Exhibit 10.1
AMENDMENT NUMBER SEVEN TO CREDIT AGREEMENT
This AMENDMENT NUMBER SEVEN TO CREDIT AGREEMENT (this “Amendment”), dated as of
February 11, 2010, is entered into by and among BELL INDUSTRIES, INC., a
California corporation (“Parent”), and each of Parent’s Subsidiaries identified
on the signature pages hereof (such Subsidiaries, together with Parent are
referred to hereinafter each individually as a “Borrower”, and individually and
collectively, jointly and severally, as the “Borrowers”), the lenders signatory
hereto (such lenders, together with their respective successors and permitted
assigns, are referred to hereinafter each individually as a “Lender” and
collectively, the “Lenders”), and WELLS FARGO CAPITAL FINANCE, INC., formerly
known as Wells Fargo Foothill, Inc., a California corporation, as the arranger
and administrative agent for the Lenders (in such capacity, together with its
successors and assigns in such capacity, the “Agent”). Initially capitalized
terms used herein and not otherwise defined herein shall have the meaning
ascribed thereto in the Credit Agreement (as defined below).
WITNESSETH
WHEREAS, the Borrowers and the Lender Group are parties to that certain Credit
Agreement, dated as of January 31, 2007 (as amended, restated, supplemented, or
otherwise modified from time to time, the “Credit Agreement”);
WHEREAS, the Borrowers have requested that the Agent and the Lenders make
certain amendments to the Credit Agreement; and
WHEREAS, upon the terms and conditions set forth herein, Agent and Lenders are
willing to accommodate the Borrowers’ requests.
NOW THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. Amendments to Credit Agreement.
(a) Schedule 1.1 of the Credit Agreement is hereby amended and modified by
amending and restating, or adding (as applicable) the following definitions in
the appropriate alphabetical order:
“Availability Block” means (a) from March 1, 2009 up to and including June 30,
2009, $4,500,000, (b) from July 1, 2009 and up to and including October 31,
2009, $3,500,000, (c) from November 1, 2009 up to and including February 28,
2010, $6,000,000, (d) from March 1, 2010 and up to and including June 30, 2010,
$4,500,000, (e) from July 1, 2010 and up to and including October 31, 2010,
$3,500,000, and (f) from and after November 1, 2010, $6,000,000.
“Base Rate Margin” means (a) from the Closing Date through and including
April 30, 2008, 0.75 percentage points, (b) from May 1, 2008 up to and including
March 24, 2009, 1.25 percentage points, (c) from March 25, 2009 up to and
including October 31, 2009, 4.00 percentage points, (d) from November 1, 2009 up
to and including January 31, 2010, 4.25 percentage points, (e) from February 1,
2010 and up to and including October 31, 2010, 4.00 percentage points, (f) from
November 1, 2010 and up to and including January 31, 2011, 4.25 percentage
points, and (g) from and after February 1, 2011, 4.50 percentage points.

 

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“LIBOR Rate Margin” means (a) from the Closing Date through and including
April 30, 2008, 2.25 percentage points, (b) from May 1, 2008 up to and including
March 24, 2009, 2.75 percentage points, (c) from March 25, 2009 up to an
including October 31, 2009, 4.00 percentage points, (d) from November 1, 2009 up
to and including January 31, 2010, 4.25 percentage points, (e) from February 1,
2010 and up to and including October 31, 2010, 4.00 percentage points, (f) from
November 1, 2010 and up to and including January 31, 2011, 4.25 percentage
points, and (g) from and after February 1, 2011, 4.50 percentage points.
“Maximum Revolver Amount” means (a) from the Closing Date up to and including
June 12, 2008, $30,000,000, (b) from June 13, 2008 up to and including July 14,
2010, $10,000,000, (c) from July 15, 2010 up to and including September 14,
2010, $12,500,000, and (d) from and after September 15, 2010, $10,000,000.”
(b) Section 3.3 of the Credit Agreement is hereby amended and restated in its
entirety as follows:
“3.3 Term. This Agreement shall continue in full force and effect for a term
ending on March 31, 2011 (the “Maturity Date”). The foregoing notwithstanding,
the Lender Group, upon the election of the Required Lenders, shall have the
right to terminate its obligations under this Agreement immediately and without
notice upon the occurrence and during the continuation of an Event of Default.”
(c) Section 6.16(a) of the Credit Agreement hereby is amended and restated in
its entirety to read as follows:
“(a) Minimum Adjusted EBITDA.
Fail to achieve Adjusted EBITDA, measured on a month-end basis, of at least the
required amount set forth in the following table for the applicable period set
forth opposite thereto:

