EXECUTION COPY
FIRST AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(this "Amendment"), dated as of June 25, 1996, is entered into by and among:
(1) BELL MICROPRODUCTS INC., a California corporation
("Borrower");
(2) Each of the financial institutions listed in Schedule I to
the Credit Agreement referred to in Recital A below (collectively, the
"Banks"); and
(3) SUMITOMO BANK OF CALIFORNIA, a California banking
corporation, as agent for the Banks (in such capacity, "Agent").
RECITALS
A. Borrower, the Banks and Agent are parties to a Second Amended and
Restated Credit Agreement dated as of May 23, 1995 (the "Credit Aqreement").
B. Borrower has requested the Banks and Agent to amend the Credit
Agreement in certain respects.
C. The Banks and Agent are willing so to amend the Credit Agreement
upon the terms and subject to the conditions set forth below.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Borrower, the Banks and Agent hereby agree as follows:
1. Definitions, Interpretation. All capitalized terms defined above and
elsewhere in this Amendment shall be used herein as so defined. Unless otherwise
defined herein, all other capitalized terms used herein shall have the
respective meanings given to those terms in the Credit Agreement, as amended by
this Amendment. The rules of construction set forth in Section I of the Credit
Agreement shall, to the extent not inconsistent with the terms of this
Amendment, apply to this Amendment and are hereby incorporated by reference.
2. Amendments to Credit Agreement. Subject to the conditions set forth
in paraqraph 4 below, the Credit Agreement is hereby amended as follows:
(a) Subparaqraph 2.01(a) is amended to read in its entirety as
follows:
(a) Revolving Loan Availability. Subject to the terms
and conditions of this Agreement (including the amount
limitations set forth in Paragraph 2.02 and the conditions set
forth in Section III), each Bank severally agrees to advance
to Borrower from time to time during the period beginning on
the Effective Date and ending on May 31, 1998 (the "Revolving
Loan Maturity Date") such loans as Borrower may request under
this Paragraph 2.01 (individually, a "Revolving Loan"), not to
exceed at any time in aggregate principal amount then
outstanding:
(i) At any time during the period commencing
on the Effective Date and ending on May 31, 1996 (the
"Commitment Adjustment Date"), the amount set forth
opposite the name of such Bank in Schedule I under
the column headed "Initial Revolving Loan Commitment"
(as reduced from time to time pursuant to Paragraph
2.02, the "Initial Revolving Loan Commitment" of such
Bank); or
(ii) At any time during the period commencing
on the Commitment Adjustment Date and ending on the
Revolving Loan Maturity Date, the amount set forth
opposite the name of such Bank in Schedule I under
the column headed "Increased Revolving Loan
Commitment" (as reduced from time to time pursuant to
Paragraph 2.02, the "Increased Revolving Loan
Commitment" of such Bank);
Provided, however, that the aggregate principal amount of all
Revolving Loans made by such Bank at any time outstanding
shall not exceed at any time the Initial Revolving Loan
Commitment of such Bank unless the conditions set forth in
Paragraph 3.02 are satisfied. All Revolving Loans shall be
made on a pro rata basis by the Banks in accordance with their
respective Proportionate Shares, with each Revolving Loan
Borrowing to be comprised of a Revolving Loan by each Bank
equal to such Bank's Proportionate Share of such Revolving
Loan Borrowing. Except as otherwise provided herein, Borrower
may borrow, repay and reborrow Revolving Loans until the
Revolving Loan Maturity Date.
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(b) Subparagraph 5.02(m) is amended to read in its entirety as
follows:
(m) Financial Covenants. Borrower shall not permit:
(i) Its Quick Ratio to be less than 0.75 to
1.00 at any time;
(ii) Its Working Capital to be less than
$50,000,000 at any time;
(iii) Its Tangible Net Worth to be less than:
(A) At any time during the period
beginning on the Effective Date and ending
on December 30, 1995, $45,000,000;
(B) At any time during the period
beginning on December 31, 1995 and ending on
the Commitment Adjustment Date, $55,000,000;
and
(C) At any time thereafter, the sum
on any date of determination of (1)
$57,000,000 plus (2) fifty percent (50%) of
the sum of Borrower's Net Income After Tax
for each quarter (excluding any quarter in
which such amount was negative) which begins
after the Commitment Adjustment Date and
ends on or prior to such date of
determination;
(iv) Its Leverage Ratio to be greater than
2.25 to 1.00 at any time;
(v) Its Interest Coverage Ratio for any
consecutive four-quarter period to be less than 2.00
to 1.00; or
(vi) Its Net Operating Income or Net Income
After Tax to be (1) a loss in excess of $350,000 for
any quarter or (2) a loss of any amount for any
consecutive two-quarter period.
