Exhibit 10.13

 

TWELFTH AMENDMENT AND WAIVER TO LOAN AGREEMENT

 

This TWELFTH AMENDMENT AND WAIVER TO LOAN AGREEMENT (this “Amendment”) is dated
as of February 10, 2005, by and among CELLSTAR CORPORATION, a Delaware
corporation (“Parent”), each of Parent’s Subsidiaries signatory hereto (together
with Parent, each an individual “Borrower”, and collectively, the “Borrowers”),
the lenders signatory hereto (the “Lenders”) and WELLS FARGO FOOTHILL, INC., in
its capacity as agent for the Lenders (the “Agent”).

 

W I T N E S S E T H:

 

WHEREAS, the Borrowers, the Lenders and the Agent have entered into that certain
Loan and Security Agreement dated as of September 28, 2001, as amended by that
certain First Amendment to Loan Agreement dated as of October 12, 2001, as
further amended by that certain Second Amendment to Loan Agreement dated as of
February 11, 2002, as further amended by that certain Third Amendment and Waiver
to Loan Agreement dated as of May 9, 2002, as further amended by that certain
Fourth Amendment to Loan Agreement effective as of May 9, 2002, as further
amended by that certain Fifth Amendment to Loan Agreement dated as of November
13, 2002, as further amended by that certain Sixth Amendment to Loan Agreement
dated as of February 6, 2003, as further amended by that certain Seventh
Amendment to Loan Agreement dated as of February 28, 2003, as further amended by
that certain Eighth Amendment and Waiver to Loan and Security Agreement dated as
of May 31, 2003, as further amended by that certain Consent and Waiver and Ninth
Amendment to Loan and Security Agreement dated as of February 24, 2004, as
further amended by that certain Tenth Amendment to Loan Agreement dated as of
March 31, 2004, and as further amended by that certain Eleventh Amendment and
Waiver to Loan Agreement dated as of August 31, 2004 (as the same may be further
modified, amended, restated or supplemented from time to time, the “Loan
Agreement”), pursuant to which the Lenders have agreed to make loans and other
financial accommodations to the Borrowers from time to time;

 

WHEREAS, the Borrowers have requested that the Agent and the Lenders amend
certain terms of the Loan Agreement; and

 

WHEREAS, the Agent and the Lenders have agreed to the requested amendments on
the terms and conditions set forth herein.

 

NOW THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree that all capitalized terms not
otherwise defined herein shall have the meanings ascribed to such terms in the
Loan Agreement and further agree as follows:

 

1. Amendments to Section 1.1 of the Loan Agreement.

 

(a) Section 1.1 of the Loan Agreement, “Definitions”, is hereby amended and
modified by inserting the following definition in appropriate alphabetical order
therein:

 

““Miami A/R Factoring Facility” means one or more accounts receivable factoring
facilities or other credit facilities that satisfy the requirements set forth in
Section 7.1(e)(iii), in each case as determined by the Agent in its sole and
absolute discretion.”

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(b) Section 1.1 of the Loan Agreement, “Definitions”, is hereby modified and
amended by deleting the existing definition of “Fixed Charge Coverage Ratio” set
forth therein and inserting the following definition in substitution thereof:

 

““Fixed Charge Coverage Ratio” means, with respect to any Person during any
fiscal period and without duplication, the ratio for such Person during such
fiscal period, of (a) EBITDA, minus (i) cash capital expenditures, minus (ii)
tax expense (excluding amounts to be offset by any net operating losses) for
such Person during such fiscal period, plus cash tax refunds received in such
period, plus (iii) Restructuring Expenses incurred during such fiscal period,
plus (iv) to the extent deducted in calculating net earnings for the
Subsidiaries operating within the geographic area comprising Asia, expenses in
an aggregate amount of up to $6,500,000 incurred prior to November 30, 2004, in
connection with the initial public offering of the Stock of any such
Subsidiaries, to (b) (i) principal payments made by such Person on any
Indebtedness during such fiscal period (other than (A) refinancings permitted by
Section 7.1(d), (B) payments on Advances, (C) payments on revolving loans under
any Permitted Foreign Subsidiary Credit Facility to the extent available to be
reborrowed under such facility or to the extent cash collateral is released as a
result thereof, (D) payments under any Permitted Foreign Subsidiary Credit
Facility with an initial term, including any permitted extensions thereof, of
six (6) months or less, (E) cash payments on the Convertible Subordinated Debt
required by Section 6.16, (F) refinancings of debt of a Foreign Subsidiary with
the proceeds of a credit facility obtained by another Foreign Subsidiary within
the same non-U.S. geographic region, (G) principal payments on a revolving
credit facility of CellStar-Intercall AB (Cellstar Sweden) in an aggregate
amount not exceeding $10,000,000 during any fiscal year, (H) principal payments
on any accounts receivable factoring facility of CellStar Mexico to the extent
such facility is with recourse to CellStar Mexico in an aggregate amount not
exceeding $30,000,000 during any fiscal year, and (I) principal payments on any
foreign accounts receivable factoring facility or other credit facility of
CellStar Ltd. and/or National Auto Center, Inc. to the extent such facility is
with recourse to CellStar Ltd. and/or National Auto Center, Inc.), and (ii) cash
interest expense (other than (A) interest expense on a principal amount of up to
(1) $10,000,000 borrowed by CellStar-Intercall AB (Cellstar Sweden) under a
revolving credit facility, (2) $30,000,000 borrowed by CellStar Mexico under an
accounts receivable factoring facility and (3) $30,000,000 borrowed by CellStar
Mexico under a revolving credit facility, (B) an amount up to $100,000 on past
due vendor payables, and (C) interest expense incurred under the Miami A/R
Factoring Facility in an aggregate amount not to exceed $700,000 per fiscal
quarter) minus cash interest income during such fiscal period.”

