exv10wq






EXHIBIT 10.q




AMENDMENT NO. 1 TO

SECOND AMENDED AND RESTATED CONVERTIBLE PROMISSORY NOTE




          This Amendment No. 1 to Second Amended and Restated Convertible Promissory Note (this
“Amendment”) is made effective as of March 25, 2009 and amends that certain Second Amended and
Restated Convertible Promissory Note, dated June 13, 2008 (the “Note”) made by Bell Industries,
Inc., a California Corporation (the “Maker” or the “Company”), Bell Industries, Inc., a Minnesota
corporation (“Bell Minnesota”), and Bell Techlogix, Inc., a Delaware corporation (“Bell Techlogix”
and with the Maker and Bell Minnesota, referred to herein collectively as the “Obligors”), in favor
of BI Holdings, L.P., a Delaware limited partnership (the successor payee to Newcastle Partners,
L.P.), or its assigns (the “Payee”). Bell Techlogix became an Obligor under the Note pursuant to a
Joinder Agreement dated as of March 13, 2009.




W I T N E S S E T H:




          WHEREAS, the Obligors intend to enter into Amendment Number Six to Credit Agreement
(“Amendment No. 6”) with Wells Fargo Foothill, Inc., as agent for lender (“Wells Fargo”); and




          WHEREAS, the Obligors and the Payee desire to amend the Note as provided herein to reset
certain EBITDA covenants set forth in the Note to correspond to those to be set forth in Amendment
No. 6;




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




     A. Amendment to Section 12(a). Section 12(a) of the Note is deleted in its entirety
and replaced with the following:



          (a) Minimum Adjusted EBITDA. As of any date of determination from and after April 1,
2008, if Borrowers do not have Net Debt in an amount less than $4,000,000 at all times during the
most recently completed fiscal quarter, then Borrowers shall not fail to achieve Adjusted EBITDA,
measured on a quarter-end basis, of at least the required amount set forth in the following table
for the applicable period set forth opposite thereto (and the failure to do so shall be deemed an
Event of Default):




	 	 	 
	Applicable Amount	 	Applicable Period
	$(1,234,000)
	 	For the 3 month period ending

March 31, 2008
	 	 	 
	$(1,246,000)
	 	For the 6 month period ending

June 30, 2008






 









 






	 	 	 
	Applicable Amount	 	Applicable Period
	$   (200,000)
	 	For the 9 month period ending

September 30, 2008
	 	 	 
	$   (839,000)
	 	For the 12 month period ending

December 31, 2008
	 	 	 
	$(2,100,000)
	 	For the 3 month period ending

March 31, 2009
	 	 	 
	$(1,900,000)
	 	For the 6 month period ending

June 30, 2009
	 	 	 
	$   (500,000)
	 	For the 9 month period ending

September 30, 2009
	 	 	 
	$   (500,000)
	 	For the 12 month period ending

December 31, 2009
	 	 	 
	$    350,000
 	 	For the 12 month period ending

March 31, 2010
	 
	$    550,000  
	 	For the 12 month period ending

June 30, 2010
	 	 	 
	$    750,000  
	 	For the 12 month period ending

September 30, 2010
	 	 	 
	$    950,000  
	 	For the 12 month period ending

December 31, 2010 and

for each 12 month period

ending as of the last day of

each fiscal quarter thereafter






          B. No Other Amendments. This Amendment shall not be deemed to modify the terms of the
Note except as expressly set forth herein.




          C. Defined Terms. Any term in this Amendment that is not defined herein shall have the
meaning ascribed thereto in the Note.




          D. Applicable Law; Forum. THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS
AMENDMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO
CONFLICT OF LAWS PRINCIPLES THEREOF. EACH OF PAYEE AND MAKER 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 AMENDMENT,





 









 







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
AMENDMENT IN ANY OTHER COURT. EACH OF THE PARTIES TO THIS AMENDMENT AGREES NOT TO ASSERT IN ANY
ACTION OR PROCEEDING ARISING OUT OF RELATING TO THIS AMENDMENT THAT THE VENUE IS IMPROPER, AND
WAIVES ANY DEFENSE OF INCONVENIENT FORUM TO THE MAINTENANCE OF ANY ACTION OR PROCEEDING SO BROUGHT
AND WAIVES ANY BOND, SURETY OR OTHER SECURITY THAT MIGHT BE REQUIRED OF ANY OTHER PARTY WITH
RESPECT THERETO.




          E. Counterparts. This Amendment may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an original, all such counterparts
shall together constitute but one and the same instrument and facsimile and electronic or
photostatic copies of such executed counterparts shall be given the same effect as the originals.




[SIGNATURE PAGE TO FOLLOW]




 









 








[SIGNATURE PAGE TO AMENDMENT NO. 1 TO

SECOND AMENDED AND RESTATED CONVERTIBLE PROMISSORY NOTE




          IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1 to Second Amended
and Restated Convertible Promissory Note as of the date first written above.




THE OBLIGORS:




Bell Industries, Inc., a California Corporation




	 	 	 	 	 
	By:

	 	/s/ Kevin J Thimjon
 

	 	 
	Name:

	 	Kevin J Thimjon
 

	 	 
	Title:

	 	President & CFO
 

	 	 
	 
	 	 	 	 
	Bell Industries, Inc., a Minnesota Corporation	 	 
	 
	 	 	 	 
	By:

	 	/s/ Kevin J Thimjon
 

	 	 
	Name:

	 	Kevin J Thimjon
 

	 	 
	Title:

	 	Treasurer
 

	 	 
	 
	 	 	 	 
	Bell Techlogix, Inc., a Delaware Corporation	 	 
	 
	 	 	 	 
	By:

	 	/s/ Kevin J Thimjon
 

	 	 
	Name:

	 	Kevin J Thimjon
 

	 	 
	Title:

	 	 Treasurer
 

	 	 






	 	 	 	 	 	 	 
	 	 	THE LENDER:	 	 
	 
	 	 	 	 	 	 
	 	 	BI Holdings, L.P.,	 	 
	 	 	a Delaware limited partnership	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Evan Stone
 

	 	 
	 

	 	Name:
	 	Evan Stone	 	 
	 

	 	Title:
	 	General Counsel, Newcastle Management,
L.P., its General Partner