Deed of Trust

EXHIBIT 10.4


When recorded, return to: - ------------------------


Mark S. Biskamp, Esq. Locke Liddell & Sapp 2200 Ross Avenue, Suite 2200 Dallas, Texas 75201-6776


DEED OF TRUST
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This Deed of Trust (herein referred to as the "Deed of Trust"), is entered
------------- into as of February 27, 2001 by CELLSTAR, LTD., a Texas limited partnership, as Grantor, whose mailing address for notice hereunder is at 1730 Briercroft Court, Carrollton, Texas 75006 to David L. Mendez, Trustee, whose address is 712 Main Street, Houston, Texas 77002, for the benefit of the hereinafter described Beneficiary.


WITNESSETH:
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ARTICLE I


DEFINITIONS
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1.1 Definitions. As used herein, the following terms shall have the
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following meanings:


Architectural Barrier Laws: Any and all architectural barrier laws
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including, without limitation, the Americans with Disabilities Act of 1990,
P.L. 101-336, and the Architectural Barrier Act, 23 Tex. Rev. Civ. Stat.
art. 9102, as amended, or any successor thereto.


Banks: The financial institutions party to the Credit Agreement,
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together with their respective successors and permitted assigns.


Beneficiary: The Chase Manhattan Bank, a New York banking
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corporation, as agent for the Banks and as issuer of Letters of Credit
under the Credit Agreement (in such capacity, together with its successors
in such capacity, the "Agent") whose address for notice hereunder 712 Main
Street, Houston, Texas 77002, and the subsequent holder or holders, from
time to time, of the Notes.


Borrower: CellStar Corporation, a Delaware corporation.
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Charges: shall mean all fees, charges and/or other things of value, if
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any, contracted for, charged, received, taken or reserved by Beneficiary in
connection with the transactions relating to the Notes and the Loan
Documents, which are treated as interest under applicable law.


Code: The Uniform Commercial Code, as amended from time to time, in
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effect in the state in which the Mortgaged Property is located.


Constituent Party: Any signatory to this Deed of Trust that signs on
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Grantor's behalf that is a corporation, general partnership, limited
partnership, limited liability company, joint venture, trust, or other type
of business organization.


Contracts: All of the right, title, and interest of Grantor, including
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equitable rights, in, to, and under any and all (i) contracts for the
purchase of all or any portion of the Mortgaged Property, whether such
Contracts are now or at any time hereafter existing, including but without
limitation, any and all earnest money or other deposits escrowed or to be
escrowed or letters of credit provided or to be provided by the purchasers
under the Contracts, including all amendments and supplements to and
renewals and extensions of the Contracts at any time made, and together
with all payments, earnings, income, and profits arising from the sale of
all or any portion of the Mortgaged Property or from the Contracts and all
other sums due or to become due under and pursuant thereto and together
with any and all earnest money, security, letters of credit or other
deposits under any of the Contracts; (ii) contracts, licenses, permits, and
rights relating to living unit equivalents or other entitlements for water,
wastewater, and other utility services whether executed, granted, or issued
by a private person or


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entity or a governmental or quasi-governmental agency, which are directly
or indirectly related to, or connected with, the development, ownership,
maintenance or operation of the Mortgaged Property, whether such contracts,
licenses, and permits are now or at any time thereafter existing, including
without limitation, any and all rights of living unit equivalents or other
entitlements with respect to water, wastewater, and other utility services,
certificates, licenses, zoning variances, permits, and no-action letters
from each governmental authority required: (a) to evidence compliance by
Grantor and all improvements constructed or to be constructed on the
Mortgaged Property with all Legal Requirements applicable to the Mortgaged
Property, and (b) to develop and/or operate the Mortgaged Property as a
commercial and/or residential project, as the case may be; (iii) any and
all right, title, and interest Grantor may have in any financing
arrangements relating to the financing of or the purchase of all or any
portion of the Mortgaged Property by future purchasers; and (iv) all other
contracts which in any way relate to the use, enjoyment, occupancy,
operation, maintenance, repair, management or ownership of the Mortgaged
Property (save and except any and all Leases), including but not limited to
maintenance and service contracts and management agreements.


