Document:

FIRST
AMENDMENT TO RIGHTS AGREEMENT

FIRST
AMENDMENT (this “Amendment”) dated as of November 20, 2006, to the RIGHTS
AGREEMENT, dated as of December 23, 1999 (the “Rights Agreement”), between OREGON
STEEL MILLS, INC., a Delaware corporation (the “Company”), and MELLON INVESTOR
SERVICES LLC (f/k/a CHASEMELLON SHAREHOLDER SERVICES, LLC), a New Jersey
limited liability company (the “Rights Agent”).

RECITALS

WHEREAS, the Company and the
Rights Agent have heretofore executed and entered into the Rights Agreement (capitalized
terms used herein but not defined herein shall have the meanings given to such
terms in the Rights Agreement);

WHEREAS, pursuant to Section
27 of the Rights Agreement, for as long as the Rights are redeemable, the
Company may in its sole and absolute discretion, and the Rights Agent shall, if
the Company so directs, supplement or amend any provision of the Rights
Agreement without the approval of any holders of the Rights;

WHEREAS, the Company desires
to amend the Rights Agreement to render the Rights inapplicable to the Offer
and the Merger (each as defined in the Merger Agreement (as defined below)) and
the other transactions contemplated by the Merger Agreement; and

WHEREAS, the Board of
Directors has determined that it is in the best interests of the Company and
its stockholders to amend the Rights Agreement as set forth below.

AGREEMENT

NOW, THEREFORE, in
consideration of the mutual covenants and agreements herein contained and other
good and valuable consideration, the receipt, adequacy and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
hereby amend the Rights Agreement as follows:

(a)           Amendment to Section 1(a). The following text is
added at the end of the definition of “Acquiring Person” in Section 1(a) of the
Rights Agreement:

“Notwithstanding anything in
this Agreement to the contrary, none of Parent or Purchaser shall be deemed to
be an Acquiring Person, either individually or collectively, by virtue of (i)
the approval, execution or delivery of the Merger Agreement, (ii) the
announcement of the Merger, (iii) the consummation of the Offer, the Merger or
the other transactions contemplated by the Merger Agreement or (iv) the
acquisition of Common Stock pursuant to the Offer, the Merger or the Merger
Agreement.”

 

(b)           The following definitions are added
to Section 1 of the Rights Agreement in the appropriate alphabetical order:

“Effective Time” shall have the meaning assigned to
such term in the Merger Agreement.

“Merger Agreement” shall mean the Agreement
and Plan of Merger dated as of November 20, 2006, among Parent, Purchaser and
the Company, as the same may be amended from time to time.

“Merger” shall have the meaning assigned to
such term in the Merger Agreement.

“Purchaser” shall mean Oscar Acquisition
Merger Sub, Inc., a Delaware corporation, and a wholly owned subsidiary of
Parent.

“Offer” shall have the meaning assigned to
such term in the Merger Agreement.

“Parent” shall mean Evraz Group S.A., a
company incorporated as a société anonyme under the laws of the Grand Duchy of
Luxembourg.

(c)           Amendment to Section 3(b). The following text is
added at the end of Section 3(b) of the Rights Agreement:

“Notwithstanding anything in
this Agreement to the contrary, no Stock Acquisition Date or Distribution Date
shall occur by virtue of (i) the approval, execution or delivery of the Merger
Agreement, (ii) the announcement of the Merger, (iii) the consummation of the Offer,
the Merger or the other transactions contemplated by the Merger Agreement or (iv)
the acquisition of Common Stock pursuant to the Offer, the Merger or the Merger
Agreement.”

(d)           Section 7(e) of the Rights Agreement is amended by
adding the following sentence at the end thereof:

“Notwithstanding anything in
this Agreement to the contrary, no Invalidation Time shall occur by virtue of
(i) the approval, execution or delivery of the Merger Agreement, (ii) the
announcement of the Merger, (iii) the consummation of the Offer, the Merger or
the other transactions contemplated by the Merger Agreement or (iv) the
acquisition of Common Stock pursuant to the Offer, the Merger or the Merger
Agreement.”

 

 

 

(e)           Section 11(a)(ii) of the Rights
Agreement is amended by adding the following sentence at the end thereof:

“Notwithstanding the
foregoing or anything in this Agreement to the contrary, this
Section 11(a)(ii) shall not apply by virtue of (i) the approval, execution
or delivery of the Merger Agreement, (ii) the announcement of the Merger, (iii)
the consummation of the Offer, the Merger or the other transactions
contemplated by the Merger Agreement or (iv) the acquisition of Common Stock
pursuant to the Offer, the Merger or the Merger Agreement.”

(f)            Section 13 of
the Rights Agreement is amended by adding the following provision at the end
thereof:

“(f)          Notwithstanding the foregoing or anything in this Agreement
to the contrary, this Section 13 shall not apply by virtue of (i) the
approval, execution or delivery of the Merger Agreement, (ii) the announcement
of the Merger, (iii) the consummation of the Offer, the Merger or the other
transactions contemplated by the Merger Agreement or (iv) the acquisition of
Common Stock pursuant to the Offer, the Merger or the Merger Agreement.”

Section 2.  Full Force and Effect.  This Amendment shall become, and be deemed to
be, effective immediately prior to the execution and delivery of the Merger
Agreement.  Except as expressly amended
hereby, the Rights Agreement shall continue in full force and effect in
accordance with the provisions thereof on the date hereof.

Section 3.  Governing Law.  This Amendment for all purposes shall be
governed by, and construed in accordance with, the laws of the State of
Delaware applicable to contracts executed in and to be performed entirely in
such State; provided, however, that all provisions regarding the
rights, duties and obligations of the Rights Agent shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such State.

Section 4.  Counterparts.  This Amendment may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.

Section
5.  Authority.  Each party represents that such party has
full power and authority to enter into this Amendment and that this Amendment
constitutes a legal, valid and binding obligation of such party, enforceable
against such party in accordance with its terms.

Section
6.  Severability.  If any term, provision, covenant or
restriction of this Amendment or applicable to this Amendment is held by a
court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Amendment shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.

[SIGNATURE PAGE FOLLOWS]

 

IN WITNESS,WHEREOF, the
Company has caused this Amendment to be duly executed as of the day and year
first above written.

OREGON
STEEL MILLS, INC.

	
  By:

  	
  /s/ Jennifer R. Murray

  	
   

  
	
   

  	
  Name: Jennifer
  R. Murray

  	
   

  
	
   

  	
  Title: Vice
  President Administration and Corporate Secretary

  	
   

  

 

Acknowledged
and Approved by:

MELLON
INVESTOR SERVICES LLC,

as Rights Agent

	
  By:

  	
  /s/ Tiffany J. Skiles

  	
   

  
	
   

  	
  Name: Tiffany J.
  Skiles

  	
   

  
	
   

  	
  Title: Assistant
  Vice-PresidentExhibit
10.1

EMPLOYMENT
AGREEMENT

This
EMPLOYMENT AGREEMENT (this “Agreement”),
effective as of January 14, 2007 (the “Effective
Date”), is made by and among CellStar Ltd., a Texas limited
partnership (“Employer”),
CellStar Corporation, a Delaware corporation and parent company of Employer (“Parent”), and ELAINE FLUD RODRIGUEZ (“Employee”).

