Exhibit 10.1

SETTLEMENT AGREEMENT

This SETTLEMENT AGREEMENT (“Agreement”) is made and entered into this 27th day
of February, 2007 (the “Effective Date”), by and between CellStar International
Corporation\Asia, a Delaware corporation (“CICA”), CellStar Corporation, a
Delaware corporation and parent company of CICA  (“CellStar”), CellStar, Ltd., a
Texas limited partnership (“CellStar Ltd.”), Fine Day Holdings Limited, a
corporation organized and existing under the laws of the British Virgin Islands
(“Fine Day”), CellStar (Asia) Corporation Limited, a Hong Kong corporation
(“CellStar Asia”), and Mr. Horng An-Hsien, the Chairman and sole shareholder of
Fine Day (“Mr. Horng”).

WITNESSETH:

WHEREAS, Fine Day is the Obligor under that one certain Subordinated Promissory
Note dated September 2, 2005, in the principal amount of US$6,000,000.00 (the
“Note”); and

WHEREAS, the principal balance of the Note is payable in full on or before
September 1, 2008 (the “Maturity Date”), with interest paid quarterly in
advance, commencing March 1, 2006; and

WHEREAS, the Note was issued by Fine Day as partial payment of the purchase
price for the outstanding shares of CellStar Asia pursuant to the terms of an
Amended and Restated Stock Purchase Agreement between CICA and Fine Day dated as
of August 24, 2005 (the “Stock Purchase Agreement”); and

WHEREAS, further in connection with the execution of the Stock Purchase
Agreement, CellStar, Ltd. granted a license to CellStar Asia to use certain
trademarks, logos, service marks and other intellectual property (the “Marks”)
pursuant to a Trademark License Agreement dated as of September 2, 2005 (the
“License Agreement”); and

WHEREAS, Fine Day has informed CICA that it intends to cause CellStar Asia and
its wholly-owned subsidiary Shanghai CellStar International Trading Co., Ltd.
(“Shanghai CellStar”), to cease operations and, as a result, Fine Day will not
be able to pay quarterly interest payments or the principal of the Note at the
Maturity Date; and

WHEREAS, Fine Day and Mr. Horng have requested that CICA agree to accept a
compromise settlement of the obligation under the Note;

NOW, THEREFORE, in consideration of the premises, representations, mutual
covenants and agreements hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
intending to be legally bound hereby, the Parties agree as follows:

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

1.             Mutual Release of All Claims.  Upon the terms and subject to the
conditions  contained in this Agreement, CICA hereby waives, releases and
forever discharges Fine Day, and Fine Day hereby waives, releases and forever
discharges CICA, from any and all claims, causes of action, losses, obligations,
liabilities, damages, judgments, costs or expenses (including attorneys’ fees),
of any kind whatsoever, except for the rights and obligations of this Agreement
and Mutual Release as outlined below.  CICA and Fine Day agree, to the fullest
extent permitted by law, not to in any manner — and whether directly or
indirectly — institute, prosecute or pursue any complaints, claims, charges,
demands, suits, actions or causes of action, whether in law or in equity, which
they assert or could assert against the other, at common law or under any
statute, rule, regulation, order or law, whether federal, state or local or on
any grounds whatsoever.

2.             Consideration for this Settlement.  As consideration for the
promises contained in this Agreement, and the mutual releases granted pursuant
hereto, Fine Day, CellStar Asia, Mr. Horng and CICA make the following
representations and agreements:

(a)           On or before the Closing Date, Fine Day shall pay to CICA the
amount of US$650,000.00, payable to CICA by wire transfer to an account
nominated in writing by CICA.

(b)           On or before the Closing Date, Mr. Horng shall transfer to
CellStar, free and clear of all liens, pledges and security interests of any
kind, all of his ownership interest in all shares of common stock of CellStar
owned by him (the “CellStar Shares”).  Mr. Horng hereby represents and warrants
to CICA and CellStar that, as of the date of this Agreement, he owns at least
474,000 shares of CellStar common stock but if he shall subsequently become
aware of any further shares owned by him in CellStar, these shares shall also be
included within the definition of “CellStar Shares”.  Mr. Horng shall execute
and deliver to CellStar at Closing a stock power in substantially the form
attached hereto as Exhibit A, along with any other documents reasonably
requested by CellStar in order to consummate the transfer of the CellStar Shares
to CellStar.

