Document:

First Supplemental Indenture

Exhibit 4.12 
 

 
CELLSTAR CORPORATION, 
Issuer 
 
AND 
 
THE BANK OF NEW YORK, 
Trustee 
 

 
FIRST SUPPLEMENTAL INDENTURE

Dated as of November 5, 2002 
 
to 
 
INDENTURE 
Dated as of February 20, 2002 
 

 
$39,148,0000 
 
5% Senior Subordinated Convertible Notes 
Due November 30, 2002 
 

 

 
This First
Supplemental Indenture (herein so called) is dated as of November 5, 2002, among CellStar Corporation., a Delaware corporation (the “Company”), and The Bank of New York, a New York banking corporation, as Trustee (the
“Trustee”). Each defined term used herein shall have the meaning assigned to it in the Indenture (hereinafter defined), unless the context hereof otherwise requires or provides. 
 
RECITALS 
 
1.    As of February 20, 2002, the Company
and the Trustee executed an Indenture (the “Indenture”) providing for the issuance of $39,148,000 of the Company’s 5% Senior Subordinated Convertible Notes Due November 30, 2002 (the “Notes”).

 
2.    Sections 1 and 2 of
the Notes provide that interest on the unpaid principal amount of the Notes is payable on August 15, 2002 and on the Maturity Date. 
 
3.    Section 2 of the Notes provides that the Company shall pay interest on the Notes to the persons who are the
registered Holders at the close of business on the Record Date immediately preceding the Interest Payment Date. 
 
4.    The Notes provide that the Record Date for the August 15, 2002 Interest Payment Date is August 1, 2002 and do
not specify a Record Date for payment of interest on the Notes due on the Maturity Date. 
 
5.    The Company and the Trustee desire to amend the terms of the Indenture and Notes to clarify that the Record Date for payment of interest due on the Maturity Date is November
15, 2002. 
 
6.    Section
8.01(a) of the Indenture permits the Indenture to be amended or supplemented to cure any ambiguity, defect or inconsistency arising under the Indenture provided such action does not materially adversely affect the rights of any Holder. 
 
7.    The Company and the Trustee agree as
follows for the benefit of each other and for the equal and ratable benefit of the Holders of the Notes: 
 
ARTICLE 1 
 
AMENDMENT TO INDENTURE 
 
Section 1.01    Amendment of Definition of Record Date.  The definition of “Record Date” set forth in the Indenture is hereby amended in its entirety to read as follows:

 
“Record Date” means
August 1, 2002 for the Interest Payment Date of August 15, 2002 and November 15, 2002 for the payment of accrued unpaid interest due on the Maturity Date; provided, however, that if any such date is a Legal Holiday, the Record Date
shall be the first day immediately preceding such specified day that is not a Legal Holiday. 
 
Section 1.02    Exhibit A.  Exhibit A to the Indenture is amended and replaced in its entirety by Exhibit A attached hereto. 
 
 
FIRST SUPPLEMENTAL INDENTURE 
 

Page  2 

 
ARTICLE    2 
 
MISCELLANEOUS 
 
Section
2.01    Further Assurances.  The parties will execute and deliver such further instruments and do such further acts and things as may be reasonably required to carry out the intent and purpose of this First
Supplemental Indenture. 
 
Section
2.02    Trust Indenture Act Controls.  If any provision of this First Supplemental Indenture limits, qualifies, or conflicts with another provision hereof that is required to be included in this First
Supplemental Indenture by the TIA, the required provision shall control. 
 
Section 2.03    Counterpart Originals.  This First Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be an original, but all of them
together represent the same agreement. 
 
Section
2.04    Headings.  Headings of the Articles and Sections of this First Supplemental Indenture have been inserted for convenience of reference only, are not to be considered a part of this First Supplemental
Indenture, and shall in no way modify or restrict any of the terms or provisions hereof. 
 
Section 2.05    Governing Law.  This First Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State of New York but
without giving effect to applicable principles of conflicts of law to the extent that the application of the laws of another jurisdiction would be required thereby. 
 
Section 2.06    Successors.  All agreements of the Company, the
Guarantors, and the Trustee in this First Supplemental Indenture shall bind their successors. 
 
Section 2.07    Severability.  In case any provision in this First Supplemental Indenture shall be invalid, illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 
 
Section 2.08    Indenture Remains in Full Force and Effect.  Except to the extent amended hereby or in connection herewith, all terms, provisions and conditions of
the Indenture, and all documents executed in connection therewith, shall continue in full force and effect and shall remain enforceable and binding in accordance with their terms. Except as specifically modified herein, the Indenture remains
unchanged and in full force and effect. 
 
