Document:

Second Amendment to Amended and Restated Loan Agreement

 Exhibit 10.2 
 SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT 
 This SECOND AMENDMENT TO AMENDED AND
RESTATED LOAN AGREEMENT (this “Amendment”) is dated as of August 31, 2006, 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 WELLS FARGO FOOTHILL, INC., in its capacity as agent
for the Lenders (the “Agent”). 
 WITNESSETH: 
 WHEREAS, the Borrowers, the Lenders and the Agent have entered into that certain Amended and Restated Loan and Security Agreement dated as of
March 31, 2006, as amended by that certain First Amendment to Amended and Restated Loan Agreement dated as of July 12, 2006 (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; 
 WHEREAS, the Borrowers have requested that the Agent and the Lenders amend certain terms of the Loan Agreement; and 
 WHEREAS, the Agent and the Lenders have agreed to the requested amendments on the terms and conditions set forth herein. 
 NOW
THEREFORE, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree that all capitalized terms not otherwise defined herein
shall have the meanings ascribed to such terms in the Loan Agreement and further agree as follows: 
 1. Amendment to Section 1.1 of
the Loan Agreement. 
 (a) Section 1.1 of the Loan Agreement, “Definitions”, is hereby modified and amended by
deleting the existing definitions of “Change of Control”, “Collateral”, “Eligible Accounts”, “Existing Subordinated Debt”, “Existing Subordinated Debt Documents”, “Fixed Charge Coverage
Ratio”, “Loan Documents”, “Permitted Dispositions”, “Permitted Investments”, “Permitted Liens” and “Purchase Money Indebtedness” set forth therein and inserting the following definition in
substitution thereof: 
 ““Change of Control” means (a) any “person” or “group”
(within the meaning of Sections 13(d) and 14(d) of the Exchange Act), becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 35%, or more, of the Stock of Parent having the right to vote for
the election of members of the Board of Directors, or (b) a majority of the members of the Board of Directors do not constitute Continuing Directors, or (c) Parent ceases to directly or indirectly own and control 100% of the outstanding
Stock of each of its Subsidiaries (except as permitted by Section 7.3 or in connection with a Permitted Disposition).” 

 ““Collateral” means all assets and property (including personal
property) of each Borrower, including, without limitation, all of each Borrower’s now owned or hereafter acquired right, title, and interest in and to each of the following: 
 (a) Accounts, 
 (b) Books, 
 (c) Equipment, 
 (d) General Intangibles, 
 (e) Inventory, 
 (f) Investment Property, 
 (g) Negotiable Collateral, 
 (h) Real Property Collateral, 
 (i) money or other assets of each such Borrower that now or
hereafter come into the possession, custody, or control of any member of the Lender Group, and 
 (j) the proceeds and
products, whether tangible or intangible, of any of the foregoing, including proceeds of insurance covering any or all of the foregoing, and any and all Accounts, Books, Equipment, General Intangibles, Inventory, Investment Property, Negotiable
Collateral, Real Property, Commercial Tort Claims, money, deposit accounts, or other tangible or intangible property resulting from the sale, exchange, collection, or other disposition of any of the foregoing, or any portion thereof or interest
therein, and the proceeds thereof.” 
 ““Eligible Accounts” means Eligible Domestic Accounts”

 ““Existing Subordinated Debt” means the subordinated Indebtedness of Parent in a original principal
amount equal to $12,374,000 issued pursuant to the Existing Subordinated Debt Documents, the outstanding principal amount of which equaled $12,374,000 on the Second Amendment Date.” 
 ““Existing Subordinated Debt Documents” means the Existing Indenture, together with such other documents and
instruments executed in connection therewith.” 
  

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 ““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 during such period) for such Person during such fiscal period, plus cash tax refunds received in such period, to (b) (i) principal payments made by such Person on any Indebtedness during such fiscal period (other than
(A) refinancings permitted by Section 7.1(d), (B) payments on Advances, (C) payments on revolving loans under any Permitted Foreign Subsidiary Credit Facility to the extent available to be reborrowed under such facility or to the
extent cash collateral is released as a result thereof, (D) payments under any Permitted Foreign Subsidiary Credit Facility with an initial term, including any permitted extensions thereof, of six (6) months or less, (E) 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 (F) resulting from the Discharge of Existing Subordinated Debt with the proceeds of the
Second Lien Term Loans), plus (ii) cash interest expense (including factoring costs associated with sale of Accounts) during such fiscal period minus (iii) interest income during such fiscal period.” 
 ““Loan Documents” means this Agreement, the Cash Management Agreements, the Control Agreements, the Intellectual
Property Security Agreement, the Disbursement Letter, the Due Diligence Letter, the Fee Letter, the Letters of Credit, the Mortgages (if any), the Officers’ Certificate, any Stock Pledge Agreement, the Intercompany Subordination Agreement, the
Reaffirmation Agreement, the Intercreditor Agreement, the Post-Closing Agreement any note or notes executed by a Borrower in connection with this Agreement and payable to a member of the Lender Group, and any other agreement entered into, now or in
the future, by any Borrower and the Lender Group in connection with this Agreement.” 
 ““Permitted
Dispositions” means (a) sales or other dispositions by Borrowers of Equipment that is worn, damaged, or obsolete in the ordinary course of the applicable Borrower’s business, (b) sales by Borrowers of Inventory to buyers in
the ordinary course of business, (c) the use or transfer of money or Cash Equivalents by Borrowers in a manner that is not prohibited by the terms of this Agreement or the other Loan Documents, (d) the licensing by Borrowers, on a
non-exclusive basis, of patents, trademarks, copyrights, and other intellectual property rights in the ordinary course of the applicable Borrower’s business, (e) so long as no Event of Default exists or would be created thereby, sales of
Equipment and other assets (other than Real Property, Inventory and Accounts) having a fair market value not to exceed $3,000,000 in the aggregate during the period from the Closing Date through the Maturity Date, provided that all proceeds of any
and all dispositions of all such assets of any Borrower shall be paid to Agent for application to outstanding Advances (which amounts may be reborrowed subject to the terms and conditions of this Agreement), (f) dispositions of assets during
any fiscal year with an aggregate market value of 
  

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 less than $100,000, (g) so long as no Event of Default has occurred and is continuing, the sale of
any (i) Foreign Subsidiary with a net worth of less than $1,500,000, or (ii) a Domestic Subsidiary or Borrower with a net worth of less than $1,500,000 with the consent of Agent, (h) dispositions of Accounts of CellStar Mexico in an
aggregate amount not exceeding $30,000,000 outstanding at any time pursuant to a factoring facility permitted by Section 7.1(e)(ii) hereof, (i) disposition of Accounts of CellStar Ltd. and/or National Auto Center, Inc. owed by
non-U.S. Account Debtors pursuant to a factoring facility or other credit facility permitted by Section 7.1(e)(iii) hereof, and (j) dispositions of Accounts of CellStar Chile S.A. in an aggregate amount not exceeding $20,000,000
outstanding at any time pursuant to a factoring facility permitted by Section 7.1(e)(iv) hereof.” 
 ““Permitted Investments” means (a) investments in Cash Equivalents, (b) investments in negotiable instruments in the ordinary course of business for collection, and (c) advances made in connection with
purchases of goods or services in the ordinary course of business.” 
 ““Permitted Liens” means
(a) (i) Liens held by Agent for the benefit of Agent and the Lenders, and (ii) the Liens securing Second Lien Obligations in accordance with the terms of the Intercreditor Agreement, (b) Liens for unpaid taxes that either
(i) are not yet delinquent, or (ii) do not constitute an Event of Default hereunder and are the subject of Permitted Protests, (c) Liens set forth on Schedule P-1, (d) the interests of lessors under operating leases,
(e) purchase money Liens or the interests of lessors under Capital Leases to the extent that such Liens or interests secure Permitted Purchase Money Indebtedness and so long as such Lien attaches only to the asset purchased or acquired and the
proceeds thereof, (f) Liens arising by operation of law in favor of warehousemen, landlords, carriers, mechanics, materialmen, laborers, or suppliers, incurred in the ordinary course of Borrowers’ business and not in connection with the
borrowing of money, and which Liens either (i) are for sums not yet delinquent, or (ii) are the subject of Permitted Protests, (g) Liens arising from deposits made in connection with obtaining worker’s compensation or other
unemployment insurance, (h) Liens or deposits to secure performance of bids, tenders, or leases incurred in the ordinary course of Borrowers’ business and not in connection with the borrowing of money, (i) Liens granted as security
for surety or appeal bonds in connection with obtaining such bonds in the ordinary course of Borrowers’ business, (j) Liens resulting from any judgment or award that is not an Event of Default hereunder, (k) Liens with respect to the
Real Property Collateral that are exceptions to the commitments for title insurance issued in connection with the Mortgages, as accepted by Agent, (l) with respect to any Real Property that is not part of the Real Property Collateral,
easements, rights of way, and zoning restrictions that do not materially interfere with or impair the use or operation thereof by Borrowers, (m) Liens on funds in the possession of credit card companies pertaining to credit card sales of
Inventory in the ordinary course of business pursuant to merchant credit card services agreements, provided that Agent shall have a satisfactory agreement with such 
  

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 credit card companies regarding the assignment of such credit card receivables to Agent, and
(n) Liens on any unearned insurance premiums and dividends that may become payable under the insurance policies and loss payments which reduce the unearned premiums relating to insurance policies, subject to any mortgagee or loss payee
interests, securing financing of insurance premiums by third party insurance finance companies in the ordinary course of business and to the extent permitted by Section 7.1(i) hereof.” 
 ““Purchase Money Indebtedness” means Indebtedness (other than the Obligations and the Second Lien Obligations, but
including Capitalized Lease Obligations), incurred at the time of, or within 20 days after, the acquisition of any fixed assets for the purpose of financing all or any part of the acquisition cost thereof.” 
 (b) Section 1.1 of the Loan Agreement, “Definitions”, is hereby further modified and amended by inserting the following definitions
in appropriate alphabetical order therein: 
 ““CapitalSource” means CapitalSource Finance LLC, a
Delaware limited liability company.” 
 ““Commercial Tort Claim” shall have the meaning given to
“commercial tort claim” in the Code.” 
 ““Discharge of Existing Subordinated Debt”
means, collectively, (i) the redemption in full in cash of the outstanding “Notes” under the Existing Indenture at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest thereon through the date of
redemption (the “Existing Subordinated Debt Redemption Price”), (ii) the payment of all other sums payable by Parent and its Subsidiaries under the Existing Indenture, and (iii) the full and complete discharge and satisfaction of
all obligations of Parent and its Subsidiaries under such Notes and the Existing Indenture, other than those of Parent contained in Section 7.07, 8.04 and 8.05 of the Existing Indenture which expressly survive the occurrence of the events
described in the foregoing clauses (i) and (ii).” 
 ““Existing Indenture” means that certain
Indenture, dated as of February 20, 2002, between Parent, as Issuer, and The Bank of New York, as Trustee, with respect to $12,374,000 of 12% senior subordinated notes due January 15, 2007, as heretofore amended.” 
 ““Existing Subordinated Debt Redemption Price” has the meaning ascribed to it in the definition of “Discharge
of Existing Subordinated Debt.” 
 ““Existing Trustee” means The Bank of New York, as Trustee under
the Existing Indenture.” 
  

