contemplated by this Agreement, there are
no preemptive rights to subscribe for or purchase shares of the Company's
Common Stock provided in the Company's charter or bylaws or, to the
knowledge of such counsel, in any agreement to which the Company is a
party.
(vi) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement and each of the other Transaction Agreements to which it is a
party and to consummate the transactions contemplated thereby, including,
without limitation, the corporate power and authority to issue, sell and
deliver the Notes as provided herein.
(vii) This Agreement has been duly authorized, executed and
delivered by the Company.
(viii) The Indenture has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution and
delivery thereof by the Trustee, constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, fraudulent transfer, reorganization, moratorium and similar
laws affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding in equity or at law).
(ix) The Notes have been duly authorized, executed and
issued by the Company and, assuming due authentication thereof by the
Trustee, upon payment therefor and delivery thereof in accordance with this
Agreement and the Indenture, will constitute the legal, valid and binding
obligations of the Company enforceable against the Company in accordance
with their terms and will be entitled to the benefits of the Indenture,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
fraudulent transfer, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding in equity or at law).
(x) The Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and, assuming due
authorization, execution and delivery thereof by the Initial Purchasers,
constitutes the legal, valid
21
and binding obligation of the Company enforceable against the Company in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, fraudulent transfer, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally, and
subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding in equity or
at law) and except as the enforceability of rights to indemnification
thereunder may be limited by federal or state securities laws or public
policy relating thereto and the right of a Holder to receive Liquidated
Damages may be limited to the amount of actual damages suffered by such
Xxxxxx.
(xi) The Notes, the Indenture and the Registration Rights
Agreement conform as to legal matters in all material respects to the
descriptions thereof contained in the Offering Circular.
(xii) The issue and sale of the Notes by the Company and the
compliance by the Company with all of the provisions of this Agreement and
the Registration Rights Agreement will not conflict with, violate the terms
of or result in a default under any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument filed or incorporated by
reference as an exhibit to the Company's Annual Report on Form 10-K for the
year ended November 30, 1996 (the "1996 FORM 10-K"), or its Quarterly
Reports on Form 10-Q for the quarters ended February 28, 1997, May 31, 1997
and August 31, 1997 or any material agreement entered into by the Company
subsequent to August 31, 1997 of which such counsel has knowledge, except
for conflicts, violations or defaults which have been waived, nor will such
action violate the charter or bylaws of the Company or any federal or,
solely with respect to the General Corporation Law of the State of
Delaware, Delaware statute, rule or regulation applicable to the Company or
violate any order known to such counsel issued by any governmental agency
or body or court having jurisdiction over the Company or any of its
subsidiaries or any of its or their respective properties.
(xiii) Except as have been obtained or made, no consent,
approval, authorization, order, registration or qualification of or with
any federal or, solely with respect to the General Corporation Law of the
State of Delaware, Delaware governmental agency or body is required for the
issue and sale of the Notes and the underlying Common Stock by the Company
and compliance by the Company with the provisions of this Agreement and the
Registration Rights Agreement, except for the registration of the Notes
under the Securities Act (as to which no opinion is expressed in this
paragraph) and qualification of the Indenture under the Trust
22
Indenture Act (as to which no opinion is expressed in this paragraph), and
such consents, approvals, authorizations, registrations or qualifications
as may be required under state securities or Blue Sky laws or the
securities laws of any jurisdiction outside the United States in connection
with the purchase and resale of the Notes by the Initial Purchasers (as to
which no opinion is expressed).
(xiv) The statements made in the Offering Circular under the
heading "Certain Tax Considerations," insofar as they purport to constitute
summaries of matters of United States federal tax law and regulations or
legal conclusions with respect thereto, constitute accurate summaries of
the matters described therein in all material respects.
