0001104659-05-029347.txt : 20050623 0001104659-05-029347.hdr.sgml : 20050623 20050623104721 ACCESSION NUMBER: 0001104659-05-029347 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20050623 DATE AS OF CHANGE: 20050623 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CELLSTAR CORP CENTRAL INDEX KEY: 0000913590 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-ELECTRONIC PARTS & EQUIPMENT, NEC [5065] IRS NUMBER: 752479727 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-42959 FILM NUMBER: 05911619 BUSINESS ADDRESS: STREET 1: 1730 BRIERCROFT DR CITY: CARROLLTON STATE: TX ZIP: 75006 BUSINESS PHONE: 972-466-5000 MAIL ADDRESS: STREET 1: 1730 BRIERCROFT DRIVE STREET 2: LEGAL DEPT. CITY: CARROLLTON STATE: TX ZIP: 75006 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GOLDFIELD ALAN H CENTRAL INDEX KEY: 0000946529 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 1730 BRIERCROFT CT STREET 2: LEGAL DEPT CITY: CARROLLTON STATE: TX ZIP: 75006 BUSINESS PHONE: 2144665021 MAIL ADDRESS: STREET 1: 1730 BRIERROFT COURT STREET 2: LEGAL DEPT CITY: CARROLLTON STATE: TX ZIP: 75006 SC 13D/A 1 a05-11259_1sc13da.htm SC 13D/A

	UNITED STATES
	SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549

	SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. 10)*

CellStar Corporation

(Name of Issuer)

Common Stock, par value $0.01 per share

(Title of Class of Securities)

150925105

(CUSIP Number)

Alan J. Perkins, Gardere Wynne Sewell LLP, 1601 Elm Street, Suite 3000, Dallas, Texas 75201, (214) 999-3000

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

June 16, 2005

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

^* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 150925105

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) Alan H. Goldfield

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			ý

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) OO

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization United States

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 2,720,214

			8.	Shared Voting Power 0

			9.	Sole Dispositive Power 2,720,214

			10.	Shared Dispositive Power 0

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 2,780,214

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 13.6%

	14.	Type of Reporting Person (See Instructions) IN

Item 1.	Security and Issuer
Not amended.
Item 2.	Identity and Background
Not amended.
Item 3.	Source and Amount of Funds or Other Consideration
Not amended.
Item 4.	Purpose of Transaction
Item 4 is hereby amended in its entirety to read as follows:
Mr. Goldfield has recently had discussions with Stanford Financial Group Company and its affiliates (“Stanford”) about a possible investment by Stanford in the Company.
On June 17, 2005, the Company announced a proposal to sell up to $50 million of convertible debentures (the “Debentures”), and, on June 16, 2005, the Company signed a letter of intent to sell up to $25 million of the Debentures to Stanford. Stanford is acting on its own behalf and is not acting as Mr. Goldfield’s financial advisor. Mr. Goldfield is not aware that the Company has entered into any letter of intent for the sale of the balance of the Debentures.
The Debentures would have a four-year term with a coupon rate of 8% and would be convertible into Common Stock at $4.00 a share. For each $1,000 of Debentures, the Company would issue warrants to purchase 192 shares of Common Stock exercisable at $0.01 per share, with a five-year term. The Debentures would be subordinate to the Company’s senior credit facility and 12% senior subordinated notes due January of 2007.
The letter of intent is non-binding, and the final terms of the definitive agreements are contingent upon, among other conditions, the satisfactory results of Stanford’s due diligence investigation of the Company, the prevailing securities market conditions at the time of the closing of the proposed transaction, the election of Mr. Goldfield as the Company’s Chairman of the Board and Chief Executive Officer, the election of three persons named by Mr. Goldfield to serve on the Company’s five-member Board of Directors, and certain agreements between Mr. Goldfield and Stanford. Stanford would require Mr. Goldfield and one of his affiliates (collectively, the “Pledgors”) to pledge oil and gas properties owned by them as security for the due and timely payment of the Debentures that Stanford purchases (the “Stanford Debentures”). Stanford and Mr. Goldfield are in the process of negotiating the terms by which the Pledgors will be entitled to share in the benefits that would accrue to Stanford under the terms of the proposed transaction between Stanford and the Company, which would include the assignment by Stanford to the Pledgors of 50% of the warrants granted to Stanford and the payment to the Pledgors of 50% of all amounts realized by Stanford from (a) the sale of any shares of Common Stock into which the Stanford Debentures are converted (the “Debenture Shares”) and (b) the payment of dividends on the Debenture Shares, provided that Stanford is first paid an amount equal to (i) all costs incurred by Stanford related to the sale of the Debenture Shares, plus (ii) the original principal amount of the Stanford Debentures, plus the interest due thereon through the date any of the Stanford Debentures were first converted to Debenture Shares, minus (iii) all payments of principal of and interest on the Stanford Debentures, and all dividends on the Debenture Shares, previously received by Stanford.
In addition, the Company’s senior lenders must agree to enter into an intercreditor agreement that, among other things, waives all non-monetary defaults. In the event of the subsequent default under the Company’s senior debt, Stanford would have the right to purchase additional Debentures in the amount necessary to provide the funds necessary to cure such default.
Stanford is aware of the on-going review in the Company’s Asia Pacific Region by the Company’s Audit Committee. It is anticipated that the due diligence examination will commence immediately and that the closing will be held on, or the efforts toward concluding a transaction will terminate by, July 31, 2005.

