THIRTEENTH AMENDMENT AND WAIVER TO LOAN AGREEMENT

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 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 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;

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(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 the failure to satisfy the conditions set forth in clause (b) of this Section 3 shall cause the waivers contained herein to be of no further effect.

(d) In no event shall the waivers set forth above waive any other requirement or hinder, restrict or otherwise modify the rights and remedies of the Agent and the Lenders following the occurrence of any other failure to comply with Section 7.20, or the occurrence of any Default or Event of Default under the Loan Agreement.

4. No Other Amendments or Waivers. Except as set forth in Section 3 above, 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 and waivers 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. The Borrowers have no knowledge of any challenge to the Agent’s or any Lenders’ claims arising under the Loan Documents, or to the effectiveness of the Loan Documents.

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;

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(b) financial statements of the Parent and its Subsidiaries for the fiscal year ended November 30, 2004 in form and substance satisfactory to Agent and Lenders, copies of which are attached hereto as Exhibit A;

(c) payment of a amendment fee from the Borrowers in the amount of $500,000.00 (it being understood that, by execution and delivery of this Amendment, the Borrowers authorize the Agent to charge the Borrowers’ Loan Account for such fee and such amount shall thereafter accrue interest at the rate applicable to Advances under the Loan Agreement in accordance with Section 2.6 of the Loan Agreement) which shall be for the benefit of the Lenders signatory hereto in accordance with such Lender’s Pro Rata Share; and

(d) 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) As of the date hereof, the holders of the Subordinated Notes (or the trustee on behalf of the holders of the Subordinated Notes) have not exercised any remedies against any Loan Party with respect to the Specified Events of Default or given notice of default pursuant to Section 6.01(c) of the Indenture with respect to the Specified Events of Default;

(e) The financial statements attached hereto as Exhibit A have been prepared in accordance with GAAP and fairly present in all material respects the financial condition of the Parent and its Subsidiaries as of the dates indicated therein;

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(f) 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

(g) No Default or Event of Default is existing.

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]

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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

THIRTEENTH AMENDMENT TO LOAN AGREEMENT

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						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

THIRTEENTH AMENDMENT TO LOAN AGREEMENT

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						NAC HOLDINGS, INC., a Nevada corporation
						By:		/s/ Xxxxxx Xxxx Xxxxxxxxx
						Name:		Xxxxxx Xxxx Xxxxxxxxx
						Title:		President
						CELLSTAR GLOBAL SATELLITE SERVICES, 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
						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

THIRTEENTH AMENDMENT TO LOAN AGREEMENT

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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
						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
						PNC BANK NATIONAL ASSOCIATION, as a Lender
						By:		/s/ Xxxxx X. Xxxxxxx
						Name:		Xxxxx X. Xxxxxxx
						Title:		Vice President

THIRTEENTH AMENDMENT TO LOAN AGREEMENT

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