          Applicable       Amount     Applicable Period $ (500,000 )  
For the 12 month period ending December 31, 2009
$ (1,400,000 )  
For the 2 month period ending February 28, 2010
$ (1,900,000 )  
For the 3 month period ending March 31, 2010
$ (2,000,000 )  
For the 4 month period ending April 30, 2010
$ (1,800,000 )  
For the 5 month period ending May 31, 2010

 

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          Applicable       Amount     Applicable Period $ (1,400,000 )  
For the 6 month period ending June 30, 2010
$ (800,000 )  
For the 7 month period ending July 31, 2010
$ (400,000 )  
For the 8 month period ending August 31, 2010
$ (400,000 )  
For the 9 month period ending September 30, 2010
$ (400,000 )  
For the 10 month period ending October 31, 2010
$ (400,000 )  
For the 11 month period ending November 30, 2010
$ (400,000 )  
For the 12 month period ending December 31, 2010

Agent, in its Permitted Discretion, shall establish the minimum Adjusted EBITDA
covenant for each trailing 12 month period after December 31, 2010, which
covenant levels will be based upon Borrowers’ projections for such trailing
12 month period delivered to Agent pursuant to Section 5.3 of this Agreement and
utilizing criteria similar to the criteria that Agent used to establish the
Adjusted EBITDA covenants in the above table. Borrowers shall execute any
amendment to this Section 6.16(a) reasonably requested by Agent in order to
document the inclusion of such minimum Adjusted EBITDA covenant levels for such
periods in the covenant set forth in this Section 6.16(a). If Borrowers fail to
timely deliver the projections pursuant to Section 5.3 of this Agreement, then
(i) such failure shall constitute an Event of Default; and (ii) the Adjusted
EBITDA covenant for each succeeding trailing twelve month period, measured on a
monthly basis, after December 31, 2010 shall be $1,000,000 (the “Interim Minimum
Amount”), until such time as the projections required by Section 5.3 for such
periods have been delivered to Agent and Borrowers have executed an amendment
requested by Agent to document the inclusion of new Adjusted EBITDA covenant
levels (to be set in the manner set forth in the first sentence of this
paragraph) for such periods in the Adjusted EBITDA covenant set forth in this
Section 6.16(a) (it being understood that the Interim Minimum Amount shall not
suggest that Agent would agree to establish the minimum Adjusted EBITDA covenant
for any of the trailing 12 month periods after December 31, 2010 at the Interim
Minimum Amount).”
(d) Section 6.16(b) of the Credit Agreement is hereby amended and restated in
its entirety to read as follows:
“(b) Capital Expenditures. Unless the Required Lenders, in their sole
discretion, otherwise consent thereto in advance in writing, make Capital
Expenditures in any fiscal year in excess of the amount set forth in the
following table for the applicable period:

          Fiscal Year 2009   Fiscal Year 2010
$500,000
  $400,000    

 