ARTICLE
I

Employment

1.1           Employment.  Employee currently serves as an employee of
Employer.  Effective as of the Effective
Date, Employee’s employment shall be governed by, and shall be continued under,
the terms and conditions contained in this Agreement.  This Agreement supersedes any prior agreement
regarding Employee’s employment with Employer except for the provisions of
Section 2.5 (non-compete) of the Employment Agreement between the parties dated
May 1, 2004, which, together with Section 2.5 of this Agreement, remains
in effect.  To the extent there is any
conflict between those Sections, Section 2.5 of this Agreement shall
control.

1.2           Term.  The term of this Agreement shall commence on
the Effective Date and shall end on the two-year
anniversary of the Effective Date, unless earlier terminated as provided herein
(the “Term”).  Upon expiration of the Term, the provisions
of this Agreement, other than the provisions of Article 2 and Article 6,
shall terminate and be of no further force or effect and Employee’s employment
with Employer shall be “at will”.

1.3           Position and Duties.

(a)           Position.  During the Term, Employee shall serve as
serve as Senior Vice President and General Counsel of Employer and Parent, with
authority, duties and responsibilities consistent with such position, and shall
perform such other services for Employer, Parent and their affiliates (as
defined in Rule 405 promulgated under the Securities Act of 1933) (“Affiliates”) consistent with such
position as may be reasonably assigned to her from time to time by the chief
executive officer of Employer or Parent (the “Chief Executive Officer”) and/or
the board of directors of the general partner of Employer or the board of
directors of Parent.  During the Term,
Employee shall, if reasonably requested to do so and if so elected or
appointed, also accept election or appointment, and serve, as an officer and/or
director of Employer or any of its Affiliates and perform the duties
appropriate thereto, without additional compensation other than as set forth
herein. Employee’s actions hereunder shall at all times be subject to the
direction of the Chief Executive Officer and/or the board of directors of the
general partner of Employer or the board of directors of Parent.

(b)           Commitment.  During the Term, Employee shall devote
substantially all of her business time, energy, skill and best efforts to the
performance of her duties 

  
 

 

hereunder in a manner
that will faithfully and diligently further the business and interests of
Employer, Parent and their Affiliates. 
Subject to the foregoing, Employee may serve in any capacity with any
civic, educational or charitable organization; provided that such activities
and services do not interfere or conflict with the performance of her duties
hereunder. Employee shall comply with policies, standards and regulations
established from time to time by the Chief Executive Officer and/or the general
partner of Employer or the board of directors of Parent.

1.4           Compensation.

(a)           Base Salary.  Subject to Section 1.4(c) (Withholding), beginning on the Effective
Date, Employer shall pay Employee as compensation an aggregate salary (“Base Salary”) of Two Hundred Eighty-Five
Thousand dollars ($285,000) per year during the Term, or such greater amount as
shall be approved in accordance with the policies of Employer and/or Parent, as
applicable.  The Base Salary for each
year shall be paid by Employer in accordance with the regular payroll practices
of Employer.

(b)           Annual Incentive Payment.  Employee shall be eligible to participate in
an annual incentive plan approved by the board of directors of Parent.

(c)           Withholding.  With respect to any compensation received by
Employee for her services for Employer or any of its Affiliates, Employer will
deduct such withholding and other payroll taxes as are required to be withheld
by Employer under applicable law.

(d)           Equity Incentive Awards.  Employee shall be entitled to annual
consideration for future grants of stock options and other forms of equity
incentive awards in amounts (if any) and on terms and conditions to be
determined by the board of directors of Parent.

(e)           Payment and Reimbursement of
Expenses.  During the Term, Employer
shall pay or reimburse Employee for all reasonable travel and other expenses
incurred by Employee in performing her obligations under this Agreement in
accordance with the policies and procedures of Employer or Parent, provided
that Employee properly accounts therefor in accordance with the regular
policies of Employer or Parent, as applicable.

(f)            Fringe Benefits and Perquisites.  During the Term, Employee shall be entitled
to participate in or receive benefits under any stock purchase, profit-sharing,
pension, retirement, paid time off, life, medical, dental, disability or other
plan or arrangement made generally available by Employer or Parent to
employees, subject to and on a basis consistent with the terms, conditions and
overall administration of such plans and arrangements.

If, on the Effective
Date, Employer maintains a long-term disability insurance for Employee that
provides for annual disability payments equal to 60% of Employee’s Base Salary,
after giving effect to all other disability benefits that would be payable to 

 2
 

 

Employee by Parent,
Employer or government agencies, Employer may only reduce or cancel such policy
after (i) approval of such action by two-thirds of the independent directors of
Parent, and (ii) offering such policy to Employee for conversion to an
individual policy and making a payment to Employee of the amount necessary to
pay the premium for such policy for a one-year period.

1.5           Termination by Employer.

(a)           Disability.  Employer may terminate this Agreement for
Disability. “Disability” shall
exist if, because of ill health or physical or mental disability, Employee
shall have been unable to perform the essential functions of her position under this Agreement,
after reasonable accommodation by Employer, as determined in good faith by
Parent’s board of directors or a committee thereof, for a period of 180
consecutive days, or if, in any 12-month period, Employee shall have been
unable or shall have failed to perform her
duties for a period of 130 or more business days, irrespective of whether or
not such days are consecutive days.

(b)           Cause.  Employer may terminate Employee’s employment
for Cause. Termination for “Cause”
shall mean termination because of Employee’s (i) willful failure to
substantially perform her
duties under this Agreement after written notice is delivered by Employer in
writing specifically identifying the manner in which Employee has not
substantially performed her duties (which must be delivered within 30 days
after any such failure), and Employee fails to substantially comply during the
cure period set forth below, (ii) willful misconduct that causes or is likely
to cause material economic harm to Employer, Parent or any of their Affiliates
or that brings or is likely to bring material discredit to the reputation of
Employer, Parent or any of their Affiliates, as determined by the board of
directors of Parent in good faith, (iii) failure to substantially follow
directions of the Chief Executive Officer and/or the general partner of
Employer or the board of directors of Parent that are consistent with her duties under this Agreement, provided,
that no act, or failure to act, on Employee’s part shall be deemed to
constitute Cause unless done, or omitted to be done, by Employee not in good
faith and without reasonable belief that Employee’s act, or failure to act, was
in or not opposed to the best interest of Employer, (iv) conviction of, or
entry of a pleading of guilty or nolo contendere to, any crime involving moral
turpitude or entry of an order duly issued by any federal or state regulatory
agency having jurisdiction in the matter permanently prohibiting Employee from
participating in the conduct of the affairs of Employer, Parent or their
Affiliates, (v) intentional violation of any material written policy or
procedure of Employer, Parent or any of their Affiliates or (vi) any other material breach of any
provision of this Agreement. Items (i), (ii), (iii), (v) and (vi) of this
Section shall not constitute Cause unless Employer or Parent notified Employee
thereof in writing, specifying the basis therefor and stating that it is
grounds for Cause. Furthermore, if Employee’s actions are curable, items (i),
(ii), (iii), (v) and (vi) of this Section shall not constitute Cause unless
Employee fails to cure such matter within 30 days after such notice is sent or
given under this Agreement. Notwithstanding the previous sentence, if Employer
has given notice to Employee of the same action covered by item (i), (ii),
(iii), (v), or (vi) on two separate occasions, Cause shall exist for terminating
Employee upon the giving of the second notice, and Employee shall not have the
right to cure such matter 

 3
 

 

covered by the second
notice. It is understood that “Cause”
shall not include a failure to perform due to Disability.

