EXHIBIT 1.1
Brightstar Corp.
Shares(1)
Common Stock
($0.0001 par value)
Underwriting Agreement
New York, New York
, 2004
Citigroup Global Markets Inc.
▇▇▇▇▇▇ Brothers Inc.
As Representatives of the several Underwriters,
c/o Citigroup Global Markets Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Brightstar Corp., a corporation organized under the laws of
Delaware (the "Company"), proposes to sell to the several underwriters named in
Schedule I hereto (the "Underwriters"), for whom you (the "Representatives") are
acting as representatives, shares of Common Stock, $0.0001 par value
("Common Stock"), of the Company (said shares to be issued and sold by the
Company being hereinafter called the "Underwritten Securities"). The Company and
R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇") and the persons, other than ▇▇▇▇▇▇, named in
Schedule II hereto (the "Other Selling Stockholders", and together with ▇▇▇▇▇▇,
the "Selling Stockholders") also propose to grant to the Underwriters an option
to purchase up to and , respectively, additional shares of
Common Stock only to cover any over-allotments (the "Option Securities"; the
Option Securities, together with the Underwritten Securities, being hereinafter
called the "Securities"). To the extent that there are no additional
Underwriters listed on Schedule I other than you, the term Representatives as
used herein shall mean you, as Underwriters, and the terms Representatives and
Underwriters shall mean either the singular or plural as the context requires.
In addition, to the extent that there is not more than one Selling Stockholder
--------
(1) Plus an option to purchase from the Company and the Selling Stockholders,
up to additional Securities only to cover over-allotments.
mean either the singular or plural as the context requires. In addition, to the
extent that there is not more than one Selling Stockholder named in Schedule II,
the term Selling Stockholder shall mean either the singular or plural. Certain
terms used herein are defined in Section 17 hereof.
As part of the offering contemplated by this Agreement, ▇▇▇▇▇▇
Brothers Inc. has agreed to reserve out of the Securities set forth opposite its
name on Schedule I to this Agreement, up to shares, for sale to the
Company's employees, officers and directors and other parties associated with
the Company (collectively, the "Participants"), as set forth in the Prospectus
under the heading "Underwriting" (the "Directed Share Program"). The Securities
to be sold by ▇▇▇▇▇▇ Brothers Inc. pursuant to the Directed Share Program (the
"Directed Shares") will be sold by ▇▇▇▇▇▇ Brothers Inc. pursuant to this
Agreement at the public offering price. Any Directed Shares not orally confirmed
for purchase by any Participants by [7:30 A.M.], New York City time, on the
business day following the date on which this Agreement is executed will be
offered to the public by ▇▇▇▇▇▇ Brothers Inc. as set forth in the Prospectus.
1. REPRESENTATIONS AND WARRANTIES. (i) The Company and ▇▇▇▇▇▇
jointly and severally represent and warrant to, and agree with, each Underwriter
as set forth below in this Section 1.
(a) The Company has prepared and filed with the Commission a
registration statement (file number 333-118036) on Form S-1, including
a related preliminary prospectus, for registration under the Act of the
offering and sale of the Securities. The Company may have filed one or
more amendments thereto, including a related preliminary prospectus,
each of which has previously been furnished to you. The Company will
next file with the Commission one of the following: either (1) prior to
the Effective Date of such registration statement, a further amendment
to such registration statement (including the form of final prospectus)
or (2) after the Effective Date of such registration statement, a final
prospectus in accordance with Rules 430A and 424(b). In the case of
clause (2), the Company has included in such registration statement, as
amended at the Effective Date, all information (other than Rule 430A
Information) required by the Act and the rules thereunder to be
included in such registration statement and the Prospectus. As filed,
such amendment and form of final prospectus, or such final prospectus,
shall contain all Rule 430A Information, together with all other such
required information, and, except to the extent the Representatives
shall agree in writing to a modification, shall be in all substantive
respects in the form furnished to you prior to the Execution Time or,
to the extent not completed at the Execution Time, shall contain only
such specific additional information and other changes (beyond that
contained in the latest Preliminary Prospectus) as the Company has
advised you, prior to the Execution Time, will be included or made
therein.
(b) On the Effective Date, the Registration Statement did or
will, and when the Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date (as defined herein)
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and on any date on which Option Securities are purchased, if such date
is not the Closing Date (a "settlement date"), the Prospectus (and any
supplements thereto) will, comply in all material respects with the
applicable requirements of the Act and the rules thereunder; on the
Effective Date and at the Execution Time, the Registration Statement
did not or will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; and,
on the Effective Date, the Prospectus, if not filed pursuant to Rule
424(b), will not, and on the date of any filing pursuant to Rule 424(b)
and on the Closing Date and any settlement date, the Prospectus
(together with any supplement thereto) will not, include any untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that the Company and ▇▇▇▇▇▇ make no representations
or warranties as to the information contained in or omitted from the
Registration Statement or the Prospectus (or any supplement thereto) in
reliance upon and in conformity with information furnished in writing
to the Company by or on behalf of any Underwriter through the
Representatives specifically for inclusion in the Registration
Statement or the Prospectus (or any supplement thereto).
(c) Each of the Company and its subsidiaries has been duly
incorporated or formed, as applicable, and is validly existing as a
corporation or other entity in good standing under the laws of the
jurisdiction in which it is organized, with the corporate or company
power and authority to own or lease, as the case may be, and to operate
its properties and conduct its business as described in the Prospectus,
and is duly qualified to do business and is in good standing under the
laws of each jurisdiction that requires such qualification.
(d) All the outstanding shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and
issued and are fully paid and nonassessable, and, except as otherwise
set forth in the Prospectus, all outstanding shares of capital stock of
such subsidiaries are owned by the Company, either directly or through
subsidiaries, free and clear of any perfected security interest or any
other security interests, claims, liens or encumbrances.
(e) The Company's authorized equity capitalization is as set
forth in the Prospectus; the capital stock of the Company conforms in
all material respects to the description thereof contained in the
Prospectus; the outstanding shares of Common Stock have been duly
authorized and validly issued and are fully paid and nonassessable; the
Securities have been duly authorized, and, when issued and delivered to
and paid for by the Underwriters pursuant to this Agreement, will be
fully paid and nonassessable; the Securities are duly listed, and
admitted and authorized for trading, subject to official notice of
issuance, on the Nasdaq National Market; the certificates for the
Securities are in valid and sufficient form; the holders of outstanding
shares of capital stock of the Company are not entitled to preemptive
or other rights to subscribe for the Securities; and, except as set
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forth in the Prospectus, no options, warrants or other rights to
purchase, agreements or other obligations to issue, or rights to
convert any obligations into or exchange any securities for, shares of
capital stock of or ownership interests in the Company are outstanding.
(f) There is no franchise, contract or other document of a
character required by the Act to be described in the Registration
Statement or Prospectus, or to be filed as an exhibit thereto, that is
not described or filed as required; and the statements in the
Prospectus under the headings "Risk Factors - We are heavily dependent
on a few suppliers, particularly Motorola, Inc., or Motorola, to
provide us with the products that we distribute; our contracts with
Motorola are generally non-exclusive and may be terminated on short
notice", "Business - Intellectual Property", "Business - Supplier
Relationships", "Business - Customer Relationships", "Business - Legal
Proceedings", "Management - Employment Agreements", "Management -
Non-Compete Agreements", "Management - 2004 Stock Incentive Plan",
"Management - Management Compensation", "Management - 401k Plan",
"Certain Relationships and Related Parties", "Description of Capital
Stock - Registration Rights", "Description of Certain Indebtedness" and
"Material United States Federal Income Tax Considerations for Non-U.S.
Holders of Our Common Stock", insofar as such statements summarize
legal matters, agreements, documents or proceedings discussed therein,
are accurate and fair summaries of such legal matters, agreements,
documents or proceedings.
(g) This Agreement has been duly authorized, executed and
delivered by the Company.
(h) The Company is not and, after giving effect to the
offering and sale of the Securities and the application of the net
proceeds thereof as described in the Prospectus, will not be an
"investment company", as defined in the Investment Company Act of 1940,
as amended.
(i) No consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection
with the transactions contemplated herein, except such as have been
obtained under the Act and such as may be required under the federal
and provincial laws of Canada or the blue sky laws of any jurisdiction
in connection with the purchase and distribution of the Securities by
the Underwriters in the manner contemplated herein and in the
Prospectus.
(j) Neither the issue and sale of the Securities nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will (after giving effect to any
consents or waivers obtained on or prior to the date hereof) conflict
with, result in a breach or violation of, or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
of its subsidiaries pursuant to, (i) the charter, by-laws or similar
organizational documents of the Company or any of its subsidiaries,
(ii) the terms of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement, obligation,
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condition, covenant or instrument to which the Company or any of its
subsidiaries is a party or bound or to which its or their property is
subject or (iii) any statute, law, rule, regulation, judgment, order or
decree applicable to the Company or any of its subsidiaries of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or
any of its subsidiaries or any of its or their properties, except in
the case of clauses (ii) and (iii) as could not reasonably be expected
to have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business (a "Material Adverse
Effect").
(k) Except as set forth in the Prospectus, no holders of
securities of the Company have rights to the registration of such
securities under the Registration Statement.
(l) The consolidated historical financial statements and
schedules of the Company and its consolidated subsidiaries included in
the Prospectus and the Registration Statement present fairly in all
material respects the financial condition, results of operations and
cash flows of the Company as of the dates and for the periods
indicated, comply as to form with the applicable accounting
requirements of the Act and have been prepared in conformity with U.S.
generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except as otherwise noted therein).
The selected financial data set forth under the caption "Selected
Consolidated Financial Data" in the Prospectus and Registration
Statement present fairly, in all material respects and on the basis
stated in the Prospectus and the Registration Statement, the
information included therein. The pro forma and pro forma as adjusted
balance sheet data under the headings "Summary - Summary Consolidated
Financial Data" and "Capitalization" included in the Prospectus and the
Registration Statement include assumptions that provide a reasonable
basis for presenting the significant effects directly attributable to
the transactions and events described therein, the related pro forma
adjustments give appropriate effect to those assumptions, and the
related pro forma adjustments reflect the proper application of those
adjustments to the historical balance sheet data under the headings
"Summary - Summary Consolidated Financial Data" and "Capitalization"
included in the Prospectus and the Registration Statement. The pro
forma and pro forma as adjusted balance sheet data under the headings
"Summary - Summary Consolidated Financial Data" and "Capitalization"
included in the Prospectus and the Registration Statement comply as to
form in all material respects with the applicable accounting
requirements of Regulation S-X under the Act and the pro forma
adjustments have been properly applied to the historical amounts in the
compilation of that data.