Section
2.09    No Third Party Benefits.  Nothing in this First Supplemental Indenture, express or implied, shall give to any Person, other than the parties hereto and their successors under the Indenture, and the
Holders of the Notes, any benefit or any legal or equitable right, remedy or claim under the Indenture. 
 
 
FIRST SUPPLEMENTAL INDENTURE 
 

Page  3 

 
Section
2.10    The Trustee.  The Trustee shall not be responsible in any manner for or in respect of the validity or sufficiency of this First Supplemental Indenture, or for or in respect of the recitals contained
herein, all of which recitals are made by the Company solely. 
 
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed as of the date first written above. 
 

	 CellStar Corporation

	
	 By:
	 	 /s/  Elaine Flud Rodriguez        

	 	 	 Name:  Elaine Flud Rodriguez
 Title:  Senior Vice President

 

	 THE BANK OF NEW YORK, as
Trustee

	
	 By:
	 	 /s/  Van K. Brown        

	 	 	 Name: Van K. Brown
 Title: Vice President

 
 
FIRST SUPPLEMENTAL INDENTURE 
 

Page  4 

EXHIBIT “A” 
TO FIRST SUPPLEMENTAL INDENTURE 
 
CELLSTAR CORPORATION 
 
5% SENIOR SUBORDINATED CONVERTIBLE NOTE DUE NOVEMBER 30, 2002 
 

	 No. 1
	 	 New York, New York

	 $39,148,000
	 	 February 20, 2002

	 	 	 CUSIP 150925 AE5

 
THIS
NOTE IS SUBORDINATED TO THE PRIOR PAYMENT IN CASH OF ALL SENIOR INDEBTEDNESS, AS DEFINED IN THAT CERTAIN INDENTURE DATED AS OF FEBRUARY 20, 2002, AS THE SAME MAY BE AMENDED FROM TIME TO TIME IN THE MANNER PROVIDED IN THE INDENTURE. 
 
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS
NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY
OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. 
 
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
(“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 
 
FOR VALUE RECEIVED, the undersigned, CELLSTAR CORPORATION, a Delaware corporation (the “Borrower,” which term includes any successor entity), hereby promises to pay to the order of CEDE & CO. (together with its
registered assigns, the “Holder”), the principal sum of Thirty 
 
 
FIRST SUPPLEMENTAL INDENTURE 
 

Page  5 

Nine Million One Hundred Forty-Eight Thousand Dollars ($39,148,000) on November 30, 2002 (the
“Maturity Date”), with interest thereon from time to time as provided herein. 
 

	 Interest Payment Date:
	 	 August 15, 2002

	 Record Dates:
	 	 August 1, 2002 and November 15, 2002

 
Reference is made to the further provisions of this Note contained herein, which will for all purposes have the same effect as if set forth at this place. 
 
[Remainder of page intentionally left blank] 
 
FIRST SUPPLEMENTAL INDENTURE 
 

Page  6 

IN WITNESS WHEREOF, the Company has caused this Note to be signed manually or by facsimile
by its duly authorized officers. 
 

	 CELLSTAR CORPORATION

	
	 	 	 
	 By:
	 	  

	 	 	 Name:
 Title:

 

	 Attest

	
	 By:
	 	  

	 	 	 Name:
 Title:

 
TRUSTEE’S CERTIFICATE OF AUTHENTICATION 
 
This is one of the Notes in the within-mentioned Indenture. 
 
Dated: February 20, 2002 
 

	 THE BANK OF NEW YORK, as Trustee

	
	 	 	 
	 By:
	 	  

	 	 	 Authorized Signatory

 
FIRST
SUPPLEMENTAL INDENTURE 
 

Page  7 

 
CELLSTAR
CORPORATION 
 
5% SENIOR SUBORDINATED
CONVERTIBLE PROMISSORY NOTE 
DUE NOVEMBER 30, 2002 
 
Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the
Indenture, dated as of February 20, 2002 (the “Indenture”), as amended from time to time, by and between CellStar Corporation, a Delaware corporation (the “Company”), and The Bank of New York, as trustee (the
“Trustee”). 
 
