THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT

Exhibit 10.2

THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT

This THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT (this “Amendment”) is dated as of October 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 XXXXX 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 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, and as further amended by that certain Second Amendment to Amended and Restated Loan Agreement dated as of August 31, 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.  Section 1.1 of the Loan Agreement, “Definitions”, is hereby modified and amended by deleting clause (j) of the existing definition of “Permitted Dispositions” set forth therein and inserting the following clause (j) in substitution thereof:

“(j) dispositions of Accounts of CellStar Chile S.A. in an aggregate amount not exceeding $40,000,000 outstanding at any time pursuant to a factoring facility permitted by Section 7.1(e)(iv) hereof.”

2.             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)(iv) thereof in its entirety and inserting the following in substitution thereof:

“(iv)        any accounts receivable factoring facility entered into by CellStar Chile S.A. for general working capital needs in an aggregate amount not exceeding $40,000,000 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;”

3.             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 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.

4.             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;

2

provided, however, this release shall not extend to any claims arising after the execution of this Amendment.

5.             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)           fully executed amendment to the Second Lien Credit Agreement containing corresponding amendments to those contained herein, which shall be in form and substance satisfactory to the Agent; and

(c)           such other information, documents, instruments or approvals as the Agent or the Agent’s counsel may reasonably require.

6.             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.

3

7.             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.

8.             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.

9.             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.

10.           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.

11.           Loan Document.  This Amendment shall be deemed to be a Loan Document for all purposes.

[Signature pages follow]

4

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Amendment as of the day and year first written above.

BORROWERS:		CELLSTAR CORPORATION, a Delaware corporation
		By:	/s/ Xxxxxx Xxxx Xxxxxxxxx
			Name:	Xxxxxx Xxxx Xxxxxxxxx
			Title:	Sr. VP and General Counsel
		CELLSTAR, LTD., a Texas limited partnership
		By:	National Auto Center, Inc., its General Partner
		By:	/s/ Xxxxxx Xxxx Xxxxxxxxx
			Name:	Xxxxxx Xxxx Xxxxxxxxx
			Title:	Sr. VP and General Counsel
		NATIONAL AUTO CENTER, INC., a Delaware corporation
		By:	/s/ Xxxxxx Xxxx Xxxxxxxxx
			Name:	Xxxxxx Xxxx Xxxxxxxxx
			Title:	Sr. VP and General Counsel
		CELLSTAR FINANCO, INC., a Delaware corporation
		By:	/s/ Xxxxxx Xxxx Xxxxxxxxx
			Name:	Xxxxxx Xxxx Xxxxxxxxx
			Title:	Sr. VP and General Counsel

THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT

S-1

		CELLSTAR INTERNATIONAL CORPORATION/SA, a Delaware corporation
		By:	/s/ Xxxxxx Xxxx Xxxxxxxxx
			Name:	Xxxxxx Xxxx Xxxxxxxxx
			Title:	Sr. VP and General Counsel
		CELLSTAR FULFILLMENT, INC., a Delaware corporation
		By:	/s/ Xxxxxx Xxxx Xxxxxxxxx
			Name:	Xxxxxx Xxxx Xxxxxxxxx
			Title:	Sr. VP and General Counsel
		CELLSTAR INTERNATIONAL CORPORATION/ASIA, a Delaware corporation
		By:	/s/ Xxxxxx Xxxx Xxxxxxxxx
			Name:	Xxxxxx Xxxx Xxxxxxxxx
			Title:	Sr. VP and General Counsel
		AUDIOMEX EXPORT CORP., a Texas corporation
		By:	/s/ Xxxxxx Xxxx Xxxxxxxxx
			Name:	Xxxxxx Xxxx Xxxxxxxxx
			Title:	Sr. VP and General Counsel

THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT

S-2

		NAC HOLDINGS, INC., a Nevada corporation
		By:	/s/ Xxxxxx Xxxx Xxxxxxxxx
			Name:	Xxxxxx Xxxx Xxxxxxxxx
			Title:	President
		CELLSTAR FULFILLMENT LTD., a Texas limited partnership
		By:	CellStar Fulfillment, Inc., its General       Partner
		By:	/s/ Xxxxxx Xxxx Xxxxxxxxx
			Name:	Xxxxxx Xxxx Xxxxxxxxx
			Title:	Sr. VP and General Counsel

THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT

S-3

AGENT AND LENDERS:		XXXXX FARGO FOOTHILL, INC., a California corporation, as Agent and as a Lender
		By:	/s/ Xxxxxx Xxxxxxx
			Name: Xxxxxx Xxxxxxx
			Title: Vice President
		BANK OF AMERICA, N.A. (successor to Fleet Capital Corporation), as a Lender
		By:	/s/ H Xxxxxxx Xxxxx
			Name: H Xxxxxxx Xxxxx
			Title: Senior Vice President
		TEXTRON FINANCIAL CORPORATION, as a Lender
		By:	/s/ Xxxxxx X. Xxxx
			Name: Xxxxxx X. Xxxx
			Title: Senior Account Executive

THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT

S-4