(m) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property is pending
or, to the knowledge of the Company, threatened that (i) could
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reasonably be expected to have a material adverse effect on the
performance of this Agreement or the consummation of any of the
transactions contemplated hereby or (ii) could reasonably be expected
to have a Material Adverse Effect, except as set forth or contemplated
in the Prospectus (exclusive of any supplement thereto).
(n) Each of the Company and each of its subsidiaries own or
leases all such properties as are necessary for the conduct of its
operations as presently conducted.
(o) Neither the Company nor any subsidiary is in violation or
default of (i) any provision of its charter, by-laws or similar
organizational documents, (ii) except as set forth in the Prospectus
and after giving effect to any consents or waivers obtained on or prior
to the date hereof, the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which it is
a party or otherwise bound or to which its property is subject or (iii)
any statute, law, rule, regulation, judgment, order or decree of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or
such subsidiary or any of its properties, except in the case of clauses
(ii) and (iii) above for such violations or defaults that could not
reasonably be expected to have a Material Adverse Effect.
(p) Deloitte & Touche LLP, who have certified certain
financial statements of the Company and its consolidated subsidiaries
and delivered their report with respect to the audited consolidated
financial statements and schedules included in the Prospectus, are
independent public accountants with respect to the Company within the
meaning of the Act and the applicable published rules and regulations
thereunder.
(q) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who certified certain financial
statements of the Company and its consolidated subsidiaries, were, at
all times during their engagement in connection with the audit of the
financial statements of the Company and its consolidated subsidiaries
for the three-year period ended December 31, 2001, independent public
accountants with respect to the Company and its consolidated
subsidiaries within the meaning of Rule 101 of the Code of Professional
Conduct of the American Institute of Certified Public Accountants.
(r) There are no transfer taxes or other similar fees or
charges under Federal law or the laws of any state, or any political
subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance by the Company
or sale by the Company of the Securities.
(s) The Company has filed all foreign, federal, state and
local tax returns that are required to be filed or has requested
extensions thereof (except in any case in which the failure so to file
would not have a Material Adverse Effect, except as set forth or
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contemplated in the Prospectus (exclusive of any supplement thereto)
and has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any
of the foregoing is due and payable, except for any such tax,
assessment, fine or penalty that is currently being contested in good
faith or as would not have a Material Adverse Effect, except as set
forth or contemplated in the Prospectus (exclusive of any supplement
thereto).
(t) No labor problem or dispute with the employees of the
Company or any of its subsidiaries exists or, to the Company's
knowledge, is threatened or imminent, and the Company is not aware of
any existing or imminent labor disturbance by the employees of any of
its or its subsidiaries' principal suppliers, contractors or customers,
that could reasonably be expected to have a Material Adverse Effect,
except as set forth or contemplated in the Prospectus (exclusive of any
supplement thereto).
(u) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are customary in the businesses in which
they are engaged; all policies of insurance insuring the Company or any
of its subsidiaries or their respective businesses, assets, employees,
officers and directors are in full force and effect; the Company and
its subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; and there are no material claims
by the Company or any of its subsidiaries under any such policy or
instrument as to which any insurance company is denying liability or
defending under a reservation of rights clause; neither the Company nor
any such subsidiary has been refused any insurance coverage sought or
applied for; and neither the Company nor any such subsidiary has any
reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a Material Adverse Effect,
except as set forth or contemplated in the Prospectus (exclusive of any
supplement thereto).
(v) Except as provided by applicable law, no subsidiary of the
Company is currently prohibited, directly or indirectly, from paying
any dividends to the Company, from making any other distribution on
such subsidiary's capital stock, from repaying to the Company any loans
or advances to such subsidiary from the Company or from transferring
any of such subsidiary's property or assets to the Company or any other
subsidiary of the Company, except as set forth or contemplated in the
Prospectus (exclusive of any supplement thereto).
(w) The Company and its subsidiaries have all the licenses,
certificates, permits and other authorizations issued by the
appropriate federal, state or foreign regulatory authorities necessary
to conduct their respective businesses, except for those that the
failure of which to have would not have a Material Adverse Effect.
Neither the Company nor any such subsidiary has received any notice of
7
proceedings relating to the revocation or modification of any such
license, certificate, authorization or permit that, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a Material Adverse Effect, except as set forth or
contemplated in the Prospectus (exclusive of any supplement thereto).
(x) The Company and each of its subsidiaries 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 asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(y) The Company has not taken, directly or indirectly, any
action designed to or that would constitute or that could reasonably be
expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(z) Except as set forth or contemplated in the Prospectus
(exclusive of any supplement thereto), the Company and its subsidiaries
are (i) in compliance with any and all applicable foreign, federal,
state and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental
Laws"), (ii) have received and are in compliance with all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii)
have not received notice of any actual or potential liability under any
Environmental Laws, except where such non-compliance with Environmental
Laws, failure to receive and/or comply with required permits, licenses
or other approvals, or liability would not, individually or in the
aggregate, have a Material Adverse Effect. Except as set forth in the
Prospectus (exclusive of any supplement thereto), neither the Company
nor any of its subsidiaries has been named as a "potentially
responsible party" under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended.
(aa) In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for any clean-up, closure of properties or
compliance with Environmental Laws, or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such reviews, the
Company has concluded that such associated costs and liabilities could
8
not, singly or in the aggregate, reasonably be expected to have a
Material Adverse Effect, except as set forth or contemplated in the
Prospectus (exclusive of any supplement thereto).
(bb) Any minimum funding standards under Section 302 of the
Employee Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder ("ERISA"), have
been satisfied by each "pension plan" (as defined in Section 3(2) of
ERISA) that has been established or maintained by the Company and/or
one or more of its subsidiaries, and the trust forming part of each
such plan that is intended to be qualified under Section 401 of the
Code is so qualified; each of the Company and its subsidiaries has
fulfilled its obligations, if any, under Section 515 of ERISA; neither
the Company nor any of its subsidiaries maintains or is required to
contribute to a "welfare plan" (as defined in Section 3(1) of ERISA)
that provides retiree or other post-employment welfare benefits or
insurance coverage (other than "continuation coverage" (as defined in
Section 602 of ERISA)); each pension plan and welfare plan established
or maintained by the Company and/or one or more of its subsidiaries is
in compliance in all material respects with the currently applicable
provisions of ERISA; and neither the Company nor any of its
subsidiaries has incurred or could reasonably be expected to incur any
withdrawal liability under Section 4201 of ERISA, any liability under
Section 4062, 4063 or 4064 of ERISA or any other material liability
under Title IV of ERISA.
(cc) There is and has been no failure on the part of the
Company and any of the Company's directors or officers, in their
capacities as such, to comply with any applicable provision of the
Sarbanes Oxley Act of 2002 and the rules and regulations promulgated in
connection therewith (the "Sarbanes Oxley Act"), including (if
applicable) Section 402 related to loans and Sections 302 and 906
related to certifications.
(dd) Neither the Company nor any of its subsidiaries nor, to
the knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its subsidiaries is aware of or has
taken any action, directly or indirectly, that would result in a
violation by such Persons of the FCPA, including, without limitation,
making use of the mails or any means or instrumentality of interstate
commerce corruptly in furtherance of an offer, payment, promise to pay
or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to
any "foreign official" (as such term is defined in the FCPA) or any
foreign political party or official thereof or any candidate for
foreign political office, in contravention of the FCPA; and the
Company, its subsidiaries and, to the knowledge of the Company, its
affiliates have conducted their businesses in compliance with the FCPA
and have instituted and maintain policies and procedures designed to
ensure, and that are reasonably expected to continue to ensure,
continued compliance therewith.
(ee) The operations of the Company and its subsidiaries are
and have been conducted at all times in material compliance with
applicable financial recordkeeping and reporting requirements of the
9
Currency and Foreign Transactions Reporting Act of 1970, as amended,
the money laundering statutes of all jurisdictions having authority
over any of them, the rules and regulations thereunder and any related
or similar rules, regulations or guidelines, issued, administered or
enforced by any governmental agency (collectively, the "Money
Laundering Laws") having authority over any of them and no action, suit
or proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or any of its
subsidiaries with respect to the Money Laundering Laws is pending or,
to the knowledge of the Company, threatened.
(ff) Neither the Company, any of its subsidiaries nor, to the
knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its subsidiaries is currently
subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department ("OFAC"); and the
Company will not, directly or indirectly, use the proceeds of the
offering of the Securities, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or
other person or entity, for the purpose of financing the activities of
any person currently subject to any U.S. sanctions administered by
OFAC.
(gg) The Company and its subsidiaries own, possess, license or
have other rights to use, on reasonable terms, all patents, patent
applications, trade and service marks, trade and service ▇▇▇▇
registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property
(collectively, the "Intellectual Property") necessary for the conduct
of the Company's business as now conducted or as proposed in the
Prospectus to be conducted, except where the failure to own, possess,
license or otherwise have a right to use any Intellectual Property
would not have a Material Adverse Effect. Except as set forth in the
Prospectus, (a) there are no rights of third parties to any such
Intellectual Property, except for licensor's and/or licensee's rights,
if any; (b) to the knowledge of the Company, there is no material
infringement by third parties of any such Intellectual Property; (c)
there is no pending or, to the knowledge of the Company, threatened
action, suit, proceeding or claim by others challenging the Company's
rights in or to any such Intellectual Property, and the Company is
unaware of any facts that would form a reasonable basis for any such
claim; (d) there is no pending or, to the knowledge of the Company,
threatened action, suit, proceeding or claim by others challenging the
validity or scope of any such Intellectual Property, and the Company is
unaware of any facts that would form a reasonable basis for any such
claim; (e) there is no pending or, to the knowledge of the Company,
threatened action, suit, proceeding or claim by others that the Company
infringes or otherwise violates any patent, trademark, copyright, trade
secret or other proprietary rights of others, and the Company is
unaware of any other fact that would form a reasonable basis for any
such claim; (f) there is no U.S. patent or published U.S. patent
application that, to the knowledge of the Company, contains claims that
dominate or may dominate any Intellectual Property described in the
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Prospectus as being owned by or licensed to the Company or that
interferes with the issued or pending claims of any such Intellectual
Property; and (g) there is no prior art of which the Company is aware
that could reasonably be expected to render any U.S. patent held by the
Company invalid or any U.S. patent application held by the Company
unpatentable that has not been disclosed to the U.S. Patent and
Trademark Office.