(xv) No registration under the Securities Act of the Notes
or the shares of Common Stock issuable upon conversion of the Notes in
accordance with the Indenture, and no qualification of the Indenture under
the Trust Indenture Act of 1939, as amended, is required for the offer and
sale of the Notes by the Company to the Initial Purchasers or the initial
reoffer and resale of the Notes by the Initial Purchasers solely in the
manner contemplated by the Offering Circular and this Agreement.
(xvi) Except as disclosed in the Offering Circular, to the
knowledge of such counsel, no holders of securities of the Company have
rights to require the registration of such securities because of the filing
by the Company of the Shelf Registration Statement (as such term is defined
in the Offering Circular) except such as have been validly waived.
(xvii) When the Notes are issued and delivered pursuant to
this Agreement, no Notes will be of the same class (within the meaning of
Rule 144A under the Act) as securities of the Company that are listed on a
national securities exchange registered under Section 6 of the Exchange Act
or that are quoted in a United States automated inter-dealer quotation
system.
(xviii) Assuming the proceeds from the Offering are applied as
described in the Offering Circular, none of the execution, delivery and
performance of this Agreement, the issuance and sale of the Notes, the
application of the proceeds from the issuance and sale of the Notes and the
consummation of the transactions contemplated thereby as set forth in the
Offering Circular, will violate Regulations G, T, U or X promulgated by the
Board of Governors of the Federal Reserve System.
23
In addition, such counsel shall state that such counsel has participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company,
representatives of the Initial Purchasers and Counsel for the Initial
Purchasers at which the contents of the Offering Circular and related matters
were discussed and, although such counsel did not independently verify such
information and is not passing upon and does not assume any responsibility
for the accuracy, completeness or fairness of the statements contained in the
Offering Circular, on the basis of the foregoing (relying as to the factual
matters upon the statements of officers and other representatives of the
Company and public officials) no facts have come to such counsel's attention
that caused such counsel to believe that the Offering Circular (other than
the financial statements and notes thereto and other financial and accounting
data included or incorporated by reference therein, or omitted therefrom, as
to which such counsel need express no belief) at the date of the Offering
Circular and as of the Closing Date contained or contains an untrue statement
of a material fact or omitted or omits to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely (x) as to matters
involving the application of laws other than the laws of the United States
and jurisdictions in which such counsel are admitted, to the extent such
counsel may deem proper and to the extent specified in such opinion, if at
all, upon an opinion or opinions (in form and substance reasonably
satisfactory to Counsel for the Initial Purchasers) of other counsel,
reasonably acceptable to Counsel for the Initial Purchasers, familiar with
the applicable laws (it being understood, however, that with respect to the
validity, binding effect and enforceability of the Indenture, the Notes and
the Registration Rights Agreement, counsel may opine as if such instruments
were governed by the laws of the State of Texas) and (y) as to matters of
fact, to the extent they deem proper, on the representations and warranties
of the Company and the Initial Purchasers contained herein, on certificates
of responsible officers of the Company and certificates or other written
statements of officers of departments of various jurisdictions having custody
of documents respecting the corporate existence or good standing of the
Company and its subsidiaries.
(c) All proceedings taken in connection with the sale of the Notes
as herein contemplated shall be reasonably satisfactory in form and substance
to the Initial Purchasers and to Counsel for the Initial Purchasers, and the
Initial Purchasers shall have received from said Counsel for the Initial
Purchasers a favorable opinion, dated as of the Closing Date with respect to
the issuance and sale of the Notes, the Offering Circular and such other
related matters as the Initial Purchasers may reasonably require, and the
Company shall have furnished to Counsel for the Initial Purchasers such
documents as they reasonably may request for the purpose of enabling them to
pass upon such matters.
