Exhibit 10.17
THIRTEENTH AMENDMENT AND WAIVER
TO LOAN AGREEMENT
This THIRTEENTH AMENDMENT AND WAIVER
TO LOAN AGREEMENT (this “ Amendment ”) is dated
as of May 13, 2005, 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 ”).
W I T N E S S E T
H:
WHEREAS, the Borrowers, the Lenders
and the Agent have entered into that certain Loan and Security
Agreement dated as of September 28, 2001, as amended by that
certain First Amendment to Loan Agreement dated as of October 12,
2001, as further amended by that certain Second Amendment to Loan
Agreement dated as of February 11, 2002, as further amended by that
certain Third Amendment and Waiver to Loan Agreement dated as of
May 9, 2002, as further amended by that certain Fourth Amendment to
Loan Agreement effective as of May 9, 2002, as further amended by
that certain Fifth Amendment to Loan Agreement dated as of November
13, 2002, as further amended by that certain Sixth Amendment to
Loan Agreement dated as of February 6, 2003, as further amended by
that certain Seventh Amendment to Loan Agreement dated as of
February 28, 2003, as further amended by that certain Eighth
Amendment and Waiver to Loan and Security Agreement dated as of May
31, 2003, as further amended by that certain Consent and Waiver and
Ninth Amendment to Loan and Security Agreement dated as of February
24, 2004, as further amended by that certain Tenth Amendment to
Loan Agreement dated as of March 31, 2004, as further amended by
that certain Eleventh Amendment and Waiver to Loan Agreement dated
as of August 31, 2004, and as further amended by that certain
Twelfth Amendment and Waiver to Loan Agreement dated as of February
10, 2005 (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 and waive certain
terms of the Loan Agreement; and
WHEREAS, the Agent and the Lenders
have agreed to the requested amendments and waivers on the terms
and conditions set forth herein.
NOW THEREFORE, in consideration of
the foregoing premises and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree that all capitalized terms not
otherwise defined herein shall have the meanings ascribed to such
terms in the Loan Agreement and further agree as
follows:
1. Amendments to Section 1.1 of
the Loan Agreement . Section 1.1 of the Loan Agreement, “
Definitions ”, is hereby modified and amended by
deleting the existing definition of “ Initial Consolidated
Tangible Net Worth ” set forth therein and inserting the
following definition in substitution thereof:
““ Initial
Consolidated Tangible Net Worth ” means
$85,000,000.”
2. Establishment of Reserves
. In accordance with Section 2.1(b) of the Loan Agreement, the
Agent and the Lenders hereby establish an additional reserve
against Availability in the amount of $5,000,000.
3. Waivers .
(a) Subject to the terms and
conditions set forth herein, the Agent and the Lenders hereby waive
compliance with, and waive the Defaults and Events of Default (the
“ Specified Events of Default ”) arising under
the Loan Agreement, applicable to:
(i) Borrowers’ failure to
maintain the required Consolidated Tangible Net Worth for the
quarters ended November 30, 2004 and February 28, 2005 as required
under Section 7.20(a) of the Loan Agreement;
(ii) Borrowers’ failure to
maintain the Consolidated Tangible Net Worth and Fixed Charge
Coverage Ratios for the quarters ended prior to November 30, 2004
as required under Sections 7.20(a), (b) and (c) of the Loan
Agreement solely as a result of Parent’s restatement of its
previously delivered financial statements as contemplated in the
draft financial statements attached hereto as Exhibit A;
(iii) Parent’s failure to (A)
file its Form 10-K Annual Report for the fiscal year ending
November 30, 2004 on or before March 1, 2005 in violation of
Section 4.08 of the Indenture (the “ Indenture
”) for the Parent’s 12% Senior Subordinated Notes due
January 2007 (the “ Subordinated Notes ”), (B)
file its Form 10-Q Quarterly Report for the fiscal quarter ending
February 28, 2005 on or before April 15, 2005 in violation of
Section 4.08 of the Indenture, and (C) cause its independent public
accountants to deliver a letter (the “ Accountants
Letter ”) to the Trustee (as defined in the Indenture)
confirming that their audit examination included a review of the
terms of the Indenture and whether any “Default” or
“Event of Default” has come to their attention as
required pursuant to Section 4.06(b) of the Indenture, in each case
resulting in an Event of Default under Section 8.9 of the Loan
Agreement;
(iv) Parent’s failure to
deliver the financial statements of the Parent and its Subsidiaries
for the quarter ended February 28, 2005 as required pursuant to
Section 6.3(a) of the Loan Agreement; and
(v) Parent’s failure to
deliver the audited financial statements of the Parent and its
Subsidiaries for the fiscal year ended November 30, 2004 as
required pursuant to Section 6.3(b) of the Loan
Agreement;
(b) Each of the above waivers is
subject to satisfaction of the following conditions:
(i) the Parent shall file its Form
10-K Annual Report for the fiscal year ended November 30, 2004,
which shall contain financial statements that are in form and
substance substantially the same as the financial statements
attached hereto as Exhibit A , on or before May 31,
2005;
2
(ii) Parent shall file its Form 10-Q
Quarterly Report for the fiscal quarter ended February 28, 2005 on
or before May 31, 2005;
(iii) Parent shall deliver the
financial statements for the fiscal year ended November 30, 2004 as
required by Section 6.3(b) of the Loan Agreement on or before May
31, 2005, which shall be in form and substance substantially the
same as the financial statements attached hereto as Exhibit
A ;
(iv) Parent shall deliver the
financial statements for the quarter ended February 28, 2005 as
required by Section 6.3(a) of the Loan Agreement on or before May
31, 2005; and
(v) the holders of the Subordinated
Notes (or the Trustee on behalf of the holders of the Subordinated
Notes) shall not exercise any remedies against any Loan Party with
respect to the Specified Events of Default (other than giving of
notice of default pursuant to Section 6.01(c) of the
Indenture).
(c) Each Borrower hereby
acknowledges and agrees that t
