Exhibit 10.16

 

WAIVER

 

As of April 14, 2005

 

CELLSTAR CORPORATION,

as Administrative Borrower

1730 Briercroft Court

Carrollton, Texas 75006

 

Ladies and Gentlemen:

 

Reference is hereby made to that certain Loan and Security Agreement (as
amended, restated, supplemented or otherwise modified from time to time, the
“Loan Agreement”), dated as of September 28, 2001, by and among CellStar
Corporation, a Delaware corporation (the “Parent”), certain of its Subsidiaries
(as defined therein) signatory thereto (together with the Parent, each a
“Borrower” and collectively the “Borrowers”), the lenders signatory thereto
(“Lenders”) and Wells Fargo Foothill, Inc., as Administrative Agent for the
Lenders (the “Agent”). All capitalized terms not otherwise defined herein shall
have the meanings set forth in the Loan Agreement.

 

The Borrowers have failed to perform obligations owed to the Agent and the
Lenders under the terms and conditions of the Loan Agreement as a result of the
Parent’s failure to (i) file its Form 10-K Annual Report for the fiscal year
ending November 30, 2004 on or before March 1, 2005 in violation of Section 4.08
of the Indenture (the “Indenture”) for the Parent’s 12% Senior Subordinated
Notes due January 2007 (the “Subordinated Notes”), and (ii) cause its
independent public accountants to deliver a letter (the “Accountants Letter”) to
the Trustee (as defined in the Indenture) confirming that their audit
examination included a review of the terms of the Indenture and whether any
“Default” or “Event of Default” has come to their attention as required pursuant
to Section 4.06(b) of the Indenture, in each case resulting in an Event of
Default under Section 8.9 of the Loan Agreement (the “Existing Events of
Default”). The Agent and the Lenders have previously waived the Existing Events
of Default provided that, among other things, the Parent file its Form 10-K
Annual Report and deliver the Accountants Letter on or prior to April 15, 2005
pursuant to that certain Waiver dated as of March 1, 2005 and that certain
Waiver and Consent dated as of March 29, 2005 (collectively, the “Previous
Waiver”). The Borrowers anticipate that the Parent will not file its Form 10-K
Annual Report or deliver the Accountants Letter on or before April 15, 2005, in
which case the Previous Waiver will be of no further force or effect.

 

In addition, the Borrowers anticipate that they will be unable to perform
obligations owed to the Agent and the Lenders under the terms and conditions of
the Loan Agreement as a result of the Parent’s failure to file its Form 10-Q
Quarterly Report for the fiscal quarter ending February 28, 2005 on or before
April 15, 2005 in violation of Section 4.08 of the Indenture resulting in an
Event of Default under Section 8.9 of the

--------------------------------------------------------------------------------

Loan Agreement (the “Anticipated Event of Default”; together with the Existing
Events of Default, collectively the “Specified Events of Default”). As such,
CellStar Corporation, as Administrative Borrower, has requested that the Agent
and the Lenders (i) extend the delivery date for the Form 10-K Annual Report and
the Accountants Letter as required under the Previous Waiver until May 16, 2005,
(ii) waive the Anticipated Event of Default and (iii) further extend the date of
delivery for the Parent’s Financial Statements required pursuant to Section
6.3(b) of the Loan Agreement until May 16, 2005.

 

The Agent and the Lenders hereby (i) extend the delivery date for the Form 10-K
Annual Report and the Accounts Letter as required under the Previous Waiver
until May 16, 2005 and (ii) waive the Anticipated Event of Default; and their
respective rights and remedies under the Loan Agreement arising as a result of
the Anticipated Event of Default, in each case so long as the following
conditions are satisfied: (a) the Parent shall file its Form 10-K Annual Report
for the fiscal year ended November 30, 2004 and its Form 10-Q Quarterly Report
for the fiscal quarter ended February 28, 2005 on or before May 16, 2005 and (b)
the holders of the Subordinated Notes (or the Trustee on behalf of the holders
of the Subordinated Notes) shall not exercise any remedies against any Loan
Party with respect to the Specified Events of Default (other than giving of
notice of default pursuant to Section 6.01(c) of the Indenture). Each Borrower
hereby acknowledges and agrees that the failure of the events set forth in (a)
and (b) above to occur shall cause this Waiver to be of no further effect.

 

In addition, the Agent and the Lenders hereby further waive the provisions of
Section 6.3(b) of the Loan Agreement to the extent necessary to permit the
Parent to deliver audited financial statements for the Parent and its
Subsidiaries for the fiscal year ending November 30, 2004 required pursuant to
Section 6.3(b) of the Loan Agreement, no later than May 16, 2005.

 

Each of the Borrowers hereby represents and warrants that (i) as of the date
hereof, the holders of the Subordinated Notes (or the trustee on behalf of the
holders of the Subordinated Notes) have not exercised any remedies against any
Loan Party with respect to the Specified Events of Default or given notice of
default pursuant to Section 6.01(c) of the Indenture with respect to the
Specified Events of Default and (ii) after giving effect hereto, no event has
occurred and is continuing which constitutes an Event of Default or would
constitute an Event of Default but for the requirement that notice be given or
time elapse or both.