3. Representations and Warranties. Borrower hereby represents and
warrants to Agent and the Banks that, on the date of this Amendment and after
giving effect to the amendments set forth in Paragraph 2 above on the Amendment
Effective Date (as defined below), the following are and shall be true and
correct on each such date:
(a) The representations and warranties set forth in Paragraph
4.01 of the Credit Agreement are true and correct in all material
respects;
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(b) No Event of Default or Default has occurred and is
continuing; and
(c) Each of the Credit Documents is in full force and effect.
4. Amendment Effective Date. The amendments effected by paragraph 2
above shall become effective on June 25, 1996 (the "Amendment Effective Date",
subject to receipt by the Banks and Agent on or prior to the Amendment Effective
Date of the following, each in form and substance satisfactory to the Banks,
Agent and their respective counsel:
(a) This Amendment duly executed by Borrower, each Bank and
Agent;
(b) Evidence in form and substance satisfactory to Agent of
the merger by Vantage into Borrower, with Borrower as the surviving
corporation, effective as of December 31, 1995;
(c) A Certificate of the Secretary of Borrower, dated the
Amendment Effective Date, certifying that (i) the Certificate of
Incorporation and Bylaws of Borrower, in the form delivered to Agent on
the Effective Date, are in full force and effect and have not been
amended, supplemented, revoked or repealed since such date and (ii)
that attached thereto are true and correct copies of resolutions duly
adopted by the Board of Directors of Borrower and continuing in effect,
which authorize the execution, delivery and performance by Borrower of
this Amendment and the consummation of the transactions contemplated
hereby;
(d) A written opinion of Wilson, Sonsini, Goodrich & Rosati,
outside counsel to Borrower, dated the Amendment Effective Date and
addressed to Agent and each Bank, in the form of Exhibit A hereto; and
(e) Such other evidence as Agent or any Bank may reasonably
request to establish the accuracy and completeness of the
representations and warranties and the compliance with the terms and
conditions contained in this Amendment and the other Credit Documents.
5. Effect of this Amendment. On and after the Amendment Effective Date,
each reference in the Credit Agreement and the other Credit Documents to the
Credit Agreement shall mean the Credit Agreement as amended hereby. Except as
specifically amended above, (a) the Credit Agreement and the other Credit
Documents shall remain in full force and effect and are hereby ratified and
confirmed and (b) the execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power, or
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remedy of the Banks or Agent, nor constitute a waiver of any provision of the
Credit Agreement or any other Credit Document.
Miscellaneous.
(a) Counterparts. 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.
(b) Headings. Headings in this Amendment are for convenience
of reference only and are not part of the substance hereof.
(c) Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of California
without reference to conflicts of law rules.
IN WITNESS WHEREOF, Borrower, the Agent and the Banks have caused this
Amendment to be executed as of the day and year first above written.
BORROWER: BELL MICROPRODUCTS INC.
By: /s/ W. Donald Bell
------------------------------------
Name: W. Donald Bell
Title: President and CEO
AGENT: SUMITOMO BANK OF CALIFORNIA,
As Agent
By: /s/ S.C. Bellicini
------------------------------------
Name: S.C. Bellicini
Title: Vice President
By: /s/ Clark Warden
------------------------------------
Name: F. Clark Warden
Title: Sr. Vice President/Secretary
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BANKS SUMITOMO BANK OF CALIFORNIA,
As a Bank
By: /s/ S.C. Bellicini
------------------------------------
Name: S.C. Bellicini
Title: Vice President
By: /s/ Clark Warden
------------------------------------
Name: F. Clark Warden
Title: Sr. Vice President
UNION BANK, a Division of Union Bank of
California, N.A.,
As a Bank
By: /s/ Frank Gwynn
------------------------------------
Name: Frank Gwynn
Title: Vice President
By: /s/ Kelly D. Takahashi
------------------------------------
Name: Kelly D. Takahashi
Title: Vice President
THE FIRST NATIONAL BANK OF BOSTON,
As a Bank
By: /s/ Melissa Forbes
------------------------------------
Name: Melissa Forbes
Title: Vice President
COMERICA BANK-CALIFORNIA,
As a Bank
By: /s/ Scott T. Smith
------------------------------------
Name: Scott T. Smith
Title: Assistant Vice President
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THE SUMITOMO BANK LIMITED,
As a Bank
By: /s/ Andrea B. Sargent
------------------------------------
Name: Andrea B. Sargent
Title: Vice President and Manager
By: /s/ Carole A. Daley
------------------------------------
Name: Carole A. Daley
Title: Vice President
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