(c)           Within twenty (20) days following the date of this Agreement, Mr.
Horng shall deliver to CellStar a legal proxy obtained from his broker with
respect to the CellStar Shares, duly executed by Mr. Horng.  Mr. Horng further
agrees to execute and deliver to CellStar within twenty (20) days following the
date of this Agreement, an irrevocable proxy with respect to the CellStar Shares
in substantially the form set forth as Exhibit B attached hereto, entitling the
attorneys in fact named therein to vote the CellStar Shares.

(d)           CellStar Ltd and Cellstar Asia hereby agree to terminate the
License Agreement without any further claim by either party against the other
effective as of the Closing Date but subject to the following terms upon
Closing:

·                                    CellStar Asia shall, and shall cause each
of its subsidiaries to immediately cease (i) using the Marks, and (ii) any
Internet domain names that include the name “CellStar” or any similar name,

2

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

                                          including any translation or
transliteration of such name (“Internet Domain Names”).

·                                    CellStar Asia will assign, transfer and
convey to CellStar, Ltd. upon Closing any and all right, title and interest in
and to the Marks, together with any goodwill, and the Internet Domain Names,
which CellStar Asia may have obtained and agrees to execute any instrument
reasonably requested by CellStar, Ltd. to accomplish, register, record or
confirm such transfer upon Closing.

·                                    Immediately following the Closing, CellStar
Asia shall, and shall cause each of its subsidiaries and affiliates, including
Shanghai CellStar, to change their respective corporate name to delete the name
“CellStar” or any similar name, including any translation or transliteration of
such name, from its corporate name.

·                                    Notwithstanding the foregoing, CellStar
Limited will grant a non-exclusive licence to CellStar Asia and Shanghai
CellStar and their subsidiaries and affiliates to continue to use the name
“CellStar” and its Chinese transliteration for the following purposes only:

(i)                                           for the purposes of winding down
their respective businesses;

(ii)                                        for the purposes of continuing their
existing litigation in China and Hong Kong subject to them providing to CellStar
Ltd. at least annually and on demand a  report from the attorneys of Cellstar
Asia or Shanghai Cellstar (as the case may be) as to  whether or not such
litigation is subsisiting; and

(iii)                               for the purposes of policing the vendors of
CellStar products in China (including those known as the “Small Bs”).

·                                          The limited non-exclusive license set
forth above shall automatically terminate upon the earlier to occur of (i) the
final wind down of the business of CellStar Asia and Shanghai CellStar and the
completion of all outstanding litigation, or (ii) the expiration of  48 months
from the date of this Agreement.

(e)           Save only for compliance by the respective parties with the terms
of this Agreement (i) Mr. Horng hereby releases CellStar, its subsidiaries and
their respective employees, officers, agents, directors, stockholders and
affiliates, from any and all claims, causes of action, losses, obligations,
liabilities, damages, judgments, costs, or expenses (including attorneys fees),
of any kind whatsoever, including, but not limited to, any claims for
indemnification and/or expense reimbursement arising out of his employment
and/or service as a director or officer of CellStar and its subsidiaries and
(ii) Cellstar, Cellstar Ltd and CICA and their respective subsidiaries and
affiliates hereby release Mr Horng, Fine Day and Cellstar Asia and their
subsidiaries and their respective employees, officers, agents, directors,
stockholders and affiliates from any and all claims, causes of action, losses,
obligations, liabilities, damages, judgments, costs, or expenses (including
attorneys fees), of any kind whatsoever including but not limited to claims
under the Licence Agreement, the Stock Purchase Agreement and the Note.

3

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

(f) CICA confirms that with effect from the date hereof no further sums shall be
due and/or payable by Mr. Horng (by way of principal, interest or otherwise)
pursuant to the Note.

3.             Closing.  The closing of the transactions contemplated in this
Agreement (the “Closing”) shall occur on April 13, 2007 (the “Closing Date”),
unless mutually extended by mutual agreement of the parties. Upon Closing the
Note shall be cancelled with CICA confirming that there are no further amounts
(whether principal, interest or otherwise) due thereunder. In the event at
Closing, either party shall fail to take any action required to be taken or
deliver any document required to be provided herein, this Agreement shall be
null and void for all purposes and Cellstar shall return to Mr. Horng the
irrevocable proxy provided pursuant to Section 2(c) duly cancelled.