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 ““Intercreditor Agreement” means that certain Intercreditor
Agreement, dated as of August 31, 2006, among the Agent, the Second Lien Agent and the Borrowers, as amended, restated, supplemented or otherwise modified from time to time with the consent of all Lenders.” 
 ““Post-Closing Agreement” means a post-closing agreement dated as of August 31, 2006 among Agent and the
Borrowers.” 
 ““Purchased Notes” means the “Notes” issued under the Existing Indenture
that Parent shall have elected to purchase or otherwise acquire, in accordance with the terms of the Existing Indenture and applicable law, in the public market or a private transaction with a portion of the proceeds of the Advances or the Second
Lien Term Loans in accordance with the terms of this Agreement and the Second Lien Credit Agreement.” 
 ““Purchased Notes Discharge Date” means the earliest date on which the Purchased Notes can be cancelled by the Existing Trustee in accordance with the terms of the Existing Indenture, which date, in any event, shall
not be after the Existing Subordinated Debt Discharge Date (as defined in the Second Lien Credit Agreement) or more than three (3) Business Day after the date on which Parent shall have purchased the Purchased Notes, in accordance with the
terms of the Existing Indenture or applicable law, in the public market or a private transaction for par or less than par.” 
 ““Redemption and Cancellation of the Purchased Notes” means, collectively, (i) the purchase or acquisition by Parent of the Purchased Notes prior to the Second Term Loan Disbursement Date (as defined in the Second
Lien Credit Agreement), in accordance with the terms of the Existing Indenture and applicable law, in the public market or a private transaction for less than par, and (ii) the subsequent indefeasible cancellation of the Purchased Notes by the
Existing Trustee on the Purchased Notes Discharge Date in accordance with the terms of the Existing Indenture.” 
 ““Restricted Subsidiary” means any of (i) CellStar (UK) Ltd., (ii) CellStar El Salvador S.A., (iii) CellStar de Guatemala S.A., (iv) CellStar Philippines, Inc. or (v) CellStar Holding AB, or
any of their respective Subsidiaries; provided, that, any such Person shall cease to be a Restricted Subsidiary (x) upon written notice by Administrative Borrower of its desire to cause such cessation, (y) if all terms and conditions in
respect of such Person set forth in Section 7.13(c) shall have been complied with and otherwise satisfied and (z) Borrowers and their respective Subsidiaries shall have executed and/or delivered, as applicable, to Agent all agreements,
documents and instruments necessary for compliance with the foregoing clause (y) and, in addition, all agreements, documents and instruments, if any, in respect of such Person that shall have been executed and/or delivered, as applicable, to
the Second Lien Agent.” 
  

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 ““Second Amendment Date” means August 31, 2006.” 

““Second Lien Agent” means CapitalSource, solely in its capacity as agent for the Second Lien Lenders and any
successor thereto.” 
 ““Second Lien Credit Agreement” means that certain Term Loan and Security
Agreement dated as of August 31, 2006, by and among the Second Lien Agent, the Second Lien Lenders, and the Borrowers, as the same may be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms of the
Intercreditor Agreement.” 
 ““Second Lien Debt Documents” means the Second Lien Credit Agreement
and the other “Loan Documents” (as defined in the Second Lien Credit Agreement), in each case, as amended, restated, supplemented or otherwise modified in accordance with the terms of the Intercreditor Agreement.” 
 ““Second Lien Lenders” means each “Lender” under and as defined in the Second Lien Credit Agreement.”

 ““Second Lien Obligations” has the meaning set forth in the Intercreditor Agreement.”

 ““Second Lien Term Loans” means the “Term Loans” as that term is defined in the Second Lien
Credit Agreement.” 
 ““Shareholder Blocking Rights” means any rights of any owner (direct or
indirect) of any Stock of any Borrower or other Loan Party which, pursuant to the terms of any agreement or Governing Document, has the right to consent, or the effect of requiring such consent, to any foreclosure by Agent under any Stock Pledge
Agreement or otherwise to the exercise of any of Agent’s rights and remedies thereunder or otherwise has the right to restrain, delay, impair or otherwise interfere with the Agent in the event of Agent’s exercise of its rights under a
Stock Pledge Agreement.” 
 ““Term Loan Reserve” means, at any time of determination, an amount
equal to $2,500,000; provided, however, such amount shall be reduced by $250,000 per fiscal quarter commencing with the first fiscal quarter after the Second Amendment Date in which EBITDA for the four-fiscal quarter period then ended is greater
than or equal to $7,500,000 and continuing on each fiscal quarter thereafter for which the four-fiscal quarter period then ended is greater than or equal to $7,500,000 until reduced to zero.” 
  

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 (c) Section 1.1 of the Loan Agreement, “Definitions”, is hereby further modified
and amended by inserting the word “any” immediately preceding the word “Borrower” in clause (b) of the definition of “Environmental Actions”. 
 (d) Section 1.1 of the Loan Agreement, “Definitions”, is hereby further modified and amended by deleting the definition of
“Eligible Foreign Accounts” in its entirety. 
 2. Amendment to Section 2.1 of the Loan Agreement. Section 2.1 of
the Loan Agreement, “Revolver Advances”, is hereby modified and amended by deleting subsection (a) thereof in its entirety and inserting the following in lieu thereof: 
 “(a) Subject to the terms and conditions of this Agreement, and during the term of this Agreement, each Lender with a Commitment
agrees (severally, not jointly or jointly and severally) to make advances (“Advances”) to Borrowers in an amount at any one time outstanding not to exceed such Lender’s Pro Rata Share of an amount equal to the lesser of (i) the
Maximum Revolver Amount less the Letter of Credit Usage, or (ii) the Borrowing Base less the Letter of Credit Usage. For purposes of this Agreement, “Borrowing Base,” as of any date of determination, shall mean the result of:

 (w) 85% of the amount of Eligible Domestic Accounts, less the amount, if any, of the Dilution Reserve, plus 
 (x) the lowest of 
 (i)
$42,500,000, 
 (ii) the lesser of (1) 60% of the value of Eligible Inventory consisting of digital handsets, or (2) 85% times the
then extant Net Liquidation Percentage (as calculated by Agent), times the book value of such Eligible Inventory consisting of digital handsets, or 
 (iii) 100% of the amount of credit availability created by clause (w) above, minus 
 (y) the Term Loan
Reserve, minus. 
 (z) the aggregate amount of reserves, if any, established by Agent under Section 2.1(b).”

  

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 3. Amendment to Section 2.13 of the Loan Agreement. Section 2.13 of the Loan Agreement,
“LIBOR Option.”, is hereby modified and amended by deleting the reference to “LIBOR Advances” is clause (d)(ii) thereof and replacing it with “LIBOR Rate Loans”. 
 4. Amendment to Section 4.2 of the Loan Agreement. Section 4.2 of the Loan Agreement, “Negotiable Collateral.”, is
hereby modified and amended by deleting such section in its entirety and inserting the following in lieu thereof: 
 “4.2 Negotiable Collateral; Commercial Tort Claims. In the event that any Collateral, including proceeds, is evidenced by or consists of Negotiable Collateral, and if and to the extent that perfection or priority of
Agent’s security interest is dependent on or enhanced by possession, the applicable Borrower, immediately upon the request of Agent, shall endorse and deliver physical possession of such Negotiable Collateral to Agent. Each Borrower shall
promptly notify Agent of any Commercial Tort Claim acquired by it that reasonably is expected to be in excess of $100,000 and, unless otherwise consented to by Agent, such Borrower shall enter into a supplement to this Agreement granting to Agent a
Lien on and security interest in such Commercial Tort Claim (or, if any Event of Default shall have occurred and is continuing, upon request by Agent each Borrower shall enter into a supplement to this Agreement granting to Agent a Lien on and
security interest in all Commercial Tort Claims acquired by such Borrower).” 
 5. Amendment to Section 5.8 of the Loan
Agreement. Section 5.8 of the Loan Agreement, “Due Organization and Qualifications; Subsidiaries”, is hereby modified and amended by deleting subsections (a) and (d) in their entirety and inserting the following
in substitution thereof: 
 “(a) Each Borrower is duly (i) organized and existing and in good standing under the
laws of the jurisdiction of its organization and (ii) qualified to do business in any state where, with respect to this clause (ii), the failure to be so qualified reasonably could be expected to have a Material Adverse Change. No Restricted
Subsidiary has any material assets or conducts any business activity. 
 (d) Except as set forth on Schedule 5.8(c), there are
no subscriptions, options, warrants, or calls relating to any shares of any Borrower’s Subsidiaries’ Stock, including any right of conversion or exchange under any outstanding security or other instrument. No Borrower or any of its
respective Subsidiaries is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of any Borrower’s Subsidiaries’ Stock or any security convertible into or exchangeable for any such
Stock. No Borrower has any stock appreciation rights, phantom stock plan or similar rights or obligations outstanding. No owner or holder of any Stock of any Loan Party has any Shareholder Blocking Rights.” 
  

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 6. Amendment to Article 5 of the Loan Agreement. Article 5 of the Loan Agreement,
“Representations and Warranties”, is hereby further modified and amended by inserting the following Sections 5.22, 5.23 and 5.24 immediately following Section 5.21 of the Loan Agreement: 
 “5.22 OFAC; Patriot Act. 
 (a) Neither Parent nor any of its Subsidiaries (i) is a Person whose property or interest in property is blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23,
2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engages in any dealings or transactions prohibited by Section 2 of such executive
order, or is otherwise associated with any such Person in any manner violative of Section 2 of such executive order, or (iii) is a Person on the list of Specially Designated Nationals and Blocked Persons or subject to is in violation of
the limitations or prohibitions under any other U.S. Department of Treasury’s Office of Foreign Assets Control regulation or executive order. 
 (b) Parent and its Subsidiaries each is in compliance, in all material respects, with the Patriot Act. No part of the proceeds of the Advances will be used, directly or indirectly, for any payments to any governmental
official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the
United States Foreign Corrupt Practices Act of 1977, as amended. 
 5.23 Incorporation. As of the Second
Amendment Date and any other date on which representations and warranties are otherwise remade or deemed remade hereunder, each of the representations and warranties contained in the Second Lien Loan Documents and, until terminated, the Existing
Subordinated Debt Documents made by Parent or any of its Subsidiaries is true and correct in all material respects. The Borrowers agree that, by this reference, such representations and warranties contained in the Second Lien Debt Documents and,
until terminated, the Existing Subordinated Debt Documents made by the Parent and any of its Subsidiaries, without limiting any of the representations and warranties otherwise contained herein or in any other Loan Document, hereby are incorporated
herein, mutatis mutandis, for the benefit of Agent and the other members of the Lender Group. 
 5.24 Specific
Representations. The Obligations and the Obligations (as defined in the Second Lien Credit Agreement) and the Liens and security interests securing the Obligations and the Obligations (as defined in the Second Lien Credit Agreement) are
permitted under the terms of the Existing Subordinated Debt Documents, and the execution and delivery of, and performance of the obligations under, the Loan Documents and the Second Lien Loan Debt Documents by each Loan Party do not, and will
not, conflict with the 
  

