bm20090226_8k-ex102.htm


    Exhibit
10.2

    

      SECOND
AMENDMENT TO THE

       

      AMENDED
AND RESTATED CREDIT AGREEMENT

       

      


       

      This
Second Amendment to the Amended and Restated Credit
Agreement (the “Second Amendment”),
dated as of February 24, 2009, by and among The Teachers’ Retirement System of
Alabama (“Teachers’ Retirement
System”), The
Employees’ Retirement System of
Alabama (“Employees’ Retirement
System”), Judicial
Retirement Fund, PEIRAF-Deferred Compensation
Plan, and Public
Employees Individual Retirement Account Fund, (each, a “Lender” and
collectively, the “Lenders”), Teacher’s Retirement System,
as Agent for the Lenders (the “Agent”) and Bell Microproducts Inc., a
California corporation (the “Borrower”).

       

      R E C I T A L
S

       

      A.           Borrower
and the Lenders, including the Agent, are parties to that certain Amended and
Restated Credit Agreement, dated as of June 30, 2008, as amended by the First
Amendment thereto dated as of December 23, 2008 (the “Credit
Agreement”).

       

      B.           Borrower
has requested that Lenders agree to modify certain terms contained in the Credit
Agreement and Lenders are willing to do so, but only on the terms and subject to
the conditions and limitations set forth herein.

       

      C.           The
parties have had the opportunity to consult with, and obtain the representation
and advice of, their respective legal counsel with regard to the terms and
conditions of this Agreement, and each party has had the opportunity to
participate fully in the drafting of this Agreement.

       

      NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and intending to be legally bound, the parties
hereto agree as follows:

       

      1. Defined
Terms.  All terms used in this Second Amendment shall have the
same meaning as used in the Credit Agreement.

       

      2. Deletion
of “Net Worth.”  The definition of the term “Net Worth” set
forth in Section
1.1 of the Credit Agreement is hereby deleted in its
entirety.

       

      3. Additional
Defined Terms.  The following defined terms shall be added to
Section 1.1 of
the Credit Agreement:

       

      “‘Consolidated EBITDA’
shall mean, as to any Person, with respect to any period, an amount equal
to:  (a) the Net Income of such Person and its Subsidiaries for such
period on a consolidated basis determined in accordance with GAAP, plus (b)
depreciation, amortization and other non-cash charges (including, but not
limited to, imputed interest and deferred compensation) of such Person and its
Subsidiaries for such period (to the extent deducted in the computation of Net
Income), all in accordance with GAAP, plus (c) Interest
Expense of such Person and its Subsidiaries for such period (to the extent
deducted in the computation of Net Income), plus (d) the
provision for Federal, State, local and foreign income taxes payable by such
Person or its Subsidiaries for such period (to the extent deducted in the
computation of Net Income), plus (e)
restructuring charges for the downsizing of the business of Borrower and its
Subsidiaries in an aggregate sum not to exceed (i) $3,000,000 for periods ending
on or before September 30, 2009, or (ii) for periods ending after September 30,
2009, the sum of $3,000,000 minus the amount of such restructuring charges
incurred after September 30, 2008, but prior to the beginning of such
period.

       

      “‘Fixed Charge Coverage
Ratio’ shall mean, as to any Person for any period, the ratio of (a) the
Consolidated EBITDA of such Person during such period, divided by (b) the sum of
(i) taxes paid or required to be paid in cash by such Person or its Subsidiaries
during such period, (ii) Interest Expense paid or required to be paid in cash by
such Person or its Subsidiaries during such period, (iii) capital expenditures
made by such Person or its Subsidiaries during such period (including
obligations incurred during such period under Capital Leases), as determined in
accordance with GAAP, and (iv) principal payments made or required to be
made by such Person or its U.S.-based Subsidiaries during such period on account
of any Indebtedness.

       

      “‘Interest Expense’
shall mean, for any period, as to any Person and its Subsidiaries, all of the
following as determined in accordance with GAAP, total interest expense, whether
paid or accrued (including the interest component of any obligations under
Capital Leases for such period), including, without limitation, all bank fees,
commissions, discounts and other fees and charges owed with respect to letters
of credit, banker’s acceptances or similar instruments.