4.             Confidentiality. Each party agrees  not to directly or indirectly
make any press announcement whatsoever relating to the terms hereof, and
specifically not to make any press announcement in relation the winding down of
Cellstar Asia and Shanghai Cellstar and/or the release of the Note, save only if
such announcement has been approved by all other parties in writing; provided,
however, that CellStar may make such disclosure of this Agreement as may be
required by applicable law, rule or regulation.

5.             Breach.  Subject to the provision of Section 10 of this
Agreement, in the event either party breaches any term or provision of this
Agreement, the non-breaching party may bring suit in a court of competent
jurisdiction to enforce any term or provision of this Agreement, and in the
event said court determines that a party has breached or failed to perform any
material term or provision of this Agreement, damages and injunctive relief may
be issued against such party.

6.             Assignability.  Following the Closing, this Agreement and all
rights and duties hereunder may be assigned by CellStar, CICA and CellStar, Ltd.
to 2601 Metropolis Corp., an Indiana corporation and wholly-owned subsidiary of
Brightpoint, Inc.

7.             Recovery Of Attorneys Fees.  If either party seeks and obtains
judicial or equitable relief for any violation of this Agreement by the
breaching party, the non-breaching party shall be entitled to recover from the
breaching party its costs and reasonable attorneys’ fees expended in such
effort.

8.             Notices.  All notices and other communications hereunder will be
in writing.  Any notice or other communication hereunder shall be deemed duly
given if it is sent by registered or certified mail, return receipt requested,
postage prepaid, and addressed to the intended recipient as set forth:

If to CellStar, CICA or CellStar Ltd.:

CellStar  Corporation
601 S. Royal Lane
Coppell, Texas 75019 U.S.A.
Fax:  972-462-3566
Attn:  General Counsel

4

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

If to Fine Day, CellStar Asia or Mr. Horng:

Fine Day Holdings Limited
___________________________
___________________________
___________________________

With copy to:

c/o Stephan, Oringher, Richman & Theodora
 2029 Century Park East, Sixth Floor
 Los Angeles, California 90067
 Attention: Martha Shen-Urquidez
 Fax: (310) 551-0283

Any party may send any notice or other communication hereunder to the intended
recipient at the address set forth above using any other means (including
personal delivery, expedited courier, messenger services, telecopy, telex,
ordinary mail or electronic mail), but no such notice or other communication
shall be deemed to have been duly given unless and until it is actually received
by the intended recipient.  Any party may change the address to which notices
and other communications hereunder are to be delivered by giving the other party
notice in the manner set forth herein.

9.             Joint Preparation.  The Parties acknowledge that this Agreement
has been drafted, prepared, negotiated and agreed to jointly, with advice of
each Party’s respective legal counsel, and to the extent that any ambiguity
should appear, now, or at any time in the future, latent or apparent, such
ambiguity shall not be resolved or construed against either Party.

10.           Review By Counsel.  The Parties acknowledge that they have
thoroughly discussed all aspects of this Agreement and the effect of same with
their respective legal counsel, that they have had a reasonable time to review
the Agreement, that they fully understand all the provisions of the Agreement
and are voluntarily entering into this Agreement.  The parties further represent
that they have not transferred or assigned to any person or entity any claim
involving the other party or any portion thereof or interest therein.

11.           Execution In Multiple Counterparts.  This Agreement may be
executed in multiple counterparts, whether or not all signatories appear on
these counterparts, and each counterpart shall be deemed an original for all
purposes.

12.           Choice of Law; Venue.   This Agreement shall be deemed to have
been entered into and performed in Hong Kong and shall thereby be governed by
and interpreted in accordance with the laws of Hong Kong (being also the
governing law of the Note and the Stock Purchase Agreement).  Any disputes
between the parties hereto relating to or arising under this Agreement that
cannot be resolved by good faith negotiation within sixty (60) days or notice
thereof shall be brought, heard and determined in the appropriate court in Hong
Kong.

[The remainder of this page has been intentionally left blank.]

5

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

IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed
as of the day and year first above written.

