exv10w3






Exhibit 10.3




WAIVER AND AMENDMENT AGREEMENT




     THIS WAIVER AND AMENDMENT AGREEMENT (the “Agreement”) is entered into as of the 13th day of
June, 2008, by and between Bell Industries, Inc., a California corporation (“Bell California”), and
Bell Industries, Inc., a Minnesota Corporation (“Bell Minnesota, and together with Bell California,
the “Company”), on the one hand, and Newcastle Partners, L.P., a Texas limited partnership (the
“Noteholder”), on the other hand.



     WHEREAS, the Company issued to Noteholder a $10,000,000 convertible promissory note on January
31, 2007, which note was amended and restated on March 12, 2007 (the convertible promissory note,
as amended, the “Note”);



     WHEREAS, the Company and Noteholder entered into a Security Agreement dated March 12, 2007
(the “Security Agreement”) and certain related agreements granting Noteholder a security interest
in the Collateral (as defined in the Security Agreement) to secure the Company’s obligations under
the Note;



     WHEREAS, the Company has previously entered into an Asset Purchase Agreement with Velocita
Wireless LLC, which agreement is set forth hereto as Exhibit A (the “Asset Purchase Agreement”) to
sell certain material assets of the Company, and the consummation of the transactions contemplated
thereby by the Company would constitute a breach of, inter alia, Sections 10(c) and 11 of the Note
and a breach of the Security Agreement, respectively (collectively, the “Defaults”) but for the
execution of this Agreement;



     WHEREAS, the Company is also considering future transactions;



     WHEREAS, the Company seeks a forbearance and waiver from Noteholder under the Note and the
Security Agreement with respect to the transactions contemplated by the Asset Purchase Agreement
and for certain of such future transactions;



     WHEREAS, the Company also seeks an additional waiver under the Note that would permit the
Company, for a period of ninety (90) days following the date hereof, to prepay all outstanding
amounts owing under the Note without penalty or premium;



     WHEREAS, in consideration of the granting of the foregoing waiver, forbearance and limited
prepayment right, and for the other benefits the Company is receiving under this Agreement, the
Company proposes to enter into, upon the consummation of the transactions set forth in the Asset
Purchase Agreement a certain Amended Note (as hereinafter defined, the form of which is set forth
hereto as Exhibit B); and



     WHEREAS, the Board of Directors of the Company has formed a special committee consisting of
directors unaffiliated with Noteholder for the purpose of reviewing, negotiating and approving the
terms of this Agreement and the Amended Note on behalf of the Company.



     NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises hereinafter
set forth, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:



 









 





SECTION 1. WAIVER AND FORBEARANCE




     1.1 Subject to the conditions set forth in Section 2.1, Noteholder hereby grants the Company
a waiver of the Defaults for the limited purpose of permitting the Company to consummate all of the
transactions under and contemplated by the Asset Purchase Agreement (the “Transaction Waiver”).
The Transaction Waiver shall not be effective until each of the conditions in Section 2.1 hereof
have been fulfilled.



     1.2 The Company represents, warrants, acknowledges and agrees that the Transaction Waiver
shall be required in order for the Company to consummate the transactions set forth in the Asset
Purchase Agreement.



     1.3 The Transaction Waiver is not a continuing waiver of Sections 10(c) and 11 of the Note
(or the Amended Note) or any other provisions of the Note (or the Amended Note), or any provisions
of the Security Agreement, and shall apply solely in respect of the transactions expressly set
forth in the Asset Purchase Agreement. For the avoidance of doubt, the Transaction Waiver shall
not apply to any amendment, modification or waiver of the Asset Purchase Agreement or in respect of
any transactions contemplated by any Asset Purchase Agreement as amended, modified or waived.



     1.4 The Transaction Waiver shall be revoked in the event the Company breaches (or determines
to breach at or prior to the closing under the Asset Purchase Agreement) any of its other
obligations under this Agreement.



SECTION 2. AMENDMENT OF FOOTHILL FACILITY AND AMENDMENT OF NOTE




     2.1 The effectiveness of the Transaction Waiver described in Section 1 shall be subject to
the following conditions set forth in Sections 2.1(a), (b) and (c) below:




	 	(a)	 	The Company shall have received consent from Wells Fargo Foothill, Inc.
(including any successor or assignee, “Foothill”) under the Company’s financing
agreements with Foothill for the actions contemplated in this Agreement, to the extent
such consent is required thereunder.
	 