(c)           Without Cause.  Employer may, at any time, terminate Employee’s
employment Without Cause. Termination “Without
Cause” shall mean termination of Employee’s employment by Employer
other than termination for Cause or for Disability.

(d)           Employer Explanation of
Termination.  Upon termination of
this Agreement by Employer, Employer shall give prompt written notice to
Employee advising Employee of such termination and indicating whether the
termination is being made for Cause, Without Cause or for Disability.

(e)           Definition of Date of Termination.  “Date of
Termination” shall mean the last day of Employee’s employment.

(f)            Payments upon Termination by
Employer.  After termination by Employer,
Employer shall provide the following payments to Employee:

(i)            If Employer terminates Employee’s
employment for Disability, Employer’s obligation to make payments and provide
benefits pursuant to Section 1.4 (Compensation)
shall terminate, except that Employer shall pay Employee her accrued but unpaid
Base Salary and benefits pursuant to Section 1.4 (Compensation) through the Date of
Termination, after giving effect to all disability benefits received by
Employee under the terms of any applicable disability policy.

(ii)           If Employer terminates Employee’s
employment for Cause, Employer’s obligation to make payments and provide
benefits pursuant to Section 1.4 (Compensation)
shall terminate, except that Employer shall pay Employee her accrued but unpaid
Base Salary and benefits pursuant to Section 1.4 (Compensation) through the Date of
Termination; provided, however, that Employee shall not be
entitled to any payment pursuant to Section 1.4(b) (Annual Incentive Payment) for the fiscal
year of Parent in which such termination occurs.

(iii)          If Employer terminates Employee’s
employment Without Cause, and no Change in Control (as defined in Section
1.7(a) (Change in Control)
has occurred in the 24-month period prior to the Date of Termination, Employer
shall pay to Employee as severance pay and in lieu of any further Base Salary,
annual incentive payments or other forms of compensation for periods subsequent
to the Date of Termination:

(1)           her accrued but unpaid Base Salary through the Date of Termination at the rate in effect as of
the Date of Termination;

(2)           installment payments equal to, in the
aggregate, the greater of (i) her regular Base Salary pursuant to Section
1.4(a) payable throughout the remainder of the Term of this Agreement or
(ii) her regular 

 4
 

 

Base Salary pursuant to Section
1.4(a) payable through the date that is one year after the Date of
Termination; and

(3)           installment payments equal to, in the
aggregate, Employee’s Bonus (as defined below) divided by 12, then multiplied
by the number of months during which her regular Base Salary is to be paid
pursuant to paragraph (2) of this Section 1.5(f).  “Bonus”
for any fiscal year shall mean the
greater of (i) the amount of the annual incentive payment made (or to be
made) to Employee pursuant to Section 1.4(b) (Annual Incentive Payment) for the fiscal year of Parent
immediately preceding the fiscal year that includes the Date of Termination or
(ii) the average of the annual incentive payments made (or to be made) to
Employee for each of the last three fiscal years of Parent immediately
preceding the fiscal year that includes the Date of Termination.

In addition, Employee
will be entitled to (A) a portion of any annual incentive payment earned
for the fiscal year that includes the Date of Termination, if earned in
accordance with the terms of its grant and prorated for the portion of such
fiscal year before the Date of Termination, and (B) for a period of up to
nine (9) months following the Date of
Termination, the services of an
outplacement consultant who is selected by Employer and reasonably acceptable
to Employee and whose fees are paid by Employer.

The installment payments
described in Sections 1.5(f)(iii)(2) and (3) above shall be payable on a
quarterly basis, in advance, in approximately equal payments, over the period
for which such payments are calculated, with the first such installment payment
to be paid on the Date of Termination.

Installment payments
under this Section 1.5(f) may not be terminated or delayed without the
written consent of two-thirds of the independent directors of the Parent, and
after notification to Employee thereof in writing, specifying the basis
therefor, and, if Employee’s actions that are stated as grounds for termination
or delay of payment are curable, no such termination or delay may occur unless
Employee fails to cure such matter within 30 days after such notice is sent or
given under this Agreement.

(iv)          In the event Employee is required to
take steps to enforce provisions of this Section 1.5(f) against Employer
or Parent, Employer shall advance to Employee all reasonable costs and expenses
(including without limitation, attorneys’ fees) incurred by Employee as a
remedy in such action; and such costs and expenses shall be promptly paid to
Employee upon delivery of a written notice specifying the amount of the expense
and the purpose of the expense.

(g)           Waiver of Other Rights upon
Employer Termination.  Employee
hereby acknowledges and agrees that the payments by Employer under Section
1.5(f) (Payments

 5
 

 

upon Termination by Employer)
shall be the sole and exclusive remedy of Employee for termination of Employee’s
employment by Employer, and Employee hereby waives any and all other remedies
under law or in equity.

1.6           Termination by Employee.

(a)           Company Breach.  Employee may terminate her employment
hereunder for Company Breach.  For
purposes of this Agreement, a “Company
Breach” shall be deemed to occur in the event of a material breach
of this Agreement by Employer or Parent; provided, however, that
Employee shall not be entitled to terminate for Company Breach unless Employee
notifies Employer thereof in writing within 30 days after the Company Breach,
specifying in reasonable detail the basis therefor and stating that it is
grounds for Company Breach, and unless Employer fails to cure such Company
Breach within 30 days after such notice is sent or given under this Agreement.  For purposes of this Agreement, a material
breach by Employer or Parent shall mean (i) Employer or Parent fails to perform
any material term of this Agreement; (ii) the reduction in Employee’s Base
Salary as in effect on the Effective Date; or
(iii) a change in Employee’s duties or responsibilities with Employer or Parent
that represents a substantial reduction of the duties or responsibilities of
Employee as in effect immediately prior thereto (including, without limitation,
the Employee ceasing to be the chief legal officer of a public company) and
Employee does not expressly consent to such reduction in writing.  In addition, after a Change in Control, it
shall be a material breach by Employer or Parent to require Employee to be
based at any place outside a fifty (50) mile radius of Parent’s Coppell, Texas
headquarters as in use on the date of this Agreement, except for reasonable
travel on behalf of Employer or Parent.

(b)           Voluntary Resignation.  During the Term, Employee may voluntarily
terminate her employment upon 30 days prior written notice to Employer, which
notice may be waived by Employer in Employer’s discretion. “Voluntary Resignation” shall mean
termination of Employee’s employment by Employee other than termination for
Company Breach.

(c)           Employee Explanation of
Termination.  Upon termination of
this Agreement by Employee, Employee shall give prompt written notice to
Employer of such termination, which shall state in reasonable detail the basis
for such termination and shall indicate whether the termination is being made
for Company Breach or if the termination is due to Voluntary Resignation.