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 terms or result in or constitute a breach, contravention or violation of, result in the creation of
a Lien or a default or event of default under, or cause the acceleration of any amounts evidenced by, any of the provisions of the Existing Subordinated Debt Documents. None of the Existing Subordinated Debt Documents prohibits or
otherwise restricts in any manner the making of any payments hereunder or under the Second Lien Credit Agreement by the Borrowers or any other Loan Party.” 
 7. Amendment to Section 6.3 of the Loan Agreement. Section 6.3 of the Loan Agreement, “Financial Statements, Reports, Certificates”, is hereby modified and amended by deleting the
“and” at the end of subsection (i), deleting the period at the end of subsection (j) and replacing it with “, and” and inserting the following subsection (k): 
 “(k) promptly upon any Loan Party obtaining knowledge or notice thereof, notice of any default or event of default under any Second
Lien Debt Document, and promptly upon receipt or delivery thereof, copies of all written materials delivered to or by Parent or any of its Subsidiaries by or to the Second Lien Lenders or the Second Lien Agent under the Second Lien Debt Documents
(except to the extent such delivery would be duplicative of deliveries otherwise required and made hereunder to Agent).” 
 8.
Amendment to Section 6.8 of the Loan Agreement. Section 6.8 of the Loan Agreement, “Insurance”, is hereby modified and amended by inserting the following subsection (d) immediately following subsection
(c) thereof: 
 “(d) Upon request of Agent or any Lender, Borrowers shall furnish to Agent, with sufficient copies
for each Lender, at reasonable intervals (but not more than once per calendar year) a certificate of an Authorized Officer (and, if requested by Agent, any insurance broker of Borrowers) setting forth the nature and extent of all insurance
maintained by Borrowers and its Subsidiaries in accordance with this Section. Unless Borrowers provide Agent with evidence of the insurance coverage required by this Agreement within ten (10) Business Days of such request, Agent may purchase
insurance at Borrowers’ expense to protect Agent’s and the Lender Group’s interests in the Collateral. This insurance may, but need not, protect Borrowers’ interests. The coverage that Agent purchases may not pay any claim that
the Borrowers make or any claim that is made against any Borrower in connection with said Collateral. Borrowers may later cancel any insurance purchased by Agent, but only after providing Agent with satisfactory evidence to Agent, and written
acknowledgment thereof, that Borrowers have obtained insurance as required by this Agreement. If Agent purchases insurance, Borrowers shall be responsible for the costs of that insurance, including interest and any other charges Agent may impose in
connection with the placement of insurance, until the effective date of the cancellation or expiration of the insurance. The costs of the insurance shall be added to the Obligations and payable on demand. The costs incurred by Agent of the insurance
may be more than the costs of insurance Borrowers may be able to obtain on their own.” 
  

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 9. Amendment to Article 6 of the Loan Agreement. Article 6 of the Loan Agreement,
“Affirmative Covenants”, is hereby further modified and amended by inserting the following Section 6.16 immediately following Section 6.15. 
 “6.16 Existing Subordinated Debt. 
 (a) On the Purchased Notes
Discharge Date, (i) effectuate, and cause and direct the Existing Trustee to effectuate, the indefeasible cancellation of the Purchased Notes, and Parent shall comply in all respects with the Existing Indenture as necessary for such purposes,
and (ii) request and obtain from Existing Trustee, and deliver to Agent, a written acknowledgement from Existing Trustee of the cancellation of the Purchased Notes. 
 (b) Promptly upon delivery thereof, and in any event within three (3) Business days thereafter, provide Agent with copies of all
notices and other deliveries made in connection with the cancellation of the Purchased Notes, including, without limitation, copies of all material notices, publishings and mailings made under the Existing Indenture, all of which notices shall
contain information consistent with the requirements set forth in this Agreement. Parent further shall deliver to Agent copies of all other agreements, documents, instruments and opinions as Agent may reasonably request from time to time that shall
have been executed and/or delivered by Parent or Existing Trustee in connection with the cancellation of the Purchased Notes. 
 (c) On the Existing Subordinated Debt Discharge Date (as defined in the Second Lien Credit Agreement), (i) effectuate, and cause and direct the Existing Trustee to effectuate, the Discharge of Existing Subordinated Debt, and Parent
shall comply in all respects with the Existing Indenture as necessary for such purposes, and (ii) request and obtain from Existing Trustee, and deliver to Agent, a written acknowledgement from Existing Trustee of the Discharge of Existing
Subordinated Debt. 
 (d) Promptly upon delivery thereof, and in any event within three (3) Business days thereafter,
provide Agent with copies of all notices and other deliveries made in connection with the Discharge of Existing Subordinated Debt, including, without limitation, copies of all material notices, publishings and mailings made under Section 3.02
of the Existing Indenture, all of which notices shall contain information consistent with the requirements set forth in this Agreement. Parent further shall deliver to Agent copies of all other agreements, documents, instruments and opinions as
Agent may reasonably request from time to time that shall have been executed and/or delivered by Parent or Existing Trustee in connection with the Discharge of Existing Subordinated Debt.” 
  

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 10. Amendment to Section 7.1 of the Loan Agreement. 
 (a) Section 7.1 of the Loan Agreement, “Indebtedness”, is hereby modified and amended by deleting subsection (e) thereof in its
entirety and inserting the following in substitution thereof: 
 “(e) (i) any Permitted Foreign Subsidiary Credit
Facility; 
 (ii) any accounts receivable factoring facility entered into by CellStar Mexico for general working capital
needs in an aggregate amount not exceeding $30,000,000 outstanding at any time; provided such factoring facility (x) is not guaranteed by any Borrower; provided, such factoring facility may be guaranteed by a Borrower if such guaranty is
unsecured and subject to a subordination agreement satisfactory to Agent, and (y) does not limit or prohibit the payment of any Management Fees to any Borrower; 
 (iii) any accounts receivable factoring facility or other credit facility for the Miami, Florida based Accounts owed by non-U.S. Account
Debtors entered into by CellStar Ltd. and/or National Auto Center, Inc. for general working capital needs; provided that: 
 (y) such factoring facility or other credit facility (A) is not guaranteed by or with recourse (other than standard carve-outs for commercial disputes, delivery of non-conforming goods and similar exceptions) to any Borrower; provided,
such factoring facility may be guaranteed by or with recourse to a Borrower if such guaranty or other liability is unsecured and subject to a subordination agreement satisfactory to Agent, (B) does not limit or prohibit the payment of any
Management Fees to any Borrower, (C) is otherwise on terms satisfactory to Agent, and the net proceeds thereof received promptly shall be either (1) used by the Borrowers to repay outstanding Advances or pay trade payables of the Borrowers
owing in the ordinary course of business or (2) deposited in a deposit account that is the subject of a Control Agreement in favor of the Agent and, if permitted thereunder, used solely for purposes not prohibited by this Agreement, and

 (z) at no time shall CellStar Ltd., National Auto Center, Inc. or any Borrower or other Loan Party permit or cause any
such Miami, Florida based Accounts owed by non-U.S. Account Debtors to be subject to any such accounts receivable factoring facility or other credit facility, or otherwise factored, if, after giving effect thereto, the aggregate amount of such
Accounts not factored or otherwise not subject to any such factoring arrangement or credit facility would be less than the sum of the outstanding principal amount of the Second Lien Obligations, plus accrued and unpaid interest under the Second Lien
Debt Documents; and 
  

 13 

 (iv) any accounts receivable factoring facility entered into by CellStar Chile S.A. for
general working capital needs in an aggregate amount not exceeding $20,000,000 outstanding at any time; provided such factoring facility (x) is not guaranteed by any Borrower; provided, such factoring facility may be guaranteed by a Borrower if
such guaranty is unsecured and subject to a subordination agreement satisfactory to Agent, and (y) does not limit or prohibit the payment of any Management Fees to any Borrower;” 
 (b) Section 7.1 of the Loan Agreement, “Indebtedness”, is hereby further modified by modified and amended by deleting the
“and” at the end of subsection (h), deleting the period at the end of subsection (i) and inserting a semicolon in substitution thereof, and inserting the following subsections (j) and (k) immediately following subsection
(i) thereof: 
 “(j) At any time on or before the Existing Subordinated Debt Discharge Date (as defined in the
Second Lien Credit Agreement), the Existing Subordinated Debt; and 
 (k) The Second Lien Obligations in a principal amount
not to exceed the sum of (i) $12,300,000 less (ii) the aggregate amount of all principal repayments and prepayments of the Second Lien Obligations.” 
 11. Amendment to Section 7.3 of the Loan Agreement. Section 7.3 of the Loan Agreement, “Restrictions on Fundamental Changes”, is hereby modified and amended by deleting such Section
in its entirety and inserting the following in substitution thereof: 
 “7.3 Restrictions on Fundamental Changes.

 (a) Enter into any merger, consolidation, reorganization, or recapitalization, or reclassify its Stock. 

(b) Liquidate, wind up, or dissolve itself (or suffer any liquidation or dissolution). 
 (c) Convey, sell, lease, license, assign, transfer, or otherwise dispose of, in one transaction or a series of transactions, all or any
substantial part of its assets. 
 Notwithstanding the foregoing, so long as no Default or Event of Default exists or would
result therefrom and the Agent receives at least 30 days’ prior written notice and delivery of any documentation requested to ensure the continued perfection and priority of Agent’s Liens: 
 (i) any Borrower (other than Administrative Borrower) may merge or consolidate with any other Borrower (other than Administrative
Borrower); 
 (ii) any Borrower may be dissolved or liquidated so long as such dissolution or liquidation results in all
assets of such Borrower being owned by another Borrower (other than Administrative Borrower); and 
  

 14 

 (iii) any Subsidiary that is not a Borrower hereunder and in which Agent does not have a
Stock pledge may be dissolved or liquidated, so long as such dissolution or liquidation results in all assets of such Subsidiary being owned by a Borrower (other than Administrative Borrower) or another Subsidiary in which Agent has a valid
perfected first priority Lien in the Stock of such transferee Subsidiary.” 
 12. Amendment to Section 7.8 of the Loan
Agreement. Section 7.8 of the Loan Agreement, “Prepayments and Amendments”, is hereby modified and amended by deleting such Section in its entirety and inserting the following in substitution thereof: 
 “7.8 Prepayments and Amendments. 
 (a) Except in connection with a refinancing permitted by Section 7.1(d), prepay, redeem, defease, purchase, or otherwise acquire any Indebtedness of any Borrower, other than (i) the Obligations in accordance
with this Agreement, (ii) the Second Lien Obligations to the extent expressly permitted by the Intercreditor Agreement, (iii) the Existing Subordinated Debt in accordance with the terms hereof and the Existing Indenture provided that
(A) no Default or Event of Default has occurred or will be caused thereby and (B) not more than $2,400,000 from the proceeds of Advances shall be used for payments or prepayments of principal of the Existing Subordinated Debt, and
(iv) Indebtedness under Permitted Affiliate Transactions to the extent the repayment thereof is permitted by the Intercompany Subordination Agreement; 
 (b) Except in connection with a refinancing permitted by Section 7.1(d), directly or indirectly, amend, modify, alter, increase, or change any of the terms or conditions of any agreement, instrument, document,
indenture, or other writing evidencing or concerning the Existing Subordinated Debt or any Indebtedness permitted under Sections 7.1(b) or (c); and 
 (c) Directly or indirectly, amend, modify, alter, increase, or change any of the terms or conditions of any Second Lien Debt Documents, except to the extent permitted under the Intercreditor Agreement; provided, that,
in the event any such amendment, modification or change results in the addition of any event of default, representation, warranty or any covenant with respect to the Second Lien Obligations or modifies any existing event of default, representation,
warranty or covenant which would have the effect of making such event of default, representation, warranty or covenant more restrictive as to Borrowers or any of them, then, upon request by Agent, Borrowers shall effect a similar amendment or
modification to the applicable Loan Document which shall maintain any “cushion” between the Second Lien Debt Documents and the Loan Documents in existence prior to such amendment or modification.” 
  