1.    Interest. 
 
The Company promises to pay interest on the unpaid principal amount of this Note at a rate of five percent (5%) per annum (the “Interest Rate”) commencing on the date hereof. The Company will pay interest in
arrears on August 15, 2002 or if such day is not a Business Day, on the next succeeding Business Day (the “Interest Payment Date”). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of issuance; provided, however, that if there is no existing Default in the payment of interest, and if this Note is authenticated between the Record Date referred to on the face hereof and the
Interest Payment Date, interest shall accrue from the Interest Payment Date. Interest shall accrue with respect to principal on this Note to, but not including the date of repayment of such principal; provided, however, that if payment
to the Paying Agent occurs after 10:00 a.m., New York City time, interest shall be deemed to accrue until the following Business Day. On the Interest Payment Date, interest on the Notes will be paid for the immediately preceding accrual period. Any
accrued and unpaid interest outstanding on the Maturity Date shall be paid on the Maturity Date concurrently with payment of the Principal. 
 
To the extent lawful, the Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on (i)
overdue Principal, if any, at a rate equal to the sum of the Interest Rate and an additional two percent (2%) per annum (such sum being referred to herein as the “Default Rate”), compounded semiannually; and (ii) overdue installments of
interest, if any (without regard to any applicable grace period) at the Default Rate, compounded semiannually. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 
 
2.    Method of Payment.

 
The Company shall pay interest on the Notes
to the persons who are the registered Holders at the close of business on the Record Date immediately preceding the Interest Payment Date or Maturity Date, as applicable, even if the Notes are canceled on registration of transfer or registration of
exchange after such Record Date. Interest on the Notes shall be paid on the Interest Payment Date and on the Maturity Date in cash or in Interest Shares, at the option of the Company. Except as set forth in the Indenture, Holders must surrender
Notes to the Paying Agent to collect principal payments. The Principal on the Notes shall be paid on the Maturity Date in Principal Shares. The Notes will be payable as to Principal and interest at the office or agency of the Company maintained for
such purpose within the City and State of New York, or, at the option of the Company, payment of interest may be made by check or stock certificates, as appropriate, mailed to the Holders of the Notes at their addresses set forth in the register of
Holders. If this Note is a Global Note, all 

 
FIRST SUPPLEMENTAL
INDENTURE 
 

Page  8 

payments in respect of this Note will be made to the Depository or its nominee in immediately available funds in accordance with customary
procedures established from time to time by the Depository. 
 
3.    Paying Agent and Registrar. 
 
Initially, the Trustee under the Indenture will act as Paying Agent and Registrar. The Company may change any Paying Agent, Registrar or co-Registrar without notice to the Holders. The Company or any
of its Subsidiaries may act as Registrar. 
 
4.    Indenture. 
 
The Company issued this Note under an Indenture, dated as of February 20, 2002 (the “Indenture”), between the Company and the Trustee. This Note is one of a duly authorized issue of Notes of the Company designated
as its 5% Senior Subordinated Convertible Notes Due November 30, 2002 (the “Notes”). Each Holder, by accepting this Note, agrees to be bound by all the terms and provisions of the Indenture, as the same may be amended from time to time in
accordance with its terms. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code §§ 77aaa-77bbbb) (the “TIA”), as in effect
on the date of the Indenture. Notwithstanding anything to the contrary herein, the Notes are subject to all such terms, and Holders are referred to the Indenture and the TIA for a statement of such terms. The Notes are unsecured obligations of the
Company limited (except as otherwise provided in the Indenture) in aggregate principal amount to Sixty Million One Hundred Forty-Two Thousand Dollars ($60,142,000) plus amounts, if any, sufficient to pay interest and premium, if any, on outstanding
Notes as set forth in Paragraph 2 hereof. The Company will furnish to any Holder of a Note upon written request and without charge a copy of the Indenture. Requests may be made to: CellStar Corporation, 1730 Briercroft Court, Carrollton, Texas
75006, Attn.: General Counsel. 
 
5.    Subordination. 
 
The Indebtedness evidenced by the Notes is, to the extent and in the manner provided in the Indenture, subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness, and this Note is
issued subject to such provisions. Each Holder of this Note, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee, on behalf of such Holder, to take such action as may be necessary or
appropriate to effectuate the subordination as provided in the Indenture, and (c) appoints the Trustee attorney-in-fact of such Holder for such purpose. 
 
6.    Denominations; Transfer; Exchange. 
 
The Notes are in registered form, without coupons, in denominations of One Thousand Dollars ($1,000) and
integral multiples of One Thousand Dollars ($1,000). A Holder shall register the transfer of or exchange Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay certain taxes or similar governmental charges required by law and as permitted by the Indenture. The Registrar need not register the transfer of or exchange of any Notes. No service charge shall be made for any registration of
transfer or exchange of Notes, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Company need not exchange or register the transfer of any Note. 
 