24
(d) At the Closing Date, the Initial Purchasers shall have received
a certificate of the Chief Executive Officer and Chief Financial Officer of
the Company, dated the Closing Date, to the effect that (i) as of the date
hereof and as of the Closing Date, the representations and warranties of the
Company set forth in Section 1 hereof are accurate in all material respects,
(ii) as of the Closing Date, the obligations of the Company to be performed
hereunder on or prior thereto have been duly performed in all material
respects and (iii) subsequent to the respective dates as of which information
is given in the Offering Circular, the Company and its subsidiaries have not
sustained any material loss or interference with their respective businesses
or properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any labor dispute or any legal
or governmental proceeding, and there has not been any material adverse
change, or any development involving a material adverse change in the
business, properties, operations, condition (financial or otherwise), or
results of operations of the Company and its subsidiaries taken as a whole,
except in each case as disclosed in the Offering Circular.
(e) At the time this Agreement is executed and at the Closing Date,
the Initial Purchasers shall have received a letter from KPMG Peat Marwick
LLP, independent accountants for the Company, dated, respectively, as of the
date of this Agreement and as of the Closing Date and addressed to the
Initial Purchasers, in form, scope and substance as shall have been
previously agreed to by the Representative.
(f) Prior to the Closing Date, the Company shall have furnished to
the Initial Purchasers such further information, certificates and documents
as the Initial Purchasers may reasonably request.
(g) The Company shall have entered into the Indenture and the
Registration Rights Agreement and the Initial Purchasers shall have received
counterparts, conformed and executed, thereof.
(h) The Initial Purchasers shall have received from each person who
is a director or executive officer (as defined in the proxy rules of the
Securities and Exchange Commission) of the Company an agreement to the effect
that during the period of 90 days from the date of the Offering Circular,
such person will not, directly or indirectly, without the prior written
consent of the Representative, offer to sell, sell, contract to sell, grant
any option or rights to acquire or purchase any option to sell, or otherwise
dispose of, any shares of Common Stock; PROVIDED, HOWEVER, that the foregoing
restrictions shall not apply with respect to approximately 38,500 shares of
Common Stock upon the exercise of certain employee stock options held by
Xxxxxxx Xxxxx, Xxxxxxx Xxxxx and A.S. Horng.
25
(i) At the Closing Date, the Notes shall have been approved for
quotation in the PORTAL Market.
(j) Prior to the Closing Date, the Company shall have filed the
Third Quarter Form 10-Q in substantially the same form as provided to the
Initial Purchasers prior to the execution of this Agreement.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as required by this
Agreement, or if any of the certificates, opinions, written statements or
letters furnished to the Initial Purchasers or to Counsel for the Initial
Purchasers pursuant to this Section 6 shall not be in all material respects
reasonably satisfactory in form and scope to the Representative and to
Counsel for the Initial Purchasers, all obligations of the Initial Purchasers
hereunder may be canceled by the Representative at, or at any time prior to,
the Closing Date and the obligations of the Initial Purchasers to purchase
the Optional Notes may be canceled by the Representative at, or at any time
prior to, the Additional Closing Date. Notice of such cancellation shall be
given to the Company in writing, or by telephone, telex or telegraph,
confirmed in writing.
7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each Initial
Purchaser and each person, if any, who controls any Initial Purchaser within
the meaning of Section 15 of the Securities Act or Section 20(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), against any
and all losses, liabilities, claims, damages and expenses whatsoever as
incurred (including but not limited to reasonable attorneys' fees and
expenses whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation) (collectively,
"LOSSES"), joint or several, to which they or any of them may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such
Losses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in
the Offering Circular or any related Preliminary Offering Circular or any
amendment or supplement thereto or arise out of or are based upon the
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 under which they were made, not misleading; PROVIDED, HOWEVER,
that the Company will not be liable in any such case to the extent but only
to the extent that any such Losses arise out of or are based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by
26
or on behalf of any Initial Purchaser through the Representative expressly
for use therein, and PROVIDED FURTHER, that the foregoing indemnity with
respect to any untrue statement contained in or omission from a Preliminary
Offering Circular or the Offering Circular shall not inure to the benefit of
any Initial Purchaser (or any person controlling such Initial Purchaser) from
whom the person asserting any such loss, liability, claim, damage or expense
purchased any of the Notes if a copy of the Offering Circular (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Initial
Purchaser to such person at or prior to the written confirmation of the sale
of such Notes to such person, and if the Offering Circular (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage or liability. This indemnity agreement will be in addition to any
liability which the Company may otherwise have including under this Agreement.