 15 

 13. Amendment to Section 7.13 of the Loan Agreement. Section 7.13 of the Loan Agreement,
“Investments”, is hereby modified and amended by deleting clause (c) thereof in its entirety and inserting the following in substitution thereof: 
 “(c) the ownership of the Stock of any wholly-owned Subsidiary created after the Closing Date; provided, if such new Subsidiary is a Domestic Subsidiary at the time of its creation, it becomes a Borrower
hereunder by executing an amendment to this Agreement assuming all Obligations hereunder and delivers to Agent all other documentation necessary to grant Agent a first-priority perfected Lien on its assets and the parent of such new Subsidiary
executes and delivers a Stock Pledge Agreement to Agent pledging the Stock of such new Subsidiary in favor of Agent, or, if such new Subsidiary is a First Tier Foreign Subsidiary, at the time of its creation, Agent receives a pledge of 65% of the
Stock of such First Tier Foreign Subsidiary’s Stock,” 
 14. Amendment to Section 7.16 of the Loan Agreement.
Section 7.16 of the Loan Agreement, “Intentionally Omitted”, is hereby modified and amended by deleting such section in its entirety and inserting the following in substitution thereof: 
 “7.16 Shareholder Blocking Rights. Issue any Stock which grants or provides any direct or indirect owner or
equityholder thereof any Shareholder Blocking Rights.” 
 15. Amendment to Section 7.17 of the Loan Agreement.
Section 7.17 of the Loan Agreement, “Use of Proceeds”, is hereby modified and amended by deleting such section in its entirety and inserting the following in substitution thereof: 
 “7.17 Use of Proceeds. Use the proceeds of the Advances for any purpose other than (a) to repay, in full or in part, the
outstanding principal, accrued interest, and accrued fees and expenses owing with respect to the Existing Subordinated Debt, (b) to pay transactional fees, costs, and expenses incurred in connection with this Agreement, the other Loan
Documents, and the transactions contemplated hereby and thereby and (c) other uses consistent with the terms and conditions hereof, for its lawful and permitted purposes. Notwithstanding the foregoing, Borrowers shall not be permitted to use
Advances to fund the repayment of the Existing Subordinated Debt unless the Administrative Borrower shall have first delivered a Pay-Off Letter with respect to such repayment that is in form and substance satisfactory to the Agent; provided,
however, not more than $2,400,000 from the proceeds of Advances shall be used for payments or prepayments of principal of the Existing Subordinated Debt.” 
 16. Amendment to Article 7 of the Loan Agreement. Article 7 of the Loan Agreement, “Negative Covenants”, is hereby further modified and amended by inserting the following Section 7.22
immediately following Section 7.21 of the Loan Agreement: 
 “7.22 Restricted Subsidiaries. Permit or cause
any Restricted Subsidiary to engage in any business activity other than activities incidental to 
  

 16 

 maintenance of its corporate existence. Without limiting the generality of the foregoing, and anything
contained herein to the contrary notwithstanding, the Borrowers shall not permit or cause any Restricted Subsidiary to (i) receive or retain any dividends or other distributions from any Borrower or any Subsidiary of any Borrower,
(ii) incur, grant or suffer to exist any Liens, Indebtedness or guarantees, (iii) accept or make any Investment, (iv) issue, sell or dispose of any equity securities or (v) consummate any merger or consolidation with any other
Person (except that a Restricted Subsidiary may merge with, or dissolve or liquidate into, any Borrower (other than Administrative Borrower) or any other domestic wholly-owned subsidiary of Parent).” 
 17. Amendment to Section 8.10 of the Loan Agreement. Section 8.10 of the Loan Agreement, “Events of Default”, is hereby
modified and amended by deleting such section in its entirety and inserting the following in substitution thereof: 
 “8.10 If any
Loan Party makes any payment on account of Indebtedness that has been contractually subordinated in right of payment to the payment of the Obligations, except to the extent such payment is permitted by the terms of the subordination provisions
applicable to such Indebtedness and except for the cancellation of the Purchased Notes on the Purchased Notes Discharge Date and the Discharge of Existing Subordinated Debt in accordance with the terms of this Agreement and the Second Lien Credit
Agreement;” 
 18. Amendment to Article 8 of the Loan Agreement. Article 8 of the Loan Agreement, “Events of
Default”, is hereby further modified and amended by deleting the “or” at the end of Section 8.13, deleting the period at the end of Section 8.14 and inserting a semicolon in substitution thereof, and inserting the
following Sections 8.15, 8.16. 8.17 and 8.18 immediately following Section 8.14 of the Loan Agreement: 
 “8.15 (i) Any
Loan Party is (A) criminally indicted or convicted of a felony or (B) charged under any law that could reasonably be expected to lead to forfeiture of any material portion of Collateral, or (ii) any director or senior officer of any
Loan Party is (A) convicted of a felony for fraud or dishonesty in connection with the business of the Loan Parties or (B) charged under any law that could reasonably be expected to lead to forfeiture of any material portion of Collateral;

 8.16 (i) The intercreditor provisions of the Intercreditor Agreement and/or the subordination provisions contained in or
otherwise pertaining to any agreement or instrument governing any subordinated Indebtedness shall for any reason be revoked or invalidated, or otherwise cease to be in full force and effect, or (ii) any Person shall contest in any manner the
validity or enforceability thereof, deny that it has any further liability or obligation thereunder, or take any action in violation thereof or fail to take any action required by the terms thereof; or 
 8.17 (i) Any “Event of Default” as defined in the Second Lien Credit Agreement shall occur or (ii) any event of default
(however defined) shall occur under any other Second Lien Debt Document. 
  

 17 

 8.18 (i) The failure of the Redemption and Cancellation of the Purchased Notes to occur on
the Purchase Notes Discharge Date; or (ii) the failure of the Discharge of Existing Subordinated Debt to occur on the Existing Subordinated Debt Discharge Date (as defined in the Second Lien Credit Agreement).” 
 19. Amendment to Section 9.1 of the Loan Agreement. Section 9.1 of the Loan Agreement, “Rights and Remedies”, is hereby
modified and amended by deleting the introductory language immediately prior to subsection (a) thereof in its entirety and inserting the following in substitution thereof: 
 “9.1 Rights and Remedies. Upon the occurrence, and during the continuation, of an Event of Default, the Required
Lenders (at their election but without notice of their election and without demand) may authorize and instruct Agent to do any one or more of the following on behalf of the Lender Group (and Agent, acting upon the instructions of the Required
Lenders, shall do the same on behalf of the Lender Group), all of which are authorized by Borrowers; provided, however, that upon the occurrence of any event specified in Section 8.4 or 8.5, the unpaid principal
amount of all outstanding Advances and all interest and all other amounts owing or payable hereunder shall automatically become due and payable without further act of the Agent or any Lender:” 
 20. Amendment to Section 15.1 of the Loan Agreement. Section 15.1 of the Loan Agreement, “Amendments and Waivers”, is
hereby modified and amended by deleting subsection (j) thereof its entirety and inserting the following in substitution thereof: 
 “(j) change the definition of Borrowing Base or the definitions of Eligible Accounts, Eligible Domestic Accounts, Eligible Inventory, Maximum Revolver Amount, or change Section 2.1(b) or Section 2.4(b) or change
any provision of the Intercreditor Agreement; or” 
 21. Amendment to Article 17 of the Loan Agreement. Article 17 of the Loan
Agreement, “General Provisions”, is hereby modified and amended by inserting the following Sections 17.11 immediately following Section 17.10 of the Loan Agreement: 
 “17.11 No Consequential Damages. Neither Agent nor any Lender, nor any agent or attorney of Agent or any Lender, shall be liable to any
Loan Party or any other Person on any theory of liability for any special, indirect, consequential or punitive damages.” 
 22. No
Other Amendments or Waivers. The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Agent or the Lenders under the Loan Agreement or any of the other Loan Documents, nor
constitute a waiver of any provision of the Loan Agreement or any of the other Loan Documents. Except for the amendments set forth above, the text of the Loan Agreement and all other Loan Documents shall remain unchanged and in full force and effect
and each Borrower hereby ratifies and confirms its obligations thereunder. This Amendment shall not constitute a modification of the Loan Agreement or a course of dealing with the Agent or the Lenders at variance with the Loan 
  

 18 

 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. 
 23. Release. In consideration for the accommodations
provided pursuant to this Amendment, and acknowledging that Agent and Lenders will be specifically relying on the following provisions as a material inducement in entering into this Amendment, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, each Borrower hereby releases, remises and forever discharges the Agent and the Lenders and their respective agents, servants, employees, directors, officers, attorneys, accountants,
consultants, affiliates, representatives, receivers, trustees, subsidiaries, predecessors, successors and assigns (collectively, the “Released Parties”) from any and all claims, damages, losses, demands, liabilities, obligations,
actions and causes of action whatsoever (whether arising in contract or in tort, and whether at law or in equity), whether known or unknown, matured or contingent, liquidated or unliquidated, in any way arising from, in connection with, or in any
way concerning or relating to the Loan Agreement, the other Loan Documents, and/or any dealings with any of the Released Parties in connection with the transactions contemplated by such documents or this Amendment prior to date hereof. This release
shall be and remain in full force and effect notwithstanding the discovery by the Borrowers after the date hereof (a) of any new or additional claim against any Released Party, (b) of any new or additional facts in any way relating to the
subject matter of this release, (c) that any fact relied upon by it was incorrect or (d) that any representation made by any Released Party was untrue or that any Released Party concealed any fact, circumstance or claim relevant to the
Borrowers’ execution of this release; provided, however, this release shall not extend to any claims arising after the execution of this Amendment. 
 24. Conditions Precedent to Effectiveness. This Amendment shall become effective as of the date hereof when, and only when, the Agent shall have received each of the following: 
 (a) fully executed and delivered counterparts of this Amendment by the Borrowers, the Required Lenders and the Agent; 
 (b) the Intercreditor Agreement, duly executed by the Second Lien Agent and the Agent; 
 (c) the Post-Closing Agreement, duly executed by the Borrowers and Agent; 
 (d) a certified copy of the Second Lien Debt Documents, each of which shall have been duly executed by each of the parties thereto and in form and substance satisfactory to the Agent, together with evidence that each
of the conditions precedent to the effectiveness of the Second Lien Credit Agreement shall have been satisfied or shall have been waived in writing by the Second Lien Lenders; and 
 (e) such other information, documents, instruments or approvals as the Agent or the Agent’s counsel may reasonably require. 
  