(d)           Payments upon Termination by
Employee.  Employer shall provide the
following payments to Employee upon Employee’s termination of this Agreement:

(i)            If
Employee’s termination is due to Voluntary Resignation, then Employer’s
obligation to make payments and provide benefits pursuant to Section 1.4
(Compensation) shall terminate,
except that Employer shall pay Employee her accrued but unpaid Base Salary and
benefits pursuant to Section 1.4 (Compensation)
through the Date of Termination; provided, however, that 

 6
 

 

Employee shall not be entitled to any payment pursuant
to Section 1.4(b) (Annual Incentive Payment) for the fiscal
year of Parent in which such termination occurs.

(ii)           If
Employee terminates her employment for Company Breach, and no Change in Control
(as defined in Section 1.7(a) (Change
in Control) has occurred in the 24-month period prior to the Date of
Termination, Employee shall be entitled to the payments specified in Section
1.5(f)(iii) as if Employee were terminated by Employer Without Cause; provided,
that if the termination for Company Breach is based upon a material reduction
by Employer of Employee’s Base Salary, then for the purposes of the
calculations set forth in Section 1.5(f)(iii), Employee’s Base Salary as
of the Date of Termination shall be deemed to be Employee’s Base Salary
immediately prior to the reduction that Employee claims as grounds for Company
Breach.

(e)           Waiver of Other Rights upon
Employee Termination.  Employee
hereby acknowledges and agrees that the payments by Employer under Section
1.6(d) (Payments upon Termination by
Employee) shall be the sole and exclusive remedy of Employee for
termination of Employee’s employment by Employee, and Employee hereby waives
any and all other remedies under law or in equity.

1.7           Change in Control.

(a)           Definition of Change in Control.  For the purposes of this Agreement, a “Change in Control” shall mean any of the
following:

(i)            any
consolidation or merger of Parent in which Parent is not the continuing or
surviving corporation or pursuant to which shares of Parent’s common stock
would be converted into cash, securities or other property, other than a merger
of Parent (for example, in a reincorporation or restructuring) in which the
holders of Parent common stock immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation
immediately after the merger (subject to adjustment for rounding or fractional
interests resulting therefrom);

(ii)           any
sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the assets of Parent;

(iii)          any
approval by the stockholders of Parent of any plan or proposal for the
liquidation or dissolution of Parent;

(iv)          the
members of the board of directors of Parent on the date hereof (the “Incumbent
Directors”) cease to be a majority of the members of that Board; provided that
any individual becoming a director subsequent to the date hereof whose election
or nomination for election by the Parent’s stockholders was approved by a
majority of the Incumbent Directors shall be considered an Incumbent Director;

 7
 

 

(v)           (A)
the acquisition of beneficial ownership (“Beneficial
Ownership”), within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the “Exchange
Act”), of an aggregate of fifty percent (50%) or more of the voting
power of Parent’s outstanding voting securities by any person or group (as such
term is used in Rule 13d-5 under the Exchange Act) who Beneficially Owned less
than ten percent (10%) of the voting power of Parent’s outstanding voting
securities on the Effective Date of this Agreement, (B) the acquisition of
Beneficial Ownership of an additional forty percent (40%) of the voting power
of Parent’s outstanding voting securities by a person or group who Beneficially
Owned at least ten percent (10%) of the voting power of Parent’s outstanding
voting securities on the Effective Date of this Agreement, or (C) the execution
by Parent and a stockholder of a contract that by its terms grants such
stockholder (in its, his or her capacity as a stockholder) or such stockholder’s
Affiliate (as defined in Rule 405 promulgated under the Securities Act of 1933
(an “Affiliate”)) including,
without limitation, such stockholder’s nominee to Parent’s Board of Directors
(in its, his or her capacity as an Affiliate of such stockholder), the right to
veto or block decisions or actions of Parent’s Board of Directors; provided,
however, that notwithstanding the foregoing, the events described in
items (A), (B) or (C) above shall not constitute a Change in Control hereunder
if the acquiror is (1) a trustee or other fiduciary holding securities under an
employee benefit plan of Employer, Parent or one of their affiliated entities
and acting in such capacity, (2) a corporation owned, directly or indirectly,
by the stockholders of Parent in substantially the same proportions as their
ownership of voting securities of Parent, (3) a person or group meeting the
requirements of clauses (i) and (ii) of Rule 13d-1(b)(1) under the Exchange Act
or (4) in the case of an acquisition described in items (A) or (B) above (but
not in the case of an acquisition described in item (C) above), any other
person whose ownership or acquisition of shares of voting securities is
approved by a majority of the Incumbent Directors; provided further,
that none of the following shall constitute a Change in Control: (aa) the right
of the holders of any voting securities of Parent to vote as a class on any
matter or (bb) any vote required of disinterested or unaffiliated directors or
stockholders including, without limitation, pursuant to Section 144 of the
Delaware General Corporation Law or Rule 16b-3 promulgated pursuant to the
Exchange Act; or

(vi)          subject
to applicable law, in a Chapter 11 bankruptcy proceeding, the appointment of a
trustee or the conversion of a case involving Parent to a case under Chapter 7.

(b)           Termination Following a Change in
Control.  Notwithstanding the
provisions of Section 1.5 (Termination
by Employer) or Section 1.6 (Termination
by Employee) hereof, if, during the 24-month period after a Change
in Control, Employee terminates her employment for Company Breach, or if
Employer or Parent terminates Employee Without Cause during such period, then
in lieu of any payments that Employee would be otherwise entitled to receive
pursuant to Section 1.5(f)(iii) or Section 1.6(d)(ii) of this
Agreement, Employee shall be entitled to the following payments and benefits:

 8
 

 

(i)            Employer shall pay to
Employee as severance pay and as liquidated damages (because actual damages are
difficult to ascertain), in a lump sum, in cash, within 30 days after termination,
an amount which is equal to two  times the sum of
(A) Employee’s Base Salary as of the Date of Termination (or such greater
amount of Base Salary that was paid to Employee prior to any material salary
reduction that serves as the basis for termination by Employee upon Company
Breach) plus (B) Employee’s Bonus (as defined in Section
1.5(f)(iii)(3) above); provided, however, that if such
payment, either alone or together with other payments or benefits, either cash
or non-cash, that Employee has the right to receive from Employer, including,
but not limited to, accelerated vesting or payment of any deferred
compensation, options, stock appreciation rights or any benefits payable to
Employee under any plan for the benefit of employees, would constitute an “excess
parachute payment” (as defined in Section 280G of the Internal Revenue Code of
1986, as amended (the “Code”)),
then such payment or other benefit shall be reduced to the largest amount that
will not result in receipt by Employee of a parachute payment. The
determination of the amount of the payment described in this Section shall be
made by Parent’s independent auditors.

(ii)           Notwithstanding
any provision to the contrary in any option agreement, restricted stock
agreement, or other agreement relating to equity-type compensation that may be
outstanding between Employee and Employer, all restricted stock, restricted
stock units, stock options, incentive stock options, performance shares, stock
appreciation rights, and any other form of equity compensation granted to
Employee by Employer (hereafter sometimes referred to as the “Rights”) held by
Employee immediately prior to the Date of Termination, shall immediately become
100% vested and exercisable; provided, however, that to the extent Employer is
unable to provide for such acceleration of vesting with respect to any such
Rights, Employer shall provide in lieu thereof a lump-sum cash payment equal to
the difference between the total value of such unaccelerated Rights as of the
date of Employee’s termination of employment, and the total value of the Rights
in which Employee is vested as of the date of her Date of Termination.  The value of such accelerated vesting in
Employee’s Rights shall be determined by the Board in good faith based on a
valuation performed by an independent consultant selected by the Board; any
such Rights which are not in existence at the time of Employee’s termination of
employment shall be valued as of the date of the Date of Termination.