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Agent, in its Permitted Discretion, shall establish the maximum Capital
Expenditures covenant for Fiscal Year 2011, which covenant level will be based
upon Borrowers’ projections for Fiscal Year 2011 delivered to Agent pursuant to
Section 5.3 of this Agreement and utilizing criteria similar to the criteria
that Agent used to establish the Capital Expenditures covenants in the above
table. Borrowers shall execute any amendment to this Section 6.16(b) reasonably
requested by Agent in order to document the inclusion of such maximum Capital
Expenditures level for Fiscal Year 2011 in the covenant set forth in this
Section 6.16(b). If Borrowers fail to timely deliver the projections pursuant to
Section 5.3 of this Agreement, then (i) such failure shall constitute an Event
of Default; and (ii) the Capital Expenditures covenant for Fiscal Year 2011
shall be $400,000 (“Interim Maximum CapEx Amount”) until the Projections have
been delivered to Agent and Borrowers have executed an amendment requested by
Agent to document the inclusion of a new Capital Expenditures covenant level for
Fiscal Year 2011 (to be set in the manner set forth in the first sentence of
this paragraph) in the Capital Expenditures covenant set forth in this
Section 6.16(b) (it being understood that the Interim Maximum CapEx Amount shall
not suggest that Agent would agree to establish the maximum Capital Expenditures
covenant for Fiscal Year 2011 at the Interim Maximum CapEx Amount).”
(e) Schedules A-2 and C-1 to the Credit Agreement are hereby amended by (i)
deleting such Schedules in their entirety and (ii) inserting the Schedules A-2
and C-1 attached hereto as Exhibit A in lieu thereof.
2. Conditions Precedent to Agreement. This Amendment shall become effective only
upon satisfaction in full in the reasonable judgment of the Agent of each of the
following conditions:
(a) Agent shall have received an amendment to the Newcastle Note in form and
substance satisfactory to Agent, duly executed by the parties thereto, and the
same shall be in full force and effect.
(b) Agent shall have received a certificate from the Secretary of each Borrower
attesting to the incumbency and signatures of specific officers of such Borrower
authorized to execute Loan Documents.
(c) After giving effect to this Amendment, the representations and warranties
herein and in the Credit Agreement and the other Loan Documents shall be true
and correct in all material respects (except that such materiality qualifier
shall not be applicable to any representations and warranties that already are
qualified or modified by materiality in the text thereof) on and as of the date
hereof, as though made on such date (except to the extent that such
representations and warranties relate solely to an earlier date, on and as of
such earlier date).
(d) No injunction, writ, restraining order, or other order of any nature
prohibiting, directly or indirectly, the consummation of the transactions
contemplated herein shall have been issued and remain in force by any
Governmental Authority against any Borrower, Agent, or any Lender.
(e) Borrower shall pay concurrently with the closing of the transactions
evidenced by this Amendment, all Lender Group Expenses then payable pursuant to
Section 17.10 of the Credit Agreement.
(f) No Default or Event of Default shall have occurred and be continuing on the
effective date of this Amendment, nor shall either result immediately after the
consummation of the transactions contemplated herein.

 

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(g) Agent shall have received payment in full in immediately available funds of
the Amendment Fee described in Section 4 of this Amendment.
3. Representations and Warranties. Each Borrower hereby represents and warrants
to Agent and each Lender as follows:
(a) The execution, delivery, and performance by such Borrower of this Amendment
and the Loan Documents to which it is a party have been duly authorized by all
necessary action on the part of such Borrower.
(b) The execution, delivery, and performance by such Borrower of this Amendment
and the other Loan Documents to which it is a party do not and will not
(i) violate any provision of federal, state, or local law or regulation
applicable to any 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 contract or undertaking
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
interestholders or any approval or consent of any Person under any Material
Contract of any Borrower, other than consents or approvals that have been
obtained and that are still in force and effect.
(c) This Amendment has been duly executed and delivered by each Borrower. This
Amendment and each Loan Document is the legal, valid and binding obligation of
each Borrower, enforceable against such Borrower in accordance with its terms,
and is in full force and effect except as such validity and enforceability is
limited by the laws of insolvency and bankruptcy, laws affecting creditors’
rights and principles of equity applicable hereto.
(d) No injunction, writ, restraining order, or other order of any nature
prohibiting, directly or indirectly, the consummation of the transactions
contemplated herein has been issued and remains in force by any Governmental
Authority against any Borrower, any Guarantor, Agent or any Lender.
(e) No Default or Event of Default has occurred and is continuing on the date
hereof or as of the date of the effectiveness of this Amendment.
(f) The representations and warranties in the Credit Agreement and the other
Loan Documents are true and correct in all material respects (except that such
materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof) on and as of the date hereof, as though made on such date (except to
the extent that such representations and warranties relate solely to an earlier
date).
4. Amendment Fee. The Borrowers shall pay to Agent an amendment fee in the
amount of $100,000 (“Amendment Fee”) in immediately available funds, which
Amendment Fee shall be retained by Agent (solely for its account and not for the
account of any Lender). Such Amendment Fee shall be fully earned and, non
refundable on the date of this Amendment.
5. Payment of Costs and Expenses. Borrowers agree to pay all Lender Group
Expenses incurred in connection with the preparation, negotiation and execution
of this Amendment and the review of all documents incidental thereto in
accordance with the terms of the Credit Agreement.

