No. pages 12
index exhibit pg. none
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended: June 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to ____________
Commission file number 0-21528
Bell Microproducts Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 94-3057566
- -------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1941 Ringwood Avenue, San Jose, California 95131-1721
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(408) 451-9400
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
N/A
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No initial report, previously not
------------ ---------- required to file
Common Stock, $.01 Par Value -- Number of Shares Outstanding at June 30, 1997:
8,600,694
1
<PAGE>
<TABLE>
BELL MICROPRODUCTS INC.
INDEX TO FORM 10-Q
<CAPTION>
Page
PART I - FINANCIAL INFORMATION Number
- ---------------------------------- ------
<S> <C>
Item 1: Financial Statements
Condensed Balance Sheets - June 30, 1997 and December 31, 1996
3
Condensed Statements of Operations - Three months and six months
ended June 30, 1997 and 1996 4
Condensed Statements of Cash Flows - Six months ended June 30,
1997 and 1996 5
Notes to Condensed Financial Statements 6
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 6. Exhibits and Reports 11
Signature 12
2
</TABLE>
<PAGE>
<TABLE>
PART I - FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
Bell Microproducts Inc.
Condensed Balance Sheets
(in thousands, except per share data)
(unaudited)
<CAPTION>
June 30, December 31,
1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 2,240 $ 5,682
Accounts receivable, net 75,290 70,686
Inventories 94,791 78,659
Deferred and refundable income taxes 3,714 3,714
Prepaid expenses 1,221 885
-------- --------
Total current assets 177,256 159,626
Property and equipment, net 10,813 9,006
Goodwill 6,528 6,685
Other assets 418 363
-------- --------
Total assets $195,015 $175,680
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 147 $ 294
Accounts payable 51,360 45,725
Other accrued liabilities 6,805 6,271
Current portion of capitalized lease
obligations 1,616 1,378
-------- --------
Total current liabilities 59,928 53,668
Line of credit 54,000 45,900
Capitalized lease obligations, less current portion 5,233 4,985
-------- --------
Total liabilities 119,161 104,553
-------- --------
Commitments and contingencies
Shareholders' equity:
Common Stock, $0.01 par value, 20,000 shares
authorized; 8,601 and 8,445 issued and outstanding
52,321 51,644
Retained earnings 23,533 19,483
-------- --------
Total shareholders' equity 75,854 71,127
-------- --------
Total liabilities and shareholders' equity $195,015 $175,680
======== ========
<FN>
See accompanying notes to condensed financial statements.
</FN>
</TABLE>
3
<PAGE>
<TABLE>
Bell Microproducts Inc.
Condensed Statements of Operations
(in thousands, except per share data)
(unaudited)
<CAPTION>
Three Months ended June 30, Six Months ended June 30,
------------------------------ ------------------------------
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Sales $ 115,136 $ 113,644 $ 256,104 $ 229,075
Cost of sales 101,511 99,020 226,331 200,829
--------- --------- --------- ---------
Gross profit 13,625 14,624 29,773 28,246
Selling, general and
administrative expenses 9,569 10,518 20,720 20,277
--------- --------- --------- ---------
Income from operations 4,056 4,106 9,053 7,969
Interest expense (1,178) (909) (2,070) (1,904)
--------- --------- --------- ---------
Income before income taxes 2,878 3,197 6,983 6,065
Provision for income taxes (1,209) (1,343) (2,933) (2,548)
--------- --------- --------- ---------
Net income $ 1,669 $ 1,854 $ 4,050 $ 3,517
========= ========= ========= =========
Earnings per share $ .19 $ .22 $ .45 $ .41
========= ========= ========= =========
Weighted average common
shares and equivalents 8,978 8,539 8,957 8,481
========= ========= ========= =========
<FN>
See accompanying notes to condensed financial statements.
</FN>
</TABLE>
4
<PAGE>
<TABLE>
Bell Microproducts Inc.
Condensed Statements of Cash Flows
(Increase/(decrease) in cash, in thousands)
(unaudited)
<CAPTION>
Six months ended June 30,
- ------------------------------------------------------------------------------------------------------------------------------------
1997 1996
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 4,050 $ 3,517
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization 1,562 1,286
Change in allowance for doubtful accounts (949) (314)
Change in deferred and refundable income taxes -- 383
Changes in assets and liabilities:
Accounts receivable (3,655) (139)
Inventories (16,132) 6,762
Prepaid expenses (336) (176)
Other assets (55) (156)
Accounts payable 5,635 6,297
Other accrued liabilities 534 2,647
-------- --------
Net cash provided by (used in) operating activities (9,346) 20,107
-------- --------
Cash flows from investing activities:
Acquisition of property and equipment (2,007) (411)
-------- --------
Cash flows from financing activities:
Net borrowings/(repayments) under line of credit agreement 8,100 (19,000)
Net borrowings/(repayments) on current portion of long term liabilities (147) 132
Proceeds from issuance of Common Stock 677 341
Principal payments on long term liabilities (719) (719)
-------- --------
Net cash provided by (used in) financing activities 7,911 (19,246)
-------- --------
Net increase/(decrease) in cash (3,442) 450
Cash at beginning of period 5,682 2,489
-------- --------
Cash at end of period $ 2,240 $ 2,939
======== ========
Supplemental disclosures of cash flow information: Cash paid during the period
for:
Interest $ 2,051 $ 1,825
Income taxes $ 2,083 $ 1,620
Obligations incurred under capital leases $ 1,205 $ 1,845
<FN>
See accompanying notes to condensed financial statements.