Credit Agreement: That certain Second Amended and Restated Credit
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Agreement of even date herewith by and among Borrower, Beneficiary, as
Agent, and the Banks.


Debtor Relief Laws: Title 11 of the United States Code, as now or
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hereafter in effect, or any other applicable law, domestic or foreign, as
now or hereafter in effect, relating to bankruptcy, insolvency,
liquidation, receivership, reorganization, arrangement or composition,
extension or adjustment of debts, or similar laws affecting the rights of
creditors.


Default Rate: The rate of interest specified in the Credit Agreement
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to be paid by Borrower from and after the occurrence of a default in
payment under the provisions of the Notes and Loan Documents but not in
excess of the Maximum Lawful Rate.


Disposition: Any sale, lease (except as permitted under this Deed of
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Trust), exchange, assignment, conveyance, transfer, trade, or other
disposition of all or any portion of the Mortgaged Property (or any
interest therein) or all or any part of the beneficial ownership interest
in Grantor (if Grantor is a corporation, partnership, general partnership,
limited partnership, joint venture, trust, or other type of business
association or legal entity).


Environmental Law: Any federal, state, or local law, statute,
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ordinance, or regulation, whether now or hereafter in effect, pertaining to
health, industrial hygiene, or the environmental conditions on, under, or
about the Mortgaged Property, including without limitation, the following,
as now or hereafter amended: Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 ("CERCLA"), 42 U.S.C. (S) 9601 et
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seq.; Resource, Conservation and Recovery Act ("RCRA"), 42 U.S.C. (S) 6901
--- ----
et seq. as amended by the Superfund Amendments and Reauthorization Act of
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1986 ("SARA"), Pub. L. 99-499, 100 Stat. 1613; the Toxic Substances Control
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Act, 15 U.S.C. (S) 2601 et seq.; Emergency Planning and Community Right to
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Know Act of 1986, 42 U.S.C. (S) 1101 et seq.; Clean Water Act ("CWA"), 33
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U.S.C. (S) 1251 et seq.; Clean Air Act ("CAA"), 42 U.S.C. (S) 7401 et seq.;
------ --- ------
Federal Water Pollution Control Act ("FWPCA"), 33 U.S.C. (S) 1251 et seq.;
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and any corresponding state laws or ordinances including but not limited to
the Texas Water Code ("TWC") (S) 26.001 et seq; Texas Health & Safety Code
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("THSC") (S) 361.001 et seq.; Texas Solid Waste Disposal Act, Tex. Rev.
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Civ. Stat. Ann. art. 4477-7; and regulations, rules, guidelines, or
standards promulgated pursuant to such laws, statutes and regulations, as
such statutes, regulations, rules, guidelines, and standards are amended
from time to time.


ERISA: The Employee Retirement Income Security Act of 1974, 29 U.S.C.
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(S) 1001 et seq., as amended, and any and all successor statutes thereof.
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Event of Default: Any happening or occurrence described in Article VI
---------------- ----------
hereof.


Fixtures: All materials, supplies, equipment, systems, apparatus, and
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other items now owned or hereafter acquired by Grantor and now or hereafter
attached to, installed in, or used in connection with (temporarily or
permanently) any of the Improvements or the Land, which are now owned or
hereafter acquired by Grantor and are now or hereafter attached to the Land
or the Improvements, and including but not limited to any and all
partitions, dynamos, window screens and shades, draperies, rugs and other
floor coverings, awnings, motors, engines, boilers, furnaces, pipes,
cleaning, call and sprinkler systems, fire extinguishing apparatus and
equipment, water tanks, swimming pools, heating, ventilating,
refrigeration, plumbing, laundry, lighting, generating, cleaning, waste
disposal, transportation (of people or things, including but not limited
to, stairways, elevators, escalators, and conveyors), incinerating, air
conditioning and air cooling equipment and systems, gas and electric
machinery, appurtenances and equipment, disposals, dishwashers,
refrigerators and ranges,


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recreational equipment and facilities of all kinds, and lighting, traffic
control, waste disposal, raw and potable water, gas, electrical, storm and
sanitary sewer, telephone and cable television facilities, and all other
utilities whether or not situated in easements, together with all
accessions, appurtenances, replacements, betterments, and substitutions for
any of the foregoing and the proceeds thereof.