(b) Each Initial Purchaser severally, and not jointly, agrees to
indemnify and hold harmless the Company, each of the directors of the
Company, each of the officers of the Company, and each other person, if any,
who controls the Company within the meaning of Section 15 of the Securities
Act or Section 20(a) of the Exchange Act, against any Losses whatsoever as
incurred (including but not limited to reasonable attorneys' fees and any and
all expenses whatsoever incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever, and
any and all amounts paid in settlement of any claim or litigation), jointly
or severally, to which they or any of them may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such Losses (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Offering Circular, or any related Preliminary Offering Circular, or in any
amendment thereof or supplement thereto, or arise out of or are based upon
the 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 under which they were made, not misleading, in each case to
the extent, but only to the extent, that any such Losses arise out of or are
based upon any such untrue statement or alleged untrue statement or omission
or alleged omission made therein in reliance upon and in conformity with
written information furnished to the Company by or on behalf of any Initial
Purchaser through the Representative expressly for use therein; PROVIDED,
HOWEVER, that in no case shall any Initial Purchaser be liable or responsible
for any amount in excess of the discount applicable to the Notes purchased by
such Initial Purchaser hereunder. This indemnity will be in addition to any
liability which any Initial Purchaser may otherwise have including under this
Agreement. The Company shall only be permitted to seek indemnity pursuant to
this Section 7(b) or contribution pursuant to Section 8 from the Initial
Purchasers for the statements set forth in the last paragraph of the cover
page prior to the paragraph entitled "Special Cautionary Notice Regarding
Forward Looking Statements" and in the eleventh,
27
twelfth and fourteenth paragraphs under the caption "Plan of Distribution" in
the Offering Circular.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but
the failure so to notify an indemnifying party shall not relieve it from any
liability which it may have otherwise than under this Section 7 unless and to
the extent that it has been prejudiced by such failure or from the forfeiture
of rights and defenses). In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein, and
to the extent it may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such indemnified
party, to assume the defense thereof with counsel reasonably satisfactory to
such indemnified party. Notwithstanding the foregoing, the indemnified party
or parties shall have the right to employ its or their own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense
of such indemnified party or parties unless (i) the employment of such
counsel shall have been authorized in writing by one of the indemnifying
parties in connection with the defense of such action, (ii) the indemnifying
parties shall not have employed counsel to have charge of the defense of such
action within a reasonable time after notice of commencement of the action,
or (iii) such indemnified party or parties shall have reasonably concluded
that there may be defenses available to it or them which are different from
or additional to those available to one or all of the indemnifying parties
(in which case the indemnifying parties shall not have the right to direct
the defense of such action on behalf of the indemnified party or parties), in
any of which events such fees and expenses shall be borne by the indemnifying
parties. In no event shall the indemnifying party be liable for the fees and
expenses of more than one counsel in connection with any one such action or
separate but similar related actions in the same jurisdiction arising out of
the same general allegations or circumstances. Anything in this subsection
to the contrary notwithstanding, an indemnifying party shall not be liable
for any settlement of any claim or action effected without its written
consent; PROVIDED, HOWEVER, that such consent was not unreasonably withheld
or delayed, and the indemnifying party agrees to indemnify and hold harmless
any indemnified party from and against any Loss by reason of any settlement
of any action effected with the indemnifying party's written consent. The
indemnifying party shall not, without the prior written consent of each
indemnified party, settle or compromise or consent to the entry of a judgment
in or otherwise seek to terminate any pending or threatened litigation or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not any indemnified party is a party thereto), unless
such settlement, compromise, consent or
28
termination includes an unconditional release of each indemnified party from
all liability arising out of such action, claim, litigation or proceeding.