	 	(b)	 	Noteholder shall have entered into an amendment of the Intercreditor and
Subordination Agreement dated as of January 31, 2007 with Foothill, as amended,
restated, supplemented, or otherwise modified from time to time (the “Intercreditor
Agreement”), which amendment shall provide Noteholder with the right to purchase
Foothill’s entire interest in the Company’s financing agreements with Foothill
substantially upon the terms set forth in the amendment to the Intercreditor Agreement
attached hereto.
	 
	 	(c)	 	Compliance with the covenant set forth in Section 2.2 below.





     2.2 Concurrently with the consummation of the transactions under the Asset Purchase Agreement
and upon execution of this Agreement, the Company shall issue to Noteholder an amended Note on
substantially the terms set forth on Exhibit B hereto (the “Amended Note”),



2









 




which Amended Note, when executed, shall amend and supersede the existing Note. Upon issuance
of the Amended Note, the existing Note shall be returned to the Company and shall be cancelled.
The Amended Note, upon issuance, shall be subject to the terms of Section 3 hereto. For the
avoidance of doubt, the parties hereto agree that in the event that the transactions contemplated
by the Asset Purchase Agreement are not consummated, then the Company shall have no obligation to
issue the Amended Note.




     2.3 Upon issuance of the Amended Note hereunder, the Company acknowledges and agrees that (i)
all references to the “Note” under the prior transaction and security agreements (including the
Security Agreement) (collectively, the “Security Agreements”) executed by the Company and
Noteholder shall be deemed to refer to the Amended Note and (ii) all references to “Registrable
Shares” under the Registration Rights Agreement dated January 31, 2007 entered into by the Company
and Noteholder (and any other agreement or instrument executed in connection therewith where such
term applies) shall be deemed to include all shares issuable under the Amended Note. The foregoing
supersedes any contrary or inconsistent provision in documents executed by the parties.



SECTION 3. LIMITED PREPAYMENT RIGHT




     3.1 Notwithstanding anything to the contrary set forth herein or in the Amended Note, the
Noteholder hereby agrees that, for a period of ninety (90) days following the date hereof (the
“Prepayment Period”) (i) the Company shall have the right to prepay all amounts outstanding under
the Amended Note at 105% (the “Applicable Prepayment Premium Rate”) of the aggregate outstanding
principal under the Amended Note, plus accrued but unpaid interest thereon and (ii) the Noteholder
shall not have the right to convert the Amended Note into the Company’s Common Stock pursuant to
the provisions therein. The foregoing shall operate as a limited waiver of any contrary provisions
set forth in the Amended Note. Upon expiration of the Prepayment Period, the Company’s prepayment
right as set forth herein and this limited waiver of the prepayment restriction shall terminate,
and the Company’s rights with respect to prepayment shall be solely as set forth in the Amended
Note .



     3.2 Noteholder agrees that, during the Prepayment Period, Noteholder shall (i) if proceeds
from the issuance of securities are used to prepay Noteholder in full, waive any pre-emptive right
it has to acquire any of the Company’s securities triggered by such issuance and (ii) cooperate
with the Company in the Company’s efforts to obtain permanent debt financing in replacement of the
financing under the Amended Note (the “Replacement Financing”). Noteholder and its representatives
shall use commercially reasonable efforts to facilitate the closing of any such Replacement
Financing during the Prepayment Period, including execution of customary payoff letters and lien
releases.



SECTION 4. ADDITIONAL WAIVER.




Subject to the conditions set forth on Schedule A to this Agreement, Noteholder hereby grants the
Company a waiver of breaches under Sections 11(c) and 13 of the Amended Note and breaches under the
Security Agreement (the “Additional Transaction Defaults”) for the limited purpose of permitting
the Company to consummate a potential sale of the assets set forth Schedule A (the “Additional
Transaction Waiver”). The Additional Transaction Waiver shall



3









 




not be effective unless and until each of the conditions on Schedule A have been fulfilled. The
Additional Transaction Waiver is not a continuing waiver of Sections 11(c) and 13 of the Amended
Note or any other provisions of the Amended Note, or any provisions of the Security Agreement, and
shall apply solely in respect of a sale of the assets set forth on Schedule A which is undertaken
in manner consistent with the conditions set forth on Schedule A. The Company represents,
warrants, acknowledges and agrees that the Additional Transaction Waiver shall be required in order
for the Company to consummate the disposal of the assets set forth on Schedule A.




