Contribution And Indemnification Agreement

EXHIBIT 10.6


CONTRIBUTION AND INDEMNIFICATION AGREEMENT
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THIS CONTRIBUTION AND INDEMNIFICATION AGREEMENT (this "Agreement"), dated
--------- as of July 10, 1998, is entered into by and among CellStar Corporation, a Delaware corporation (the "Borrower"), and the undersigned Guarantors (each a
-------- "Guarantor" and collectively, the "Guarantors," and together with Borrower each - ---------- ---------- a "Company" and, collectively, the "Companies").
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R E C I T A L S:
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A. Borrower, certain banks or lending institutions from time to time party thereto (each a "Bank" and, collectively, the "Banks"), The First National
---- ----- Bank of Chicago and National City Bank, as co-agents (collectively, the "Co-
-- Agents"), and Chase Bank of Texas, National Association (formerly known as Texas - ------ Commerce Bank National Association), as agent for the Banks (the "Agent"), have
----- entered into that certain Credit Agreement dated as of October 15, 1997 (such Credit Agreement, as the same has been and may be amended, supplemented or modified from time to time, the "Credit Agreement"), providing for loans and
---------------- extensions of credit to the Borrower.


B. Concurrently herewith, CellStar Telecom, Inc., a Delaware corporation ("CellStar Telecom"), Florida Properties, Inc., a Texas corporation ("Florida ---------------- ------- Properties"), and CellStar Global Satellite Service, Ltd., a Texas limited - ---------- partnership ("CellStar Global" and together with CellStar Telecom and Florida
--------------- Properties, the "New Guarantors"), are executing and delivering a Guaranty (the
-------------- "New Guaranty"), pursuant to which the New Guarantors jointly and severally ------------ guarantee the full and prompt payment and performance of the Guaranteed Indebtedness, as such term is defined in the New Guaranty.


C. Concurrently with the execution and delivery of the Credit Agreement, the Guarantors other than the New Guarantors (collectively, the "Existing
-------- Guarantors") executed and delivered a Guaranty (the "Existing Guaranty" and - ---------- ----------------- together with the New Guaranty, the "Guaranties"), pursuant to which the
---------- Existing Guarantors jointly and severally guarantee the full and prompt payment and performance of the Guaranteed Indebtedness.


D. Concurrently with the execution and delivery of the Existing Guaranty, the Existing Guarantors and the Borrower entered into a Contribution and Indemnification Agreement dated as of October 15, 1997 (the "Existing
-------- Contribution Agreement"). - ----------------------


E. The Companies wish to enter into this Agreement to effect equitable sharing of their risk in respect of the Guaranteed Indebtedness among all of the Companies, including the New Guarantors, and to supersede and replace the Existing Contribution Agreement.


CONTRIBUTION AND INDEMNIFICATION AGREEMENT - Page 1


A G R E E M E N T:
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NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:


1. Capitalized terms used in this Agreement to the extent not otherwise defined herein shall have the same meanings as in the Credit Agreement.


2. If any Guarantor makes a payment in respect of the Guaranteed Indebtedness, it shall have the rights of contribution and reimbursement set forth below against the other Companies and shall be indemnified as set forth below; provided that no Guarantor shall enforce its rights to any payment by
-------- exercising its rights of contribution, reimbursement or indemnification unless and until all the Guaranteed Indebtedness shall have been paid in full.


3. If any Guarantor makes a payment in respect of the Guaranteed Indebtedness that is greater than its Pro Rata Percentage (hereinafter defined) of the Guaranteed Indebtedness, calculated as of the date such payment is made, the Guarantor making such payment shall have the right to receive from each of the other Guarantors, and the other Guarantors jointly and severally agree to pay to such Guarantor, when permitted by paragraph 2 hereof, an amount such that
----------- the net payments made by the Guarantors in respect of the Guaranteed Indebtedness shall be shared among the Guarantors pro rata in proportion to their respective Pro Rata Percentages of the Guaranteed Indebtedness. The Guarantors hereby jointly and severally indemnify each of the other Guarantors and jointly and severally agree to hold each of them harmless from and against any and all amounts which any such Guarantor shall ever be required to pay in respect of the Guaranteed Indebtedness in excess of such Guarantor's respective Pro Rata Percentage of the Guaranteed Indebtedness. Notwithstanding anything to the contrary contained in this paragraph or in this Agreement, no liability or obligation of any Guarantor that shall accrue pursuant to this Agreement shall be paid nor shall it be deemed owed pursuant to this Agreement or any Loan Documents unless and until all of the Guaranteed Indebtedness shal ...