 19 

 25. 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; 
 (b) The execution, delivery, and performance by each Borrower of this Amendment 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 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 all other documents
contemplated hereby, 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. 
 26. 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. Delivery of a signature page hereto by facsimile transmission or by e-mail transmission of an adobe file format document (also known as a PDF
file) shall be as effective as delivery of a manually executed counterpart hereof. 
 27. 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. 
  

 20 

 28. 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. 
 29.
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. 
 30. Loan Document. This
Amendment shall be deemed to be a Loan Document for all purposes. 
 [Signature pages follow] 
  

 21 

 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
			
		 	By:	 	 /s/ Elaine Flud Rodriguez

		 	Name:	 	Elaine Flud Rodriguez
		 	Title:	 	Sr. VP and General Counsel
		
		 	CELLSTAR, LTD., a Texas limited partnership
			
		 	By:	 	National Auto Center, Inc., its General Partner
			
		 	By:	 	 /s/ Elaine Flud Rodriguez

		 	Name:	 	Elaine Flud Rodriguez
		 	Title:	 	Sr. VP and General Counsel
		
		 	NATIONAL AUTO CENTER, INC., a Delaware corporation
			
		 	By:	 	 /s/ Elaine Flud Rodriguez

		 	Name:	 	Elaine Flud Rodriguez
		 	Title:	 	Sr. VP and General Counsel
		
		 	CELLSTAR FINANCO, INC., a Delaware corporation
			
		 	By:	 	 /s/ Elaine Flud Rodriguez

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

 SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT 
  

 S-1 

			
	CELLSTAR INTERNATIONAL
CORPORATION/SA, a Delaware corporation
		
	By:	 	 /s/ Elaine Flud Rodriguez

	Name:	 	Elaine Flud Rodriguez
	Title:	 	Sr. VP and General Counsel
	
	 CELLSTAR FULFILLMENT, INC., a Delaware
 corporation

		
	By:	 	 /s/ Elaine Flud Rodriguez

	Name:	 	Elaine Flud Rodriguez
	Title:	 	Sr. VP and General Counsel
	
	 CELLSTAR INTERNATIONAL
 CORPORATION/ASIA, a Delaware corporation

		
	By:	 	 /s/ Elaine Flud Rodriguez

	Name:	 	Elaine Flud Rodriguez
	Title:	 	Sr. VP and General Counsel
	
	 AUDIOMEX EXPORT CORP., a Texas
 corporation

		
	By:	 	 /s/ Elaine Flud Rodriguez

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

 SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT 
  

 S-2 

			
	NAC HOLDINGS, INC., a Nevada corporation
		
	By:	 	 /s/ Elaine Flud Rodriguez

	Name:	 	Elaine Flud Rodriguez
	Title:	 	President
	
	 CELLSTAR FULFILLMENT LTD., a Texas
 limited partnership

		
	By:	 	CellStar Fulfillment, Inc., its General Partner
		
	By:	 	 /s/ Elaine Flud Rodriguez

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

 SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT 
  

 S-3 

					
	AGENT AND LENDERS:	 	 WELLS FARGO FOOTHILL, INC., a California
 corporation, as Agent and as a Lender

			
		 	By:	 	 /s/ Robert Bernier

		 	Name:	 	Robert Bernier
		 	Title:	 	VP
		
		 	 BANK OF AMERICA, N.A. (successor to Fleet
 Capital Corporation), as a Lender

			
		 	By:	 	 /s/ H Michael Willss

		 	Name:	 	H Michael Willss
		 	Title:	 	Senior Vice President
		
		 	TEXTRON FINANCIAL CORPORATION, as a Lender
			
		 	By:	 	 /s/ Stuart A. Hall

		 	Name:	 	Stuart A. Hall
		 	Title:	 	Senior Account Executive

 SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT 
  

 S-4Employment Agreement

 Exhibit 10.1 
 EMPLOYMENT AGREEMENT 
 This EMPLOYMENT
AGREEMENT is entered into effective as of this 1st day of September, 2006, by and among W. Keith Betts (the “Executive”), Crescent Financial Corporation, a North Carolina corporation, and
Port City Capital Bank, a North Carolina-chartered bank and wholly owned subsidiary of Crescent Financial Corporation. Crescent Financial Corporation and Port City Capital Bank are hereinafter sometimes referred to together or individually as
“Employer.” 
 WHEREAS, the Executive possesses unique skills, knowledge, and
experience relating to the banking business, and as President of Port City Capital Bank is expected to make significant contributions to the profitability, growth, and financial strength of Crescent Financial Corporation and affiliates, 

WHEREAS, Employer desires to assure itself of the continuity of management and desires to establish minimum
severance benefits for certain of its officers and other key employees if a change in control occurs, and Employer wishes to ensure that officers and other key employees are not practically disabled from discharging their duties if a proposed or
actual transaction involving a change in control arises, 
 WHEREAS, Employer desires to provide
additional inducement for the Executive to remain in the employ of Port City Capital Bank as President, 
 WHEREAS, Port City Capital Bank is expected to be merged into Crescent State Bank, a North Carolina-chartered bank and wholly owned subsidiary of Crescent Financial Corporation, in June 2007, 

WHEREAS, use of the term “Bank” or “Employer” in this Employment Agreement encompasses the
Executive’s service to (i) Port City Capital Bank after the acquisition of Port City Capital Bank by Crescent Financial Corporation but before the merger of Port City Capital Bank with and into Crescent State Bank and (ii) Crescent
State Bank after the merger of Port City Capital Bank with and into Crescent State Bank. The term “Bank” encompasses service to both such FDIC-insured banks unless specifically noted otherwise, 
 WHEREAS, Crescent Financial Corporation, Port City Capital Bank, and the Executive desire to set forth in this
Employment Agreement the terms and conditions of the Executive’s employment, 
 WHEREAS, the
Executive and Port City Capital Bank are parties to an Employment Agreement dated as of January 3, 2006, but the Executive and the Employer intend that this Employment Agreement supersede and replace the previous employment agreement in its
entirety, and 

 WHEREAS, none of the conditions or events included in the definition
of the term “golden parachute payment” that is set forth in Section 18(k)(4)(A)(ii) of the Federal Deposit Insurance Act [12 U.S.C. 1828(k)(4)(A)(ii)] and in Federal Deposit Insurance Corporation Rule 359.1(f)(1)(ii) [12 CFR
359.1(f)(1)(ii)] exists or, to the best knowledge of Employer, is contemplated insofar as Employer or any affiliates are concerned. 
 NOW THEREFORE, in consideration of these premises, the mutual covenants contained herein, and other good and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows. 
 ARTICLE 1 
 EMPLOYMENT 
 1.1 EMPLOYMENT.
Port City Capital Bank hereby employs the Executive to serve as President according to the terms and conditions of this Employment Agreement and for the period stated in section 1.3. After the merger of Port City Capital Bank with and into Crescent
State Bank, Crescent State Bank will employ the Executive as Executive Vice President according to the terms and conditions of this Employment Agreement. The Executive hereby accepts employment according to the terms and conditions of this
Employment Agreement and for the period stated in section 1.3. The Executive agrees that the merger of Port City Capital Bank with and into Crescent State Bank and his subsequent employment as Executive Vice President of the Bank are not events that
trigger any compensation or benefit entitlements whatsoever under the terms of this Agreement. The change in duties and authority that accompanies the change in title from President to Executive Vice President when the separate corporate existence
of Port City Capital Bank disappears is not an event that gives Executive any rights under this Agreement. 
 1.2
DUTIES. As President of Port City Capital Bank, the Executive shall serve under the direction of the board of directors and in accordance with Port City Capital Bank’s Articles of Incorporation and Bylaws, as
each may be amended or restated from time to time. As Executive Vice President of Crescent State Bank after the merger of Port City Capital Bank with and into Crescent State Bank, he shall serve the Bank faithfully, diligently, competently, and to
the best of his ability, and he shall exclusively devote his full time, energy, and attention to the promotion of the Bank’s interests throughout the term of this Employment Agreement. During the two (2) year period commencing upon the
consummation of the merger of Port City Capital Bank with and into Crescent State Bank, Executive shall report only to the President and Chief Executive Officer of Crescent State Bank or any successor thereto. Without the written consent of Crescent
Financial Corporation’s board of directors, during the term of this Employment Agreement the Executive shall not render services to or for any person, firm, corporation, or other entity or organization in exchange for compensation, regardless
of the form in which such compensation is paid and regardless of whether it is paid directly or indirectly to the Executive provided, however, that Executive may serve, with or without compensation, as an officer or director of any charitable or
civic organization. Nothing in this section 1.2 shall prevent the Executive from managing his personal investments and affairs, however, provided that doing so does not interfere with the proper performance of his duties and responsibilities.

 1.3 TERM. The initial term of this Employment Agreement shall be for
a period of three years, commencing September 1, 2006. On the first anniversary of the September 1, 2006 effective date of this Employment Agreement and on each anniversary thereafter, this Employment Agreement shall be extended
automatically for one additional year unless the Bank’s board of directors determines that the term shall not be extended. If the board of directors determines not to extend the term, it shall promptly notify the Executive in writing. If the
board of directors decides not to extend the term of this Employment Agreement, this Employment Agreement shall nevertheless remain in force until its term expires. The board of directors’ decision not to extend the term of this Employment
Agreement shall not – by itself – give the Executive any rights under this Employment Agreement to claim an adverse change in his position, compensation, or circumstances or otherwise to claim entitlement to severance benefits under
Articles 4 or 5 of this Employment Agreement. References herein to the term of this Employment Agreement shall refer to the initial term, as the same may be extended. Unless sooner terminated, the Executive’s employment shall terminate when he
reaches age 65. 
 1.4 SERVICE ON THE BOARD OF
DIRECTORS. The board of directors of Crescent Financial Corporation and the board of directors of Port City Capital Bank shall undertake every lawful effort to ensure that the Executive continues to be elected or
reelected as a director of Port City Capital Bank. The Executive shall be deemed to have resigned as a director of Port City Capital Bank effective immediately after termination of the Executive’s employment under Article 3 of this Employment
Agreement, or on the effective date of the merger of Port City Capital Bank with and into Crescent State Bank, regardless of whether the Executive submits a formal, written resignation as director. After consummation of the merger of Port City
Capital Bank and Crescent State Bank, Executive shall serve as a non-voting member of the Bank’s loan committee. 
 ARTICLE 2 
 COMPENSATION AND OTHER BENEFITS

 2.1 BASE SALARY. In consideration of the Executive’s performance of his
obligations under this Employment Agreement, Employer shall pay or cause to be paid to the Executive a salary at the annual rate of not less than $170,000, payable in monthly installments. The Executive’s salary shall be reviewed annually
commencing during the first quarter of 2007 by the Compensation Committee of the Bank’s board of directors or by such other board committee as has jurisdiction over executive compensation. The Executive’s salary shall be increased no less
frequently than annually to account for cost of living increases. The Executive’s salary also may be increased beyond the amount necessary to account for cost of living increases at the discretion of the committee having jurisdiction over
executive compensation. However, the Executive’s salary shall not be reduced. The Executive’s salary, as the same may be increased from time to time, is referred to in this Employment Agreement as the “Base Salary.”