SECTION 5. REPRESENTATIONS AND WARRANTIES.



The Company makes the following representations and warranties to the Noteholder, each of which
Noteholder has relied upon in entering into this Agreement:




     5.1 Organization, Good Standing and Qualification. Bell California and Bell Minnesota are
corporations duly organized, validly existing and in good standing under the laws of the State of
California and the State of Minnesota, respectively. The Company has all requisite corporate power
and authority to own and operate its respective properties and assets and to carry on its
respective business as presently conducted and as presently proposed to be conducted. The Company
has all requisite corporate power and authority to execute and deliver this Agreement and all other
agreements or instruments delivered or deliverable in connection herewith (collectively, the “2008
Transaction Documents”) including but not limited to the Amended Note when executed and to carry
out the provisions of the 2008 Transaction Documents. Each of the Company and their respective
subsidiaries are duly qualified and is authorized to do business and is in good standing in each
jurisdiction in which the nature of its respective activities and of its respective properties
(both owned and leased) makes such qualification necessary, except for those jurisdictions in which
failure to be so qualified would not have a material adverse effect on the Company or its business,
taken as a whole.



     5.2 Capitalization. Bell California is authorized to issue 35,000,000 shares of Common
Stock, of which 8,650,224 shares are issued and outstanding as of the date hereof, and 1,000,000
shares of preferred stock, of which no shares are issued and outstanding as of the date hereof.
Bell Minnesota is authorized to issue 5,000 shares of Class A Common Stock and 2,500 shares of
Class B Common Stock, $100.00 par value per share, of which 3,000 shares of Class A Common Stock
and 2,047 shares of Class B Common Stock are issued and outstanding, all of which are owned by Bell
California. Except as set forth in Bell California’s current, quarterly, annual and other periodic
filings, including the exhibits thereto (the “SEC Reports”) with the U.S. Securities and Exchange
Commission (the “Commission”), there are no outstanding options, warrants or other rights to
acquire any of the Company’s capital stock, or securities convertible, exercisable or exchangeable
for the Company’s capital stock or for securities themselves convertible, exercisable or
exchangeable for the Company’s capital stock (together, “Convertible Securities”). Except as set
forth in the SEC Reports, the Company has no agreement or commitment to sell or issue any shares of
capital stock or Convertible Securities. All issued and outstanding shares of the Company’s
capital stock (i) have been duly authorized and validly issued, (ii) are fully paid and
nonassessable, (iii) subject to the rights of Noteholder, are free from any preemptive and
cumulative voting rights and (iv) were issued pursuant to an effective registration statement filed
with the Commission and applicable state securities



4









 




authorities or pursuant to valid exemptions under federal and state securities laws. Except
as set forth in the SEC Reports, there are no outstanding rights of first refusal or proxy or
shareholder agreements of any kind relating to any of the Company’s securities to which the Company
or any of its executive officers and directors is a party or as to which the Company otherwise has
knowledge. When issued in compliance with the provisions of the Amended Note, and subject to any
required amendment to Bell California’s Articles of Incorporation to increase the authorized shares
thereto in order to satisfy the conversion provisions of the Amended Note (the “Articles
Amendment”), as the case may be, the shares issuable thereunder will be validly issued, fully paid
and nonassessable, and will be free of any liens or encumbrances; provided, however, that such
shares may be subject to restrictions on transfer under state and/or federal securities laws as set
forth herein or as otherwise required by such laws at the time a transfer is proposed.