GAAP: Generally accepted accounting principles, as promulgated by the
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Financial Accounting Standards Board.


Governmental Authority: Any and all applicable courts, boards,
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agencies, commissions, offices, or authorities of any nature whatsoever for
any governmental unit (federal, state, county, district, municipal, city or
otherwise), whether now or hereafter in existence.


Grantor: The individual or entity described as Grantor in the initial
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paragraph of this Deed of Trust and any and all subsequent owners of the
Mortgaged Property or any part thereof (without hereby implying
Beneficiary's consent to any Disposition of all or any part of the
Mortgaged Property).


Guarantor (individually and/or collectively, as the context may
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require): Those persons, firms, or entities, if any, designated as
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Guarantor in the Guaranty.


Guaranty (individually and/or collectively, as the context may
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require): That instrument or those instruments of guaranty, if any, now or
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hereafter in effect, from Guarantor to Beneficiary, for its benefit and the
benefit of the Banks, guaranteeing the repayment of all or any part of the
Indebtedness or the satisfaction of, or continued compliance with, the
Obligations, or both.


Hazardous Substance: Any substance, product, waste, or other material
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which is or becomes listed, regulated, or addressed as being a toxic,
hazardous, polluting, or similarly harmful substance under any
Environmental Law, including without limitation: (i) any substance included
within the definition of "hazardous waste" pursuant to Section 1004 of
RCRA; (ii) any substance included within the definition of "hazardous
substance" pursuant to Section 101 of CERCLA; (iii) any, substance included
within (a) the definition of "regulated substance" pursuant to Section
26.342(11) of TWC; or (b) the definition of "hazardous substance" pursuant
to Section 361.003(11) of THSC; (iv) asbestos; (v) polychlorinated
biphenyls; (vi) petroleum products; (vii) underground storage tanks,
whether empty, filled or partially filled with any substance; (viii) any
radioactive materials, urea formaldehyde foam insulation or radon; (ix) any
substance included within the definition of "waste" pursuant to Section
30.003(b) of TWC or "pollutant" pursuant to Section 26.001(13) of TWQ and
(x) any other chemical, material or substance, the exposure to which is
prohibited, limited or regulated by any Governmental Authority on the basis
that such chemical, material or substance is toxic, hazardous or harmful to
human health or the environment.


Impositions: (i) All real estate and personal property taxes, charges,
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assessments, standby fees, excises, and levies and any, interest, costs, or
penalties with respect thereto, general and special, ordinary and
extraordinary, foreseen and unforeseen, of any kind and nature whatsoever
which at any time prior to or after the execution hereof may be assessed,
levied, or imposed upon the Mortgaged Property or the ownership, use,
occupancy, or enjoyment thereof, or any portion thereof, or the sidewalks,
streets, or alleyways adjacent thereto; (ii) any charges, fees, license
payments, or other sums payable for or under any easement, license, or
agreement maintained for the benefit of the Mortgaged Property; (iii)
water, gas, sewer, electricity, and other utility charges and fees relating
to the Mortgaged Property; and (iv) assessments and charges arising under
any subdivision, condominium, planned unit development, or other
declarations, restrictions, regimes, or agreements affecting the Mortgaged
Property.


Improvements: Any and all buildings, covered garages, air conditioning
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towers, open parking areas, structures and other improvements of any kind
or nature, and any and all additions, alterations, betterments or
appurtenances thereto, now or at any time hereafter situated, placed, or
constructed upon the Land or any part thereof.