 

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(c) Section 1.1 of the Loan Agreement, “Definitions”, is hereby modified and
amended by deleting the existing definition of “Initial Consolidated Tangible
Net Worth” set forth therein and inserting the following definition in
substitution thereof:

 

““Initial Consolidated Tangible Net Worth” means $130,000,000.”

 

2. Amendments to Section 7.20 of the Loan Agreement.

 

(a) Section 7.20 of the Loan Agreement, “Financial Covenants”, is hereby
modified and amended by deleting subsection (a) in its entirety and by inserting
the following in substitution thereof:

 

“(a) Consolidated Tangible Net Worth. Parent and its Subsidiaries, taken as a
whole, shall not permit Consolidated Tangible Net Worth to be less than the
required amount set forth in the following table as of the last day of each
fiscal quarter as set forth below, and for each month following such quarter-end
date until the next fiscal quarter-end calculation:

 

Applicable Amount

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Applicable Period

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Initial Consolidated Tangible Net Worth, plus (a) 75% of net income of the
Parent and its Subsidiaries, on a consolidated basis (without any deduction for
losses) on a cumulative basis from December 1, 2004 for each quarter ended
thereafter through such date of determination, minus (b) 100% of the
Restructuring Expenses incurred on or after December 1, 2004 on a cumulative
basis through such date of determination not to exceed $5,000,000.    Beginning
with the fiscal quarter ended November 30, 2004 through the Maturity Date.

 

”

 

(b) Section 7.20 of the Loan Agreement, “Financial Covenants”, is hereby
modified and amended by deleting subsection (b) in its entirety and by inserting
the following in substitution thereof:

 

“(b) Fixed Charge Coverage Ratio for Asia and Latin America. Fail to maintain a
Fixed Charge Coverage Ratio of at least the required ratio set forth in the
following table as of the last day of each fiscal quarter set forth in the table
below, (i) with respect to the Subsidiaries operating within the geographic area
comprising Latin America, calculated for the immediately preceding four fiscal
quarter period ending on such date, and (ii) with respect to the Subsidiaries
operating within the geographic area comprising Asia, (A) calculated as of
August 31, 2005 for the one-quarter fiscal period

 

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then ended, (B) calculated as of November 30, 2005 for the two-quarter fiscal
period then ended, (C) calculated as of February 28, 2006 for the three-quarter
fiscal period then ended and (D) calculated as of May 31, 2006 and each fiscal
quarter ending thereafter, for the immediately preceding four-quarter fiscal
period ending on such date.

 

Required Ratio

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Applicable Region

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(2.00):1.00 for the fiscal quarter
ending on or about August 31, 2005;

 

(1.00):1.00 for the fiscal quarter
ending on or about November 30, 2005;

 

(0.00):1.00 for the fiscal quarter
ending on or about February 28, 2006;

 

0.50:1.00 for the fiscal quarter
ending on or about May 31, 2006; and

 

for each fiscal quarter end thereafter,
2.00:1.00

   Subsidiaries operating within the geographic area comprising Asia 2.00:1.00
for the fiscal quarter
ending on November 30, 2001 and
each fiscal quarter end thereafter    Subsidiaries operating within the
geographic area comprising Latin America

 

Notwithstanding the foregoing, for any period in which a Fixed Charge Coverage
Ratio is calculated hereunder for the Asia and Latin America regions, if, for
any region on an individual basis, the result of the calculation set forth in
clause (b) of the definition of Fixed Charge Coverage Ratio hereunder for the
Asia and Latin America regions, respectively is less than or equal to zero, no
Fixed Charge Coverage Ratio will be tested pursuant to this subsection (b).”