       

      “‘Net Income’ shall
mean, with respect to any Person, for any period, the aggregate of the net
income (loss) of such Person and its Subsidiaries, on a consolidated basis, for
such period (excluding to the extent included therein any extraordinary or
one-time gains or losses) after deducting all charges which should be deducted
before arriving at the net income (loss) for such period and after deducting
taxes for such period, all as determined in accordance with GAAP, provided,
that, (a) the net income of any Person that is not a wholly-owned Subsidiary or
that is accounted for by the equity method of accounting shall be included only
to the extent of the amount of dividends or distributions paid or payable to
such Person or a wholly-owned Subsidiary of such Person; (b) the effect of any
change in accounting principles adopted by such Person or its Subsidiaries after
the date hereof shall be excluded; and (c) the net income (if positive) of any
wholly-owned Subsidiary to the extent that the declaration or payment of
dividends or similar distributions by such wholly-owned Subsidiary to such
Person or to any other wholly-owned Subsidiary of such Person is not at the time
permitted by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule of government regulation applicable to
such wholly-owned Subsidiary shall be excluded.”

       

      4. Modification
of Affirmative Covenants.

       

      (a) Section 6.1(a)(iii)
of the Credit Agreement is hereby amended to read, in its entirety, as
follows:

       

      “(iii)                      Contemporaneously
with the quarterly and year-end financial statements required by the foregoing
clauses (i) and
(ii), a certificate of the president or chief financial officer of the
Borrower, in form and substance and in such detail as the Agent may reasonably
request which sets forth the calculations conducted to verify that the Borrower
is in compliance with (A) the provisions of Section 6.2(g)
hereof, and (B) the limitations on Indebtedness set forth in Sections 6.2 (a) and
6.2(h), stating that no Event of Default and no Default has occurred and
is continuing, or, if any such Event of Default or Default has occurred and is
continuing, a statement as to the nature thereof and what action the Borrower
proposes to take with respect thereto;”

       

      (b) Section 6.1(a)(vi) of
the Credit Agreement is hereby amended to read, in its entirety, as
follows:

       

      “(vi)                      Notwithstanding
any provision to the contrary contained in this Agreement, Borrower shall
deliver to the Agent, for distribution to the Lenders, true, correct and
complete copies of the items described in Section 6.1(a)(ii)
hereof, (1) for the fiscal year ended December 31, 2006, on or prior to December
31, 2008, and (2) for the fiscal years ended December 31, 2007 and December
31, 2008, on or prior to June 30, 2009.”

       

      5. Modification
of Negative Covenants.  If and to the extent that Borrower
violated Section
6.2(g) of the Credit Agreement, as in effect immediately prior to the
execution of this Amendment, for the quarter ended December 31, 2008, the
Lenders hereby waive such violation.  Section 6.2(g) of the
Credit Agreement is hereby amended to read, in its entirety, as
follows:

       

      “(g)           Borrower
and its Subsidiaries, on a consolidated basis, shall achieve, when measured for
each fiscal period of Borrower set forth below, a Fixed Charge Coverage Ratio of
not less than the ratio set forth opposite such fiscal period:

       

      
        
          	
                  Fiscal Period

                	
                  Minimum

                  Fixed Charge Coverage
  Ratio

                
	
                  For
      the 3 month period ending March 31, 2009

                	
                  0.35
      to one

                
	
                  For
      the 3 month period ending June 30, 2009

                	
                  0.75
      to one

                
	
                  For
      the 3 month period ending September 30, 2009

                	
                  1.10
      to one

                
	
                  For
      the 6 month period ending December 31, 2009

                	
                  1.10
      to one

                
	
                  For
      the 9 month period ending March 31, 2010

                	
                  1.10
      to one

                
	
                  For
      each 12 month period ending on the last day of each fiscal quarter after
      March 31, 2010

                	
                  1.10
      to one”

                


        

      

      


       

      6. Amendment
Fee.  On the date first
stated above, Borrower shall pay an amendment fee to the Agent, for the ratable
benefit of all of the Lenders, in the aggregate amount of $78,600.33 (the “Amendment
Fee”).

       

      7. Conditions
to Effectiveness.  The effectiveness
of the Lenders’ agreements contained in this Second Amendment are subject to the
satisfaction of the following conditions:

       

      (a) Executed Documents.
Each of the Lenders and the Agent shall have received fully executed copies of
this Amendment, in form and substance satisfactory to it and its
counsel.

       

      (b) Consent of Holders of Senior
Indebtedness. The Borrower shall have obtained, and provided to the
Lenders and the Agent (i) the consent of the holders of the Senior Indebtedness
outstanding under the New Senior Credit Agreement (or, if authorized to do so,
the Senior Agents) to the amendment of the Credit Agreement in the manner
contemplated herein, and (ii) the waiver of the prohibitions and restrictions
applicable to this Amendment contained in the New Senior Credit Agreement
(including, without limitation, the provisions of Section 9.9(c)(v)
thereof).