(hh) Except as set forth in the Registration Statement and the
Prospectus, the Company (i) does not have any material lending or other
relationship with any bank or lending affiliate of Citigroup Global
Markets Holdings Inc. or ▇▇▇▇▇▇ Brothers Inc. (other than the
relationship between Citigroup Global Markets Inc. and the Company
pursuant to the advisory agreement dated June 29, 2004) and (ii) does
not intend to use any of the proceeds from the sale of the Securities
hereunder to repay any outstanding debt owed to any affiliate of
Citigroup Global Markets Holdings Inc. or ▇▇▇▇▇▇ Brothers Inc.
(ii) Neither the Company nor any of its subsidiaries nor any
of its or their properties or assets has any immunity from the
jurisdiction of any court or from any legal process (whether through
service or notice, attachment prior to judgment, attachment in aid of
execution or otherwise) under the laws of New York; PROVIDED, HOWEVER,
that the Underwriters acknowledge that certain of the Company's
contracts may have exclusive jurisdiction provisions relating to courts
outside of the State of New York.
Furthermore, the Company and ▇▇▇▇▇▇ represent and warrant to
▇▇▇▇▇▇ Brothers Inc. that (i) the Registration Statement, the Prospectus, any
preliminary prospectus, and any supplements thereto, comply, and any further
amendments or supplements thereto will comply, with any applicable laws or
regulations of foreign jurisdictions in which the Prospectus or any preliminary
prospectus, as amended or supplemented, if applicable, are distributed in
connection with the Directed Share Program, (ii) any offer of Directed Shares
will comply with any applicable laws or regulations of foreign jurisdictions in
which such offer is made in connection with the Directed Share Program and (iii)
no consent, approval, authorization or order of or qualification with, any
governmental body or agency, other than those obtained, is required in
connection with the offering of the Directed Shares in any jurisdiction where
the Directed Shares are being offered, except that no representation or warranty
is made as to any requisite qualification under United States state securities
laws for the offer and sale of the Directed Shares by ▇▇▇▇▇▇ Brothers. The
Company has not offered, or caused the Underwriters to offer, Directed Shares
pursuant to the Directed Share Program (a) to any person in a foreign
jurisdiction or whose receipt of any such Directed Shares would be subject to
laws or regulations of a foreign jurisdiction, except for offers to persons in
[ ], or (b) with the specific intent to unlawfully influence (i) a customer or
supplier of the Company to alter the customer's or supplier's level or type of
business with the Company or (ii) a trade journalist or publication to write or
publish favorable information about the Company or its products.
Any certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters in connection
11
with the offering of the Securities shall be deemed a representation and
warranty by the Company and ▇▇▇▇▇▇, as to matters covered thereby, to each
Underwriter.
(ii) Each Selling Stockholder (other than, in the case of
paragraphs (e) and (f) below, ▇▇▇▇▇▇), severally and not jointly, represents and
warrants to, and agrees with, each Underwriter that:
(a) Such Selling Stockholder is the record and beneficial
owner of the Securities to be sold by it hereunder free and clear of
all liens, encumbrances, equities and claims, other than with respect
to the Securities to be sold by ▇▇▇▇▇▇, which as of the date hereof are
subject to a lien (such lien to be released prior to the Closing Date),
and has duly endorsed such Securities in blank, and, assuming that each
Underwriter acquires its interest in the Securities it has purchased
from such Selling Stockholder without notice of any adverse claim
(within the meaning of Section 8-105 of the New York Uniform Commercial
Code ("UCC")), upon the Underwriters' acquiring possession of stock
certificates representing the Option Securities to be sold by such
Selling Stockholder, endorsed to the Underwriters and paying the
purchase price therefor pursuant to Section 3, the Underwriters will
acquire their respective interests in such Option Securities
(including, without limitation, all right such Selling Stockholder had
to transfer such Securities) and no action based on an adverse claim
(within the meaning of Section 8-105 of the UCC) may be asserted
against such Underwriter with respect to such Securities.
(b) Such Selling Stockholder has not taken, directly or
indirectly, any action designed to or that would constitute or that
might reasonably be expected to cause or result in, under the Exchange
Act or otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
(c) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation by such
Selling Stockholder of the transactions contemplated herein, except
such as may have been obtained under the Act and such as may be
required under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Securities by the Underwriters and
such other approvals as have been obtained.
(d) Neither the sale of the Securities being sold by such
Selling Stockholder nor the consummation of any other of the
transactions herein contemplated by such Selling Stockholder or the
fulfillment of the terms hereof by such Selling Stockholder will
conflict with, result in a breach or violation of, or constitute a
default under any law or, if applicable, the charter or by-laws of such
Selling Stockholder, or the terms of any indenture or other agreement
or instrument to which such Selling Stockholder or, if applicable, any
of its subsidiaries, is a party or bound, or any judgment, order or
decree applicable to such Selling Stockholder or, if applicable, any of
12
its subsidiaries, of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over such Selling
Stockholder or, if applicable, any of its subsidiaries.
(e) The sale of Securities by such Selling Stockholder
pursuant hereto is not prompted by any information concerning the
Company or any of its subsidiaries that is not set forth in the
Prospectus or any supplement thereto.
(f) In respect of any statements in or omissions from the
Registration Statement or the Prospectus or any supplements thereto
made in reliance upon and in conformity with information furnished in
writing to the Company by such Selling Stockholder specifically for use
in connection with the preparation thereof, such information with
respect to such Selling Stockholder does not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein with
respect to such Selling Stockholder, in light of the circumstances
under which they were made, not misleading.
Any certificate signed by any Selling Stockholder or any
officer thereof and delivered to the Representatives or counsel for the
Underwriters in connection with the offering of the Securities shall be deemed a
representation and warranty by such Selling Stockholder, as to matters covered
thereby, to each Underwriter.
2. PURCHASE AND SALE. (a) Subject to the terms and conditions
and in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
$[ ] per share, the amount of the Underwritten Securities set forth opposite
such Underwriter's name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Company and
the Selling Stockholders hereby grant an option to the several
Underwriters to purchase, severally and not jointly, up to [ ]
Option Securities at the same purchase price per share as the
Underwriters shall pay for the Underwritten Securities. Said option may
be exercised only to cover over-allotments in the sale of the
Underwritten Securities by the Underwriters. Said option may be
exercised in whole or in part at any time on or before the 30th day
after the date of the Prospectus upon written or telegraphic notice by
the Representatives to the Company and such Selling Stockholders
setting forth the number of shares of the Option Securities as to which
the several Underwriters are exercising the option and the settlement
date. The maximum number of Option Securities to be sold by the Company
is . The maximum number of Option Securities that each Selling
Stockholder agrees to sell is set forth in Schedule II hereto. In the
event that the Underwriters exercise less than their full
over-allotment option, the number of Option Securities to be sold by
the Company and each Selling Stockholder shall be, as nearly as
practicable, in the same proportion as the maximum number of Option
Securities to be sold by the Company and each Selling Stockholder and
the number of Option Securities to be sold[; PROVIDED, HOWEVER, that in
13
any event ▇▇▇▇▇▇ shall be entitled to sell at least 50% of the actual
number of Option Securities to be sold pursuant to the over-allotment].
The number of Option Securities to be purchased by each Underwriter
shall be the same percentage of the total number of shares of the
Option Securities to be purchased by the several Underwriters as such
Underwriter is purchasing of the Underwritten Securities, subject to
such adjustments as you in your absolute discretion shall make to
eliminate any fractional shares.
3. DELIVERY AND PAYMENT. Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option provided for in
Section 2(b) hereof shall have been exercised on or before the third Business
Day prior to the Closing Date) shall be made at 10:00 AM, New York City time, on
[ ], 2004, or at such time on such later date not more than three Business Days
after the foregoing date as the Representatives shall designate, which date and
time may be postponed by agreement among the Representatives, the Company and,
if any Option Securities are to be delivered and paid for on the Closing Date,
the Selling Stockholders or, if applicable, as provided in Section 9 hereof
(such date and time of delivery and payment for the Securities being herein
called the "Closing Date"). Delivery of the Securities shall be made to the
Representatives for the respective accounts of the several Underwriters against
payment by the several Underwriters through the Representatives of the purchase
price therefor to or upon the order of the Company and, if any Option Securities
are to be delivered and paid for on the Closing Date, the Selling Stockholders
by wire transfer payable in same-day funds to the accounts specified by the
Company and the Selling Stockholders. Delivery of the Underwritten Securities
and the Option Securities shall be made through the facilities of The Depository
Trust Company unless the Representatives shall otherwise instruct.
Each Selling Stockholder will pay all applicable state
transfer taxes, if any, involved in the transfer to the several Underwriters of
the Securities to be purchased by them from such Selling Stockholder and the
respective Underwriters will pay any additional stock transfer taxes involved in
further transfers.
If the option provided for in Section 2(b) hereof is exercised
after the third Business Day prior to the Closing Date, the Company and the
Selling Stockholders will deliver the Option Securities (at the expense of the
Company) to the Representatives, at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
the date specified by the Representatives (which date shall be within three
Business Days after exercise of said option) for the respective accounts of the
several Underwriters, against payment by the several Underwriters through the
Representatives of the purchase price therefor to or upon the order of the
Company and the Selling Stockholders by wire transfer payable in same-day funds
to the accounts specified by the Company and the Selling Stockholders (such date
and time of delivery and payment for the Option Securities being herein called
the "Option Closing Date"). If settlement for the Option Securities occurs after
the Closing Date, the Company and the Selling Stockholders will deliver to the
Representatives on the Option Closing Date, and the obligation of the
Underwriters to purchase the Option Securities shall be conditioned upon receipt
14
of, supplemental opinions, certificates and letters confirming as of such date
the opinions, certificates and letters delivered on the Closing Date pursuant to
Section 6 hereof.