(iii)          Employee
will be entitled to the services of an outplacement consultant who is
selected by Employer and reasonably acceptable to Employee and whose fees are
paid by Employer for a period of up to nine (9) months following Employee’s
termination of employment.

(iv)          In
the event Employee is required to take steps to enforce provisions of this Section
1.7(b) and Section 1.8 (Employee
Benefits after Termination) against Employer or Parent, Employee
shall be entitled to recover from Employer for all reasonable costs and
expenses (including without 

 9
 

 

limitation, attorneys’ fees) incurred by Employee as a
remedy in such action; and such costs and expenses shall be promptly paid to
Employee.

Employee hereby
acknowledges and agrees that the payments by Employer under this Section
1.7(b) shall be the sole and exclusive remedy of Employee for termination
of Employee’s employment Without Cause or by reason of a Company Breach within
the 24-month period following a Change in Control, and Employee hereby waives
any and all other remedies under law or in equity.

(c)           Termination in Connection With a
Change in Control.  Notwithstanding
the foregoing provisions of this Section 1.7, if Employee’s employment
is terminated by Employer or Parent Without Cause or by Employee upon a Company
Breach prior to a Change in Control, and it is reasonably demonstrated that
such termination (i) was at the request of a third party who has taken steps
reasonably calculated to effect a Change in Control or (ii) otherwise arose in
connection with a Change in Control, then for all purposes of this Agreement,
such termination shall be deemed to have occurred immediately following a
Change in Control. In addition, if Employee’s employment is terminated by
Employer or Parent Without Cause or by Employee upon a Company Breach within
the 180-day period immediately prior to a Change in Control, such termination
shall be conclusively deemed to have occurred following a Change in Control.

1.8           Employee Benefits after
Termination.

(a)           Benefits Through Termination.  Employer shall maintain in full force and
effect (to the extent consistent with past practice), for the continued benefit
of Employee and, if applicable, her spouse and children, the employee benefits
set forth in Section 1.4(f) (Fringe
Benefits and Perquisites) through the Date of Termination (subject
to the provisions of Section 1.5(f)(i)); provided, that her
continued participation or, if applicable, the participation of her spouse and
children, is possible under the general terms and conditions of such plans and
programs, as such terms and conditions may be amended by Employer from time to
time.  Following the Date of Termination,
Employee and her eligible dependents shall be eligible for continued health
coverage in accordance with the terms of applicable law and the terms and
conditions of the applicable Employer plan or program and subject to applicable
premiums contributions.

(b)           Benefits After Termination of
Employment.  If Employee (i) is terminated Without Cause or resigns
upon a Company Breach and (ii) is eligible for and elects continuation coverage
under Employer’s health plans, then Employer shall pay, the same portion of
Employee’s premiums for such continuation coverage for Employee and her
eligible dependents as Employer paid for Employee immediately prior to her
termination of employment, until the earlier of: (1) the last day of the 24th month following the Date of Termination or (2)
the date Employee’s coverage under Employer’s health plan terminates for any
reason.  Thereafter, if Employee is
eligible and desires to continue her continuation coverage and the maximum
applicable continuation coverage period has not expired, Employee may continue
such coverage, provided, however, that Employee shall be solely
responsible for payment of the entire premium for such coverage.

 10
 

 

If Employee is (i)
terminated Without Cause or resigns upon a Company Breach and (ii) on such Date
of Termination is covered by a life insurance policy sponsored by Employer and
such policy’s terms permit conversion of the policy to an individual policy,  Employer shall pay, the premiums for such
policy (only for death benefits up to $50,000) until the earlier of (x) the
last day of the 24th month following the Date of Termination or (y)
the date Employee’s coverage under such policy terminates for any reason.

1.9           Death of Employee.  Notwithstanding any other provision of this
Agreement to the contrary, if Employee dies prior to the expiration of this
Agreement, Employee’s employment and other obligations under this Agreement
shall automatically terminate and all compensation to which Employee is or
would have been entitled hereunder (including without limitation under Sections
1.4(a) (Base Salary) and 1.4(b)
(Annual Incentive Payment)) shall
terminate as of the end of the month in which Employee’s death occurs; provided,
however, that (i) Employer shall pay to Employee’s estate, as soon as
practicable, a prorated amount of the annual incentive payment specified in Section
1.4(b) (Annual Incentive Payment)
for the fiscal year of Parent in which Employee’s death occurs, if earned in
accordance with Parent’s annual incentive plan; and (ii) for the balance of the
month in which Employee’s death occurs, Employee’s spouse and children shall be
entitled to receive their benefits under Employer’s group hospitalization,
medical and dental plans (if any), to the extent permitted under the terms of
such plans, and thereafter Employee’s dependents shall have a right to
continued health coverage in accordance with the terms of applicable law.

1.10         Delay of Payments. Notwithstanding
anything to the contrary contained herein, if any payments made pursuant to Section
1.5, Section 1.6, Section 1.7, or Section 1.8 are
deemed to be subject to (and not otherwise exempt from) the requirements of
Code Section 409A and Employee is deemed a “key employee” (as defined by Code
Section 416(i), disregarding Code Section 416(i)(5)), Employee shall not be
entitled to any such payments that are subject to Code Section 409A until the
first day of the seventh month following her Date of Termination.

1.11         Mutual Dependence.  The rights, obligations and liabilities of
the parties with respect to Sections 1.4(b) (Annual Incentive Payment), 1.4(d) (Equity Incentive Awards), and 1.5(f)(iii)
are conditioned and dependent on Employee’s consent, agreement and compliance
with her covenants set forth in Article 2 (Non-Competition and Confidentiality) and to the
enforceability of those covenants.

1.12         Release and Covenant Not to Sue.  If Employee is entitled to any payments or
benefits under any one or more of the sections of this Agreement listed below,
such payments and benefits shall be payable only upon receipt by Employer of a
release and covenant not to sue from Employee in a form reasonably satisfactory
to Employer (the “Release”).  This Section
1.12 applies to Sections 1.5(f)(iii) (other than subparagraph (1)),
1.6(d)(ii), 1.7(b), and 1.8(b) of this Agreement.  The Release shall include a general release
of Employee and covenant not to sue by Employer in a form reasonably
satisfactory to Employee, but excluding (i) any obligations of Employee under
this Agreement that survive termination of employment; and (ii) any claims that
Employer may have against Employee as a result of harm caused to Employer
arising out of a final adjudication in a criminal proceeding against Employee
in connection with action taken by Employee during the term of Employee’s
employment with Employer.  Employee’s
release and 

 11
 

 

covenant not to sue shall not extend to (i) any
obligations of Employer under this Agreement, including provisions that survive
termination of employment or (ii) any rights to indemnification under any
agreement, insurance policy, or the organizational documents of Employer,
Parent or their Affiliates.