There can be no assurance that the parties will be successful in negotiating a definitive agreement or consummating the proposed transaction. The Debentures will not be registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
Item 5.	Interest in Securities of the Issuer
Not amended.
Item 6.	Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
In connection with the proposed transaction between Stanford and the Company, Stanford would require the Pledgors to pledge oil and gas properties owned by them as security for the due and timely payment of the Stanford Debentures. Stanford and Mr. Goldfield are in the process of negotiating the terms by which the Pledgors will be entitled to share in the benefits that would accrue to Stanford under the terms of the proposed transaction between Stanford and the Company, which would include the assignment by Stanford to the Pledgors of 50% of the warrants granted to Stanford and the payment to the Pledgors of 50% of all amounts realized by Stanford from (a) the sale of the Debenture Shares and (b) the payment of dividends on the Debenture Shares, provided that Stanford is first paid an amount equal to (i) all costs incurred by Stanford related to the sale of the Debenture Shares, plus (ii) the original principal amount of the Stanford Debentures, plus the interest due thereon through the date any of the Stanford Debentures were first converted to Debenture Shares, minus (iii) all payments of principal of and interest on the Stanford Debentures, and all dividends on the Debenture Shares, previously received by Stanford. Mr. Goldfield would also execute an agreement, in form and content acceptable to Stanford, to vote the Common Stock owned or controlled by him, in support of the proposed transaction between Stanford and the Company if any stockholder vote is necessary to approve it.
Item 7.	Material to Be Filed as Exhibits
7.1	Letter, dated May 16, 2005, executed by Stanford Financial Group Company (incorporated by reference to Exhibit 7.1 to the Schedule 13D/A dated May 16, 2005, and filed by Alan H. Goldfield with the Securities and Exchange Commission (the “Commission”) on May 26, 2005).
7.2	Press Release, dated June 17, 2005, of CellStar Corporation (incorporated by reference to Exhibit 99.1 to the Form 8-K, dated June 21, 2005, filed by CellStar Corporation with the Commission on June 21, 2005).
7.3	Letter, dated June 15, 2005, executed by Stanford Financial Group Company and Stanford International Bank Ltd. on June 15, 2005, and by CellStar Corporation on June 16, 2005.

Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

	June 23, 2005
	Date
	/s/ Alan H. Goldfield
	Signature
	Alan H. Goldfield
	Name/Title

EX-7.3 2 a05-11259_1ex7d3.htm EX-7.3

Exhibit 7.3

[Stanford Financial Group letterhead]

June 15, 2005

The Board of Directors

CellStar Corporation

1730 Briarcroft Court

Carrollton, TX 75006

Re: Proposed Investment in CellStar Corporation (the “Company”)

Gentlemen:

This letter will confirm the proposal of Stanford Financial Group Company directly, or one of its affiliates, including but not limited to Stanford International Bank Ltd. (the “Purchaser”), subject to the terms and conditions contained herein and to the execution and delivery of mutually agreeable definitive documents, to purchase $25 million original principal amount of convertible debentures of the Company (the “Debentures”) along with certain warrants (described below).

The proposed terms of the Debentures are set forth on Schedule A of the Term Sheet attached to this letter. We also acknowledge that the Company may wish to issue and sell up to an additional $25 million of Debentures having the same features as the $25 million of Debentures to be sold to the Purchaser (provided that such additional Debentures will not have the benefit of any third party guarantees arranged by the Purchaser for the Debentures that it purchases).

Our proposals are subject to, among other conditions to be set forth in the definitive documents, each of the following:

1. Our satisfaction with the financial position, business and prospects of the Company following a due diligence examination of the Company, and its subsidiaries.

2. The execution and delivery of an intercreditor agreement with the existing senior lenders that will provide for: (a) the subordination of the Debentures to the existing bank financing, and the outstanding 12% Senior Notes of the Company (the “Senior Notes”), (b) the subordination of the Subordinated Notes (defined below) to the existing bank debt, the Senior Notes, and the Debentures, (c) the Debenture holders the rights to cure monetary defaults by purchasing additional series of Debentures from the Company as set forth in the Term Sheet, and (d) provide waivers of non-monetary defaults, so that all senior debt is in good standing at the time of the Closing.