     5.3 Authorization; Binding Obligations. All corporate action on the part of the Company, its
officers and directors (including a special committee of independent directors) necessary for the
authorization of the 2008 Transaction Documents and the performance of all obligations of the
Company hereunder and thereunder, including the authorization, sale, issuance and delivery of
shares of Common Stock upon the conversion of the Amended Note, as the case maybe, has been taken,
and no further corporate action is required to be taken, subject to the Articles Amendment. The
2008 Transaction Documents, when duly executed and delivered by the Company, will be legal, valid
and binding obligations of the Company enforceable against the Company in accordance with their
terms. The issuance of shares of Common Stock upon conversion of the Amended Note is not and will
not be subject to any preemptive rights or rights of first refusal. The Amended Note upon its
execution and issuance under Section 2.2 hereof (including Bell California’s obligation to issue
shares of Common Stock upon conversion of any or all principal amounts thereunder), shall continue
to be a valid and binding obligation of the Company, enforceable against the Company in accordance
with their terms. The security interests granted by the Company to Noteholder pursuant to the
Security Agreements continue to be a valid and enforceable security interests in the Collateral (as
defined in the Security Agreement) in favor of Noteholder securing all obligations of the Company
under the Amended Note.



     5.4 No Violation or Conflicts. The execution and delivery of, and the performance of and
compliance with the transactions contemplated by, the 2008 Transaction Documents, and the issuance
of shares of common stock upon conversion of the Amended Note, as the case may be, will not, with
or without the passage of time or giving of notice or both, result in any material violation of law
or agreement, or be in conflict with or constitute a default under any such material term, or
result in the creation of any material mortgage, pledge, lien, encumbrance or charge upon any of
the properties or assets of the Company or any subsidiary or the suspension, revocation,
impairment, forfeiture or nonrenewal of any permit, license, authorization or approval applicable
to the Company or any subsidiary, the business or operations of the Company or any subsidiary or
any of the assets or properties of the Company or any subsidiary.



     5.5 Governmental Consents. No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required for the due execution,
delivery and performance by the Borrower of this Agreement.



5









 





SECTION 6. GOVERNANCE




     6.1 Following issuance of the Amended Note, so long as either (a) at any time, Noteholder
beneficially owns greater than 50% (which shall be deemed to include, for the avoidance of doubt,
all shares of Common Stock issuable upon the conversion of the Amended Note) of the shares of
Common Stock outstanding or (b) greater than 50% of the initial principal amount of the Amended
Note remains outstanding, Bell California agrees to appoint to its Board of Directors at any time
in Noteholder’s discretion, and subject to the requirements of applicable federal and California
law (including but not limited to Rule 14f-1 promulgated pursuant to the Securities Exchange Act of
1934, as amended), such number of director designees of Noteholder (each, a Designee) such that
Designees constitute 50% of the then outstanding current members of Bell California’s Board of
Directors (or, if the number of members of the Board of Directors is an odd integer, such number of
Designees shall be the lowest integer that is greater than 50% of the then outstanding members),
and Noteholder shall have the right in its sole discretion to designate to Bell any replacement for
any Designee, including to designate to Bell any director to fill any vacancy created by the
removal, death, retirement or disqualification (or other cause) of any Designee. The parties
hereto agree and acknowledge that Clinton Coleman and Mark Schwarz are Designees of Noteholder.
Subject to the provisions of Section 6.7(c) of the Note Purchase Agreement (as defined below), Bell
California agrees to take any and all action necessary to ensure that promptly following any change
in the size of Bell California’s Board of Directors and/or the election or appointment of any
additional members to Bell California’s Board of Directors, Bell California is in compliance with
the foregoing sentence. For the avoidance of doubt, for purposes of the provisions of this Section
6.1 only, during the Prepayment Period, Noteholder shall not be deemed to beneficially own Common
Stock issuable upon conversion of the Amended Note, as the case may be.



     6.2 The rights set forth in Section 6.1 hereof shall be in addition to the rights set forth
in Section 6.7 of that certain Purchase Agreement dated January 31, 2007 between Bell California
and Noteholder (the “Note Purchase Agreement”), all of which rights remain in full force and
effect. For the avoidance of doubt, the parties hereto agree that in the event that the
transactions contemplated by the Asset Purchase Agreement are not consummated, the rights set forth
in Section 6.1 shall terminate.