4. OFFERING BY UNDERWRITERS. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. AGREEMENTS. (i) The Company agrees with the several
Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the termination of the
offering of the Securities, the Company will not file any amendment of
the Registration Statement or supplement to the Prospectus or any Rule
462(b) Registration Statement unless the Company has furnished to you a
copy for your review prior to filing and will not file any such
proposed amendment or supplement to which you reasonably object.
Subject to the foregoing sentence, if the Registration Statement has
become or becomes effective pursuant to Rule 430A, or filing of the
Prospectus is otherwise required under Rule 424(b), the Company will
cause the Prospectus, properly completed, and any supplement thereto to
be filed in a form approved by the Representatives with the Commission
pursuant to the applicable paragraph of Rule 424(b) within the time
period prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. The Company will promptly advise
the Representatives (1) when the Registration Statement, if not
effective at the Execution Time, shall have become effective, (2) when
the Prospectus, and any supplement thereto, shall have been filed (if
required) with the Commission pursuant to Rule 424(b) or when any Rule
462(b) Registration Statement shall have been filed with the
Commission, (3) when, prior to termination of the offering of the
Securities, any amendment to the Registration Statement shall have been
filed or become effective, (4) of any request by the Commission or its
staff for any amendment of the Registration Statement, any Rule 462(b)
Registration Statement, any supplement to the Prospectus or any
additional information, (5) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement
or the institution or threatening of any proceeding for that purpose
and (6) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Securities for sale in
any jurisdiction or the institution or threatening of any proceeding
for that purpose. The Company will use its best efforts to prevent the
issuance of any such stop order or the suspension of any such
qualification and, if issued, to obtain as soon as possible the
withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Prospectus as then supplemented would include
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the
15
circumstances under which they were made not misleading, or if it shall
be necessary to amend the Registration Statement or supplement the
Prospectus to comply with the Act or the rules thereunder, the Company
promptly will (1) notify the Representatives of any such event, (2)
prepare and file with the Commission, subject to the second sentence of
paragraph (a) of this Section 5, an amendment or supplement that will
correct such statement or omission or effect such compliance and (3)
supply any supplemented Prospectus to you in such quantities as you may
reasonably request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an
earnings statement or statements of the Company and its subsidiaries
that will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
(d) The Company will furnish to the Representatives and
counsel for the Underwriters signed copies of the Registration
Statement (including exhibits thereto) and to each other Underwriter a
copy of the Registration Statement (without exhibits thereto) and, so
long as delivery of a prospectus by an Underwriter or dealer may be
required by the Act, as many copies of each Preliminary Prospectus and
the Prospectus and any supplement thereto as the Representatives may
reasonably request.
(e) The Company will arrange, if necessary, for the
qualification of the Securities for sale under the laws of such
jurisdictions as the Representatives may designate and will maintain
such qualifications in effect so long as required for the distribution
of the Securities; PROVIDED, that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not
now so qualified or to take any action that would subject it to service
of process in suits, other than those arising out of the offering or
sale of the Securities, in any jurisdiction where it is not now so
subject.
(f) The Company will not, without the prior written consent of
Citigroup Global Markets Inc. and ▇▇▇▇▇▇ Brothers Inc., offer, sell,
contract to sell, pledge, or otherwise dispose of (or enter into any
transaction that is designed to, or that might reasonably be expected
to, result in the disposition (whether by actual disposition or
effective economic disposition due to cash settlement or otherwise) by
the Company or any affiliate of the Company or any person in privity
with the Company or any affiliate of the Company), directly or
indirectly, including the filing (or participation in the filing) of a
registration statement with the Commission in respect of, or establish
or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Exchange
Act, any other shares of Common Stock or any securities convertible
into, or exercisable, or exchangeable for, shares of Common Stock, or
publicly announce an intention to effect any such transaction, for a
period of 180 days after the date of this Agreement; PROVIDED, HOWEVER,
that the Company may (1) issue and sell Common Stock and/or options
pursuant to any employee stock option plan, stock ownership plan or
16
dividend reinvestment plan of the Company in effect at the Execution
Time and described in the Prospectus (exclusive of any supplement
thereto), (2) issue Common Stock issuable upon the conversion of
securities or the exercise of options or warrants outstanding at the
Execution Time and (3) issue Common Stock or securities convertible
into, or exercisable, or exchangeable for, shares of Common Stock in
exchange for equity or assets of another entity in connection with a
merger, acquisition or strategic investment, PROVIDED, THAT (a) the
aggregate market value of the stock portion of the consideration for
all such acquisitions shall not exceed $[ ] and (b) prior to any
such issuance the recipient or recipients of such securities shall have
agreed with Citigroup Global Markets Inc. and ▇▇▇▇▇▇ Brothers Inc. to
be bound by this provision for the remainder of the 180-day period. If
(1) during the last 17 days of the 180-day restricted period the
Company issues an earnings release or material news or a material event
relating to the Company occurs or (2) prior to the expiration of the
180-day restricted period the Company announces that it will release
earnings results during the 16-day period beginning on the last day of
the 180-day period, then the foregoing restrictions shall continue to
apply until the expiration of the 18-day period beginning on the
issuance of the earnings release or the occurrence of the material news
or material event.
(g) The Company will comply with all applicable securities and
other applicable laws, rules and regulations, including, without
limitation, the Sarbanes Oxley Act, and to use its best efforts to
cause the Company's directors and officers, in their capacities as
such, to comply with such laws, rules and regulations, including,
without limitation, the provisions of the Sarbanes Oxley Act.
(h) The Company will not take, directly or indirectly, any
action designed to or that would constitute or that might reasonably be
expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(i) The Company agrees to pay the costs and expenses relating
to the following matters: (i) the preparation, printing or reproduction
and filing with the Commission of the Registration Statement (including
financial statements and exhibits thereto), each Preliminary
Prospectus, the Prospectus, any Preliminary Prospectus or Prospectus
with a Canadian "wrap-around" and each amendment or supplement to any
of them; (ii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and packaging) of
such copies of the Registration Statement, each Preliminary Prospectus,
the Prospectus, any Preliminary Prospectus or Prospectus with a
Canadian "wrap-around" and all amendments or supplements to any of
them, as may, in each case, be reasonably requested for use in
connection with the offering and sale of the Securities; (iii) the
preparation, printing, authentication, issuance and delivery of
certificates for the Securities, including any stamp or transfer taxes
17
in connection with the original issuance and sale of the Securities;
(iv) the printing (or reproduction) and delivery of this Agreement, any
blue sky memorandum and all other agreements or documents printed (or
reproduced) and delivered in connection with the offering of the
Securities; (v) the registration of the Securities under the Exchange
Act and the listing of the Securities on the Nasdaq National Market;
(vi) any registration or qualification of the Securities for offer and
sale under the securities or blue sky laws of the several states
(including filing fees and the reasonable fees and expenses of counsel
for the Underwriters relating to such registration and qualification);
(vii) any filings required to be made with the National Association of
Securities Dealers, Inc. (including filing fees and the reasonable fees
and expenses of counsel for the Underwriters relating to such filings);
(viii) the transportation and other expenses incurred by or on behalf
of Company representatives in connection with presentations to
prospective purchasers of the Securities; (ix) the fees and expenses of
the Company's accountants and the fees and expenses of counsel
(including local and special counsel) for the Company [and the Selling
Stockholders]; and (x) all other costs and expenses incident to the
performance by the Company [and the Selling Stockholders] of
[its/their] respective obligations hereunder.
(j) The Company agrees to pay (1) all reasonable fees and
disbursements of counsel incurred by ▇▇▇▇▇▇ Brothers Inc. in connection
with the Directed Share Program, (2) all costs and expenses incurred by
▇▇▇▇▇▇ Brothers Inc. in connection with the printing (or reproduction)
and delivery (including postage, air freight charges and charges for
counting and packaging) of copies of the Directed Share Program
material and (3) all stamp duties, similar taxes or duties or other
taxes, if any, incurred by ▇▇▇▇▇▇ Brothers Inc. in connection with the
Directed Share Program.
(ii) Each Selling Stockholder agrees with the several
Underwriters that:
(a) Such Selling Stockholder will not, without the prior
written consent of Citigroup Global Markets Inc. and ▇▇▇▇▇▇ Brothers
Inc., offer, sell, contract to sell, pledge or otherwise dispose of,
(or enter into any transaction that is designed to, or that might
reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the Selling Stockholder or any affiliate controlled by
the Selling Stockholder or any person in privity, with respect to
shares of Common Stock, with the Selling Stockholder or any affiliate
controlled by the Selling Stockholder) directly or indirectly, or file
(or participate in the filing of) a registration statement with the
Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Exchange Act with respect to, any shares
of capital stock of the Company or any securities convertible into or
exercisable or exchangeable for such capital stock, or publicly
announce an intention to effect any such transaction, for a period of
180 days after the date of this Agreement. The foregoing restrictions
shall not apply to transfers of shares of Common Stock or any security
convertible into Common Stock (a) as a bona fide gift or gifts to a
member of such Selling Stockholder's immediate family, (b) to an entity
controlled by such Selling Stockholder or an immediate family member of
such Selling Stockholder or (c) to a trust the beneficiaries of which
are exclusively such Selling Stockholder or a member of the immediate
18
family of such Selling Stockholder; PROVIDED, HOWEVER, that in
connection with any such transfer (i) each transferee shall execute and
deliver to Citigroup Global Markets Inc. and ▇▇▇▇▇▇ Brothers Inc. a
letter duplicating the agreements contained in this Section 5(ii)(a)
(dated and effective as of the date hereof) and (ii) no filing by any
party (transferee or transferor) under Section 16(a) of or Regulation
13D-G under the Exchange Act shall be required or shall be made
voluntarily. Additionally, the foregoing restrictions shall not apply
to (i) transfers of Common Stock or any securities convertible into
Common Stock by the undersigned to the Underwriters in connection with
the offering contemplated by this Agreement, (ii) the conversion of any
convertible securities into shares of Common Stock and (iii) the
transfer of the 2008 Convertible Notes and Series A Preferred Stock to
the Company as described in the Prospectus. For purposes hereof,
"immediate family" shall mean any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships. If
(1) during the last 17 days of the 180-day restricted period the
Company issues an earnings release, or material news or a material
event relating to the Company occurs or (2) prior to the expiration of
the 180-day restricted period the Company announces that it will
release earnings results during the 16-day period beginning on the last
day of the 180-day period, then the restrictions imposed by this
Section (5)(ii)(a) shall continue to apply until the expiration of the
18-day period beginning on the issuance of the earnings release or the
occurrence of the material news or material event.