FIRST SUPPLEMENTAL INDENTURE 
 

Page  9 

 
7.    Discharge Prior to Maturity; Defeasance. 
 
The Company’s obligations pursuant to the Indenture will be discharged, except for obligations pursuant to certain sections thereof, subject to the terms of the Indenture, upon the payment of all
the Notes or upon the irrevocable deposit with the Trustee of U.S. Legal Tender, Principal Shares or Interest Shares sufficient to pay when due Principal of and interest, if any, on the Notes to maturity. 
 
8.    Amendment; Supplement;
Waiver. 
 
Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the written consent of the Holders, and any existing Default or Event of Default or compliance with any provision may be waived with the consent of the Required Holders. Without notice
to or consent of any Holder, the parties thereto may amend or supplement the Indenture or the Notes to, among other things, cure any ambiguity, defect or inconsistency, provide for uncertificated Notes in addition to or in place of certificated
Notes, comply with Article IV of the Indenture or comply with any requirements of the SEC in connection with the qualification of the Indenture under the TIA, or make any other change that does not adversely affect the rights of any Holder of a
Note. 
 
9.    Defaults
and Remedies. 
 
If an Event of Default
occurs and is continuing, the Trustee or the Holders of at least twenty-five percent (25%) in the aggregate principal amount of Notes then outstanding may declare all the Notes to be due and payable in the manner, at the time and with the effect
provided in the Indenture. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. The Trustee is not obligated to enforce the Indenture or the Notes unless it has received indemnity reasonably satisfactory to it. The
Indenture permits, subject to certain limitations therein provided, the Required Holders to direct the Trustee in its exercise of any trust or power. 
 
10.    Conversion. 
 
Pursuant to the procedures set forth in Article X of the Indenture, the Holder may convert the outstanding
Principal on the Note into shares of Common Stock at any time prior to the Maturity Date. The Conversion Price shall be 1,000 shares of Common Stock to $1,000, subject to adjustment as set forth in Article X of the Indenture. 
 
11.    Trustee Dealings with
Company. 
 
Subject to certain limitations
imposed by the TIA, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with the Company, its Subsidiaries or their respective Affiliates, as if it were not the
Trustee. 
 
12.    No
Recourse Against Others. 
 
A stockholder,
director, officer, employee or Affiliate, as such, of the Company or any of its Subsidiaries shall not have any liability for any obligation of the Company under the Notes or the Indenture or for any claim based on, in respect of or by reason of,
such obligations or their creation, including with respect 
 
FIRST SUPPLEMENTAL INDENTURE 
 

Page  10 

to any certificates delivered hereunder or thereunder from any such person. Each Holder of a Note by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for the issuance of the Notes. 
 
13.    Authentication. 
 
This Note shall not be valid until the Trustee or authenticating agent manually signs the certificate of
authentication on this Note. 
 
14.    Governing Law. 
 
The Indenture and this Note shall be governed by and construed in accordance with the laws of the State of New York, as applied to contracts made and performed within the State of New York without regard to principles of
conflicts of laws. 
 
15.    Abbreviations and Defined Terms. 
 
Customary abbreviations may be used in the name of a Holder of a Note or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right
of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act). 
 
16.    CUSIP Numbers. 
 
Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the
Company may cause CUSIP numbers to be printed on the Notes immediately prior to the qualification of the Indenture under the TIA as a convenience to the Holders of the Notes. No representation is made as to the accuracy of such numbers as printed on
the Notes and reliance may be placed only on the other identification numbers printed hereon. 
 
17.    Successors. 
 
When a successor assumes all the obligations of its predecessor under the Notes and the Indenture and the transaction complies with the
terms of Article IV of the Indenture, the predecessor will be released from those obligations. 
 
18.    Unclaimed Money. 
 
If money, Principal Shares or Interest Shares for the payment of Principal or interest remains unclaimed for two (2) years, the Trustee or
Paying Agent shall return such money, Principal Shares or Interest Shares to the Company upon its request. After that, all liability of the Trustee and Paying Agent with respect to such money, Principal Shares or Interest Shares shall cease and
Holders entitled to money, Principal Shares or Interest Shares must look to the Company for payment. 
 
[Remainder of page intentionally left blank] 
 
FIRST SUPPLEMENTAL INDENTURE 
 

Page  11 

[FORM OF ASSIGNMENT] 
 

	 I or we assign this Note to

	
	

	
	

	
	

	 (Print or type name, address and zip code of assignee)

 
Please insert Social
Security or other identifying number of assignee                              and irrevocably appoint
                                     agent to transfer this
Note on the books of the Company. The agent may substitute another to act for it. 
 