ARTICLE
2

Non-Competition
and Confidentiality

2.1           Acknowledgments by Employee.  In consideration of Employee’s employment by
Employer pursuant to this Agreement and Employer’s payment to Employee of
compensation, including Base Salary, annual incentive payments (if any) and
equity incentive awards (if any), under Section 1.4 (Compensation), Employee agrees to the
terms set forth in this Article 2 
and that such terms (i) are reasonable and necessary to protect and
preserve the business of Employer, Parent and their Affiliates and
(ii) directly benefit Employee.  For
purposes of this Article 2, the term “the
Company” shall be construed to include Employer, Parent and any and
all Affiliates of Employer and Parent.

2.2           Training/Confidential Information.  At the inception of Employee’s employment
with Parent and continuing during Employee’s employment with Parent pursuant to
this Agreement, the Company has and shall provide Employee with specialized
knowledge and training regarding the business in which the Company is involved,
and has and shall provide Employee with initial and ongoing confidential
information and trade secrets of the Company (hereinafter referred to as “Confidential Information”).  For
purposes of this Agreement, Confidential Information includes, but is not
limited to:

(a)           Customer lists and prospect lists
developed by the Company;

(b)           Information regarding the Company’s
customers which Employee acquired as a result of her employment with Employer,
including but not limited to, customer contracts, work performed for customers,
customer contacts, customer requirements and needs, data used by the Company to
formulate customer bids, customer financial information and other information
regarding the customer’s business;

(c)           Information regarding the Company’s
vendors which Employee acquired as a result of her employment with Employer,
including but not limited to, product and service information and other
information regarding the business activities of such vendors;

(d)           Information related to the Company’s
business, including but not limited to marketing strategies and plans, sales
procedures, operating policies and procedures, pricing and pricing strategies,
business plans, sales, profits, and other business and financial information of
the Company;

(e)           Training materials developed by and
utilized by the Company;

 

 12

 

(f)            Any other information which Employee
acquired as a result of her employment with Employer and which Employee has a
reasonable basis to believe the Company would not want disclosed to a business
competitor or to the general public; and

(g)           Information which:

(i)            is proprietary to, about or created
by the Company;

(ii)           gives the Company some competitive
advantage, the opportunity of obtaining such advantage or the disclosure of
which could be detrimental to the interests of the Company;

(iii)          is not typically disclosed to
non-employees by the Company, or otherwise is treated as confidential by the
Company; or

(iv)          is designated as Confidential
Information by the Company or from all the relevant circumstances should
reasonably be assumed by Employee to be confidential to the Company.

Notwithstanding the
foregoing, Confidential Information shall not include any information that is
or has become public knowledge, other than by acts by Employee or
representatives of Employee in violation of this Agreement.

2.3           Non-Disclosure. Employee
acknowledges, understands and agrees that all Confidential Information, whether
developed by the Company or others or whether developed by Employee while
carrying out the terms and provisions of this Agreement (or previously while serving
as an officer of the Company), shall be the exclusive and confidential property
of the Company and (i) shall not be disclosed to any person (except as
otherwise required by law or legal process) other than employees of the Company
and professionals engaged on behalf of the Company, and other than disclosure
in the scope of the Company’s business in accordance with the Company’s
policies for disclosing information, (ii) shall be safeguarded and kept from
unintentional disclosure and (iii) shall not be used for Employee’s personal
benefit. Subject to the terms of the preceding sentence, Employee shall not
use, copy or transfer Confidential Information other than as is necessary in
carrying out her duties under this Agreement.

2.4           Return of Company Property and
Information. Upon termination of employment, or at any earlier time as
directed by the Company, Employee shall immediately deliver to the Company any
and all Confidential Information in Employee’s possession, any other documents
or information which Employee acquired as a result of her employment with
Employer, and any copies of such documents/information.  Employee shall not retain any originals or
copies of such documents or materials related to the Company’s business which
Employee came into possession of or created as a result of her employment at
the Company. Employee acknowledges that such information, documents and
materials are the exclusive property of the Company.  Upon termination of employment, or at any
earlier time as directed by the Company, Employee shall immediately deliver to
the Company any property of the Company in Employee’s possession. Employee
agrees that should she fail to return any Company property, the Company shall
be entitled to deduct from any sums otherwise due Employee (including, but not
necessarily limited 

 13
 

 

to wages and expense reimbursements) the cost and/or
value of any property which Employee fails to return, up to the maximum amount
allowed by law. Employee hereby authorizes the Company to deduct and/or
withhold any such sums from Employee’s wages and/or other sums due to Employee.

2.5           Non-Competition.

(a)           Description of Proscribed Actions.
 During
the Term and for the remainder of Employee’s employment and for the Non-Compete
Period, in consideration for the obligations of Employer and Parent hereunder,
including without limitation their disclosure (pursuant to Section 2.2 (Training/Confidential Information)) of
Confidential Information, Employee shall not, unless approved in writing by the
Chief Executive Officer of Parent or a duly passed resolution of the board of
directors of Parent:

(i)            directly or indirectly, engage or
invest in, own, manage, operate, control or participate in the ownership,
management, operation or control of, be employed by, associated or in any
manner connected with, or render services or advice to, any Competing Business
(defined below); provided, however, that Employee may invest in the securities
of any enterprise (but without otherwise participating in the activities of
such enterprise) if (x) such securities are listed on any national or regional
securities exchange or have been registered under Section 12(g) of the
Securities Exchange Act of 1934 and (y) Employee is not the Beneficial Owner of
more than five percent (5%) of the outstanding capital stock of such
enterprise;

(ii)           directly or indirectly, either as
principal, agent, independent contractor, consultant, director, officer,
employee, employer, advisor (whether paid or unpaid), stockholder, partner or
in any other individual or representative capacity whatsoever, either for her
own benefit or for the benefit of any other person or entity, solicit, divert
or take away any suppliers, customers or clients of the Company or any of its
Affiliates; or

(iii)          directly or indirectly, either as
principal, agent, independent contractor, consultant, director, officer,
employee, employer, advisor (whether paid or unpaid), stockholder, partner or
in any other individual or representative capacity whatsoever, either for her
own benefit or for the benefit of any other person or entity, either (A) hire,
attempt to hire, contact or solicit with respect to hiring, any employee of
Employer or Parent or any Affiliate thereof, (B) induce or otherwise counsel,
advise or encourage any employee of Employer, Parent or any Affiliate thereof
to leave the employment of Employer, Parent or any Affiliate thereof, or (C)
induce any representative or agent of Employer, Parent or any Affiliate thereof
to terminate or modify its relationship with Employer, Parent or such
Affiliate.

The “Non-Compete Period” shall be a period after
Employee’s termination of employment equal
to (X) in the event of a termination Without Cause or resignation for Company
Breach pursuant to Section 1.7(b) (Termination
Following a Change in 

 14
 

 

Control), 12
months, and (Y) in all other cases, the greater of 12 months or the remaining
Term of this Agreement.