(b) Such Selling Stockholder will not take, directly or
indirectly, any action designed to or that would constitute or that
might reasonably be expected to cause or result in, under the Exchange
Act or otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
(c) Such Selling Stockholder will advise you promptly, and if
requested by you, will confirm such advice in writing, so long as
delivery of a prospectus relating to the Securities by an underwriter
or dealer may be required under the Act, of any change in information
in the Registration Statement or the Prospectus relating to such
Selling Stockholder.
Furthermore, the Company covenants with Citigroup Global
Markets Inc. and ▇▇▇▇▇▇ Brothers Inc. that the Company will comply with all
applicable securities and other applicable laws, rules and regulations in each
foreign jurisdiction in which the Directed Shares are offered in connection with
the Directed Share Program.
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the Underwriters to purchase the Underwritten Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Stockholders contained herein as of the Execution Time, the Closing Date and any
Option Closing Date, to the accuracy of the statements of the Company and the
19
Selling Stockholders made in any certificates delivered pursuant to the
provisions hereof, to the performance by the Company and the Selling
Stockholders of their respective obligations hereunder and to the following
additional conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Representatives agree in
writing to a later time, the Registration Statement will become
effective not later than (i) 6:00 PM, New York City time, on the date
of determination of the public offering price, if such determination
occurred at or prior to 3:00 PM, New York City time, on such date or
(ii) 9:30 AM on the Business Day following the day on which the public
offering price was determined, if such determination occurred after
3:00 PM, New York City time, on such date; if filing of the Prospectus,
or any supplement thereto, is required pursuant to Rule 424(b), the
Prospectus, and any such supplement, will be filed in the manner and
within the time period required by Rule 424(b); and no stop order
suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been
instituted or threatened.
(b) The Company shall have requested and caused ▇▇▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP, counsel for the Company, to have furnished to the
Representatives and the Selling Stockholders their opinion, dated the
Closing Date and addressed to the Representatives, to the effect that:
(i) each of the Company, Brightstar U.S., Inc. and
Narbitec, LLC is validly existing in good standing under the
laws of the jurisdiction in which it is organized, with the
corporate power and authority to own or lease, as the case may
be, and to operate its properties and conduct its business as
described in the Prospectus, and is duly qualified to do
business as a foreign corporation or other entity and is in
good standing under the laws of each state set forth on
Schedule IV to this Agreement;
(ii) all the outstanding shares of capital stock of
Brightstar U.S., Inc. and membership interests of Narbitec,
LLC have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set
forth in the Prospectus, based solely on such counsel's review
of corporate records provided to it, 90% of the outstanding
shares of capital stock of Brightstar U.S., Inc. and 51% of
the membership interests of Narbitec, LLC are owned by the
Company directly free and clear of any perfected security
interest except as set forth in the Prospectus and, to the
knowledge of such counsel, any other security interest, claim,
lien or encumbrance;
(iii) the Company's authorized equity capitalization
is as set forth in the Prospectus; the capital stock of the
Company conforms in all material respects to the description
thereof contained in the Prospectus; the outstanding shares of
Common Stock (including the Securities being sold hereunder by
20
the Selling Stockholders) have been duly authorized and
validly issued and are fully paid and nonassessable; the
Securities being sold hereunder by the Company have been duly
authorized, and, when issued and delivered to and paid for by
the Underwriters pursuant to this Agreement, will be fully
paid and nonassessable; the Securities being sold hereunder by
the Selling Stockholders are duly listed, and admitted and
authorized for trading, on the Nasdaq National Market and the
Securities being sold hereunder by the Company are duly
listed, and admitted and authorized for trading, subject, in
each case, to official notice of issuance, on the Nasdaq
National Market; the certificates for the Securities are in
valid form; the holders of outstanding shares of capital stock
of the Company are not entitled to preemptive or other rights
to subscribe for the Securities under Delaware law, the
Company's organizational documents or, to the knowledge of
such counsel, any agreement; and, except as set forth in the
Prospectus, to such counsel's knowledge no options, warrants
or other rights to purchase, agreements or other obligations
to issue, or rights to convert any obligations into or
exchange any securities for, shares of capital stock of or
ownership interests in the Company are outstanding;
(iv) to the knowledge of such counsel, there is (A)
no pending or threatened action, suit or proceeding by or
before any court or governmental agency, authority or body or
any arbitrator involving the Company or any of its
subsidiaries or its or their property of a character required
to be disclosed in the Registration Statement that is not
adequately disclosed in the Prospectus, and (B) no franchise,
contract or other document of a character required to be
described in the Registration Statement or Prospectus, or to
be filed as an exhibit thereto, that is not described or filed
as required; and the statements included in the Prospectus
under the heading "Material United States Federal Income Tax
Considerations for Non-U.S. Holders of Our Common Stock"
insofar as such statements summarize legal matters,
agreements, documents or proceedings discussed therein, are
accurate and fair summaries of such legal matters, agreements,
documents or proceedings;
(v) the Registration Statement has become effective
under the Act; any required filing of the Prospectus, and any
supplements thereto, pursuant to Rule 424(b) has been made in
the manner and within the time period required by Rule 424(b);
to the knowledge of such counsel (based solely on a telephone
conversation with a member of the staff of the Commission), no
stop order suspending the effectiveness of the Registration
Statement has been issued, no proceedings for that purpose
have been instituted or threatened and the Registration
Statement and the Prospectus (other than the financial
statements and other financial and statistical information
contained therein, as to which such counsel need express no
opinion) comply as to form in all material respects with the
applicable requirements of the Act and the rules thereunder;
21
(vi) this Agreement has been duly authorized,
executed and delivered by the Company;
(vii) the Company is not and, immediately after
giving effect to the offering and sale of the Securities and
the application of the proceeds thereof as described in the
Prospectus, will not be, an "investment company" as defined in
the Investment Company Act of 1940, as amended;
(viii) no consent, approval, authorization, filing
with or order of any Delaware, Florida, New York or Federal
court or governmental agency or body is required for or by the
Company in connection with the transactions contemplated
hereby, except such as have been obtained under the Act and
such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution
of the Securities by the Underwriters in the manner
contemplated in this Agreement and in the Prospectus and such
other approvals (specified in such opinion) as have been
obtained;
(ix) neither the issuance and sale of the Securities,
the consummation of any other of the transactions contemplated
hereby nor the fulfillment of the terms hereof will conflict
with, result in a breach or violation of, or imposition of any
lien, charge or encumbrance upon any property or assets of the
Company or its subsidiaries pursuant to, (i) the charter or
by-laws of the Company or Brightstar U.S., Inc. or the
formation documents of Narbitec, LLC, (ii) except as set forth
in the Prospectus, (after giving effect to any consents or
waivers obtained) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or
other agreement, obligation, condition, covenant or instrument
to which the Company or its subsidiaries is a party or
otherwise bound or to which its or their property is subject
and that is set forth as an exhibit to the Registration
Statement, (iii) any Delaware, Florida, New York or Federal
statute, law, rule, regulation or (iv) to the knowledge of
such counsel, any judgment, order or decree applicable to the
Company or its subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other
authority of the United States Federal government or the
States of Delaware, New York or Florida; and
(x) to the knowledge of such counsel and except as
set forth in the Prospectus, no holders of securities of the
Company have rights to the registration of such securities
under the Registration Statement.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
State of Delaware, the State of New York, the State of Florida or the
Federal laws of the United States, to the extent it deems proper and is
22
specified in such opinion, upon the opinion of other counsel of good
standing whom it believes to be reliable and who are satisfactory to
counsel for the Underwriters and (B) as to matters of fact, to the
extent it deems proper, on certificates of responsible officers of the
Company and public officials. References to the Prospectus in this
paragraph (b) shall also include any supplements thereto at the Closing
Date.
Such counsel shall also state that:
Such counsel is not opining as to factual matters, and the
character of determinations involved in the registration process is
such that, other than as expressly set forth in their opinion, such
counsel is not passing upon and does not assume any responsibility for
the accuracy, completeness or fairness of the information included in
the Registration Statement and the Prospectus. Such counsel can advise
you, however, that in and on the basis of its review of the
Registration Statement and the Prospectus and such counsel's
participation in their preparation, nothing has come to its attention
that causes it to believe that the Registration Statement, including,
if applicable, the Rule 430A Information, at the time it became
effective, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus or
any amendment or supplement thereto, at the time the Prospectus was
issued, at the time any such amendment or supplement was issued or at
the Closing Date, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(c) Each Selling Stockholder shall have requested and caused
counsel for such Selling Stockholder reasonably satisfactory to the
Underwriters, to have furnished to the Representatives their opinion
dated the Closing Date (if any Option Securities are to be delivered
and paid for on the Closing Date) or the Option Closing Date and
addressed to the Representatives, to the effect that:
(i) this Agreement has been duly authorized, executed
and delivered by such Selling Stockholder and such Selling
Stockholder has full legal right and authority to sell,
transfer and deliver in the manner provided in this Agreement,
the Securities being sold by the Selling Stockholder
hereunder;
(ii) assuming that each Underwriter acquires its
interest in the Securities it has purchased from such Selling
Stockholder without notice of any adverse claim (within the
meaning of Section 8-105 of the UCC), upon the Underwriters'
acquiring possession of stock certificates representing the
Option Securities to be sold by such Selling Stockholder,
endorsed to the Underwriters and paying the purchase price
therefor pursuant to Section 3, the Underwriters will acquire
their respective interests in such Option Securities
(including, without limitation, all right such Selling
23
Stockholder had to transfer such Securities) and no action
based on an adverse claim (within the meaning of Section 8-105
of the UCC) may be asserted against such Underwriter with
respect to such Securities;
(iii) no consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation by such Selling Stockholder of the transactions
contemplated herein, except such as may have been obtained
under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters and such
other approvals (specified in such opinion) as have been
obtained; and
(iv) neither the sale of the Securities being sold by
such Selling Stockholder nor the consummation of any other of
the transactions herein contemplated by such Selling
Stockholder or the fulfillment of the terms hereof by such
Selling Stockholder will conflict with, result in a breach or
violation of, or constitute a default under any law or, if
applicable, the charter, by-laws or other documents of
organization of such Selling Stockholder, or the terms of any
indenture or other agreement or instrument known to such
counsel and to which such Selling Stockholder or, if
applicable, any of its subsidiaries, is a party or bound, or
any judgment, order or decree known to such counsel to be
applicable to such Selling Stockholder or, if applicable, any
of its subsidiaries, of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over such Selling Stockholder or, if applicable,
any of its subsidiaries.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of New York or the
Federal laws of the United States, to the extent they deem proper and specified
in such opinion, upon the opinion of other counsel of good standing whom they
believe to be reliable and who are satisfactory to counsel for the Underwriters,
and (B) as to matters of fact, to the extent they deem proper, on certificates
of such Selling Stockholder, responsible officers of such Selling Stockholder
and public officials.