 2.2 BENEFIT PLANS AND PERQUISITES. The Executive shall
be entitled throughout the term of this Employment Agreement to participate in any and all officer or employee compensation, bonus, incentive, and benefit plans in effect from time to time, including without limitation stock option plans and other
stock-based compensation, incentive, bonus, or purchase 

 plans, or plans providing pension, medical, dental, disability, and group life benefits, including Employer’s 401(k)
Plan, and to receive any and all other fringe benefits provided from time to time, provided that the Executive satisfies the eligibility requirements for any such plans or benefits. 
 (a) Club Dues. During the term of this Employment Agreement, the Employer shall pay or cause to be paid the Executive’s continued membership
dues in civic and/or country clubs in an amount up to $750 per month. 
 (b) Reimbursement of Business Expenses. The Executive shall
be entitled to reimbursement for all reasonable business expenses incurred in performing his obligations under this Employment Agreement, including but not limited to all reasonable business travel and entertainment expenses incurred while acting at
the request of or in the service of Employer and reasonable expenses for attendance at annual and other periodic meetings of trade associations. 
 2.3 VACATION. The Executive shall be entitled to paid annual vacation and sick leave in accordance with the policies established from time to time by Employer, but in no event fewer than four weeks of
vacation per year. The Executive shall schedule at least one week of vacation per year. The timing of vacations shall be scheduled in a reasonable manner by the Executive. The Executive shall not be entitled to any additional compensation for
failure to use allotted vacation or sick leave nor shall the Executive be entitled to accumulate unused sick leave from one year to the next, unless authorized by Crescent Financial Corporation’s board of directors to do so. Up to five vacation
days not used in a given year may be carried over and used by the Executive in a subsequent year. 
 2.4 SALARY
CONTINUATION AGREEMENT. Employer and the Executive shall use their best efforts to finalize and enter into a Salary Continuation Agreement by July 1, 2007, providing an annual benefit to the
Executive for retirement on or after attaining age 65. Unless the Salary Continuation Agreement explicitly provides otherwise, whether benefits are properly payable to the Executive under the Salary Continuation Agreement shall be determined solely
by reference to that agreement. Once the Employer and the Executive enter into a Salary Continuation Agreement, the Executive will no longer be eligible to receive the Change of Control benefits described under Article 5 and this Employment
Agreement is expected to be amended as a condition precedent to the establishment of the Salary Continuation Agreement. 
 ARTICLE 3 
 TERMINATION OF EMPLOYMENT 
 3.1 TERMINATION BY THE EMPLOYER. (a) Death or Disability.
The Executive’s employment shall terminate automatically on the date of the Executive’s death. If the Executive dies in active service to Employer, for twelve months after the Executive’s death Employer shall assist the
Executive’s family with continuing health care coverage under COBRA substantially identical to that provided for the Executive before his death. 
 By delivery of written notice 30 days in advance to the Executive, Employer may terminate the Executive’s employment if the Executive is disabled. For purposes of this Employment Agreement, the Executive shall be
considered “disabled” if an independent 

 physician selected by Employer and reasonably acceptable to the Executive or his legal representative determines that,
because of illness or accident, the Executive is unable to perform his duties for a period of 90 consecutive days. The Executive shall not be considered disabled, however, if he returns to work on a full-time basis within 30 days after Employer
gives him notice of termination due to disability. 
 Notwithstanding any other provision herein contained, in the event that
Executive’s employment hereunder terminates in the manner described in this Article 3.1 as a result of Executive’s death or disability, Executive (or Executive’s estate in the event of Executive’s death) shall be entitled to
receive the payments described in Article 7.2 hereof. 
 (b) Termination Without Cause. With written notice to the Executive 60 days
in advance, Employer may terminate the Executive’s employment without Cause. 
 (c) Termination with Cause. Employer may
terminate the Executive’s employment with Cause. For purposes of this Employment Agreement, “Cause” means any of the following – 
 (1) an intentional act of fraud, embezzlement, or theft by the Executive in the course of his employment. An act or failure to act on the
Executive’s part shall be considered intentional if it is not in good faith and if it is without a reasonable belief that the action or failure to act is in the best interests of Employer, or 
 (2) intentional violation by the Executive of any applicable law or significant policy of Employer that, in Employer’s reasonable
judgement, results in an adverse effect on Employer, regardless of whether the violation leads to criminal prosecution or conviction. For purposes of this Agreement, applicable laws include any statute, rule, regulatory order, statement of policy,
or final cease-and-desist order of any governmental agency or body having regulatory authority over Employer, or 
 (3) the
Executive’s gross negligence or gross neglect of duties in the performance of his duties, or 
 (4) intentional wrongful
damage by the Executive to the business or property of Employer, including without limitation the reputation of Employer, which in Employer’s reasonable judgment causes material harm to Employer, or 
 (5) a breach by the Executive of his fiduciary duties or misconduct involving dishonesty, in either case whether in his capacity as an
officer or as a director of the Bank, or 
 (6) a breach by the Executive of this Employment Agreement that, in the reasonable
judgment of Employer, is a material breach, which breach is not corrected by the Executive within 10 days after receiving written notice of the breach, or 

 (7) removal of the Executive from office or permanent prohibition of the Executive from
participating in the Bank’s affairs by an order issued under section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or (g)(1), or 
 (8) conviction of the Executive for or plea of nolo contendere to a felony or conviction of or plea of nolo contendere to a
misdemeanor involving moral turpitude, or the actual incarceration of the Executive for 5 consecutive days or more, or 
 (9)
the occurrence of any event that results in the Executive being excluded from coverage, or having coverage limited for the Executive as compared to other executives of the Bank, under the Bank’s blanket bond or other fidelity or insurance
policy covering its directors, officers, or employees. 
 For purposes of this Employment Agreement, no act or failure to act on the part of
the Executive shall be deemed to have been intentional if it was due primarily to an error in judgment or negligence. 
 3.2
TERMINATION BY THE EXECUTIVE. The Executive may terminate his employment with written notice to Employer 60 days in advance, whether with or without Good Reason. If the
Executive terminates with Good Reason, the termination will take effect at the conclusion of the 60-day period unless the event or circumstance constituting Good Reason is cured by Employer or unless the notice of termination for Good Reason is
revoked by the Executive within the 60-day period. For purposes of this Employment Agreement, “Good Reason” means any of the following events occur without the Executive’s written consent – 
 (a) Reduced Base Salary: reduction of the Executive’s Base Salary, 
 (b) Participation in Benefit Plans Reduced or Terminated: reduction of the Executive’s opportunities under Employer’s benefit plans,
unless in the case of either company a company-wide reduction of all officers’ award opportunities occurs simultaneously, or termination of the Executive’s participation in any officer or employee benefit plan maintained by Employer,
unless the plan is terminated because of changes in law or loss of tax deductibility to Employer for contributions to the plan, or unless the plan is terminated as a matter of Employer policy applied equally to all participants in the plan,

 (c) Reduced Responsibilities or Status or Change in Reporting Relationship: assignment to the Executive of duties that are
materially inconsistent with the Executive’s position with the Bank or that represent a reduction of his authority (other than the Executive’s new role as Executive Vice President of Crescent State Bank after the merger of Port City
Capital Bank with and into Crescent State Bank) or that represents a change in the reporting relationship described in Section 1.2 of this Agreement. 

 (d) Failure to Obtain Assumption Agreement: failure to obtain an assumption of Employer’s
obligations under this Employment Agreement by any successor to Crescent Financial Corporation, regardless of whether such entity becomes a successor to Crescent Financial Corporation as a result of a merger, consolidation, sale of assets, or other
form of reorganization, 
 (e) Material Breach: a material breach of this Employment Agreement by Employer , or 
 (f) Relocation of the Executive: requiring the Executive to change his principal work location, to any location that is more than 30 miles from
the location of Port City Capital Bank’s principal executive offices on the date of this Employment Agreement. 
 3.3
NOTICE. Any purported termination by Employer or by the Executive shall be communicated by written notice of termination to the other. The notice must state the specific termination provision of this Employment
Agreement relied upon. The notice must also state the date on which termination shall become effective, which shall be a date not earlier than the date of the termination notice. If termination is for Cause or with Good Reason, the notice must state
in reasonable detail the facts and circumstances forming the basis for termination of the Executive’s employment. 
 ARTICLE 4 
 COMPENSATION AND BENEFITS AFTER
TERMINATION 
 4.1 CAUSE. If the Executive’s employment terminates for Cause,
the Executive shall receive the salary to which he was entitled through the date on which termination became effective and any other benefits to which he may be entitled under Employer’s benefit plans and policies in effect on the date of
termination. 
 4.2 DISABILITY. If the Executive’s employment terminates because of his disability,
the Executive shall receive the salary earned through the date on which termination became effective, any unpaid bonus or incentive compensation due to the Executive for the calendar year preceding the calendar year in which the termination became
effective, any payments the Executive is eligible to receive under any disability insurance program in which the Executive participates, such other benefits to which he may be entitled under Employer’s benefit plans, policies, and agreements,
and any benefits provided for elsewhere in this Employment Agreement. 
 4.3 TERMINATION WITHOUT
CAUSE. If Employer terminates the Executive’s employment without Cause, or the Executive resigns for Good Reason prior to a Change in Control, the Executive shall be entitled to— 
 (a) Cash Severance. A lump-sum severance payment in cash in the amount of two and one half times his Base Salary, payable no later than 30 days
after termination of the Executive’s employment. Employer and the Executive acknowledge and agree that the compensation and benefits under this paragraph (a) shall not be payable if compensation and 

 benefits are payable or shall have been previously paid to the Executive under Article 5 of this Agreement. That is, the
parties acknowledge and agree that the Executive shall not be entitled to duplicative compensation and benefit payments under paragraph (a) and under Article 5 if the Executive’s employment is terminated without Cause or if the Executive
voluntarily terminates employment. 
 (b) Cash-out of Value of Unvested Stock Options. The Executive shall be entitled to receive from
Employer an amount equal to the value of any unvested stock options and any unvested restricted stock or other equity-based compensation award shall become fully vested as of the effective date of termination. Amounts payable under this paragraph
(b) shall be paid in a single lump sum within 90 days after termination of the Executive’s employment. 
 (c) Cash-out of the
Executive’s Unvested 401(k) Retirement Plan Account Balance. The Executive shall be entitled to receive from Employer an amount in cash equal to the value of any unvested matching or discretionary contributions by Employer under the
Employer’s 401(k) Plan as of the effective date of termination. 
 (d) Outplacement and Support. Employer shall pay or cause to
be paid to the Executive reasonable outplacement expenses in an amount up to $25,000, and for one year after termination Employer shall provide the Executive with the use of office space and reasonable office support facilities, including
secretarial assistance. 
 ARTICLE 5 
 CHANGE IN CONTROL BENEFITS 
 5.1
CHANGE IN CONTROL TERMINATION BENEFITS. If the Executive is terminated involuntarily but without cause within 24 months after a Change in Control, or if
the Executive terminates employment voluntarily but with Good Reason within 24 months after a Change in Control, the Executive shall be entitled to a lump-sum payment in cash in an amount equal to two times the Executive’s annual compensation.
For this purpose, annual compensation means (1) the Executive’s Base Salary at the time of the Change in Control or at the time Executive’s employment terminates, whichever is greater, plus (2) any bonuses or incentive
compensation earned for the calendar year ended immediately before the year in which termination of employment occurs or the year in which the Change in Control occurs, whichever is greater, in either case regardless of when the bonus or incentive
compensation earned for the preceding calendar year is paid and regardless of whether all or part of the bonus or incentive compensation is subject to elective deferral. The amount payable to the Executive hereunder shall not be reduced to account
for the time value of money or discounted to present value. The payment required under this section 5.1 is payable no later than five business days after the Executive’s employment terminates. The Executive shall also be entitled to the
benefits specified in section 4.3 paragraphs (b), (c), and (d). If the Executive is removed from office or if his employment terminates before a Change in Control occurs but after discussions with a third party regarding a Change in Control
commence, and if those discussions ultimately conclude with a Change in Control, then for purposes of this Employment Agreement the removal of the Executive or termination of his employment shall be deemed to have occurred after the Change in
Control. 