SECTION 7. MISCELLANEOUS




     7.1 Governing Law. This Agreement shall be governed by the laws of the State of Texas,
without regard to conflicts of law principles. EACH OF THE PARTIES TO THIS AGREEMENT CONSENTS TO
SUBMIT TO THE PERSONAL JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN THE STATE OF TEXAS, IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AGREES THAT ALL CLAIMS IN
RESPECT OF THE ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT, AND AGREES NOT
TO BRING ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY OTHER COURT.
EACH OF THE PARTIES TO THIS AGREEMENT AGREES NOT TO ASSERT IN ANY ACTION OR PROCEEDING ARISING OUT
OF RELATING TO THIS AGREEMENT THAT THE VENUE IS IMPROPER, AND WAIVES ANY DEFENSE OF INCONVENIENT
FORUM TO THE MAINTENANCE OF ANY ACTION OR PROCEEDING



6









 




SO BROUGHT AND WAIVES ANY BOND, SURETY OR OTHER SECURITY THAT MIGHT BE REQUIRED OF ANY OTHER
PARTY WITH RESPECT THERETO.




     7.2 Successors and Assigns. Except as otherwise expressly provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs,
executors and administrators of the parties hereto and shall inure to the benefit of, and be
binding upon, and be enforceable by each person who shall be a holder of the Note (or the Amended
Note, as applicable). The Company shall not assign this Agreement or any rights or obligations
hereunder without the prior written consent of the Noteholder. The Noteholder may assign some or
all of its rights hereunder without the consent of the Company in connection with a transfer by the
Noteholder of the Note (or Amended Note, as applicable); provided that any such assignee or
transferee shall be subject to the provisions herein as a Noteholder.



     7.3 Entire Agreement. This Agreement and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the parties with regard to the
subjects hereof and thereof and no party shall be liable or bound to the other in any manner by any
representations, warranties, covenants and agreements, except as specifically set forth herein and
therein. Notwithstanding the foregoing, the parties understand and agree that, other than with
respect to the Note (which shall be superseded by the Amended Note), the agreements executed by the
parties in connection with the Note Purchase Agreement (including but not limited to the Note
Purchase Agreement and the Registration Rights Agreement), and all rights thereunder, shall remain
effective.



     7.4 Severability. The invalidity, illegality or unenforceability of one or more of the
provisions of this Agreement in any jurisdiction shall not affect the validity, legality or
enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or
enforceability of this Agreement, including any such provision, in any other jurisdiction, it being
intended that all rights and obligations of the parties hereunder shall be enforceable to the
fullest extent permitted by law.



     7.5 Amendment and Waiver. This Agreement may be amended or modified, and any provision
hereunder may be waived, only upon the written consent of the Company and the Noteholder.



     7.6 Notices. All notices, requests, consents and other communications hereunder shall be
made in writing and shall be deemed given (i) when made if made by hand delivery, (ii) one business
day after being deposited with an overnight courier if made by courier guaranteeing overnight
delivery, (iii) on the date indicated on the notice of receipt if made by first-class mail, return
receipt requested or (iv) on the date of confirmation of receipt of transmission by facsimile,
addressed as follows:




	 	(a)	 	if to the Company, at
	 
	 	 	 	Bell Industries, Inc.

8888 Keystone Crossing

Suite 1700

Indianapolis, Indiana 46240




7









 






	 	 	 	Facsimile: (317) 715-6816

Attention: Chief Financial Officer
	 
	 	 	 	with a copy to:
	 
	 	 	 	Manatt, Phelps & Phillips, LLP

11355 West Olympic Boulevard

Los Angeles, CA 90064

Facsimile: (310) 914-5712

Attention: Mark Kelson, Esq.
	 
	 	(b)	 	if to the Noteholder, in care of:
	 
	 	 	 	Newcastle Partners, L.P.

200 Crescent Court, Suite 1400

Dallas, TX 75201

Facsimile: (214) 661-7475

Attention: Evan D. Stone, Esq.
	 
	 	 	 	with a copy to:
	 
	 	 	 	Olshan Grundman Frome Rosenzweig & Wolosky LLP

Park Avenue Tower

65 East 55th Street

New York, NY 10022

Attn: Steve Wolosky, Esq.