In connection with any transfer of any of the Notes evidenced by this certificate occurring prior to (x) the date which is two years after the date the undersigned acquired such Notes, and (y) such later date, if any, as may
be required by any subsequent change in applicable law (the “Resale Restriction Termination Date”), if the undersigned is an affiliate of the Company, the undersigned confirms that it has not utilized any general solicitation or general
advertising in connection with the transfer and that such Notes are being transferred: 
 
CHECK ONE BOX BELOW 
 
(1)  [_] to the Company; or 
 
(2)  [_] pursuant to a registration statement which has been declared effective under the Securities Act; or 
 
(3)  [_] pursuant to and in compliance with Rule 144A under the Securities Act; or 
 
(4)  [_] pursuant to and in compliance with Regulation S under the Securities Act; or 
 

	(5)  [_]	 	to an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) that has furnished to the Company and
the Trustee the Transferee Certificate (such Transferee Certificate can be obtained from the Trustee); or 

 

	(6)  [_]	 	pursuant to another available exemption from the registration requirements of the Securities Act. 

 
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the registered holder thereof; provided, however, that if box (3), (4), (5) or (6) is checked, the Company and the Trustee may require, prior to registering
any such transfer of the Notes, in their sole discretion, such opinions of counsel, certifications and/or other information satisfactory to each of them to confirm that such transfer is being made pursuant to an exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act. 
 
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be obligated to register this Note in the name of any person other than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.06 of the Indenture shall have been satisfied. 
 
FIRST SUPPLEMENTAL INDENTURE 
 

Page  12 

 

	 Dated:
	 	                                      
                              
	 	 Signed:                                    
                                        
                                        
 

	
	 	 	 	 	 (Sign exactly as your name appears on the front of this Note)

 

	 Signature Guarantee:
	 	                                      
                                        
                                        
                                        
                                  

	
	 	 	 NOTICE: Signature must be guaranteed by an “eligible guarantor institution” meeting the requirements of the
Bond Registrar which requirements will include membership or participation in the Securities Transfer Agents Medallion Program or such other “signature guarantee program” as may be determined by the Bond Registrar in addition to, or in
substitution for, the Securities Transfer Agents Medallion Program, all in accordance with the Securities Exchange Act of 1934, as amended.

 
FIRST SUPPLEMENTAL
INDENTURE 
 

Page  13 

 
[FORM OF
CONVERSION NOTICE] 
 
To:    CELLSTAR
CORPORATION 
 
The undersigned registered owner
of this Note hereby irrevocably exercises the option to convert this Note, or the portion hereof (which is $1,000 principal amount or an integral multiple thereof) below designated, into shares of Common Stock of the Company in accordance with the
terms of the Indenture referred to in this Note, and directs that the shares issuable and deliverable upon such conversion, together with any check in payment for fractional shares and any Notes representing any unconverted principal amount hereof,
be issued and delivered to the registered holder hereof unless a different name has been indicated below. If shares or any portion of this Note not converted are to be issued in the name of a person other than the undersigned, the undersigned will
check the appropriate box below and pay all transfer taxes payable with respect thereto. Any amount required to be paid to the undersigned on account of interest accompanies this Note. 
 
 

	 Dated:                                    
                                        
           
	 	                                      
                                        
                             

	 	 	 	 	 Signature

	 Principal amount to be converted (if less than
all):                                       
                                        
                                       
 

 
Signature(s) must be
guaranteed by an eligible guarantor institution (banks, stock brokers, savings and loan associations and credit unions) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission Rule 17Ad-15
if shares of Common Stock are to be issued, or Notes to be delivered, other than to and in the name of the registered holder. 
 

	 	 	 	 	                                      
                                        
                             

	 	 	 	 	 Signature Guarantee

 
 
Fill in for registration of shares if to be issued, and Notes if to be delivered, other than to and in the name of the registered holder: 
 

	  
                                      
                                   
	 	 	 	 
	 (Name)
	 	 	 	 
	
	  
                                      
                                   
	 	 	 	 
	 (Street Address)
	 	 	 	 
	
	  
                                      
                                   
	 	 	 	 
	 (City, State and Zip Code)
	 	 	 	 

 
FIRST SUPPLEMENTAL
INDENTURE 
 

Page  14Fifth 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; 

 

2 

 
(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. 
 

3 

 
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] 
 
 

4 

 
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

 
 
 
 
 
 
 
 

S-1 

	 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

 
 
 
 
 

S-2 

	 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

 
 
 

S-3 

	 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

 
 
 

S-4 

	 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

 
 
 
 
 
 
 
 

S-5

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