(b)           Judicial Modification.
Employee agrees that if a court of competent jurisdiction determines that the
length of time or any other restriction, or portion thereof, set forth in this
Section 2.4 (Non-Competition) is overly restrictive and unenforceable, the
court may reduce or modify such restrictions to those which it deems reasonable
and enforceable under the circumstances, and as so reduced or modified, the
parties hereto agree that the restrictions of this Section 2.4
(Non-Competition) shall remain in full force and effect. Employee further
agrees that if a court of competent jurisdiction determines that any provision
of this Section 2.4 (Non-Competition) is invalid or against public policy, the
remaining provisions of this Section 2.4 (Non-Competition) and the remainder of
this Agreement shall not be affected thereby, and shall remain in full force
and effect.

(c)           Nature of Restrictions. Employee
acknowledges that the business of Employer and Parent and their Affiliates is
international in scope and that the restrictions imposed by this Agreement are
legitimate, reasonable and necessary to protect Employer’s, Parent’s and their
Affiliates’ investment in their businesses and the goodwill thereof. Employee
acknowledges that the scope and duration of the restrictions contained herein
are reasonable in light of the time that Employee has been or will be engaged
in the business of Employer, Parent and their Affiliates, and Employee’s
relationship with the suppliers, customers and clients of Employer, Parent and
their Affiliates. Employee further acknowledges that the restrictions contained
herein are not burdensome to Employee in light of the consideration paid
therefor and the other opportunities that remain open to Employee. Moreover,
Employee acknowledges that she has other means available to her for the pursuit
of her livelihood.

(d)           Competing Business. “Competing Business” shall mean any individual,
business, firm, company, partnership, joint venture, organization, or other
entity which receives at least 20% of its gross revenues from the wholesale
distribution or retail sales of wireless handsets in any domestic or
international market area in which Employer, Parent or any of their Affiliates
does business at the time of termination of Employee’s employment with Employer
or any of its Affiliates, or in which Employer, Parent or any of their
Affiliates conducted business within three (3) years prior to such termination.

2.6           Remedies.

(a)           Injunctive Relief.  Because of Employee’s experience and
reputation in the industries in which Employer, Parent and their Affiliates
operate, and because of the unique nature of the Confidential Information, Employee
acknowledges, understands and agrees that Employer and Parent will suffer
immediate and irreparable harm if Employee fails to comply with any of her
obligations under this Article 2, and that monetary damages will be
inadequate to compensate Employer and Parent for such breach. Accordingly,
Employee agrees that Employer and Parent shall, in addition to any other
remedies available to them at law or in equity, be entitled to injunctive
relief to enforce the terms of this Article 2, without the necessity of
proving inadequacy of legal remedies or irreparable harm.

 15
 

 

(b)           Extension.  If Employee is found to have violated any of
the provisions of this Article 2, the parties agree that the duration of
the non-competition period set forth above shall be automatically
extended by the same period of time that Employee is determined to be in
violation of any of the provisions of this Article 2.

(c)           No Defense.  The representations and covenants contained
in this Article 2 on the part of Employee will be construed as ancillary
to and independent of any other provision of this Agreement, and the existence
of any claim or cause of action of Employee against Employer or any officer,
director, or stockholder of Employer whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement against Employee
of the covenants of Employee contained in this Article 2.

ARTICLE
3

Representations
and Warranties by Employee

Employee
hereby represents and warrants, the same being part of the essence of this
Agreement, that, as of the Effective Date, she is not a party to any agreement,
contract or understanding, and that no facts or circumstances exist, that would
in any way restrict or prohibit her from undertaking or performing any of her
obligations under this Agreement.  The
foregoing representation and warranty shall remain in effect throughout the
Term.

ARTICLE
4

Indemnification

Parent agrees to indemnify, and advance expenses to,
Employee to the extent provided in the Certificate of Incorporation and Bylaws
of Parent as of the date of this Agreement. To the extent that a change in the
Delaware General Corporation Law or other applicable law (whether by statute or
judicial decision) permits greater indemnification by agreement than would be
afforded currently under Parent’s Certificate of Incorporation and Bylaws and
this Agreement, it is the intent of the parties hereto that Employee shall
enjoy by this Agreement the greater benefits so afforded by such change.

ARTICLE 5

Effect of Restatement of Financial
Results

Notwithstanding anything in this Agreement to the
contrary, to the extent any financial results are misstated as a result of
Employee’s willful misconduct or gross negligence, and as a result, such
financial results are subsequently restated downward resulting in lower levels
of performance-based vesting or award earnouts, Employer shall offset the
difference between what was previously paid to Employee and what should have
been paid to Employee based upon the restated financial results against future
awards and/or payments.   If such future
awards and/or payments are insufficient to offset the full difference between
previously paid award values or earnouts and restated award values or earnouts
and/or if such restatement occurs at the end of the 

 16
 

 

Term, Employee shall promptly repay Employer the
amount necessary to satisfy the difference.

ARTICLE 6

Miscellaneous

6.1           Counterparts. This Agreement
may be executed in two or more counterparts, each of which shall be deemed to
be an original but all of which together will constitute one and the same
instrument.

6.2           Indulgences, Etc.  Neither the failure nor any delay on the part
of either party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any right, remedy, power or privilege, nor shall any
waiver of any right, remedy, power, or privilege with respect to any occurrence
be construed as a waiver of such right, remedy, power or privilege with respect
to any other occurrence.

6.3           Employee’s Sole Remedy.
Employee’s sole remedy shall be against Employer or Parent for any claim,
liability or obligation of any nature whatsoever arising out of or relating to
this Agreement or an alleged breach of this Agreement or for any other claim
arising out of the termination of Employee’s employment hereunder
(collectively, “Employee Claims”).
Employee shall have no claim or right of any nature whatsoever against any of
Employer’s or its Affiliates’ directors, former directors, officers, former
officers, employees, former employees, stockholders, former stockholders,
agents, former agents or the independent counsel in their individual capacities
arising out of or relating to any Employee Claim. Employee hereby releases and
covenants not to sue any person other than Employer or Parent over any Employee
Claim. The persons described in this Section 6.3 (other than Employer,
Parent and Employee) shall be third-party beneficiaries of this Agreement for
purposes of enforcing the terms of this Section 6.3 against Employee.

6.4           Notices. All notices,
requests, demands and other communications required or permitted under this
Agreement and the transactions contemplated herein shall be in writing and
shall be deemed to have been duly given, made and received when sent by
telecopy (with a copy sent by mail) or when personally delivered or one
business day after it is sent by overnight service, addressed as set forth
below:

If to Employee:

Elaine Flud Rodriguez

11469 Cromwell Court

Dallas, Texas  75229

 17
 

 

If to Employer or Parent:

CellStar Corporation

601 Royal Lane

Coppell, Texas 75019

Attn: Chief Executive Officer

Any party may
alter the address to which communications or copies are to be sent by giving
notice of such change of address in conformity with the provisions of this
Section for the giving of notice, which shall be effective only upon receipt.

6.5           Provisions Separable. The
provisions of this Agreement are independent of and separable from each other,
and no provision shall be affected or rendered invalid or unenforceable by
virtue of the fact that for any reason any other or others of them may be
invalid or unenforceable in whole or in part.

6.6           Entire Agreement. This
Agreement contains the entire understanding between the parties hereto with
respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements and understandings, inducements or conditions, express
or implied, oral or written, except as herein contained, which shall be deemed
terminated effective immediately. The express terms hereof control and
supersede any course of performance and/or usage of the trade inconsistent with
any of the terms hereof. This Agreement may not be modified or amended other
than by an agreement in writing.

