Sixth Amendment to Loan Agreement



Exhibit 10.39 
 
SIXTH AMENDMENT 
TO LOAN AGREEMENT 
 
This SIXTH AMENDMENT TO LOAN AGREEMENT (this “Amendment”) is entered into this 6th day of February, 2003, 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, as further
amended by that certain Fourth Amendment to Loan Agreement dated as of May 9, 2002, and as further amended by that certain Fifth Amendment to Loan Agreement dated as of November 13, 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 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 modified and amended by inserting the following definition of “CellStar Mexico” in appropriate alphabetical
order therein: 
 
““CellStar Mexico” means, collectively, Celular Express S.A. de C.V., Celular Express Management S.A. de C.V., and CellStar Mexico S.A. de C.V.” 







 
(b)    Section 1.1 of the Loan Agreement, “Definitions,” is hereby further 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, 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, and (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 (ii) cash interest expense (other than interest expense on a principal amount of up to (A) $10,000,000 borrowed by CellStar-Intercall AB (Cellstar Sweden) under a revolving
credit facility, (B) $30,000,000 borrowed by CellStar Mexico under an accounts receivable factoring facility, and (C) $30,000,000 borrowed by CellStar Mexico under a revolving credit facility) minus cash interest income during such fiscal
period.” 
 
2.    Amendment to Section 7.1 of the Loan Agreement.  Section 7.1 of the Loan Agreement, “Indebtedness” is hereby modified and amended by deleting subsection (e) thereof in its
entirety and inserting the following in substitution thereof: 
 
“(e)    (i) any Permitted Foreign Subsidiary Credit Facility, and (ii) any accounts receivable factoring facility entered into by CellStar Mexico for general working capital
needs in an aggregate amount not exceeding $30,000,000 outstanding at any time; provided such factoring facility (x) is not guaranteed by any Borrower; provided, such factoring facility may be guaranteed by a Borrower if such guaranty is unsecured
and subject to a subordination agreement satisfactory to Agent, and (y) does not limit or prohibit the payment of any Management Fees to any Borrower;” 
 
3.     Amendment to Section 7.2 of the Loan Agreement.  Section 7.2 of the Loan Agreement,
“Liens” is hereby modified and amended by deleting clause (b) thereof in its entirety and inserting the following in substitution thereof: 
 
“(b)    (i) Liens on the assets of any Foreign Subsidiaries securing any Permitted Foreign
Subsidiary Credit Facility, and (ii) Liens on accounts receivable of CellStar 

 

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Mexico securing an accounts receivable factoring facility permitted by Section 7.1(e)(ii) hereof.” 
 
4.     Amendment to Section 7.10 of the
Loan Agreement.  Section 7.10 of the Loan Agreement, “Consignments” is hereby modified and amended by deleting such section in its entirety and inserting the following in substitution thereof: 
 
“7.10    Consignments.  Consign any Inventory or sell any Inventory on bill and hold (without providing prior notice to Agent thereof), sale or return, sale on approval, or other conditional
terms of sale, except for (a) Inventory with an aggregate market value, at any point in time, not in excess of $100,000, and (b) the consignment by the Domestic Business Unit of Inventory consisting of accessories; provided, in the case of this
clause (b), (i) the aggregate book value of all such accessory Inventory on consignment shall not exceed $5,000,000 at any time, and (ii) prior to placing any such Inventory on consignment, the Agent shall have received a Collateral Access Agreement
from the consignee, together with all applicable uniform commercial code notice filings and such other documents and certificates as the Agent shall reasonably request.” 
 
5.    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 amendments 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. 
 
6.    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; and 
 
(b)    such other information, documents, instruments or approvals as the Agent or the Agent’s
counsel may reasonably require. 
 
7.    Representations and Warranties of Borrowers.  Each Borrower represents and warrants to the Agent and the Lenders as follows: 
 

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(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 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. 
 
8.    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. 
 
9.    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. 
 
10.    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. 
 
11.    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. 
 
12.    Loan Document.  This Amendment shall be deemed to be a Loan
Document for all purposes. 
 
 
 
[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 FINANCO, INC.,
 a Delaware corporation

	
	 	 	 /s/ Elaine Flud Rodriguez


	 	 	 By:
	 	 Elaine Flud Rodriguez

	 	 	 Title:
	 	 Sr. VP and General Counsel

	
	 	 	 A&S AIR SERVICE, 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:
	 	 President

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

	
	 	 	 By:
	 	 National Auto Center, Inc.

	 	 	 Title:
	 	 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.

	 	 	 Title:
	 	 General Partner

	
	 	 	 /s/ Elaine Flud Rodriguez


	 	 	 By:
	 	 Elaine Flud Rodriguez

	 	 	 Title:
	 	 Sr. VP and General Counsel

	
	 	 	 FLORIDA PROPERTIES, INC.,

	 	 	 a Texas corporation

	
	 	 	 /s/ Elaine Flud Rodriguez


	 	 	 By:
	 	 Elaine Flud Rodriguez

	 	 	 Title:
	 	 Sr. VP and General Counsel

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

	
	 	 	 /s/ R. Bernier


	 	 	 By:
	 	 R. Bernier

	 	 	 Title:
	 	 Vice President

	
	 	 	 FLEET CAPITAL CORPORATION,
 as a Lender

	
	 	 	 /s/ Dennis M. Hansen


	 	 	 By:
	 	 Dennis M. Hansen

	 	 	 Title:
	 	 Senior Vice President


 

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	 	 	 TEXTRON FINANCIAL CORPORATION,
 as a Lender

	
	 	 	 /s/ Eric R. Hubbard


	 	 	 By:
	 	 Eric R. Hubbard

	 	 	 Title:
	 	 Senior Account Executive

	
	 	 	 PNC BANK NATIONAL ASSOCIATION,
 as a Lender

	
	 	 	 /s/ Robin L. Arriola


	 	 	 By:
	 	 Robin L. Arriola

	 	 	 Title:
	 	 Vice President


 

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