 

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6. RELEASE.
Each Borrower hereby waives, releases, remises and forever discharges each
member of the Lender Group, each of their respective Affiliates, and each of
their respective officers, directors, employees, and agents (collectively, the
“Releasees”), from any and all claims, demands, obligations, liabilities, causes
of action, damages, losses, costs and expenses of any kind or character, known
or unknown, past or present, liquidated or unliquidated, suspected or
unsuspected, which such Borrower ever had, now has or might hereafter have
against any such Releasee which relates, directly or indirectly, to the Credit
Agreement or any other Loan Document, or to any acts or omissions of any such
Releasee with respect to the Credit Agreement or any other Loan Document, or to
the lender-borrower relationship evidenced by the Loan Documents. As to each and
every claim released hereunder, each Borrower hereby represents that it has
received the advice of legal counsel with regard to the releases contained
herein, and having been so advised, each Borrower specifically waives the
benefit of the provisions of Section 1542 of the Civil Code of California which
provides as follows:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”
As to each and every claim released hereunder, each Borrower also waives the
benefit of each other similar provision of applicable federal or state law, if
any, pertaining to general releases after having been advised by its legal
counsel with respect thereto.
7. CONSTRUCTION. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED IN THE STATE OF CALIFORNIA.
8. Amendments. This Amendment cannot be altered, amended, changed or modified in
any respect or particular unless each such alteration, amendment, change or
modification shall have been agreed to by each of the parties and reduced to
writing in its entirety and signed and delivered by each party.
9. Counterpart Execution. This Amendment may be executed in any number of
counterparts, all of which when taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Amendment by signing
any such counterpart. Delivery of an executed counterpart of this Amendment by
telefacsimile or electronic mail shall be equally as effective as delivery of an
original executed counterpart of this Amendment. Any party delivering an
executed counterpart of this Amendment by telefacsimile or electronic mail also
shall deliver an original executed counterpart of this Amendment, but the
failure to deliver an original executed counterpart shall not affect the
validity, enforceability and binding effect of this Amendment.

 

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10. Effect on Loan Documents.
(a) The Credit Agreement, as amended hereby, and each of the other Loan
Documents, as amended as of the date hereof, shall be and remain in full force
and effect in accordance with their respective terms and hereby are ratified and
confirmed in all respects. The execution, delivery, and performance of this
Amendment shall not operate, except as expressly set forth herein, as a
modification or waiver of any right, power, or remedy of Agent or any Lender
under the Credit Agreement or any other Loan Document. Except for the amendments
to the Credit Agreement expressly set forth herein, the Credit Agreement and
other Loan Documents shall remain unchanged and in full force and effect. The
amendments, waivers and modifications set forth herein are limited to the
specifics hereof, shall not apply with respect to any facts or occurrences other
than those on which the same are based, shall not excuse future non-compliance
with the Loan Documents, shall not operate as a consent to any further or other
matter under the Loan Documents and shall not be construed as an indication that
any future waiver of covenants or any other provision of the Credit Agreement
will be agreed to, it being understood that the granting or denying of any
waiver which may hereafter be requested by the Borrower remains in the sole and
absolute discretion of the Agent and the Lenders.
(b) Upon and after the effectiveness of this Amendment, each reference in the
Credit Agreement to “this Agreement”, “hereunder”, “herein”, “hereof” or words
of like import referring to the Credit Agreement, and each reference in the
other Loan Documents to “the Credit Agreement”, “thereunder”, “therein”,
“thereof” or words of like import referring to the Credit Agreement, shall mean
and be a reference to the Credit Agreement as modified and amended hereby.
(c) To the extent that any terms and conditions in any of the Loan Documents
shall contradict or be in conflict with any terms or conditions of the Credit
Agreement, after giving effect to this Amendment, such terms and conditions are
hereby deemed modified or amended accordingly to reflect the terms and
conditions of the Credit Agreement as modified or amended hereby.
(d) This Amendment is a Loan Document.
(e) Unless the context of this Amendment clearly requires otherwise, references
to the plural include the singular, references to the singular include the
plural, the terms “includes” and “including” are not limiting, and the term “or”
has, except where otherwise indicated, the inclusive meaning represented by the
phrase “and/or”.
11. Entire Agreement. This Amendment embodies the entire understanding and
agreement between the parties hereto with respect to the subject matter hereof
and supersedes any and all prior or contemporaneous agreements or understandings
with respect to the subject matter hereof, whether express or implied, oral or
written.
12. Integration. This Amendment, together with the other Loan Documents,
incorporates all negotiations of the parties hereto with respect to the subject
matter hereof and is the final expression and agreement of the parties hereto
with respect to the subject matter hereof.