       

      (c) Payment of Fees and
Expenses. The Borrower shall have paid the Amendment Fee, together with
the reasonable legal fees and expenses of the Lenders’ and Agent’s legal counsel
incurred in connection with this Amendment.

       

      (d) Pledge
Agreements.  The Borrower shall have provided to the Agent, for
the ratable benefit of the Lenders, a fully executed and completed stock pledge
agreement, pledging to the Lenders, as additional security for the Obligations,
a second priority lien (subject only to the holders of Senior Indebtedness) in
and to all of the issued and outstanding capital stock now owned by Borrower in
each of the Subsidiaries listed on Exhibit A attached
hereto (the “Pledge
Agreement”).

       

      (e) No
Default.  No Default or Event of Default under the Credit
Agreement shall exist.

       

      (f) Representations and
Warranties; Performance of Covenants.  The representations and
warranties of the Borrower contained herein and in the Credit Agreement shall be
correct in all material respects and the Borrower shall have performed each of
the covenants on its part to be performed under the Credit
Agreement.

       

      8. Representations
and Warranties.  The Borrower
hereby represents and warrants to and for the benefit of the Lenders and the
Agent as follows:

       

      (a) The
execution, delivery and performance by the Borrower of this Amendment and the
performance by the Borrower of the Credit Agreement, as amended hereby, (i) have
been duly authorized by all requisite corporate action on the part of the
Borrower, (ii) do not require the consent or approval of any Governmental
Authority or any third party, (iii) do not and will not violate (A) any
provision of any law, statute, rule or regulation or the certificate of
incorporation or by-laws of the Borrower, (B) any order of any court,
administrative body or arbitrator or any rule regulation or order of any
Governmental Authority binding upon the Borrower or any of its Subsidiaries, or
any of their respective properties, or (C) any provision of any loan or credit
agreement, indenture, mortgage or other agreement or instrument to which the
Borrower or any of its Subsidiaries is a party or by which any of them or any of
their respective properties are or may be bound, and (iv) do not and will not
result in any breach of, constitute (alone or with notice or lapse of time or
both) a default under or trigger to any right of acceleration under, any such
loan or credit agreement, indenture, mortgage or other agreement or
instrument.

       

      (b) As of the
date hereof, and after giving effect to this Amendment, no Default or Event of
Default has occurred and is continuing under the Credit Agreement and the
Notes.

       

      (c) This
Amendment, and the Credit Agreement as amended hereby, constitute legal, valid
and binding obligations of the Borrower, enforceable against the Borrower in
accordance with their terms, except such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

       

      
        	
                9.  

              	
                Miscellaneous.

              


      

       

      (a) The
Borrower shall pay all reasonable fees and expenses, including reasonable
attorneys’ fees and expenses, incurred by the Agent or the Lenders in connection
with the transactions contemplated by this Amendment.

       

      (b) No term,
covenant, agreement or condition of this Amendment or the Credit Agreement as
amended hereby may be amended or waived unless such amendment or waiver is in
writing and is signed by the Borrower, the Agent and each of the Lenders. No
failure or delay by the Agent or any Lender in exercising any right hereunder,
or under the Credit Agreement as amended hereby, shall operate as a waiver
thereof or of any other right nor shall any single or partial exercise of any
such right preclude any other further exercise thereof or of any other right.
Unless otherwise specified in such waiver or consent, a waiver or consent given
hereunder shall be effective only in the specific instance and for the specific
purpose for which given.

       

      (c) This
Amendment is intended as a separate agreement between the Borrower, on the one
hand, and the Agent and each of the Lenders, on the other hand.  This
Amendment shall be construed together with and as part of the Credit Agreement
and the Notes.  Except as expressly amended pursuant to this
Amendment, the terms, covenants and conditions contained in the Credit Agreement
and the Notes are hereby ratified and confirmed in all respects and each of the
Notes and, as amended hereby, the Credit Agreement, shall remain in full force
and effect.  Any and all notices, requests, certificates and other
instruments executed and delivered subsequent to the date of the effectiveness
of this Amendment may refer to the Credit Agreement without making specific
reference to this Amendment, and all such references nevertheless shall be
deemed to include, unless the context otherwise requires, this
Amendment.

       

      (d) This
Amendment, and the Credit Agreement as amended hereby, shall be governed by and
construed in accordance with the laws of the State of Alabama, without regard to
its conflicts of laws principles.

       

      (e) This
Amendment may be executed in any number of identical counterparts, any set of
which signed by all the parties hereto shall be deemed to constitute a complete,
executed original for all purposes.