 

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(c) Section 7.20 of the Loan Agreement, “Financial Covenants”, is hereby
modified and amended by deleting subsection (c) in its entirety and by inserting
the following in substitution thereof:

 

“(c) Fixed Charge Coverage Ratio for the Domestic Business Unit. Fail to
maintain a Fixed Charge Coverage Ratio of at least the required ratio set forth
in the following table calculated as of August 31, 2001 for the three quarter
fiscal period then ended, and as of November 30, 2001 and each fiscal quarter
end thereafter, for the immediately preceding four fiscal quarter period, for
the Domestic Business Unit:

 

Required Ratio prior to
giving effect to conversion,
exchange, refinance, or
extension of 80% of
Convertible Subordinated
Debt pursuant to
Section 6.16(a)

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Required Ratio after giving
effect to conversion,
exchange, refinance, or
extension of 80% of
Convertible Subordinated
Debt pursuant to
Section 6.16(a)

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Test Date

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1.10:1.0    1.10:1.0    August 31, 2001 1.10:1.0    1.25:1.0    November 30,
2001 1.10:1.0    1.25:1.0    February 28, 2002 1.10:1.0    1.25:1.0    May 31,
2002 1.10:1.0    1.25:1.0    August 31, 2002 1.50:1.0    1.50:1.0    November
30, 2002, February 28, 2003, May 31, 2003, August 31, 2003, November 30, 2003,
February 28, 2004, May 31, 2004 and August 31, 2004 (0.50):1.0    (0.50):1.0   
November 30, 2004 (1.50):1.0    (1.50):1.0    February 28, 2005 and May 31, 2005
(0.50):1.0    (0.50):1.0    August 31, 2005 0.50:1.0    0.50:1.0    November 30,
2005 1.50:1.0    1.50:1.0    February 28, 2006 and each fiscal quarter ended
thereafter

 

Notwithstanding the foregoing, for any period in which a Fixed Charge Coverage
Ratio is calculated hereunder for the Domestic Business Unit, where the result
of the calculation set forth in clause (b) of the definition of Fixed Charge
Coverage Ratio hereunder for the Domestic Business Unit, taken as a whole, is
less than or equal to zero, no Fixed Charge Coverage Ratio will be tested
pursuant to this subsection (c).”

 

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3. Waivers.

 

(a) Subject to the terms and conditions set forth herein, the Agent and the
Lenders hereby waive compliance with, and waive the Defaults and Events of
Default arising under the Loan Agreement, applicable to:

 

(i) Borrowers failing to maintain a Fixed Charge Coverage Ratio for their
Subsidiaries operating within Asia of 1.50:1.0 for the fiscal quarter ending
November 30, 2004 as required under Section 7.20(b) of the Loan Agreement; and

 

(ii) Borrowers failing to maintain a Fixed Charge Coverage Ratio for the
Domestic Business Unit of (0.50):1.0 for the fiscal quarter ending November 30,
2004 as required under Section 7.20(c) of the Loan Agreement;

 

provided, further that in no event shall such waivers 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 Section 7.20, or the occurrence of any Default or Event of Default
under the Loan Agreement.

 

4. No Other Amendments or Waivers. Except as set forth in Section 3 above, the
execution, delivery and effectiveness of this Amendment shall not operate as a
waiver of any right, power or remedy of the Agent or the Lenders under the Loan
Agreement or any of the other Loan Documents, nor constitute a waiver of any
provision of the Loan Agreement or any of the other Loan Documents. Except for
the amendments and waivers set forth above, the text of the Loan Agreement and
all other Loan Documents shall remain unchanged and in full force and effect and
each Borrower hereby ratifies and confirms its obligations thereunder. This
Amendment shall not constitute a modification of the Loan Agreement or a course
of dealing with the Agent or the Lenders at variance with the Loan Agreement
such as to require further notice by the Agent or the Lenders to require strict
compliance with the terms of the Loan Agreement and the other Loan Documents in
the future, except as expressly set forth herein. Each Borrower acknowledges and
expressly agrees that the Agent and the Lenders reserve the right to, and do in
fact, require strict compliance with all terms and provisions of the Loan
Agreement and the other Loan Documents. The Borrowers have no knowledge of any
challenge to the Agent’s or any Lenders’ claims arising under the Loan
Documents, or to the effectiveness of the Loan Documents.

 

5. Conditions Precedent to Effectiveness. This Amendment shall become effective
as of the date hereof when, and only when, the Agent shall have received each of
the following:

 

(a) fully executed and delivered counterparts of this Amendment by the
Borrowers, the Required Lenders and the Agent;

 

(b) payment of a Lenders’ amendment fee from the Borrowers in the amount of
$375,000.00 (it being understood that, by execution and delivery of this
Amendment, the Borrowers authorize the Agent to charge the Borrowers’ Loan
Account for such fee and such amount shall thereafter accrue interest at the
rate applicable to Advances under the Loan Agreement in accordance with Section
2.6 of the Loan Agreement) which shall be for the benefit of the Lenders in
accordance with each Lender’s Pro Rata Share; and

 

(c) such other information, documents, instruments or approvals as the Agent or
the Agent’s counsel may reasonably require.