     7.7 Indemnification by the Company. The Company agrees to indemnify and hold the Noteholder
harmless against any loss, liability, damage or expense (including reasonable legal fees and costs)
that the Noteholder shall suffer, sustain or become subject to as a result of or in connection with
the breach by the Company of any representation, warranty, covenant or agreement of the Company
contained in any of the 2008 Transaction Documents; provided, however, that no indemnification
shall be required hereunder for the gross negligence or willful misconduct of the Noteholder or
breach by the Noteholder of any of the representations and warranties set forth in Section 6
hereof. In case any such action is brought against the Noteholder, the Company will be entitled to
participate in and assume the defense thereof with counsel reasonably satisfactory to the
Noteholder, and after notice from the Company to the Noteholder of its election to assume the
defense thereof, the Company shall not be responsible for any legal or other expenses subsequently
incurred by the Noteholder in connection with the defense thereof; provided, that if the Noteholder
shall have reasonably concluded that there may be one or more legal defenses available to the
Noteholder which conflict in any material respect with those available to the Company, the Company
shall not have the right to assume the defense of such action on behalf of the Noteholder and the
Company shall reimburse the Noteholder for that portion of the fees and expenses of one counsel
retained by the Noteholder.



     7.8 Release. In consideration of the agreements of Noteholder contained herein and for other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
Company, on behalf of itself and its successors, assigns, and other legal



8









 







representatives, hereby absolutely, unconditionally and irrevocably releases, remises and
forever discharges Noteholder and its successors and assigns, predecessors, subsidiaries, partners
(including limited partners), directors, officers, attorneys, employees, agents and other
representatives (all such other Persons being hereinafter referred to collectively as the
“Releasees” and individually as a “Releasee”), of and from all claims, demands, actions, causes of
action, suits, and all other claims, counterclaims, defenses, rights of set-off, demands and
liabilities whatsoever (individually, a “Claim” and collectively, “Claims”) of every name and
nature, known or unknown, suspected or unsuspected, both at law and in equity, which Company or any
of its successors, assigns, or other legal representatives may now or hereafter own, hold, have or
claim to have against the Releasees or any of them for, upon, or by reason of any circumstance,
action, cause or thing whatsoever which arises at any time on or prior to the day and date of this
Agreement and relating to (a) the transactions contemplated by the Note or the Amended Note or
actions taken by Releasees in connection therewith (including but not limited to the negotiation
and execution of the Note or the Amended Note) or (b) Noteholder’s capacity as a creditor or
stockholder of the Company. The foregoing release shall not apply with respect to violations or
breaches of any state or federal securities laws unrelated to the transactions contemplated by the
Note or the Amended Note (it being understood that the foregoing release shall not release
Releasees in respect of breaches of representations under the Note or the Amended Note), or fraud
or willful misconduct committed by any Releasee.



     7.9 Further Assurances. Each party shall do and perform, or cause to be done and performed,
all such further acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as the other party may reasonably request in order to
carry out the intent and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby, including, without limitation, to enable the full conversion of
the Amended Note.



     7.10 Expenses. The Company agrees to pay or reimburse the Noteholder for its reasonable
legal fees and expenses incurred by Noteholder in connection with the negotiation and execution of
the 2008 Transaction Documents and any and all expenses that Noteholder may incur after the date
hereof in connection with the granting of any waiver with respect to, the modification of any of
the terms or provisions of, or the enforcement of any of the 2008 Transaction Documents.



     7.11 Titles and Subtitles. The titles of the sections and subsections of the Agreement are
for convenience of reference only and are not to be considered in construing this Agreement.



     7.12 Counterparts. This Agreement may be delivered via facsimile or other means of
electronic communication, and may be executed in counterparts, each of which shall be an original,
but all of which together shall constitute one instrument.



[Signature Page Follows]




9









 








     IN WITNESS WHEREOF, the parties hereto have hereunto affixed their signatures.



	 	 	 	 	 	 	 	 	 
	Bell Industries, Inc.,	 	 	 	Newcastle Partners, L.P.
	a California corporation	 	 	 	By: Newcastle Capital
Management, L.P.

 its General
Partner
	 
	 	 	 	 	 	 	 	 
	/s/ Kevin Thimjon	 	 	 	/s/ Evan Stone
	 	 	 	 	 
	By

	 	Kevin Thimjon
	 	 	 	By
	 	Evan Stone
	 

	 	 
	 	 	 	 	 	 
	Its

	 	President and Chief Executive Officer
	 	 	 	Its
	 	General Counsel
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Bell Industries, Inc.,	 	 	 	 	 	 
	a Minnesota corporation	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Kevin Thimjon	 	 	 	 	 	 
	 	 	 	 	 	 	 
	By

	 	Kevin Thimjon	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Its

	 	President and Chief Executive Officer	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 





10