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, 



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                                          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.



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(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



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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.]



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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

  	
   

  



 



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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