Indebtedness: (i) The principal of, interest on, or any other sums
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evidenced by the Credit Agreement, the Notes, the Letters of Credit, and
the Loan Documents; (ii) any other amounts, payments, or premiums payable
under the Loan Documents; (iii) such additional or future sums (whether or
not obligatory), with interest thereon, as may hereafter be borrowed or
advanced from Beneficiary or the Banks, or both, to Borrower and/or
Grantor, their respective successors or assigns, when evidenced by a
promissory note which, by its terms, is secured hereby (it being
contemplated by Borrower, Grantor, Beneficiary and the Banks that such
future indebtedness may be incurred); and (iv) any and all other
indebtedness,


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obligations, and liabilities of any kind or character of Borrower and/or
Grantor to Beneficiary or the Banks or both, now or hereafter existing,
absolute or contingent, due or not due, arising by operation of law or
otherwise, or direct or indirect, primary or secondary, joint, several,
joint and several, fixed or contingent, secured or unsecured by additional
or different security or securities, including indebtedness, obligations,
and liabilities to Beneficiary or the Banks, or both, of Borrower and/or
Grantor as a member of any partnership, joint venture, trust or other type
of business association, or other group, and whether incurred by Borrower
and/or Grantor as principal, surety, endorser, guarantor, accommodation
party or otherwise, and any and all renewals, modifications, amendments,
restatements, rearrangements, consolidations, substitutions, replacements,
enlargements, and extensions thereof, it being contemplated by Borrower
and/or Grantor and Beneficiary that Borrower and/or Grantor may hereafter
become indebted to Beneficiary or the Banks, or both, in further sum or
sums. Notwithstanding the foregoing provisions of this definition, this
Deed of Trust shall not secure any such other loan, advance, debt,
obligation or liability with respect to which Beneficiary or any Bank is by
applicable law prohibited from obtaining a lien on real estate, nor shall
this definition operate or be effective to constitute or require any
assumption or payment by any person, in any way, of any debt or obligation
of any other person to the extent that the same would violate or exceed the
limit provided in any applicable usury or other law.


Land: All that certain real property or interest therein situated in
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the County of Dallas, Texas, more particularly described in Exhibit "A"
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attached hereto and incorporated herein by this reference, together with
all right, title, interest, and privileges of Grantor in and to (i) all
streets, ways, roads, alleys, easements, rights-of-way, licenses, rights of
ingress and egress, vehicle parking rights and public places, existing or
proposed, abutting, adjacent, used in connection with or pertaining to such
real property or the improvements thereon; (ii) any strips or gores of real
property between such real property and abutting or adjacent properties;
(iii) all water and water rights, timber and crops pertaining to such real
estate; and (iv) all appurtenances and all reversions and remainders in or
to such real property.


Leases: Any and all leases, master leases, subleases, licenses,
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concessions, or other agreements (whether written or oral, or now or
hereafter in effect) which grant to third parties a possessory interest in
and to, or the right to use or occupy, all or any part of the Mortgaged
Property, together with all security and other deposits or payments made in
connection therewith.


Legal Requirements: (i) Any and all present and future judicial
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decisions, statutes (including Architectural Barrier Laws and Environmental
Laws), rulings, rules, regulations, permits, certificates, or ordinances of
any Governmental Authority in any way applicable to Grantor, any
Constituent Party, any Guarantor or the Mortgaged Property, including,
without limiting the generality of the foregoing, the ownership, use,
occupancy, possession, operation, maintenance, alteration, repair, or
reconstruction thereof, (ii) any and all covenants, conditions, and
restrictions contained in any deeds, other forms of conveyance, or in any
other instruments of any nature that relate in any way or are applicable to
the Mortgaged Property or the ownership, use, or occupancy thereof, (iii)
Grantor's or any Guarantor's presently or subsequently effective bylaws and
articles of incorporation, operating agreement and articles of organization
or partnership, limited partnership, joint venture, trust, or other form of
business association agreement, (iv) any and all Leases, (v) any and all
Contracts, and (vi) any and all leases, other than those described in (iv)
above, and other contracts (written or oral), other than those described in
(v) above, of any nature that relate in any way to the Mortgaged Property
and to which Grantor or any Guarantor may be bound, including, without
limiting the generality of the foregoing, any lease or other contract
pursuant to which Grantor is granted a possessory interest in and to the
Land and/or the Improvements.


Letters of Credit: shall mean existing letters of credit and all
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standby letters of credit and documentary sight letters of credit issued by
the Agent for the account or liability of Borrower pursuant to the terms of
the Credit Agreement, and all sums which may from time to time be paid by
any and all banks pursuant to any and all Letters of Credit, together with
all sums, fees, reimbursements or other obligations which may be due to the
Agent or any of the Banks pursuant to any Letters of Credit.