 If the Executive receives payment under section 5.1 he shall not be entitled to any additional severance
benefits under section 4.3(a) of this Employment Agreement. 
 5.2 DEFINITION OF CHANGE
IN CONTROL. For purposes of this Employment Agreement, “Change in Control” means any one of the following events occurs – 
 (a) Merger or Share Exchange. Crescent Financial Corporation merges into, consolidates, or enters into a share exchange with another corporation,
or merges another corporation into Crescent Financial Corporation, and as a result less than a majority of the combined voting power of the resulting corporation immediately after the merger, consolidation, or share exchange is held by persons who
were holders of Crescent Financial Corporation’s voting securities immediately before the merger, consolidation, or share exchange. For purposes of this Agreement, the term “person” means an individual, corporation,
partnership, trust, association, joint venture, pool, syndicate, sole proprietorship, unincorporated organization or other entity, 
 (b)
Acquisition of Significant Share Ownership. after the date of this Agreement a report on Schedule 13D, Schedule TO, or another form or schedule (other than Schedule 13G) is filed or is required to be filed under sections 13(d) or 14(d) of the
Securities Exchange Act of 1934, if the schedule discloses that the filing person or persons acting in concert has or have become the beneficial owner of 25% or more of the combined voting power of Crescent Financial Corporation’s voting
securities outstanding (but this paragraph (b) shall not apply to beneficial ownership of voting shares held by Crescent Financial Corporation or by a subsidiary of Crescent Financial Corporation in a fiduciary capacity or beneficial ownership
of voting shares held by an employee benefit plan of Crescent Financial Corporation or by a subsidiary of Crescent Financial Corporation), 
 (c) Change in Board Composition. during any period of two consecutive years, individuals who constitute Crescent Financial Corporation’s board of directors at the beginning of the two-year period cease for any reason to
constitute at least a majority thereof; provided, however, that – for purposes of this paragraph (c) – each director who is first elected by the board (or first nominated by the board for election by stockholders) by a vote of
at least two-thirds (b) of the directors who were directors at the beginning of the period shall be deemed to have been a director at the beginning of the two-year period, or 
 (d) Sale of Assets. Crescent Financial Corporation sells to a third party all or substantially all of Crescent Financial Corporation’s
assets. 
 ARTICLE 6 
 CONFIDENTIALITY AND CREATIVE WORK 
 6.1
NON-DISCLOSURE. The Executive covenants and agrees that he will not reveal to any person, firm, or corporation any confidential information of any nature concerning Employer or its business, or
anything connected therewith. As used in this Article 6, the term 

 “confidential information” means all of Crescent Financial Corporation’s and its
affiliates’ confidential and proprietary information and trade secrets in existence on the date hereof or existing at any time during the term of this Employment Agreement, including but not limited to – 
 (a) the whole or any portion or phase of any business plans, financial information, purchasing data, supplier data, accounting data, or
other financial information, 
 (b) the whole or any portion or phase of any research and development information, design
procedures, algorithms or processes, or other technical information, 
 (c) the whole or any portion or phase of any marketing
or sales information, sales records, customer lists, prices, sales projections, or other sales information, and 
 (d) trade
secrets, as defined from time to time by the laws of the State of North Carolina. 
 Notwithstanding the foregoing, confidential information excludes
information that – as of the date hereof or at any time after the date hereof – is published or disseminated without obligation of confidence or that becomes a part of the public domain by or through action of Employer or otherwise than by
or at the direction of the Executive. This section 6.1 does not prohibit disclosure required by an order of a court having jurisdiction or a subpoena from an appropriate governmental agency or disclosure made by the Executive in the ordinary course
of business and within the scope of his authority. 
 6.2 RETURN OF
MATERIALS. The Executive agrees to deliver or return to Employer upon termination, upon expiration of this Employment Agreement, or as soon thereafter as possible, all written information and any other similar items
furnished by Employer or prepared by the Executive in connection with his services hereunder. The Executive will retain no copies thereof after termination of this Employment Agreement or termination of the Executive’s employment. 

6.3 INJUNCTIVE RELIEF. The Executive acknowledges that it is impossible to measure in money the
damages that will accrue to Employer if the Executive fails to observe the obligations imposed on him by this Article 6. Accordingly, if Employer institutes an action to enforce the provisions hereof, the Executive hereby waives the claim or defense
that an adequate remedy at law is available to Employer, and the Executive agrees not to urge in any such action the claim or defense that an adequate remedy at law exists. 
 6.4 AFFILIATES’ CONFIDENTIAL INFORMATION IS COVERED;
CONFIDENTIALITY OBLIGATION SURVIVES TERMINATION. For purposes of this Employment Agreement, the term “affiliate” of Crescent Financial Corporation
includes Port City Capital Bank, any bank successor to Port City Capital Bank, and any entity that directly, or indirectly through one or 

 more intermediaries, controls, is controlled by, or is under common control with Port City Capital Bank. The rights and
obligations set forth in this Article 6 shall survive termination of this Employment Agreement. 
 6.5 CREATIVE
WORK. The Executive agrees that all creative work and work product, including but not limited to all technology, business management tools, processes, software, patents, trademarks, and copyrights developed by the
Executive during the term of this Employment Agreement, regardless of when or where such work or work product was produced, constitutes work made for hire, all rights of which are owned by Employer. The Executive hereby assigns to Crescent Financial
Corporation and to the Bank all rights, title, and interest, whether by way of copyrights, trade secret, trademark, patent, or otherwise, in all such work or work product, regardless of whether the same is subject to protection by patent, trademark,
or copyright laws. 
 ARTICLE 7 
 COMPETITION AFTER EMPLOYMENT TERMINATION 
 7.1 COVENANT NOT TO SOLICIT EMPLOYEES. The Executive agrees not to solicit the services of any officer or employee of
the Employer for one year after the Executive’s employment termination. 
 7.2 COVENANT NOT
TO COMPETE. (a) For and in consideration of the “payments” (as defined below) the Executive covenants and agrees that he will not, without advance written consent of the Employer,
compete directly or indirectly with the Employer for the “non-compete term” (as defined below) after termination of his employment, plus any period during which the Executive is in violation of this covenant not to compete and any period
during which the Employer seeks by litigation to enforce this covenant not to compete. For purposes of this section – 
  

	 	(1)	the term “compete” means 

  

	 	(a)	providing financial products or services on behalf of any financial institution for any person residing in the territory, 

  

	 	(b)	assisting (other than through the performance of ministerial or clerical duties) any financial institution in providing financial products or services to any person residing in the
territory, or 

  

	 	(c)	inducing or attempting to induce any person who was a customer of the Employer at the date of the Executive’s termination of employment to seek financial products or services
from another financial institution. 

  

	 	(2)	the words “directly or indirectly” means – 

  

	 	(a)	acting as a consultant, officer, director, independent contractor, or employee of any financial institution, de novo institution in organization, or organizational group in
competition or intending to be in competition with the Employer in the territory, or 

	 	(b)	communicating to such financial institution the names or addresses or any financial information concerning any person who was a customer of the Employer at the Executive’s
termination of employment. 

  

	 	(3)	the term “customer” means any person to whom the Employer is providing financial products or services on the date of the Executive’s termination of employment.

  

	 	(4)	the term “financial institution” means any bank, savings association, or bank or savings association holding company, or any other institution, the business of which is
engaging in activities that are financial in nature or incidental to such financial activities as described in section 4(k) of the Bank Holding Company Act of 1956, other than the Employer or one of its affiliated corporations.

  

	 	(5)	“financial product or service” means any product or service that a financial institution or a financial holding company could offer by engaging in any activity that is
financial in nature or incidental to such a financial activity under section 4(k) of the Bank Holding Company Act of 1956 and that is offered by the Employer or an affiliate on the date of the Executive’s employment termination, including but
not limited to banking activities and activities that are closely related and a proper incident to banking. 

  

	 	(6)	the term “person” means any individual or individuals, corporation, partnership, fiduciary, or association. 

  

	 	(7)	the term “territory” means New Hanover County and any counties contiguous thereto. 

  

	 	(8)	the term “non-compete term” shall be a period of two years should Executive’s employment terminate prior to the fifth anniversary of this Agreement; shall be a period
of one year should Executive’s employment terminate following the fifth anniversary of this Agreement but before the seventh anniversary of this Agreement; and after the seventh anniversary of this Agreement, there shall be no period of time in
which Executive is not permitted to “compete” as defined herein. 

  

	 	(9)	the term “payments” shall mean the payment by the Employer of $78,333.00 to the Executive on the date hereof and the payment of an equivalent amount on each of the first
two anniversaries of this Agreement. 

