Exhibit
10.19
WAIVER
As of July 15, 2005
CELLSTAR CORPORATION,
as Administrative
Borrower
1730 Briercroft Court
Carrollton, Texas 75006
Ladies and Gentlemen:
Reference is hereby made to that
certain Loan and Security Agreement (as amended, restated,
supplemented or otherwise modified from time to time, the “
Loan Agreement ”), dated as of September 28,
2001, by and among CellStar Corporation, a Delaware corporation
(the “ Parent ”), certain of its Subsidiaries
(as defined therein) signatory thereto (together with the Parent,
each a “ Borrower ” and collectively the “
Borrowers ”), the lenders signatory thereto (“
Lenders ”) and Wells Fargo Foothill, Inc., as
Administrative Agent for the Lenders (the “ Agent
”). All capitalized terms not otherwise defined herein shall
have the meanings set forth in the Loan Agreement.
The Agent and the Lenders have
previously waived certain of the Specified Events of Default (as
defined below) provided that, among other things, the Parent file
its Form 10-K Annual Report, Form 10-Q Quarterly Report and deliver
the Accountants Letter on or prior to July 15, 2005 pursuant
to that certain Waiver dated as of May 31, 2005 (the “
Previous Waiver ”). The Borrowers anticipate that the
Parent will not file its Form 10-K Annual Report, Form 10-Q
Quarterly Report or deliver the Accountants Letter on or before
July 15, 2005, in which case the Previous Waiver will be of no
further force or effect.
Subject to the terms and conditions
set forth in this letter (this “ Waiver ”), 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:
(a) 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;
(b) 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 as Exhibit A to that
certain Thirteenth Amendment and Waiver to Loan Agreement dated as
of May 13, 2005 by and among the Agent, Lenders and the
Borrowers (the “ Thirteenth Amendment
”);
(c) 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, (C) file its Form 10-Q Quarterly Report for the
fiscal quarter ending May 31, 2005 on or before July 15,
2005 in violation of Section 4.08 of the Indenture, and
(D) 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;
(d) Parent’s failure to
deliver the financial statements of the Parent and its Subsidiaries
for the quarters ended February 28, 2005 and May 31, 2005
as required pursuant to Section 6.3(a) of the Loan Agreement;
and
(e) 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.
Each of the above waivers is subject
to satisfaction of the following conditions:
(a) 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 as Exhibit A to the Thirteenth Amendment on or
before September 6, 2005;
(b) Parent shall file its Form 10-Q
Quarterly Report for the fiscal quarters ended February 28,
2005 and May 31, 2005 on or before September 6,
2005;
(c) 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 September 6, 2005, which shall be in form and substance
substantially the same as the financial statements attached as
Exhibit A to the Thirteenth Amendment;
(d) Parent shall deliver the
financial statements for the fiscal quarters ended
February 28, 2005 and May 31, 200