Loan Documents: The Credit Agreement, the Notes, the Letters of
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Credit, this Deed of Trust, the Guaranty, if any, and any and all other
documents now or hereafter executed by Borrower, Grantor, Guarantor, or any
other person or party in connection with the loan evidenced by the Credit
Agreement, the Notes, the Letters of Credit, or in connection with the
payment of the Indebtedness or the performance and discharge of the
Obligations.


Maximum Lawful Rate: The maximum non-usurious amount and the maximum
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non-usurious rate of interest that, under applicable laws, the Beneficiary,
as Agent, and the Banks are permitted to contract for, charge, take,
reserve, or receive on the Indebtedness.


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Minerals: All substances in, on, under, or above the Land which are
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now, or may become in the future, intrinsically valuable (that is, valuable
in themselves) and which now or may be in the future enjoyed through
extraction or removal from the property, including without limitation, oil,
gas, and all other hydrocarbons, coal, lignite, carbon dioxide and all
other nonhydrocarbon gases, uranium and all other radioactive substances,
and gold, silver, copper, iron and all other metallic substances or ores.


Mortgaged Property: The Land, Minerals, Fixtures, Improvements,
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Personalty, Contracts, Leases and Rents, and any interest of Grantor now
owned or hereafter acquired in and to the Land, Minerals, Fixtures,
Improvements, Personalty, Contracts, Leases and Rents, together with any
and all other security and collateral of any nature whatsoever, now or
hereafter given for the repayment of the Indebtedness or the performance
and discharge of the Obligations. As used in this Deed of Trust, the term
"Mortgaged Property" shall be expressly defined as meaning all or, where
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the context permits or requires, any portion of the above and all or, where
the context permits or requires, any interest therein.


Notes (collectively): those certain promissory notes executed by
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Borrower and payable to the order of Beneficiary and/or a Bank evidencing
the Advances (as defined in the Credit Agreement) in the amount of said
Bank's Commitment (as defined in the Credit Agreement), and secured by,
among other things, this Deed of Trust; and any and all renewals,
modifications, amendments, rearrangements, consolidations, reinstatements,
enlargements, or extensions of such promissory note or of any promissory
note or notes given in renewal, substitution or replacement therefor.


Obligations: Any and all of the covenants, conditions, warranties,
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representations, and other obligations (other than to repay the
Indebtedness) made or undertaken by Borrower, Grantor, Guarantor, or any
other person or party to the Loan Documents to Beneficiary, the Banks,
Trustee, or others as set forth in the Loan Documents, the Leases, and in
any deed, lease, sublease, or other form of conveyance, or any other
agreement pursuant to which Grantor is granted a possessory interest in the
Land.


Operating Expenses: Operating Expenses means all costs and expenses
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related to the ownership, operation, management, repair and leasing of the
Mortgaged Property, including, without limitation, ground lease payments,
costs and expenses associated with the operation of any garage associated
with and constituting a part of the Mortgaged Property, insurance charges
and premiums for coverages related to the Mortgaged Property, Impositions,
the costs of prevention of waste, ordinary repairs, maintenance,
environmental audits, property management, security, normal fees paid to
accountants, reasonable marketing and promotional expenses, reasonable
legal expenses, the cost and expense of all obligations under the Leases
and all costs related to compliance with Legal Requirements.


Permitted Exception: The liens, easements, restrictions, security
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interests, and other matters (if any) as reflected on Exhibit "B" attached
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hereto and incorporated herein by reference and the liens and security
interests created by the Loan Documents.


Personalty: All of the right, title, and interest of Grantor in and to
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(i) furniture, furnishings, equipment, machinery, goods (including, but not
limited to, crops, farm products, timber and timber to be cut, and
extracted Minerals); (ii) general intangibles, money, insurance proceeds,
accounts, contract and subcontract rights, trademarks, trade names,
copyrights, chattel paper, instruments, investment property, letters of
credit, inventory; (iii) all cash funds, fees (whether refundable,
returnable or reimbursable), deposits or other funds or evidences of cash,
credit or indebtedne ...