Exhibit 10.17

 

THIRTEENTH AMENDMENT AND WAIVER TO LOAN AGREEMENT

 

This THIRTEENTH AMENDMENT AND WAIVER TO LOAN AGREEMENT (this “Amendment”) is
dated as of May 13, 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, as further amended by that certain Eleventh Amendment and Waiver
to Loan Agreement dated as of August 31, 2004, and as further amended by that
certain Twelfth Amendment and Waiver to Loan Agreement dated as of February 10,
2005 (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 and
waive certain terms of the Loan Agreement; and

 

WHEREAS, the Agent and the Lenders have agreed to the requested amendments and
waivers 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. 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 $85,000,000.”

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2. Establishment of Reserves. In accordance with Section 2.1(b) of the Loan
Agreement, the Agent and the Lenders hereby establish an additional reserve
against Availability in the amount of $5,000,000.

 

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 (the “Specified Events of Default”) arising under the Loan Agreement,
applicable to:

 

(i) Borrowers’ failure to maintain the required Consolidated Tangible Net Worth
for the quarters ended November 30, 2004 and February 28, 2005 as required under
Section 7.20(a) of the Loan Agreement;

 

(ii) Borrowers’ failure to maintain the Consolidated Tangible Net Worth and
Fixed Charge Coverage Ratios for the quarters ended prior to November 30, 2004
as required under Sections 7.20(a), (b) and (c) of the Loan Agreement solely as
a result of Parent’s restatement of its previously delivered financial
statements as contemplated in the draft financial statements attached hereto as
Exhibit A;

 

(iii) Parent’s failure to (A) 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”), (B) 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, and (C) 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;

 

(iv) Parent’s failure to deliver the financial statements of the Parent and its
Subsidiaries for the quarter ended February 28, 2005 as required pursuant to
Section 6.3(a) of the Loan Agreement; and

 

(v) Parent’s failure to deliver the audited financial statements of the Parent
and its Subsidiaries for the fiscal year ended November 30, 2004 as required
pursuant to Section 6.3(b) of the Loan Agreement;

 

(b) Each of the above waivers is subject to satisfaction of the following
conditions:

 

(i) the Parent shall file its Form 10-K Annual Report for the fiscal year ended
November 30, 2004, which shall contain financial statements that are in form and
substance substantially the same as the financial statements attached hereto as
Exhibit A, on or before May 31, 2005;

 

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(ii) Parent shall file its Form 10-Q Quarterly Report for the fiscal quarter
ended February 28, 2005 on or before May 31, 2005;

 

(iii) Parent shall deliver the financial statements for the fiscal year ended
November 30, 2004 as required by Section 6.3(b) of the Loan Agreement on or
before May 31, 2005, which shall be in form and substance substantially the same
as the financial statements attached hereto as Exhibit A;

 

(iv) Parent shall deliver the financial statements for the quarter ended
February 28, 2005 as required by Section 6.3(a) of the Loan Agreement on or
before May 31, 2005; and

 

(v) 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).

 

(c) Each Borrower hereby acknowledges and agrees that the failure to satisfy the
conditions set forth in clause (b) of this Section 3 shall cause the waivers
contained herein to be of no further effect.

 

(d) In no event shall the waivers set forth above 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;

 

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(b) financial statements of the Parent and its Subsidiaries for the fiscal year
ended November 30, 2004 in form and substance satisfactory to Agent and Lenders,
copies of which are attached hereto as Exhibit A;

 

(c) payment of a amendment fee from the Borrowers in the amount of $500,000.00
(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 signatory hereto in
accordance with such Lender’s Pro Rata Share; and

 

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

 

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) 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;

 

(e) The financial statements attached hereto as Exhibit A have been prepared in
accordance with GAAP and fairly present in all material respects the financial
condition of the Parent and its Subsidiaries as of the dates indicated therein;

 

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(f) 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

 

(g) 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, 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

 

THIRTEENTH 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

 

THIRTEENTH 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

 

THIRTEENTH 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:

  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

 

THIRTEENTH AMENDMENT TO LOAN AGREEMENT

 

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