8. CONTRIBUTION. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 7 hereof
is for any reason held to be unavailable from any indemnifying party, or to
any indemnified party, or is insufficient to hold harmless a party
indemnified thereunder, the Company and the Initial Purchasers shall
contribute to the aggregate losses, claims, damages, liabilities and expenses
contemplated by such indemnification provision (including any investigation,
legal and other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted, but
after deducting in the case of losses, claims, damages, liabilities and
expenses suffered by the Company any contribution received by the Company
from persons, other than the Initial Purchasers, who may also be liable for
contribution, including persons who control the Company within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Exchange Act,
officers and directors of the Company) as incurred to which the Company and
one or more of the Initial Purchasers may be subject, in such proportions as
is appropriate to reflect the relative benefits received by the Company and
the Initial Purchasers from the offering of the Notes or, if such allocation
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to above but also the
relative fault of the Company and the Initial Purchasers in connection with
the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Initial Purchasers shall be deemed to be in the same proportion as (x) the
total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company and (y)
the underwriting discounts and commissions received by the Initial Purchasers
respectively. The relative fault of the Company and of the Initial
Purchasers 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 Initial Purchasers and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Initial Purchasers agree that it
would not be just and equitable if contribution pursuant to this Section 8
were determined by pro rata allocation (even if the Initial Purchasers were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to
above. Notwithstanding the provisions of this Section 8, (i) in no case
shall any Initial Purchaser be liable or responsible for any amount in excess
of the discount applicable to the Notes purchased by such Initial Purchaser
hereunder, (ii) 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
29
fraudulent misrepresentation and (iii) no Initial Purchaser shall be required
to contribute any amount in excess of the amount by which the total price at
which the Note purchased by it and sold in the Offering were offered to
subsequent purchasers exceeds the amount of any damages that such Initial
Purchaser has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. For purposes of
this Section 8, each person, if any, who controls an Initial Purchaser within
the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act shall have the same rights to contribution as such Initial
Purchaser, and each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act, each officer and each director of the Company shall have the same rights
to contribution as the Company, subject in each case to clauses (i) and (ii)
of this Section 8. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against
such party in respect of which a claim for contribution may be made against
another party or parties, notify each party or parties from whom contribution
may be sought, but the omission to so notify such party or parties shall not
relieve the party or parties from whom contribution may be sought from any
obligation it or they may have under this Section 8 or otherwise. No party
shall be liable for contribution with respect to any action or claim settled
without its consent; PROVIDED, HOWEVER, that such consent was not
unreasonably withheld.
9. DEFAULT BY AN INITIAL PURCHASER. If any of the Initial
Purchasers shall fail at the Closing Date or Additional Closing Date to
purchase the Notes which it is obligated to purchase under this Agreement
(the "DEFAULTED NOTES"), the non-defaulting Initial Purchaser shall have the
right, within 24 hours thereafter, to make arrangements for it to purchase
all, but not less than all, of the Defaulted Notes upon the terms herein set
forth; PROVIDED, HOWEVER, that if the non-defaulting Initial Purchaser shall
not have completed such arrangements within such 24-hour period, then, upon
the expiration of such 24-hour period, this Agreement shall terminate without
liability on the part of the non-defaulting Initial Purchaser.
No action taken pursuant to this Section shall relieve the
defaulting Initial Purchaser from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the non-defaulting Initial Purchaser or
the Company shall have the right to postpone the Closing Date for a period
not exceeding seven days in order to effect any required changes in the
Offering Circular or in any other documents or arrangements.
10. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All
representations and warranties, covenants and agreements of the Initial
Purchasers and the Company
30
contained in this Agreement, including the agreements contained in Section 5,
the indemnity agreements contained in Section 7 and the contribution
agreements contained in Section 8, shall remain operative and in full force
and effect regardless of any investigation made by or on behalf of any
Initial Purchasers or any agent, representative or controlling person thereof
or by or on behalf of the Company, any of its officers and directors or any
controlling person thereof, and shall survive delivery of and payment for the
Notes to and by the Initial Purchasers. The agreements contained in Sections
5, 7, 8 and 11(c) hereof shall survive the termination of this Agreement,
including termination pursuant to Section 9 or 11 hereof.
11. TERMINATION.
(a) The Representative shall have the right to terminate this
Agreement at any time prior to the Closing Date or the obligations of the
Initial Purchasers to purchase the Optional Notes at any time prior to the
Additional Closing Date, as the case may be, if (i) any domestic or
international event, act or occurrence shall have materially disrupted, or in
the Representative's reasonable opinion will in the immediate future
materially disrupt, the United States or international securities markets; or
(ii) trading on the New York Stock Exchange shall have been suspended, or
materially limited; or (iii) a banking moratorium shall have been declared by
any United States federal or New York or Texas state authority or if any new
restriction materially adversely affecting the distribution of the Firm Notes
or the Optional Notes, as the case may be, shall have become effective; or
(iv) any "nationally recognized statistical rating organization" (as defined
for purposes of Rule 436(g) under the Securities Act) shall have announced
that it is (A) downgrading its rating assigned to any class of the Company's
debt securities or (B) reviewing any such rating with a view to possible
downgrading or with negative implications; or (v) there shall have occurred
any outbreak or escalation of hostilities involving the United States, or a
declaration of war or national emergency by the United States, or any change
in political, financial or economic conditions the effect of which is such,
in the judgment of the Representative, to make it impracticable or
inadvisable to proceed with the offering, sale and delivery of the Firm Notes
or the Optional Notes, as the case may be, on the terms contemplated by the
Offering Circular.
(b) Any notice of termination pursuant to this Section 11 shall be
by telephone, telex, or telegraph, confirmed in writing by letter.
(c) If this Agreement shall be terminated pursuant to any of the
provisions hereof (other than pursuant to Section 9 or 11(a) hereof), or if
the sale of the Notes provided for herein is not consummated because any
condition to the obligations of the Initial Purchasers set forth herein is
not satisfied or because of any refusal, inability or
31
failure on the part of the Company to perform any agreement herein or comply
with any provision hereof, the Company will, upon demand by the
Representative, reimburse the Initial Purchasers for all reasonable
out-of-pocket expenses (including the reasonable fees and expenses of Counsel
for the Initial Purchasers), incurred by the Initial Purchasers solely and
directly in connection with the transactions contemplated by this Agreement,
and thereafter the Company shall have no further liability to the Initial
Purchaser.
12. NOTICE. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing and shall be
mailed, delivered, or telexed or telegraphed and confirmed in writing, (i) if
to any of the Initial Purchasers, to such Initial Purchaser in care of Bear,
Xxxxxxx & Co. Inc., 000 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000,
Attention: Xxxxxxx Xxxxx, Senior Managing Director or (ii) if to the
Company, to the Company at 0000 Xxxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxx 00000,
Attention: Chief Financial Officer and General Counsel, with a copy to
Xxxxxx and Xxxxx, LLP, 0000 XxxxxxxXxxx Xxxxx, 000 Xxxx Xxxxxx, Xxxxxx, Xxxxx
00000-0000, Attention: Xxxxxxx X. Xxxx, III.
13. PARTIES. This Agreement shall inure solely to the benefit of,
and shall be binding upon, the Initial Purchasers and the Company and their
respective successors and assigns, and no other person shall have or be
deemed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision hereof. The term
"successors and assigns" shall not include a purchaser, in its capacity as
such, of Notes from any of the Initial Purchasers.