       

      


       

      (The
signature pages follow)

       


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      IN
WITNESS WHEREOF, the Borrower, the Agent and the Lenders have caused this Second
Amendment to the Amended and Restated Credit Agreement to be executed as of the
day and year first above written.

      


       

      
        
          
            
              
                	 THE
      COMPANY:  	BELL MICROPRODUCTS
      INC.	 
	 	 	 	 
	
                         

                      	
                        By:
      

                      	/s/
      W. Donald Bell 	 
	 	 	 Name:	W.
      Donald Bell	 
	 	 	 Title: 	President
      and Chief Executive Officer	 
	 	 	 	 


              

            

          



        
          
            
              
                	 THE
      LENDERS:	
                        THE
      TEACHERS’ RETIREMENT SYSTEM OF ALABAMA

                      	 
	 	 	 	 
	
                         

                      	
                        By:
      

                      	/s/ David
      G. Bronner	 
	 	 	 Name:
      	David
      G. Bronner	 
	 	 	 Title: 	Chief
      Executive Officer	 
	 	 	 	 


              

            

          

          
            
              
                	 	
                        THE
      EMPLOYEES’ RETIREMENT SYSTEM OF ALABAMA

                      	 
	 	 	 	 
	
                         

                      	
                        By:
      

                      	/s/ David
      G. Bronner	 
	 	 	 Name: 	David
      G. Bronner	 
	 	 	 Title:	Chief
      Executive Officer	 
	 	 	 	 


                
                  
                    
                      
                        	 	
                                STATE
      EMPLOYEES’ HEALTH INSURANCE FUND

                              	 
	 	 	 	 
	
                                 

                              	
                                By:
      

                              	/s/ David
      G. Bronner	 
	 	 	 Name:
      	David
      G. Bronner	 
	 	 	 Title: 	Chief
      Executive Officer	 
	 	 	 	 


                      

                    

                  

                

              

            

          

        

      

      
        	
              	
                JUDICIAL
      RETIREMENT FUND

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ David
      G. Bronner	 
	 	 	 Name:
      	David
      G. Bronner	 
	 	 	 Title: 	Chief
      Executive Officer	 
	 	 	 	 


        	
              	
                PEIRAF-DEFERRED
      COMPENSATION PLAN

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ David
      G. Bronner	 
	 	 	 Name:
      	David
      G. Bronner	 
	 	 	 Title: 	Chief
      Executive Officer	 
	 	 	 	 


      

      
        	
              	
                PUBLIC
      EMPLOYEES INDIVIDUAL RETIREMENT ACCOUNT FUND

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ David
      G. Bronner	 
	 	 	 Name:
      	David
      G. Bronner	 
	 	 	 Title: 	Chief
      Executive Officer	 
	 	 	 	 


      

       


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      EXHIBIT
A

       

      Subsidiaries of
Borrower

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        	
                                                                                Name

                                                                              	
                                                                                Jurisdiction
      of Organization

                                                                              
	
                                                                                Bell
      Microproducts Brazil Holdings, LLC

                                                                              	
                                                                                Minnesota

                                                                              
	
                                                                                Bell
      Microproducts Canada Inc.

                                                                              	
                                                                                California

                                                                              
	
                                                                                Bell
      Microproducts Canada – Tenex Data ULC

                                                                              	
                                                                                Nova
      Scotia

                                                                              
	
                                                                                Bell
      Microproducts Europe Inc.

                                                                              	
                                                                                California

                                                                              
	
                                                                                Bell
      Microproducts Funding Corporation

                                                                              	
                                                                                Delaware

                                                                              
	
                                                                                Bell
      Microproducts – Future Tech, Inc.

                                                                              	
                                                                                California

                                                                              
	
                                                                                Bell
      Microproducts Mexico Shareholder, LLC

                                                                              	
                                                                                Florida

                                                                              
	
                                                                                Forefront
      Graphics US Inc

                                                                              	
                                                                                Ontario

                                                                              
	
                                                                                New
      ProSys Corp.

                                                                              	
                                                                                Georgia

                                                                              
	
                                                                                Now
      Direct, Inc.

                                                                              	
                                                                                Nevada

                                                                              
	
                                                                                ProSys
      Information Systems, Inc.

                                                                              	
                                                                                Georgia

                                                                              
	
                                                                                Rorke
      Data, Inc.

                                                                              	
                                                                                Minnesota

                                                                              
	
                                                                                Total
      Tec Systems, Inc.

                                                                              	
                                                                                New
      Jersey