(d) The Company shall have requested and caused local counsel
(reasonably acceptable to the Representatives) for each subsidiary
listed on Schedule III hereto to have furnished to the Representatives
their opinions, dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) such subsidiary of the Company has been duly
incorporated or formed, as applicable, and is validly existing
as a corporation or other entity in good standing under the
laws of the jurisdiction in which it is organized, with full
power and authority to own or lease, as the case may be, and
to operate its properties and conduct its business as
described in the Prospectus;
24
(ii) all the outstanding shares of capital stock of
such subsidiary have been duly and validly authorized and
issued and are fully paid and nonassessable, and, except as
otherwise set forth in the Prospectus, all outstanding shares
of capital stock of such subsidiary are owned by the Company
either directly or through subsidiaries free and clear of any
perfected security interest and, to the knowledge of such
counsel, after due inquiry, any other security interest,
claim, lien or encumbrance; and
(iii) neither the issuance and sale of the
Securities, the consummation of any other of the transactions
contemplated hereby nor the fulfillment of the terms hereof
will conflict with, result in a breach or violation of, or
imposition of any lien, charge or encumbrance upon any
property or assets of such subsidiary pursuant to, (i) its
charter, by-laws or similar organizational documents, (ii) the
terms of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which such
subsidiary is a party or otherwise bound or to which its
property is subject, (iii) any statute, law, rule or
regulation of the jurisdiction in which such subsidiary is
organized or (iv) to the knowledge of such counsel, any
judgment, order or decree applicable to the respective
subsidiary of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority
having jurisdiction over the respective subsidiary or any of
its properties.
In rendering such opinion, such counsel may rely as to matters of fact, to the
extent they deem proper, on certificates of responsible officers of the
respective subsidiary public officials. References to the Prospectus in this
paragraph (d) shall also include any supplements thereto at the Closing Date.
(e) The Representatives shall have received from Cravath,
Swaine & ▇▇▇▇▇ LLP, counsel for the Underwriters, such opinion or
opinions, dated the Closing Date and addressed to the Representatives,
with respect to the issuance and sale of the Securities, the
Registration Statement, the Prospectus (together with any supplement
thereto) and other related matters as the Representatives may
reasonably require, and the Company and each Selling Stockholder shall
have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(f) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Prospectus, any supplements to the Prospectus and this Agreement and
that:
(i) the representations and warranties of the Company
in this Agreement are true and correct on and as of the
Closing Date with the same effect as if made on the Closing
25
Date and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Prospectus (exclusive of any
supplement thereto), there has been no material adverse change
in the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth or contemplated in the Prospectus (exclusive of any
supplement thereto).
(g) Each Selling Stockholder shall have furnished to the
Representatives a certificate, signed by such Selling Stockholder or,
if applicable, by the Chairman of the Board or the President and the
principal financial or accounting officer of such Selling Stockholder
(or by officers of the Selling Stockholder performing similar
functions) dated the Closing Date, to the effect that the
representations and warranties of such Selling Stockholder in this
Agreement are true and correct in all material respects on and as of
the Closing Date to the same effect as if made on the Closing Date.
(h) The Company shall have furnished to the Representatives
such further certificates and documents as the Representatives may
reasonably request evidencing the derivation from the Company's
accounting books and records of financial data included in the
Prospectus and any amendment or supplement to the Prospectus for
periods during which the Company's financial statements were audited by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP.
(i) The Company shall have requested and caused Deloitte &
Touche LLP to have furnished to the Representatives, at the Execution
Time and at the Closing Date, letters, dated respectively as of the
Execution Time and as of the Closing Date, in form and substance
satisfactory to the Representatives, confirming that they are
independent accountants within the meaning of the Act and the
applicable rules and regulations adopted by the Commission thereunder
and that they have performed a review of the unaudited interim
financial information of the Company for the six-month periods ended
June 30, 2003 and 2004, and as at June 30, 2003 and 2004, in accordance
with Statement on Auditing Standards No. 100 and stating in effect
that:
(i) in their opinion the audited financial statements
and financial statement schedules and pro forma financial
statements included in the Registration Statement and the
Prospectus and reported on by them comply as to form in all
26
material respects with the applicable accounting requirements
of the Act and the related rules and regulations adopted by
the Commission;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the Company
and its subsidiaries; their limited review, in accordance with
standards established under Statement on Auditing Standards
No. 100, of the unaudited interim financial information for
the six-month periods ended June 30, 2003 and 2004, and as at
June 30, 2003 and 2004; carrying out certain specified
procedures (but not an examination in accordance with U.S.
generally accepted auditing standards) that would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of
the meetings of the stockholders, directors and the Audit and
Compliance, Compensation and Nominating and Governance
Committees of the Company and its subsidiaries; and inquiries
of certain officials of the Company who have responsibility
for financial and accounting matters of the Company and its
subsidiaries as to transactions and events subsequent to
December 31, 2003, nothing came to their attention which
caused them to believe that:
(1) any unaudited financial statements
included in the Registration Statement and the
Prospectus do not comply as to form in all material
respects with applicable accounting requirements of
the Act and with the related rules and regulations
adopted by the Commission with respect to
registration statements on Form S-1; and said
unaudited financial statements are not in conformity
with U.S. generally accepted accounting principles
applied on a basis substantially consistent with that
of the audited financial statements included in the
Registration Statement and the Prospectus;
(2) with respect to the period subsequent to
June 30, 2004, there were any changes, at a specified
date not more than five days prior to the date of the
letter, in the long-term debt of the Company and its
subsidiaries, minority interests or capital stock of
the Company or decreases in the stockholders' equity
or total assets of the Company as compared with the
amounts shown on the June 30, 2004 consolidated
balance sheet included in the Registration Statement
and the Prospectus, or for the period from July 1,
2004, to such specified date there were any
decreases, as compared with the comparable period in
2003 in net sales, gross profit, operating income or
net income of the Company and its subsidiaries,
except in all instances for changes or decreases set
forth in such letter, in which case the letter shall
be accompanied by an explanation by the Company as to
the significance thereof unless said explanation is
not deemed necessary by the Representatives; and
27
(3) the information included in the
Registration Statement and Prospectus in response to
Regulation S-K, Item 301 (Selected Financial Data),
Item 302 (Supplementary Financial Information) and
Item 402 (Executive Compensation) is not in
conformity with the applicable disclosure
requirements of Regulation S-K;
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Registration
Statement and the Prospectus, agrees with the accounting
records of the Company and its subsidiaries, excluding any
questions of legal interpretation; and
(iv) on the basis of a reading of the unaudited pro
forma financial statements included in the Registration
Statement and the Prospectus (the "pro forma financial
statements"); carrying out certain specified procedures;
inquiries of certain officials of the Company who have
responsibility for financial and accounting matters; and
proving the arithmetic accuracy of the application of the pro
forma adjustments to the historical amounts in the pro forma
financial statements, nothing came to their attention that
caused them to believe that the pro forma financial statements
do not comply as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation
S-X or that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of such
statements.
References to the Prospectus in this paragraph (i) shall also
include any supplements thereto at the date of the letter.
(j) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been (i) any change or
decrease specified in the letter or letters referred to in paragraph
(i) of this Section 6 or (ii) any change, or any development involving
a prospective change, in or affecting the condition (financial or
otherwise), earnings, business or properties of the Company and its
subsidiaries taken as a whole, whether or not arising from transactions
in the ordinary course of business, except as set forth or contemplated
in the Prospectus (exclusive of any supplement thereto) the effect of
which, in any case referred to in clause (i) or (ii) above, is, in the
sole judgment of the Representatives, so material and adverse as to
make it impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Registration
Statement (exclusive of any amendment thereof) and the Prospectus
(exclusive of any supplement thereto).
28
(k) Prior to the Closing Date, the Company and the Selling
Stockholders shall have furnished to the Representatives such further
information, certificates and documents as the Representatives may
reasonably request.
(l) The Securities shall have been listed and admitted and
authorized for trading on the Nasdaq National Market, and satisfactory
evidence of such actions shall have been provided to the
Representatives.
(m) At the Execution Time, the Company shall have furnished to
the Representatives a letter substantially in the form of Exhibit A
hereto from each person or stockholder identified on Annex A hereto
addressed to the Representatives.
(n) Concurrent with the consummation of the offering, (a) the
Company shall convert each share of 8% Senior Cumulative Convertible
Series A Preferred Stock and its 10.5% Convertible Senior Subordinated
Notes due 2008 into shares of Common Stock and (b) the Company shall
redeem at least [ ] shares of Common Stock issued upon the
conversion of such Series A Preferred Stock and at least [ ] shares
of Common Stock issued upon the conversion of the aggregate principal
amount of such Convertible Notes, on the terms set forth in the
Prospectus (exclusive of any supplement thereto).
(o) Subsequent to the Execution Time, there shall not have
been any decrease in the rating of any of the Company's debt securities
by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act) or any notice given
of any intended or potential decrease in any such rating or of a
possible change in any such rating that does not indicate the direction
of the possible change.
