Fifth Amendment to Loan Agreement



 
Exhibit 10.38

 
FIFTH AMENDMENT TO LOAN AGREEMENT

 
This FIFTH AMENDMENT TO LOAN AGREEMENT (this
“Amendment”) is effective as of November 13, 2002 and entered into this 13th day of November, 2002,
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 FOOTHILL CAPITAL CORPORATION, in its capacity as agent (the “Agent”) for the Lenders, 
 
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, and as further amended by that certain Fourth Amendment to Loan Agreement dated as of May 9, 2002 (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; and

 
WHEREAS, the Borrowers have requested that the
Agent and the Lenders amend the Loan Agreement to exclude the income statement effects of up to $10 million of revolving borrowings by CellStar-Intercall AB (Cellstar Sweden) from the Fixed Charge Coverage Ratio calculations; and 
 
WHEREAS, the Agent and the Lenders have agreed to the
requested amendment 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.    Amendment 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 “Fixed Charge Coverage Ratio” 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, 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 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, and (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, and (ii) cash interest expense (other than
interest expense on a principal amount of up to $10,000,000 borrowed by CellStar-Intercall AB (Cellstar Sweden) under a revolving credit facility) minus cash interest income during such fiscal period;” 
 
2.    No Other Amendments or
Waivers.  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 amendment 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. 
 
3.    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 Lenders and
the Agent; and 
 
(b)    such other information, documents, instruments or approvals as the Agent or the Agent’s counsel may reasonably require. 
 
4.    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; 

 

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(b)    The execution, delivery, and performance by each Borrower of this Amendment and the Loan Documents to which it is a party, as amended hereby, 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 and the Loan
Documents to which it is a party, as amended hereby, 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
each other Loan Document to which each Borrower is a party, and all other documents contemplated hereby and thereby, 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. 
 
5.    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. Any
signatures delivered by a party by facsimile transmission shall be deemed an original signature hereto. 
 
6.    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. 
 
7.    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. 
 

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8.    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. 
 
9.    Loan Document.  This Amendment shall be deemed to be a Loan Document for all purposes.

 
[The remainder of the page is intentionally
blank] 
 
 

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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

	
	 	 	 /s/ Elaine Flud Rodriguez


	 	 	 By:
	 	 Elaine Flud Rodriguez

	 	 	 Title:
	 	 Sr. VP and General Counsel

	
	 	 	 CELLSTAR, LTD.,

	 	 	 a Texas limited partnership

	 	 	 By:
	 	 National Auto Center, Inc.
 its General Partner

	
	 	 	 /s/ Elaine Flud Rodriguez


	 	 	 By:
	 	 Elaine Flud Rodriguez

	 	 	 Title:
	 	 Sr. VP and General Counsel

	
	 	 	 NATIONAL AUTO CENTER, INC.,

	 	 	 a Delaware corporation

	
	 	 	 /s/ Elaine Flud Rodriguez


	 	 	 By:
	 	 Elaine Flud Rodriguez

	 	 	 Title:
	 	 Sr. VP and General Counsel

	
	 	 	 CELLSTAR AIR SERVICES, INC.,

	 	 	 a Delaware corporation

	
	 	 	 /s/ Elaine Flud Rodriguez


	 	 	 By:
	 	 Elaine Flud Rodriguez

	 	 	 Title:
	 	 Sr. VP and General Counsel


 
 
 
 
 
 
 
 

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	 CELLSTAR TELECOM, INC.,
 a Delaware corporation

	
	 /s/ Elaine Flud Rodriguez      


	 By:
	 	 Elaine Flud Rodriguez

	 Title:
	 	 Sr. VP and General Counsel

	
	 CELLSTAR FINACO, INC.,
 a Delaware corporation

	
	 /s/ Elaine Flud Rodriguez        


	 By:
	 	 Elaine Flud Rodriguez

	 Title:
	 	 Sr. VP and General Counsel

	
	 A&S AIR SERIVICE, INC.,
 a Delaware corporation

	
	 /s/ Elaine Flud Rodriguez        


	 By:
	 	 Elaine Flud Rodriguez 

	 Title:
	 	 Sr. VP and General Counsel

	
	 CELLSTAR INTERNATIONAL CORPORATION/SA,
 a Delaware corporation

	
	 /s/ Elaine Flud Rodriguez


	 By:
	 	 Elaine Flud Rodriguez

	 Title:
	 	 Sr. VP and General Counsel

	
	 CELLSTAR FULFILLMENT, INC.,
 a Delaware corporation

	
	 /s/ Elaine Flud Rodriguez        


	 By:
	 	 Elaine Flud Rodriguez

	 Title:
	 	 Sr. VP and General Counsel



 
 
 
 
 

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	 CELLSTAR INTERNATIONAL CORPORATION/ASIA,
 a Delaware corporation

	
	 /s/ Elaine Flud Rodriguez        


	 By:
	 	 Elaine Flud Rodriguez

	 Title:
	 	 Sr. VP and General Counsel

	
	 AUDIOMEX EXPORT CORP.,
 a Texas corporation

	
	 /s/ Elaine Flud Rodriguez          


	 By:
	 	 Elaine Flud Rodriguez

	 Title:
	 	 Sr. VP and General Counsel

	
	 NAC HOLDINGS, INC.,
 a Nevada corporation

	
	 /s/ Elaine Flud
Rodriguez        


	 By:
	 	 Elaine Flud Rodriguez

	 Title:
	 	 Sr. VP and General Counsel

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

	
	 By:
	 	 National Auto Center, Inc.        

	 Its:
	 	 General Partner

	
	 /s/ Elaine Flud Rodriguez      


	 By:
	 	 Elaine Flud Rodriguez

	 Title:
	 	 Sr. VP and General Counsel



 
 
 

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	 CELLSTAR FULFILLMENT LTD.,
 a Texas limited partnership

	
	 By:
	 	 CellStar Fulfillment, Inc. its General Partner        

	
	 /s/ Elaine Flud Rodriguez


	 By:
 Title:
	 	 Elaine Flud Rodriguez
 Sr. VP and General Counsel



 
 

	 FLORIDA PROPERTIES, INC.,
 a Texas corporation

	
	 /s/ Elaine Flud
Rodriguez          


	 By:
 Title:
	 	 Elaine Flud Rodriguez
 Sr. VP and General Counsel



 
 

	 AGENT AND LENDERS:
	 	 FOOTHILL CAPITAL CORPORATION,
 a California corporation, as Agent and as a Lender

	
	 	 	 /s/ Robert Bernier


	 	 	 By:
 Title:
	 	 Robert Bernier
 Vice President


 
 

	 FLEET CAPITAL CORPORATION,
 as a Lender

	
	 /s/ Dennis M. Hansen      


	 By:
 Title:
	 	 Dennis M. Hansen
 Senior Vice President



 
 
 

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	 TEXTRON FINANCIAL CORPORATION,
 as a Lender

	
	 /s/ Eric R. Hubbard


	 By:
 Title:
	 	 Eric R. Hubbard
 Senior Account Executive



 
 

	 PNC BANK NATIONAL ASSOCIATION,
 as a Lender

	
	 /s/ Robin L.
Arriola          


	 By:
 Title:
	 	 Robin L. Arriola
 Vice President



 
 
 
 
 
 
 
 

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