6.7           Headings. The headings of
paragraphs herein are included solely for convenience of reference and shall
not control the meaning or interpretation of any of the provisions of this
Agreement.

6.8           Governing Law. This Agreement
shall be governed by and construed in accordance with the laws of the State of
Texas, without giving effect to principles of conflict of laws.

6.9           Dispute Resolution. Subject to
Employer’s and Parent’s right to seek injunctive relief in court as provided in
Section 2.6 (Remedies),
any dispute, controversy or claim arising out of or in relation to or
connection to this Agreement, including without limitation any dispute as to
the construction, validity, interpretation, enforceability or breach of this
Agreement, shall be exclusively and finally settled by arbitration, and any
party may submit such dispute, controversy or claim, including a claim for
indemnification under this Section 6.9, to arbitration.

(a)           Arbitrators. The arbitration
shall be heard and determined by one arbitrator, who shall be impartial and who
shall be selected by mutual agreement of the parties; provided, however, that
if the dispute involves more than $2,000,000, then the arbitration shall be
heard and determined by three arbitrators. If three arbitrators are necessary
as provided above, then (i) each side shall appoint an arbitrator of its choice
within 30 days of the submission of a notice of arbitration and (ii) the
party-appointed arbitrators shall in turn appoint a presiding arbitrator of the
tribunal within 30 days following the appointment of the last party-appointed
arbitrator. If (x) the parties cannot 

 18
 

 

agree on the sole arbitrator, (y) one party refuses to
appoint its party-appointed arbitrator within said 30 day period or (z) the
party-appointed arbitrators cannot reach agreement on a presiding arbitrator of
the tribunal, then the appointing authority for the implementation of such
procedure shall be the Senior United States District Judge for the Northern
District of Texas, who shall appoint an independent arbitrator who does not
have any financial interest in the dispute, controversy or claim. If the Senior
United States District Judge for the Northern District of Texas refuses or
fails to act as the appointing authority within 90 days after being requested
to do so, then the appointing authority shall be the Chief Executive Officer of
the American Arbitration Association, who shall appoint an independent
arbitrator who does not have any financial interest in the dispute, controversy
or claim. All decisions and awards by the arbitration tribunal shall be made by
majority vote.

(b)           Proceedings. Unless otherwise
expressly agreed in writing by the parties to the arbitration proceedings:

(i)            The arbitration proceedings shall be
held in Dallas, Texas, at a site chosen by mutual agreement of the parties, or
if the parties cannot reach agreement on a location within 30 days of the
appointment of the last arbitrator, then at a site chosen by the arbitrators;

(ii)           The arbitrators shall be and remain
at all times wholly independent and impartial;

(iii)          The arbitration proceedings shall be
conducted in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, as amended from time to time;

(iv)          Any procedural issues not determined
under the arbitral rules described in item (iii) above shall be determined by
the law of the place of arbitration, other than those laws which would refer
the matter to another jurisdiction;

(v)           Subject to Employee’s right to
recover reasonable costs and expenses as set forth in Section 1.7(b) (Termination Following a Change in Control),
the costs of the arbitration proceedings (including attorneys’ fees and costs)
shall be borne in the manner determined by the arbitrators;

(vi)          The decision of the arbitrators shall
be reduced to writing; final and binding without the right of appeal; the sole
and exclusive remedy regarding any claims, counterclaims, issues or accounting
presented to the arbitrators; made and promptly paid in United States dollars
free of any deduction or offset; and any costs or fees incident to enforcing
the award shall, to the maximum extent permitted by law, be charged against the
party resisting such enforcement;

 19
 

 

(vii)         The award shall include interest from
the date of any breach or violation of this Agreement, as determined by the
arbitral award, and from the date of the award until paid in full, at 6% per
annum; and

(viii)        Judgment upon the award may be entered
in any court having jurisdiction over the person or the assets of the party
owing the judgment or application may be made to such court for a judicial
acceptance of the award and an order of enforcement, as the case may be.

6.10         Survival. The covenants and
agreements of the parties set forth in Article 2 (Non-Competition and Confidentiality), and
this Article 6 are of a continuing nature and shall survive the
expiration, termination or cancellation of this Agreement, regardless of the
reason therefor.

6.11         Subrogation. In the event of
payment under this Agreement, Employer and Parent shall be subrogated to the
extent of such payment to all of the rights of recovery of Employee, who shall
execute all papers required and shall do everything that may be necessary to
secure such rights, including the execution of such documents necessary to
enable Employer or Parent effectively to bring suit to enforce such rights.

6.12         No Duplication of Payments.
Employer and Parent shall not be liable under this Agreement to make any
payment in connection with any claim made against Employee to the extent
Employee has otherwise actually received payment (under any insurance policy,
bylaw or otherwise) of the amounts otherwise indemnifiable hereunder.

6.13         Binding Effect, Etc. This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto and their respective successors, assigns, including any
direct or indirect successor by purchase, merger, consolidation or otherwise to
all or substantially all of the business or assets of Employer, Parent,
spouses, heirs, and personal and legal representatives. Employer and Parent
shall require and cause any successor (whether direct or indirect by purchase,
merger, consolidation or otherwise) to all, substantially all, or a substantial
part, of their business or assets, by written agreement in form and substance
satisfactory to Employee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that Employer or Parent
would be required to perform if no such succession had taken place.

6.14         Contribution. If the indemnity
to hold Employee harmless in a claim for an indemnifiable event contained in
this Agreement is unavailable or insufficient, then separate from and in
addition to the indemnity provided elsewhere herein, Parent shall contribute to
expenses, judgments, penalties, fines and amounts paid in settlement actually
and reasonably incurred by or on behalf of Employee in connection with such
claim in such proportion as appropriately reflects the relative benefits
received by, and fault of, Parent and Employer on the one hand and Employee on
the other in the acts, transactions or matters to which the claim relates and
other equitable considerations.

6.15         Parent Guaranty. Parent
guarantees the payment and performance of all obligations of Employer under
this Agreement and agrees it will pay or perform those obligations if for any
reason Employer fails to do so. This guarantee is absolute, continuing, 

 20
 

 

irrevocable and not conditional or contingent. Any
notice given hereunder to either Employer or Parent will be deemed to be notice
to Parent for purposes of this guaranty.

*********

[Remainder of page
intentionally left blank.]

 21
 

 

IN
WITNESS WHEREOF, Employer and Parent have caused this Agreement to be executed
by their officer/general partner thereunto duly authorized, and Employee has
signed this Agreement, as of the date first set forth above.

	
  

  	
  CELLSTAR LTD

  
	
   

  	
  By: 

  	
  National Auto Center, Inc.

  
	
   

  	
  General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert A. Kaiser 11/17/06

  
	
   

  	
  Name: 

  	
  Robert A. Kaiser

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CELLSTAR CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert A. Kaiser 11/17/06

  
	
   

  	
   

  	
  Robert A. Kaiser

  
	
   

  	
   

  	
  Chief Executive
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Elaine Flud
  Rodriguez 11/17/06

  
	
   

  	
  Elaine Flud
  Rodriguez

  

 

 22

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