 

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6. Representations and Warranties of Borrowers. Each Borrower represents and
warrants to the Agent and the Lenders as follows:

 

(a) Each Borrower is a corporation or limited partnership organized or formed,
as the case may be, validly existing and in good standing under the laws of the
jurisdiction indicated on the signature pages hereto and in all other
jurisdictions in which the failure to be so qualified reasonably could be
expected to constitute a Material Adverse Change;

 

(b) The execution, delivery, and performance by each Borrower of this Amendment
are within such Borrower’s corporate or partnership authority, have been duly
authorized by all necessary corporate or partnership action and do not and will
not (i) violate any provision of federal, state, or local law or regulation
applicable to such Borrower, the Governing Documents of any Borrower, or any
order, judgment, or decree of any court or other Governmental Authority binding
on any Borrower, (ii) conflict with, result in a breach of, or constitute (with
due notice or lapse of time or both) a default under any material contractual
obligation of any Borrower, (iii) result in or require the creation or
imposition of any Lien of any nature whatsoever upon any properties or assets of
any Borrower, other than Permitted Liens, or (iv) require any approval of any
Borrower’s shareholders, partners, or members or any approval or consent of any
Person under any material contractual obligation of any Borrower;

 

(c) The execution, delivery, and performance by each Borrower of this Amendment
do not and will not require any registration with, consent, or approval of, or
notice to, or other action with or by, any Governmental Authority or other
Person;

 

(d) This Amendment and all other documents contemplated hereby, when executed
and delivered by each Borrower will be the legally valid and binding obligations
of such Borrower, enforceable against each Borrower in accordance with their
respective terms, except as enforcement may be limited by equitable principles
or by bankruptcy, insolvency, reorganization, moratorium, or similar laws
relating to or limiting creditors’ rights generally; and

 

(e) No Default or Event of Default is existing.

 

7. Counterparts. This Amendment may be executed in multiple counterparts, each
of which shall be deemed to be an original and all of which, taken together,
shall constitute one and the same agreement. In proving this Amendment in any
judicial proceedings, it shall not be necessary to produce or account for more
than one such counterpart signed by the party against whom such enforcement is
sought. Delivery of a signature page hereto by facsimile transmission or by
e-mail transmission of an adobe file format document (also known as a PDF file)
shall be as effective as delivery of a manually executed counterpart hereof.

 

8. Reference to and Effect on the Loan Documents. Upon the effectiveness of this
Amendment, on and after the date hereof each reference in the Loan Agreement to
“this Agreement,” “hereunder,” “hereof” or words of like import referring to the
Loan Agreement, and each reference in the other Loan Documents to “the Loan
Agreement”, “thereunder”, “thereof” or words of like import referring to the
Loan Agreement, shall mean and be a reference to the Loan Agreement as amended
hereby.

 

9. Costs, Expenses and Taxes. The Borrowers agree to pay on demand all
reasonable costs and expenses in connection with the preparation, execution, and
delivery of this Amendment and the other instruments and documents to be
delivered hereunder, including,

 

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without limitation, the reasonable fees and out-of-pocket expenses of counsel
for the Agent with respect thereto and with respect to advising the Agent as to
its rights and responsibilities hereunder and thereunder.

 

10. Governing Law. This Amendment 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, without reference to the conflict or
choice of laws provisions thereof.

 

11. Loan Document. This Amendment shall be deemed to be a Loan Document for all
purposes.

 

[Signature pages follow]

 

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment as of the day and year 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

 

TWELFTH AMENDMENT TO LOAN AGREEMENT

 

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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

 

TWELFTH AMENDMENT TO LOAN AGREEMENT

 

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NAC HOLDINGS, INC., a Nevada corporation

By:

 

/s/ Elaine Flud Rodriguez

Name: 

 

Elaine Flud Rodriguez

Title:

 

President

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

 

TWELFTH AMENDMENT TO LOAN AGREEMENT

 

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

By:

 

/s/ Robert Bernier

           

Name: 

 

Robert Bernier

           

Title:

 

VP

            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/ Greg Gentry

           

Name: 

 

Greg Gentry

           

Title:

 

Portfolio Manager

            PNC BANK NATIONAL ASSOCIATION, as a Lender            

By:

 

/s/ Robin L. Arriola

           

Name: 

 

Robin L. Arriola

           

Title:

 

Vice President

 

TWELFTH AMENDMENT TO LOAN AGREEMENT

 

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