If any of the conditions specified in this Section 6 shall not
have been fulfilled when and as provided in this Agreement, or if any of the
opinions and certificates mentioned above or elsewhere in this Agreement shall
not be reasonably satisfactory in form and substance to the Representatives and
counsel for the Underwriters, this Agreement and all obligations of the
Underwriters hereunder may be cancelled at, or at any time prior to, the Closing
Date by the Representatives. Notice of such cancellation shall be given to the
Company in writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall
be delivered at the office of Cravath, Swaine & ▇▇▇▇▇ LLP, counsel for the
Underwriters, at Worldwide Plaza, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
on the Closing Date.
7. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company or any Selling
Stockholders to perform any agreement herein or comply with any provision hereof
other than by reason of a default by any of the Underwriters, the Company will
reimburse the Underwriters severally through Citigroup Global Markets Inc. and
29
▇▇▇▇▇▇ Brothers Inc., on demand, for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of the Securities. If the
Company is required to make any payments to the Underwriters under this Section
7 because of any Selling Stockholder's refusal, inability or failure to satisfy
any condition to the obligations of the Underwriters set forth in Section 6, the
Selling Stockholder whose refusal, inability or failure to satisfy any such
condition caused the Company to be required to make any such payment shall
reimburse the Company on demand for all amounts so paid pro rata in proportion
to the percentage of Securities to be sold by each such Selling Stockholder.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company and
▇▇▇▇▇▇ jointly and severally agree to indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each Underwriter
and each person who controls any Underwriter within the meaning of either the
Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (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 registration statement for the registration of the Securities as originally
filed or in any amendment thereof, or in any Preliminary Prospectus or the
Prospectus, 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
not misleading, and agree to reimburse each such indemnified party, as incurred,
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
PROVIDED, HOWEVER, that the Company and ▇▇▇▇▇▇ will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is 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
Underwriter through the Representatives specifically for inclusion therein. This
indemnity agreement is in addition to any liability that the Company or ▇▇▇▇▇▇
may otherwise have.
(b) Each Other Selling Stockholder severally agrees to
indemnify and hold harmless each Underwriter, the directors, officers,
employees and agents of each Underwriter and each person who controls
any Underwriter within the meaning of either the Act or the Exchange
Act and each other Selling Stockholder, if any, to the same extent as
the foregoing indemnity from the Company and ▇▇▇▇▇▇ to each
Underwriter, but only with reference to written information furnished
to the Company by or on behalf of such Other Selling Stockholder
specifically for inclusion in the documents referred to in the
foregoing indemnity. The Company and each Underwriter acknowledge that
the name and address and number of shares of Common Stock beneficially
30
owned by such Other Selling Stockholder constitute the only information
furnished in writing by or on behalf of such Other Selling Stockholder
for inclusion in any Preliminary Prospectus or the Prospectus. This
indemnity agreement will be in addition to any liability which any
Other Selling Stockholder may otherwise have.
(c) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of
its officers who signs the Registration Statement, and each person who
controls the Company within the meaning of either the Act or the
Exchange Act and each Selling Stockholder, to the same extent as the
foregoing indemnity from the Company and ▇▇▇▇▇▇ to each Underwriter,
but only with reference to written information relating to such
Underwriter furnished to the Company by or on behalf of such
Underwriter through the Representatives specifically for inclusion in
the documents referred to in the foregoing indemnity. This indemnity
agreement will be in addition to any liability which any Underwriter
may otherwise have. The Company and each Selling Stockholder
acknowledge that the statements set forth in the last paragraph of the
cover page regarding delivery of the Securities and, under the heading
"Underwriting", (i) the list of Underwriters and their respective
participation in the sale of the Securities, (ii) the sentences related
to concessions and reallowances and (iii) the paragraphs related to
stabilization, syndicate covering transactions and penalty bids in any
Preliminary Prospectus and the Prospectus constitute the only
information furnished in writing by or on behalf of the several
Underwriters for inclusion in any Preliminary Prospectus or the
Prospectus.
(d) In connection with the offer and sale of the Directed
Shares, the Company agrees to indemnify and hold harmless ▇▇▇▇▇▇
Brothers Inc. from and against any losses, claims, damages, expenses,
liabilities or actions which (i) arise out of, or are based upon, any
untrue statement or alleged untrue statement of a material fact
contained in any material prepared by or with the approval of the
Company for distribution to Participants in connection with the
Directed Share Program or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, (ii) arise out of, or are
based upon, the failure of any Participant to pay for and accept
delivery of Directed Shares that (A) the Participant agreed to purchase
or (B) were allocated to the Participant by ▇▇▇▇▇▇ Brothers Inc.
pursuant to such Participant's indication of interest, or (iii) is
otherwise related to the Directed Share Program, except that this
clause (iii) shall not apply to the extent that such loss, claim,
damage or liability is finally judicially determined to have resulted
primarily from the gross negligence or willful misconduct of ▇▇▇▇▇▇
Brothers Inc. and shall reimburse ▇▇▇▇▇▇ Brothers Inc. promptly upon
demand for any legal or other expenses reasonably incurred by ▇▇▇▇▇▇
Brothers Inc. in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or
action as such expenses are incurred.
31
(e) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party
in writing of the commencement thereof; but the failure so to notify
the indemnifying party (i) will not relieve it from liability under
paragraph (a), (b), (c) or (d) above unless and to the extent it did
not otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a), (b), (c) or (d) above. The
indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to
represent the indemnified party in any action for which indemnification
is sought (in which case the indemnifying party shall not thereafter be
responsible for the fees and expenses of any separate counsel retained
by the indemnified party or parties except as set forth below);
PROVIDED, HOWEVER, that such counsel shall be reasonably satisfactory
to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an
action, the indemnified party shall have the right to employ separate
counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel
if (i) the use of counsel chosen by the indemnifying party to represent
the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of,
any such action include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably concluded that
there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to
the indemnifying party, (iii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice
of the institution of such action or (iv) the indemnifying party shall
authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. An indemnifying party will not,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of
which indemnification or contribution may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding and
(ii) does not include a statement as to an admission of fault,
culpability or a failure to act by or on behalf of an indemnified
party. Notwithstanding anything contained herein to the contrary, if
indemnity may be sought pursuant to paragraph (d) of this Section 8 in
respect of such action or proceeding, then in addition to such separate
counsel for the indemnified parties, the indemnifying party shall be
liable for the reasonable fees and expenses of not more than one
32
separate firm (in addition to any local counsel) for ▇▇▇▇▇▇ Brothers
Inc. for the defense of any losses, claims, damages and liabilities
arising out of the Directed Share Program.
(f) In the event that the indemnity provided in paragraph (a),
(b), (c) or (d) of this Section 8 is unavailable to or insufficient to
hold harmless an indemnified party for any reason, the Company and
▇▇▇▇▇▇, jointly and severally, the Other Selling Stockholders severally
and the Underwriters severally agree to contribute to the aggregate
losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company, the
Selling Stockholders and one of more of the Underwriters may be subject
in such proportion as is appropriate to reflect the relative benefits
received by the Company, by the Selling Stockholders and by the
Underwriters from the offering of the Securities; PROVIDED, HOWEVER,
that in no case shall any Underwriter (except as may be provided in any
agreement among Underwriters relating to the offering of the
Securities) be responsible for any amount in excess of the underwriting
discounts or commissions applicable to the Securities purchased by such
Underwriter hereunder. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company and
▇▇▇▇▇▇, jointly and severally, the Other Selling Stockholders severally
and the Underwriters severally shall contribute in such proportion as
is appropriate to reflect not only such relative benefits but also the
relative fault of the Company and the Selling Stockholders on the one
hand and of the Underwriters on the other in connection with the
statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. Benefits received by the
Company and the Selling Stockholders shall be deemed to be equal to the
total net proceeds from the offering (before deducting expenses)
received by each of them, and benefits received by the Underwriters
shall be deemed to be equal to the total underwriting discounts and
commissions, in each case as set forth on the cover page of the
Prospectus. Relative fault shall be determined by reference to, among
other things, whether any untrue or any alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information provided by the Company, ▇▇▇▇▇▇ or the
Other Selling Stockholders, as applicable, on the one hand or the
Underwriters on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Company, the Selling
Stockholders and the Underwriters agree that it would not be just and
equitable if contribution were determined by pro rata allocation or any
other method of allocation that does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of
this paragraph (f), no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who
controls an Underwriter within the meaning of either the Act or the
Exchange Act and each director, officer, employee and agent of an
Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company or any Selling
Stockholder, as applicable, within the meaning of either the Act or the
33
Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the
same rights to contribution as the Company or such Selling Stockholder,
as applicable, subject in each case to the applicable terms and
conditions of this paragraph (f).
(g) The maximum liability of each Selling Stockholder under
such Selling Stockholder's representations, warranties and agreements
contained in Section 1 hereof and under the indemnity and contribution
agreements contained in this Section 8 shall be limited to an amount
equal to the total proceeds from the Offering (less the underwriting
discount, but before deducting expenses) received by each such Selling
Stockholder. The Company and the Selling Stockholders may agree, as
among themselves and without limiting the rights of the Underwriters
under this Agreement, as to the respective amounts of such liability
for which they each shall be responsible.
9. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions that the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the non-defaulting Underwriters)
the Securities that the defaulting Underwriter or Underwriters agreed but failed
to purchase; PROVIDED, HOWEVER, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such non-defaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any non-defaulting Underwriter,
the Selling Stockholders or the Company. In the event of a default by any
Underwriter as set forth in this Section 9, the Closing Date shall be postponed
for such period, not exceeding five Business Days, as the Representatives shall
determine in order that the required changes in the Registration Statement and
the Prospectus or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Underwriter of
its liability, if any, to the Company, the Selling Stockholders and any
non-defaulting Underwriter for damages occasioned by its default hereunder.
10. TERMINATION. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to the Company prior to delivery of and payment for the Securities, if at any
time prior to such time (i) trading in the Company's Common Stock shall have
been suspended by the Commission or the Nasdaq National Market or trading in
securities generally on the New York Stock Exchange or the Nasdaq National
Market shall have been suspended or limited or minimum prices shall have been
established on such Exchange or the Nasdaq National Market, (ii) a banking
moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war, or
other calamity or crisis the effect of which on financial markets is such as to
34
make it, in the sole judgment of the Representatives, impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Prospectus (exclusive of any supplement thereto).