14. GOVERNING LAW. This Agreement shall be governed by the laws of
the State of New York.
15. CAPTIONS. The captions included in this Agreement are included
solely for convenience of reference and are not to be considered a part of
this Agreement.
16. COUNTERPARTS. This Agreement may be executed in various
counterparts which together shall constitute one and the same instrument.
32
If the foregoing correctly sets forth the understanding between you
and the Company, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement among us.
Very truly yours,
CELLSTAR CORPORATION
By: /s/ Xxxxxx Xxxx Xxxxxxxxx
-----------------------------------
Name: Xxxxxx Xxxx Xxxxxxxxx
Title: Vice President and Secretary
Accepted as of the date first above written
BEAR, XXXXXXX & CO. INC.
By: /s/ Xxxxxxx Xxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxx
Title: Senior Managing Director
CHASE SECURITIES INC.
By: /s/ Xxxxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Managing Director
33
SCHEDULE I
Principal Amount of Firm
Name of Initial Purchaser Notes to be Purchased
------------------------- ------------------------
Bear, Xxxxxxx & Co. Inc. $110,500,000
Chase Securities Inc. $ 19,500,000
------------
Total $130,000,000
------------
------------
ANNEX A
LIST OF SUBSIDIARIES OF CELLSTAR CORPORATION
NAME OF SUBSIDIARY INCORPORATION
------------------ -------------
National Auto Center, Inc. Texas
CellStar Financo, Inc. Delaware
CellStar Air Services, Inc. Delaware
A&S Air Services, Inc. Delaware
CellStar Fulfillment, Inc. Delaware
NAC Holdings, Inc. Nevada
CellStar West, Inc.(1) Delaware
CellStar, Ltd. Texas Limited Partnership
CellStar Fulfillment, Ltd. Texas Limited Partnership
CellStar International Corporation/SA Delaware
CellStar, S.A. Argentina
CellStar International Telefonia
Celular Ltda. Brazil
Cellular Industria da Telefonia
da Amazonia Ltda. Brazil
CellStar Celular Chile, S.A. Chile
CellStar de Colombia, S.A. Colombia
----------------------------
1. 80% owned
CellStar Ecuador, S.A. Ecuador
CellStar (UK) Ltd. United Kingdom
CellStar Europe Ltd. United Kingdom
CellStar Celular, S.A. Venezuela
ACC-CellStar, Inc.(2) Delaware
Audiomex Export Corp. Texas
Celular Express S.A. de C.V. Mexico
Celular Express Management
S.A. de C.V. Mexico
CellStar International Corporation/Asia Delaware
CellStar Pacific Pte. Ltd. Singapore
CellStar Amtel Sdn Bhd(3) Malaysia
CellStar Philippines, Inc. Philippines
CellStar Telecommunication
Taiwan Co. Ltd. Taiwan
CellStar (Asia) Corporation Limited Hong Kong
Shanghai CellStar International
Trading Co. Ltd. PRC
----------------------------
2. 80% owned
3. 30% directly owned and 19% beneficially owned
CellStar Telecommunications
Service (Asia) Limited(4) Xxxx Xxxx
CellStar Singapore Pte Ltd. Singapore
HCL-CellStar Ltd.(5) India
----------------------------
4. 60% owned
5. 50% owned
ANNEX B
LIST OF SIGNIFICANT SUBSIDIARIES
NAME JURISDICTION
---- ------------
CellStar Corporation Delaware
National Auto Center, Inc. Texas
NAC Holdings, Inc. Nevada
CellStar Ltd. Texas
CellStar International Corporation/SA Delaware
AudioMex Export Corp. Texas
CellStar International Corporation/Asia Delaware
CellStar International Telefonia
Cellular Ltda. Brazil
Celular Express S.A. de C.V. Mexico
CellStar Pacific Pte. Ltd. Singapore
CellStar (Asia) Corporation Limited Hong Kong