Fine Day Holdings Limited

 

 

 

 

 

 

 

 

 

By:

 

/s/ An-Hsien Hong

 

 

Name:

 

An-Hsien Hong

 

 

Title:

 

 CEO/Chairman

 

 

 

 

 

 

 

/s/ An-Hsien Hong

 

 

 

Horng An-Hsien

 

 

 

 

 

 

 

 

CellStar (Asia) Corporation Limited

 

 

 

 

 

 

 

 

By:

 

/s/ Elaine Flud Rodriguez

 

 

Name:

 

Elaine Flud Rodriguez

 

 

Title:

 

Senior Vice President

 

 

 

 

 

CellStar Corporation

 

 

 

 

 

 

 

 

By:

 

/s/ Elaine Flud Rodriguez

 

 

Name:

 

Elaine Flud Rodriguez

 

 

Title:

 

Senior Vice President

 

 

 

 

 

 

 

CellStar International Corporation/Asia

 

 

 

 

 

 

By:

 

/s/ Elaine Flud Rodriguez

 

 

Name:

 

Elaine Flud Rodriguez

 

 

Title:

 

Senior Vice President

 

 

 

 

CellStar Ltd.

 

By: National Auto Center, Inc.,
   General Partner

 

 

 

 

 

 

By:

 

/s/ Elaine Flud Rodriguez

 

 

Name:

 

Elaine Flud Rodriguez

 

 

Title:

 

Senior Vice President

 

 

6

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

Exhibit A

Irrevocable Stock Power

 

Name: _________________________

For value received, the undersigned does (do) hereby sell, assign and transfer
to

________________________________________________________________________

________________________________________________________________________

________________________________________________________________________

_____________ shares of the _________ stock of _______________________________

represented by Certificate(s) No.(s) ___________________________________
inclusive,

standing in the name of the undersigned on the books of said Company.

The undersigned does (do) hereby irrevocably constitute and appoint
____________________________________________ attorney to transfer the said stock
on the books of said Company, with full power of substitution in the premises.

 

 

 

 

 

 

 

 

 

 

Dated 02-28-2007

 

Sign Here:

 

/s/ An-Hsien Hong

 

 

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

Exhibit B

IRREVOCABLE PROXY

The undersigned stockholder of CellStar Corporation, a Delaware corporation (the
“Company”), hereby irrevocably (to the fullest extent permitted by law) appoints
Elaine Flud Rodriguez  “ as the sole and exclusive attorney-in-fact and proxy of
the undersigned, with full power of substitution and resubstitution, to vote and
exercise all voting rights (to the fullest extent that the undersigned is
entitled to do so) with respect to 474,000 outstanding shares of common stock of
the Company that are held beneficially by the undersigned as of the date of this
Proxy (collectively, the “Shares”), including, without limitation, all voting
rights relating to the Company’s Special Meeting of Stockholders scheduled to be
held on March 28, 2007.  Upon the execution of this Proxy, any and all prior
proxies given by the undersigned with respect to any of the Shares are hereby
revoked and the undersigned agrees not to grant any subsequent proxies with
respect to the voting rights granted by this Proxy until after the Expiration
Time (as defined below).

This Proxy is irrevocable (to the fullest extent permitted by law) and is
coupled with an interest.  As used herein, the term “Expiration Time” shall mean
the tenth anniversary of the date of this Proxy.

The attorney-in-fact and proxy named above is hereby authorized and empowered by
the undersigned, at any time prior to the Expiration Time, to act as the
undersigned’s attorney-in-fact and proxy to vote the Shares, and to exercise all
voting, consent and similar rights of the undersigned with respect to the Shares
(including, without limitation, the power to execute and deliver written
consents), at every annual, special or adjourned meeting of stockholders of the
Company and in every written consent in lieu of such meeting.

Any obligation of the undersigned hereunder shall be binding upon the
successors, heirs and legal or personal representatives of the undersigned, and
shall survive the death or incapacity of the undersigned.

This Proxy shall terminate, and be of no further force and effect, automatically
at the Expiration Time.

Dated: 2-28-2007

WITNESS:

 

BENEFICIAL HOLDER:

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ An Hsien Hong

 

 Signature

 

 

Signature

 

 

 

 

 

 

 

 

 

An Hsien Hong

 

Print name here

 

 

Print name here

 

 

 

 

 

 

 

 

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