</FN>
</TABLE>
5
<PAGE>
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
Note 1 - Basis of Presentation:
The condensed financial statements presented in this Quarterly Report are
unaudited. It is management's opinion that all adjustments, consisting of normal
recurring items, have been included for a fair basis of presentation. This
Quarterly Report on Form 10-Q should be read in conjunction with the Company's
1996 Annual Report on Form 10-K. The operating results for the period ended June
30, 1997 are not necessarily indicative of the results that may be expected for
the year ending December 31, 1997.
Recently Issued Accounting Statements
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings per Share." This statement
is effective for the Company's year ending December 31, 1997. The Statement
redefines earnings per share under generally accepted accounting principles.
Under the new standard, primary earnings per share is replaced by basic earnings
per share and fully diluted earnings per share is replaced by diluted earnings
per share. If the Company had adopted this Statement for the three and six
months ended June 30, 1997 and for the comparable periods in the prior year, the
Company's earnings per share would have been as follows:
Three Months Ended Six Months Ended
June 30, June 30,
--------------- ---------------
1997 1996 1997 1996
---- ---- ---- ----
Basic earnings per share $0.20 $0.22 $0.48 $0.42
Diluted earnings per share $0.19 $0.22 $0.45 $0.41
Note 2 - Inventories:
A summary of inventories follows (in thousands):
June 30, 1997 December 31, 1996
------------- -----------------
Purchased components and materials $87,952 $69,513
Work-in-process 6,839 9,146
------- -------
Total $94,791 $78,659
======= =======
Note 3 - Property and equipment:
A summary of property and equipment follows (in thousands):
June 30, 1997 December 31, 1996
------------- -----------------
Manufacturing and test equipment $ 9,987 $ 9,070
Computer and other equipment 2,930 3,212
Furniture and fixtures 1,690 1,147
Leasehold Improvements and other 1,897 195
-------- --------
16,504 13,624
Accumulated depreciation (5,691) (4,618)
-------- --------
Total $ 10,813 $ 9,006
======== ========
6
<PAGE>
Note 4 - Line of Credit
On June 17, 1997, the Company entered into an amendment to the Amended and
Restated Syndicated Credit Agreement arranged by Sumitomo Bank of California
("Sumitomo Bank") as Agent. The amendment increased the Company's $80 million
revolving line of credit to $100 million and extended the maturity date to May
31, 1999. At the Company's option, the borrowings under the line of credit will
bear interest at Sumitomo Bank's prime rate or the adjusted LIBOR rate plus
1.625%. At June 30, 1997 the interest rate was 8.5%. The revolving line of
credit requires the Company to meet certain financial tests and to comply with
certain other covenants, including restrictions on incurrence of debt and liens,
restrictions on mergers, acquisitions, asset dispositions, declaration of
dividends, repurchases of stock, making investments and profitability. The
Company is in compliance with its bank covenants; however, there can be no
assurance that the Company will be in compliance in the future.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The following Management's Discussion and Analysis of Financial Condition
and Results of Operations contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, including those statements regarding the Company's working
capital position and future cash requirements. Actual results could differ
materially from those projected in the forward-looking statements as a result of
a number of factors, including the timing of delivery of products from
suppliers, the product mix sold by the Company, customer demand, the Company's
dependence on a small number of customers that account for a significant portion
of revenues, availability of products from suppliers, price competition for
products sold by the Company, management of growth, the Company's ability to
collect accounts receivable, price decreases on inventory that is not price
protected, the short history of profitability of manufacturing and the other
risk factors detailed in the Company's reports on Form 10K for the year ended
December 31, 1996 and Form 10Q for the quarter ended March 31, 1997 filed with
the Securities and Exchange Commission. Forward looking statements are indicated
by an asterisk immediately following the relevant statement.
Three months ended June 30, 1997 compared to three months ended June 30, 1996
Sales were $115.1 million for the quarter ended June 30, 1997, which
represented an increase of $1.5 million, or 1% over the same quarter in 1996.
The increase in sales was attributable to increased demand for mass storage
products, a larger proportion of value-added and subsystem sales and the
expansion of the customer base due to the addition of sales and marketing
resources. For the quarter ended June 30, 1997, Quantum Corporation, the
Company's largest supplier, provided products which represented 39% of the
Company's sales, as compared to 30% in the same quarter in 1996. The loss of
Quantum or any other significant supplier would have a material adverse effect
on the Company's results of operations.*
The Company's gross profit for the second quarter of 1997 was $13.6
million, a decrease of $1.0 million, or 7% from the second quarter of 1996. As a
percentage of sales, gross margin was 12% in the second quarter of 1997,
compared to 13% in the same quarter of 1996. The decrease in gross margin
percent was primarily due to increased manufacturing overhead as a percent of
sales.