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements of the
Company, of each Selling Stockholder and of the Underwriters set forth in or
made pursuant to this Agreement will remain in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter, any Selling
Stockholder or the Company or any of the officers, directors, employees, agents
or controlling persons referred to in Section 8 hereof, and will survive
delivery of and payment for the Securities. The provisions of Sections 7 and 8
hereof shall survive the termination or cancellation of this Agreement.
12. NOTICES. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telefaxed to the Citigroup Global Markets Inc. General
Counsel (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to the General Counsel,
Citigroup Global Markets Inc., at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇▇▇, Attention: General Counsel and telefaxed to the ▇▇▇▇▇▇ Brothers Inc.
Director of Litigation, General Counsel's Office (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇ ) and
confirmed to the Director of Litigation, General Counsel's Office, ▇▇▇▇▇▇
Brothers Inc., at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
General Counsel; or, if sent to the Company, will be mailed, delivered or
telefaxed to Brightstar Corp. (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to it at
Brightstar Corp., ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Legal Department; or if sent to any Selling Stockholder, will be mailed,
delivered or telefaxed and confirmed to it at the address set forth in Schedule
II hereto.
13. SUCCESSORS. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. APPLICABLE LAW. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
15. COUNTERPARTS. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. HEADINGS. The section headings used herein are for
convenience only and shall not affect the construction hereof.
35
17. DEFINITIONS. The terms that follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York
City.
"Commission" shall mean the Securities and Exchange
Commission.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"FCPA" means Foreign Corrupt Practices Act of 1977, as
amended, and the rules and regulations thereunder.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in Section 1(i)(a) hereof and any preliminary prospectus
included in the Registration Statement at the Effective Date that omits
Rule 430A Information.
"Prospectus" shall mean the prospectus relating to the
Securities that is first filed pursuant to Rule 424(b) after the
Execution Time or, if no filing pursuant to Rule 424(b) is required,
shall mean the form of final prospectus relating to the Securities
included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in Section 1(i)(a) hereof, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at
the Execution Time, in the form in which it shall become effective)
and, in the event that any post-effective amendment thereto or any Rule
462(b) Registration Statement becomes effective prior to the Closing
Date, shall also mean such registration statement as so amended or such
Rule 462(b) Registration Statement, as the case may be. Such term shall
include any Rule 430A Information deemed to be included therein at the
Effective Date as provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules
under the Act.
36
"Rule 430A Information" shall mean information with respect to
the Securities and the offering thereof permitted to be omitted from
the Registration Statement when it becomes effective pursuant to Rule
430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statement referred
to in Section 1(i)(a) hereof.
37
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
Brightstar Corp.,
By
------------------------------------
Name:
Title:
R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
------------------------------------
Falcon Mezzanine Partners, L.P.,
By
------------------------------------
Name:
Title:
Prudential Capital Partners, L.P.,
By
------------------------------------
Name:
Title:
Prudential Capital Partners Management
Fund, L.P.,
By
------------------------------------
Name:
Title:
Arrow Investment Partners,
By
------------------------------------
Name:
Title:
38
RCG Carpathia Master Fund, Ltd.,
By
------------------------------------
Name:
Title:
▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Foundation,
By
------------------------------------
Name:
Title:
39
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
Citigroup Global Markets Inc.
▇▇▇▇▇▇ Brothers Inc.
By: Citigroup Global Markets Inc.
By:
-----------------------------------------
Name:
Title
By: ▇▇▇▇▇▇ Brothers Inc.
By:
-----------------------------------------
Name:
Title
For themselves and the other several
Underwriters named in Schedule I to the
foregoing Agreement.
40
SCHEDULE I
NUMBER OF UNDERWRITTEN SECURITIES
UNDERWRITERS TO BE PURCHASED
------------ ---------------------------------
Citigroup Global Markets Inc. ...........................
▇▇▇▇▇▇ Brothers Inc. ....................................
---------
Total........................................... =========
SCHEDULE II
SELLING STOCKHOLDERS: MAXIMUM NUMBER OF OPTION SECURITIES TO BE SOLD:
-------------------- ----------------------------------------------
R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ [50% of total over-allotment]
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
[Fax no.]
Falcon Mezzanine Partners, L.P.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
[Fax no.]
Prudential Capital Partners, L.P.
Two Prudential Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
[Fax no.]
Prudential Capital Partners
Management Fund, L.P.
Two Prudential Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
[Fax no.]
Arrow Investment Partners
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
[Fax no.]
RCG Carpathia Master Fund, Ltd.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ [Fax no.]
▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Foundation
c/o Grandview Capital Management
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ [Fax no.]
---------------
Total
===============
SCHEDULE III
SUBSIDIARIES
Brightstar de Argentina, S.A.
Brightstar Proveedor de Soluciones Tecnologicas S.A. (Bolivia)
Brightstar Corp. Chile Ltda.
Brightstar Colombia Ltda.
Brightstar Dominicana, S.A.
Soluciones Tecnologicas Inteligentes Para El ▇▇▇▇▇▇▇ Movil, Cia., Ltda.
(Ecuador)
Brightstar El Salvador, S.A. de C.V.
Brightstar Guatemala, S.A.
Brightstar de Mexico, S.A. de C.V.
Soluciones Tecnologicas Inteligentes Para El ▇▇▇▇▇▇▇ Movil, S.A. de C.V.
Soluciones Tecnologicas Inteligentes Para El ▇▇▇▇▇▇▇ Movil Brasil Ltda.
Narbitec, LLC
Brightstar de Paraguay, S.R.L.
Brightstar de Peru S. R. L.
Brightstar Puerto Rico, Inc.
Brightstar U.S., Inc.
Brightstar de Venezuela, C.A.
SCHEDULE IV
FOREIGN QUALIFICATIONS
ENTITY JURISDICTIONS
------ -------------
Brightstar Corp. Florida
[others]
Brightstar U.S., Inc. Florida
Illinois
[others]
Narbitec, LLC Florida
[others]
EXHIBIT A
[LETTERHEAD OF OFFICER,
DIRECTOR OR MAJOR SHAREHOLDER OF CORPORATION]
BRIGHTSTAR CORP.
PUBLIC OFFERING OF COMMON STOCK
[ ], 2004
Citigroup Global Markets Inc.
▇▇▇▇▇▇ Brothers Inc.
As Representatives of the several Underwriters,
c/o Citigroup Global Markets Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This letter is being delivered to you in connection with the
proposed Underwriting Agreement (the "Underwriting Agreement"), among Brightstar
Corp., a Delaware corporation (the "Company"), the Selling Stockholders named in
Schedule II to the Underwriting Agreement and each of you as representatives of
a group of Underwriters named therein, relating to an underwritten public
offering of Common Stock, $0.0001 par value (the "Common Stock"), of the
Company.
In order to induce you and the other Underwriters to enter
into the Underwriting Agreement, the undersigned will not, without the prior
written consent of Citigroup Global Markets Inc. and ▇▇▇▇▇▇ Brothers Inc.,
offer, sell, contract to sell, pledge or otherwise dispose of (or enter into any
transaction that is designed to, or that might reasonably be expected to, result
in the disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the undersigned or any
affiliate controlled by the undersigned or any person in privity, with respect
to shares of Common Stock, with the undersigned or any affiliate controlled by
the undersigned), directly or indirectly, including the filing (or participation
in the filing) of a registration statement with the Securities and Exchange
Commission in respect of, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of Section
16 of the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Securities and Exchange Commission promulgated thereunder
with respect to, any shares of Common Stock of the Company or any securities
convertible into, or exercisable or exchangeable for shares of Common Stock, or
publicly announce an intention to effect any such transaction, for a period of
180 days after the date of the Underwriting Agreement.
The foregoing restrictions shall not apply to transfers of
shares of Common Stock or any security convertible into Common Stock (a) as a
bona fide gift or gifts to a member of the undersigned's immediate family, (b)
to an entity controlled by the undersigned or an immediate family member of the
undersigned or (c) to a trust the beneficiaries of which are exclusively the
undersigned or a member of the immediate family of the undersigned; PROVIDED,
HOWEVER, that in connection with any such transfer (i) each transferee shall
execute and deliver to Citigroup Global Markets Inc and ▇▇▇▇▇▇ Brothers Inc. a
duplicate form of this letter (dated and effective as of the date hereof) and
(ii) no filing by any party (transferee or transferor) under Section 16(a) of or
Regulation 13D-G under the Exchange Act shall be required or shall be made
voluntarily. For purposes hereof, "immediate family" shall mean any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships. Additionally, the foregoing restrictions shall not apply to (i)
transfers of Common Stock or any securities convertible into Common Stock by the
undersigned to the Underwriters in connection with the offering contemplated by
the Underwriting Agreement, (ii) the conversion of any convertible securities
into shares of Common Stock and (iii) the transfer of the 2008 Convertible Notes
and Series A Preferred Stock to the Company as described in the Prospectus.
If (1) during the last 17 days of the 180-day restricted
period the Company issues an earnings release, or material news or a material
event relating to the Company occurs or (2) prior to the expiration of the
180-day restricted period the Company announces that it will release earnings
results during the 16-day period beginning on the last day of the 180-day
period, then the restrictions imposed by this letter shall continue to apply
until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event.
If for any reason the Underwriting Agreement shall be
terminated prior to the Closing Date (as defined in the Underwriting Agreement),
the agreement set forth above shall likewise be terminated. This agreement shall
lapse and become null and void if a public offering for Common Stock
contemplated by the Underwriting Agreement shall not have occurred on or before
December 31, 2004.
Yours very truly,
By:
----------------------------------
Name:
Title:
Address:
ANNEX A
LOCK-UP AGREEMENTS
R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇. Fumigali
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ Lominiczi
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Diego ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
Falcon Mezzanine Partners, L.P.
Prudential Capital Partners, L.P.
Prudential Capital Partners Management Fund, L.P.
▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Foundation
Arrow Investment Partners
RCG Carpathia Master Fund, Ltd.
[▇▇▇▇▇ ▇▇▇▇▇▇▇▇]
Mitsui & Co., Ltd
Mitsui & Co. (U.S.A.), Inc.
[other]