3. Upon closing of the transaction, there shall be a board consisting of five directors. Alan H. Goldfield shall be elected to the Board of Directors of the Company and shall be named as its Chairman of the Board and Chief Executive Officer. Mr. Goldflield shall appoint at least three of the four remaining directors on the five member Board.

4. The delivery to the Purchaser of opinions of counsel addressed to the Purchaser in form and content reasonably acceptable to the Purchaser.

It is understood that the decision to proceed with, and the final terms of, the definitive agreements will depend on satisfactory results of the Purchaser’s due diligence investigation (including reviews of legal, accounting and operational issues) of the Company’s continuing business prospects and the prevailing securities market conditions at the time of the Closing. It is anticipated that the due diligence examination will commence immediately and that the closing will be held, or the efforts toward concluding a transaction will terminate, on or before forty five days from the date of the execution and delivery hereof by the Company (the “Closing Date”), unless extended by mutual agreement of the Purchaser and the Company.

By executing and returning this letter, the Company irrevocably commits and agrees to pay the Purchaser, within fifteen days of invoicing, the Purchaser’s reasonable out-of-pocket expenses related to the making of this proposal, its due diligence examination of the Company and the preparation of the definitive agreements, whether or not a transaction is concluded, not to exceed $150,000.00.

Until a definitive agreement is executed by the parties, only this paragraph, the preceding two paragraphs, and the two following paragraphs shall be binding on and enforceable by the parties; the remaining provisions of this letter of intent reflect an expression of the intention only and shall have no legally binding or enforceable effect.

This letter shall be governed by Florida law and the parties hereto agree to accept service of process mailed from and jurisdiction of courts of competent jurisdiction in Miami-Dade County, Florida.

If the foregoing meets with your approval, we would appreciate your signing both enclosed copies of this letter in the space provided below and returning one of them to us. In the event that we do not receive a copy of this letter evidencing your acceptance and agreement within by the close of business on June 17, 2005, the terms of this letter shall be null and void and of no further force and effect.

	Very truly yours,

	STANFORD FINANCIAL GROUP COMPANY


	By:	/s/ Daniel Bogar
		Daniel Bogar
		Senior Managing Director

			STANFORD INTERNATIONAL BANK LTD.


			By:	/s/ James M. Davis
				James M. Davis
				Chief Financial Officer and Director


Accepted and Agreed:

CELLSTAR CORPORATION


By:	/s/ Robert Kaiser
	Authorized Officer

Date:		6/16/2005

Term Sheet

Schedule A - Convertible Debentures

Amount:		$25,000,000

Instrument:		Convertible Debenture

Term:		4 years

Funding:		Full funding at closing

Coupon:		8% per annum - payable semi-annually in arrears

Fee:		1%, payable to Stanford Group Company, as agent, plus reimbursement of reasonable out-of-pocket expenses, payable at closing

Conversion price:		$4.00 per share, subject to adjustment and anti-dilution

Prepayment Option:		In whole, upon 45 days’ prior written notice that the bona fide closing price of CellStar common stock exceeded $12.00 per share (adjusted equitably for splits or reverse splits) for each of the 30 consecutive trading days prior to the date of such notice.

Warrants:		Warrants to purchase 4,800,000 shares, exercisable at $0.01 per share with 5-year term.

Registration Rights:		The Common Stock into which the Debentures are convertible will be registered for resale as soon as possible after the Closing Date. The Purchaser and the Company will enter into a Registration Rights Agreement providing, among other things, that the Registration Statement will be filed within 30 days from the Closing Date. The Company shall respond appropriately to all SEC comments as promptly as practicable after receipt of said comments, and will use its best reasonable efforts to cause the Registration Statement to become effective within 180 days from the Closing Date.

Subordination:		The Debentures shall be subordinate and junior in right of payment to the existing Foothill senior credit facility and existing 12% senior subordinated notes due January 2007.

Future Advances:		In the event of a default under any senior debt, the Purchaser shall have the right, but not the obligation, to purchase additional debentures of the Company in an original principal amount up to the amount necessary to cure such default, with interest to accrue at the maximum lawful rate and which shall be convertible at the average closing price per share for the twenty trading days preceding the date of the applicable future advance. The Purchaser shall be entitled to pay for such securities by transferring

		the sums required by the lender to cure such default directly to such lender.

Consents:		The holders will have the right to approve any transaction not in the ordinary course of business such as a sale of assets, merger, consolidation, amendment of the Articles or By-laws or otherwise.

Under the Securities Exchange Act of 1934 (Amendment No. 10)*

Signature

1. Our satisfaction with the financial position, business and prospects of the Company following a due diligence examination of the Company, and its subsidiaries.

4. The delivery to the Purchaser of opinions of counsel addressed to the Purchaser in form and content reasonably acceptable to the Purchaser.

Under the Securities Exchange Act of 1934
(Amendment No. 10)*