 

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13. Ratification. Each Borrower hereby restates, ratifies and reaffirms each and
every term and condition set forth in the Credit Agreement and the Loan
Documents effective as of the date hereof and as amended hereby.
14. Reaffirmation of Obligations. Each Borrower hereby reaffirms its obligations
under each Loan Document to which it is a party. Each Borrower hereby further
ratifies and reaffirms the validity and enforceability of all of the liens and
security interests heretofore granted, pursuant to and in connection with the
Security Agreement or any other Loan Document to Agent, on behalf of itself or
for the benefit of the Lender Group or the Bank Product Providers, as collateral
security for the obligations under the Loan Documents in accordance with their
respective terms, and acknowledges that all of such liens and security
interests, and all collateral heretofore pledged as security for such
obligations, continues to be and remain collateral for such obligations from and
after the date hereof.
15. Severability. In case any provision in this Amendment shall be invalid,
illegal or unenforceable, such provision shall be severable from the remainder
of this Amendment and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and
delivered as of the date first written above.

            BELL INDUSTRIES, INC.,
a California corporation, as Borrower
      By:   /s/ Clinton J. Coleman         Name:   Clinton J. Coleman       
Title:   Chief Executive Officer        BELL INDUSTRIES, INC.,
a Minnesota corporation, as Borrower
      By:   /s/ Clinton J. Coleman         Name:   Clinton J. Coleman       
Title:   Chief Executive Officer        BELL TECHLOGIX, INC.,
a Delaware corporation, as Borrower
      By:   /s/ Clinton J. Coleman         Name:   Clinton J. Coleman       
Title:   Chief Executive Officer        BELL TECHLOGIX MOBILITY SOLUTIONS, INC.,
a Delaware corporation, as Borrower
      By:   /s/ Clinton J. Coleman         Name:   Clinton J. Coleman       
Title:   Chief Executive Officer     

[SIGNATURE PAGE TO AMENDMENT NUMBER SEVEN TO CREDIT AGREEMENT]

 

 

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            WELLS FARGO CAPITAL FINANCE, INC.,
Formerly known as Wells Fargo Foothill, Inc.,
a California corporation,
as Agent and as a Lender
      By:   /s/ Rina Shinoda         Name:   Rina Shinoda        Title:   Vice
President     

[SIGNATURE PAGE TO AMENDMENT NUMBER SEVEN TO CREDIT AGREEMENT]

 

 

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Exhibit A

 

 

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Schedule A-2
Authorized Persons
Clinton J. Coleman, Chief Executive Officer
Jacque Cregar, Corporate Controller

 

 

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Schedule C-1
Commitments

          Lender   Revolver Commitment   Total Commitment
Wells Fargo Capital Finance, Inc.
  See Below*   See Below*           All Lenders   See Below*   See Below*

      *  
(1) from the Closing Date up to and including June 12, 2008, $30,000,000,
(2) from June 13, 2008 up to and including July 14, 2010, $10,000,000, (3) from
July 15, 2010 up to and including September 14, 2010, $12,500,000, and (4) from
and after September 15, 2010, $10,000,000.”