 

This Waiver shall not waive any other requirement or hinder, restrict or
otherwise modify the rights and remedies of the Agent and the Lenders following
the occurrence of any other failure to comply with the obligations under the
Subordinated Notes, or the occurrence of any other Event of Default under the
Loan Agreement. Except as otherwise expressed herein, the text of the Loan
Agreement and the other Loan

 

2

--------------------------------------------------------------------------------

Documents shall remain in full force and effect, and the Agent and the Lenders
hereby reserve the right to require strict compliance in the future with all
terms and conditions of the Loan Agreement and the other Loan Documents.

 

This Waiver may be executed in any number of counterparts, each of which shall
be deemed an original but all of which, when taken together, shall constitute
one in the same agreement. Delivery of a counterpart hereto by facsimile
transmission or by transmission of an Adobe portable document format file (also
known as a “PDF file”) shall be as effective as delivery of an original
counterpart hereto.

 

This Waiver shall be deemed to be made pursuant to the laws of the State of
Georgia with respect to agreements made and to be performed wholly in the State
of Georgia, and shall be construed, interpreted, performed and enforced in
accordance therewith.

 

This Waiver shall be effective as of the date set forth above upon the execution
hereof by the Agent, the Required Lenders and the Administrative Borrowers.

 

This Waiver shall constitute a Loan Document for all purposes.

 

[the remainder of this page intentionally left blank]

 

3

--------------------------------------------------------------------------------

AGENT AND LENDERS:       WELLS FARGO FOOTHILL, INC., a California corporation,
as Agent and as a Lender             By:  

/s/ Robert Bernier

           

Name: 

 

Robert Bernier

           

Title:

 

Vice President

        FLEET CAPITAL CORPORATION, as a Lender             By:  

/s/ H. Michael Wills

           

Name: 

 

H. Michael Wills

           

Title:

 

Senior Vice President

        TEXTRON FINANCIAL CORPORATION, as a Lender             By:  

/s/ Stuart A. Hall

           

Name: 

 

Stuart A. Hall

           

Title:

 

Senior Account Executive

        PNC BANK NATIONAL ASSOCIATION, as a Lender             By:  

/s/ Robin L. Arriola

           

Name: 

 

Robin L. Arriola

           

Title:

 

Vice President

 

[SIGNATURE PAGE TO WAIVER LETTER]

--------------------------------------------------------------------------------

Acknowledged and agreed to as of the date first written above:

 

BORROWERS:       CELLSTAR CORPORATION, a Delaware corporation             By:  

/s/ Elaine Flud Rodriguez

           

Name: 

 

Elaine Flud Rodriguez

           

Title:

 

Sr. VP and General Counsel

        CELLSTAR, LTD., a Texas limited partnership             By:  

National Auto Center, Inc., its General Partner

            By:  

/s/ Elaine Flud Rodriguez

           

Name: 

 

Elaine Flud Rodriguez

           

Title:

 

Sr. VP and General Counsel

        NATIONAL AUTO CENTER, INC., a Delaware corporation             By:  

/s/ Elaine Flud Rodriguez

           

Name: 

 

Elaine Flud Rodriguez

           

Title:

 

Sr. VP and General Counsel

        CELLSTAR FINANCO, INC., a Delaware corporation             By:  

/s/ Elaine Flud Rodriguez

           

Name: 

 

Elaine Flud Rodriguez

           

Title:

 

Sr. VP and General Counsel

 

[SIGNATURE PAGE TO WAIVER LETTER]

--------------------------------------------------------------------------------

        CELLSTAR INTERNATIONAL CORPORATION/SA, a Delaware corporation          
  By:  

/s/ Elaine Flud Rodriguez

           

Name: 

 

Elaine Flud Rodriguez

           

Title:

 

Sr. VP and General Counsel

        CELLSTAR FULFILLMENT, INC., a Delaware corporation             By:  

/s/ Elaine Flud Rodriguez

           

Name: 

 

Elaine Flud Rodriguez

           

Title:

 

Sr. VP and General Counsel

        CELLSTAR INTERNATIONAL CORPORATION/ASIA, a Delaware corporation        
    By:  

/s/ Elaine Flud Rodriguez

           

Name: 

 

Elaine Flud Rodriguez

           

Title:

 

Sr. VP and General Counsel

        AUDIOMEX EXPORT CORP., a Texas corporation             By:  

/s/ Elaine Flud Rodriguez

           

Name: 

 

Elaine Flud Rodriguez

           

Title:

 

Sr. VP and General Counsel

        NAC HOLDINGS, INC., a Nevada corporation             By:  

/s/ Elaine Flud Rodriguez

           

Name: 

 

Elaine Flud Rodriguez

           

Title:

 

President

 

[SIGNATURE PAGE TO WAIVER LETTER]

--------------------------------------------------------------------------------

        CELLSTAR GLOBAL SATELLITE SERVICES, LTD., a Texas limited partnership  
     

By:

 

National Auto Center, Inc., its General Partner

           

By:

 

/s/ Elaine Flud Rodriguez

           

Name: 

 

Elaine Flud Rodriguez

           

Title:

 

Sr. VP and General Counsel

        CELLSTAR FULFILLMENT LTD., a Texas limited partnership        

By:

 

CellStar Fulfillment, Inc., its General Partner

           

By:

 

/s/ Elaine Flud Rodriguez

           

Name: 

 

Elaine Flud Rodriguez

           

Title:

 

Sr. VP and General Counsel

 

[SIGNATURE PAGE TO WAIVER LETTER]