 (b) If any provision of this section or any word, phrase, clause, sentence, or other portion thereof
(including, without limitation, the geographical and temporal restrictions contained therein) is held to be unenforceable or invalid for any reason, the unenforceable or invalid provision or portion shall be modified or deleted so that the
provisions hereof, as modified, are legal and enforceable to the fullest extent permitted under applicable law. 
 7.3
SPECIFIC PERFORMANCE. The Executive’s covenants contained in Articles 7 shall survive termination of the Executive’s employment for any reason, and shall be enforceable after such
termination. Without intending to limit the remedies available to Crescent Financial Corporation and the Bank, the Executive agrees that damages at law are an insufficient remedy for violation by the Executive of his covenants contained in this
Agreement. Accordingly, the Executive hereby agrees that Crescent Financial Corporation or the Bank may apply for and is entitled to injunctive relief in any court of competent jurisdiction to restrain the breach or threatened breach of, or
otherwise to specifically enforce, any of the covenants of this Article 7, in each case without proof of actual damages, in addition to any other remedies that may be available under applicable law. The Executive hereby waives the claim or defense
that an adequate remedy at law is available to Crescent Financial Corporation or the Bank, and the Executive agrees not to urge in any action or proceeding the claim or defense that an adequate remedy at law exists. 
 Without limiting the generality of the foregoing, without limiting the remedies available to Crescent Financial Corporation or the Bank for violation of
this Agreement, and without constituting an election of remedies, if the Executive violates any of the terms of Article 7 he shall forfeit on his own behalf and that of his beneficiary(ies) any rights to and interest in any severance or other
benefits under the Employment Agreement, and the Employment Agreement shall thereafter be null, void, and of no further force or effect. 
 7.4 ARTICLE 7 SURVIVES TERMINATION. The rights and obligations set forth in this Article 7 shall survive termination of this Employment Agreement. 
 ARTICLE 8 
 MISCELLANEOUS 
 8.1 SUCCESSORS AND
ASSIGNS. (a) This Employment Agreement Is Binding on Employer’s Successors. This Employment Agreement shall be binding upon Employer and any successor to Employer, including any persons acquiring
directly or indirectly all or substantially all of the business or assets of Employer by purchase, merger, consolidation, reorganization, or otherwise. But this Employment Agreement and Employer’s obligations under this Employment Agreement are
not otherwise assignable, transferable, or delegable by Employer. By agreement in form and substance satisfactory to the Executive, Employer shall require any successor to all or substantially all of the business or assets of Employer expressly to
assume and agree to perform this Employment Agreement in the same manner and to the same extent Employer would be required to perform if no such succession had occurred. 
 (b) This Employment Agreement Is Enforceable by the Executive and His Heirs. This Employment Agreement will inure to the benefit of and be enforceable by the Executive’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, and legatees. 

 (c) This Employment Agreement Is Personal in Nature and Is Not Assignable. This Employment
Agreement is personal in nature. Without written consent of the other parties, no party shall assign, transfer, or delegate this Employment Agreement or any rights or obligations under this Employment Agreement, except as expressly provided herein.
Without limiting the generality or effect of the foregoing, the Executive’s right to receive payments hereunder is not assignable or transferable, whether by pledge, creation of a security interest, or otherwise, except for a transfer by the
Executive’s will or by the laws of descent and distribution. If the Executive attempts an assignment or transfer that is contrary to this section 8.1, Employer shall have no liability to pay any amount to the assignee or transferee. 

8.2 GOVERNING LAW, JURISDICTION AND FORUM. This
Employment Agreement shall be construed under and governed by the internal laws of the State of North Carolina, without giving effect to any conflict of laws provision or rule (whether of the State of North Carolina or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the State of North Carolina. By entering into this Employment Agreement, the Executive acknowledges that he is subject to the jurisdiction of both the federal and state courts in
the State of North Carolina. Any actions or proceedings instituted under this Employment Agreement shall be brought and tried solely in courts located in Wake County, North Carolina, or in the federal court having jurisdiction in Cary, North
Carolina. The Executive expressly waives his rights to have any such actions or proceedings brought or tried elsewhere. 
 8.3
ENTIRE AGREEMENT. This Employment Agreement sets forth the entire agreement of the parties concerning the employment of the Executive by Employer, and any oral or written statements, representations,
agreements, or understandings made or entered into prior to or contemporaneously with the execution of this Employment Agreement, are hereby rescinded, revoked, and rendered null and void by the parties. 
 8.4 NOTICES. Any notice under this Employment Agreement shall be deemed to have been effectively made or given if in
writing and personally delivered, delivered by mail properly addressed in a sealed envelope, postage prepaid by certified or registered mail, delivered by a reputable overnight delivery service, or sent by facsimile. Unless otherwise changed by
notice, notice shall be properly addressed to the Executive if addressed to the address of the Executive on the books and records of Crescent Financial Corporation at the time of the delivery of such notice, and properly addressed to Employer if
addressed to Crescent Financial Corporation, 1005 High House Road, Cary, North Carolina 27513, Attention: Corporate Secretary. 
 8.5
SEVERABILITY. In the case of conflict between any provision of this Employment Agreement and any statute, regulation, or judicial precedent, the latter shall prevail, but the affected provisions of this Employment
Agreement shall be curtailed and limited solely to the extent necessary to bring them within the requirements of law. If any provision of this Employment Agreement is held by a court of competent jurisdiction to be indefinite, invalid, 

 void or voidable, or otherwise unenforceable, the remainder of this Employment Agreement shall continue in full force and
effect unless that would clearly be contrary to the intentions of the parties or would result in an injustice. 
 8.6
CAPTIONS AND COUNTERPARTS. The captions in this Employment Agreement are solely for convenience. The captions in no way define, limit, or describe the scope or intent of this Employment
Agreement. This Employment Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument. 
 8.7 NO DUTY TO MITIGATE. Employer hereby acknowledges that it will be
difficult and could be impossible (a) for the Executive to find reasonably comparable employment after his employment terminates, and (b) to measure the amount of damages the Executive may suffer as a result of termination. Additionally,
Employer acknowledges that its general severance pay plans do not provide for mitigation, offset, or reduction of any severance payment received thereunder. Accordingly, Employer further acknowledges that the payment of severance benefits under this
Employment Agreement is reasonable and shall be liquidated damages. The Executive shall not be required to mitigate the amount of any payment provided for in this Employment Agreement by seeking other employment. Moreover, the amount of any payment
provided for in this Employment Agreement shall not be reduced by any compensation earned or benefits provided as the result of employment of the Executive or as a result of the Executive being self-employed after termination of his employment.

 8.8 AMENDMENT AND WAIVER. This Employment Agreement may not be amended,
released, discharged, abandoned, changed, or modified in any manner, except by an instrument in writing signed by each of the parties hereto. The failure of any party hereto to enforce at any time any of the provisions of this Employment Agreement
shall not be construed to be a waiver of any such provision, nor affect the validity of this Employment Agreement or any part thereof or the right of any party thereafter to enforce each and every such provision. No waiver or any breach of this
Employment Agreement shall be held to be a waiver of any other or subsequent breach. 

 8.9 PAYMENT OF LEGAL
FEES. Employer is aware that after a Change in Control management could cause or attempt to cause Employer to refuse to comply with its obligations under this Employment Agreement, or could institute or cause or
attempt to cause Employer to institute litigation seeking to have this Employment Agreement declared unenforceable, or could take or attempt to take other action to deny Executive the benefits intended under this Employment Agreement. In these
circumstances, the purpose of this Employment Agreement would be frustrated. It is Employer’s intention that the Executive not be required to incur the expenses associated with the enforcement of his rights under this Employment Agreement,
whether by litigation or other legal action, because the cost and expense thereof would substantially detract from the benefits intended to be granted to the Executive hereunder. It is Employer’s intention that the Executive not be forced to
negotiate settlement of his rights under this Employment Agreement under threat of incurring expenses. Accordingly, if after a Change in Control occurs it appears to the Executive that (a) Employer has failed to comply with any of its
obligations under this Employment Agreement, or (b) Employer or any other person has taken any action to declare this Employment Agreement void or unenforceable, or instituted any litigation or other legal action designed to deny, diminish, or
to recover from the Executive the benefits intended to be provided to the Executive hereunder, Employer irrevocably authorizes the Executive from time to time to retain counsel of his choice, at Employer’s expense as provided in this section
8.9, to represent the Executive in connection with the initiation or defense of any litigation or other legal action, whether by or against Employer or any director, officer, stockholder, or other person affiliated with Employer, in any
jurisdiction. Notwithstanding any existing or previous attorney-client relationship between Employer and any counsel chosen by the Executive under this section 8.9, Employer irrevocably consents to the Executive entering into an attorney-client
relationship with that counsel, and Employer and the Executive agree that a confidential relationship shall exist between the Executive and that counsel. The fees and expenses of counsel selected from time to time by the Executive as provided in
this section shall be paid or reimbursed to the Executive by Employer on a regular, periodic basis upon presentation by the Executive of a statement or statements prepared by such counsel in accordance with such counsel’s customary practices,
up to a maximum aggregate amount of $50,000, whether suit be brought or not, and whether or not incurred in trial, bankruptcy, or appellate proceedings. Employer’s obligation to pay the Executive’s legal fees provided by this section 8.9
operates separately from and in addition to any legal fee reimbursement obligation Employer may have with the Executive under any separate severance or other agreement. Anything in this section 8.9 to the contrary notwithstanding however, Employer
shall not be required to pay or reimburse Executive’s legal expenses if doing so would violate section 18(k) of the Federal Deposit Insurance Act [12 U.S.C. 1828(k)] and Rule 359.3 of the Federal Deposit Insurance Corporation [12 CFR 359.3].

 8.10 CONSULTATION WITH COUNSEL AND INTERPRETATION
OF THIS EMPLOYMENT AGREEMENT. The Executive acknowledges and agrees that he has had the assistance of counsel of his choosing in the negotiation of this Employment
Agreement, or he has chosen not to have the assistance of his own counsel. Both parties hereto having participated in the negotiation and drafting of this Employment Agreement, they hereby agree that there shall not be strict interpretation against
either party in connection with any review of this Employment Agreement in which interpretation thereof is an issue. 

 8.11 COMPLIANCE WITH INTERNAL REVENUE
CODE SECTION 409A. Employer and the Executive intend that their exercise of authority or discretion under this Employment Agreement shall comply with section 409A of the Internal Revenue Code of 1986. If when
the Executive’s employment terminates the Executive is a specified employee, as defined in section 409A of the Internal Revenue Code of 1986, and if any payments under this Employment Agreement, including Articles 4 or 5, will result in
additional tax or interest to the Executive because of section 409A, then despite any provision of this Employment Agreement to the contrary the Executive will not be entitled to the payments until the earliest of (a) the date that is at least
six months after termination of the Executive’s employment for reasons other than the Executive’s death, (b) the date of the Executive’s death, or (c) any earlier date that does not result in additional tax or interest to
the Executive under section 409A. As promptly as possible after the end of the period during which payments are delayed under this provision, the entire amount of the delayed payments shall be paid to the Executive in a single lump sum. If any
provision of this Employment Agreement does not satisfy the requirements of section 409A, such provision shall nevertheless be applied in a manner consistent with those requirements. If any provision of this Employment Agreement would subject the
Executive to additional tax or interest under section 409A, Employer shall reform the provision. However, Employer shall maintain to the maximum extent practicable the original intent of the applicable provision without subjecting the Executive to
additional tax or interest, and Employer shall not be required to incur any additional compensation expense as a result of the reformed provision. References in this Employment Agreement to section 409A of the Internal Revenue Code of 1986 include
rules, regulations, and guidance of general application issued by the Department of the Treasury under Internal Revenue Code section 409A. 
 IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the date first written above. 
  

			
	 	 	CRESCENT FINANCIAL CORPORATION
		
		 	 /s/ MICHAEL G. CARLTON

	 	 	MICHAEL G. CARLTON
	EXECUTIVE	 	PRESIDENT
		
	 /s/ W. KEITH BETTS
	 	
	W. KEITH BETTS	 	PORT CITY CAPITAL BANK
		
		 	 /s/ JON VINCENT

		 	JON VINCENT
		 	CHAIRMAN

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