Selling, general and administrative expenses decreased to $9.6 million in
the second quarter of 1997 from $10.5 million in the second quarter of 1996, a
decrease of $0.9 million or 9%. This decrease was primarily attributable to
lower sales volume and personnel reductions in the manufacturing division. These
expenses also decreased as a percentage of sales to 8% from 9%.
Interest expense was $1.2 million in the second quarter of 1997 as compared
to $0.9 million in the second quarter of 1996. This increase was primarily due
to higher average bank borrowings throughout the second quarter of 1997 in
relation to the comparable 1996 quarter.
7
<PAGE>
The Company's effective income tax rate remained the same, 42%, during both
periods.
Net income was $1.7 million in the second quarter of 1997, compared to $1.9
million in the same period last year. The decrease in net income was primarily
the result of lower gross profits and increased interest expense partially
offset by decreased operating expenses and income tax expense.
Six months ended June 30, 1997 compared to six months ended June 30, 1996
Sales were $256.1 million for the six months ended June 30, 1997, which
represented an increase of $27.0 million, or 12% over the same period in 1996.
The increase in sales was attributable to increased demand for mass storage
products, a larger proportion of value-added and subsystem sales, and the
expansion of the customer base due to the addition of sales and marketing
resources.
The Company's gross profit for the first six months of 1997 was $29.8
million, an increase of $1.5 million or 5% over the first six months of 1996. As
a percentage of sales, gross margin remained flat at 12% in the first six months
of 1997 compared to the same period in 1996.
Selling, general and administrative expenses increased to $20.7 million in
the first six months of 1997 from $20.3 million in the first six months of 1996,
which represented an increase of 2%, but decreased as a percentage of sales to
8% from 9%. The increase in expenses was primarily attributable to higher sales
volume.
Interest expense was $2.1 million in the first six months of 1997 as
compared to $1.9 million in the same period in 1996. This increase in interest
expense was primarily due to higher average bank borrowings during the 1997
period in relation to the comparable 1996 period.
The Company's effective income tax rate remained the same, 42%, during both
periods.
Net income grew to $4.1 million in the first six months of 1997 compared to
$3.5 million in the same period of 1996. The increase was due primarily to sales
growth and increased gross profit, partially reduced by increased selling,
general and administrative expenses, as well as increased interest and income
tax expenses.
LIQUIDITY AND CAPITAL RESOURCES
In recent years, the Company has funded its working capital requirements
principally through borrowings under bank lines of credit. Working capital
requirements have included the financing of increases in inventory and accounts
receivable resulting from sales growth.
On June 17, 1997, the Company increased its revolving line of credit from
$80 million to $100 million to provide additional working capital for the
Company. The revolving line of credit, which has a final payment due date of May
31, 1999, requires the Company to meet certain financial tests and to comply
with certain other covenants, including restrictions on incurrence of debt and
liens, restrictions on mergers, acquisitions, asset dispositions, declaration of
dividends, repurchases of stock, making investments and profitability. The
Company is in compliance with its bank covenants; however, there can be no
assurance that the Company will be in compliance in the future. Obligations of
the Company under the revolving line of credit are secured by substantially all
of the Company's assets. The Company intends to utilize its revolving line of
credit to fund future working capital requirements.*
Net cash used by operating activities for the six months ended June 30,
1997, was $9.3 million. The Company's accounts receivable as of June 30, 1997
increased to $75.3 million from $70.7 million as of December 31, 1996, as a
result of increased sales at the end of the current quarter. The Company's
inventories as of June 30, 1997 increased to $94.8 million from $78.7 million as
of December 31, 1996, primarily as a result of the Company's need to support
anticipated sales growth. The Company's accounts
8
<PAGE>
payable increased to $51.4 million as of June 30, 1997 from $45.7 million as of
December 31, 1996, due to increased inventory purchases. The Company's future
cash requirements will depend on numerous factors, including the rate of growth
of its sales.* The Company believes that its working capital, including its
existing credit facility, will be sufficient to meet the Company's short term
capital requirements.* However, the Company may, in the future, seek additional
debt or equity financing to fund continued growth.*
9
<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders
Registrant held its Annual Meeting of Shareholders on May 21, 1997.
At the meeting the following matters were voted upon, and the number of
votes cast for or against, as well as the number of abstentions and
broker nonvotes, as to each such matter, along with a separate
tabulation with respect to each nominee for office, is set forth below:
1. Election of directors to serve for the ensuing year and until their
successors are duly elected and qualified.
For Against Abstention Nonvotes
--- ------- ---------- --------
W. Donald Bell 6,311,160 -- 56,175 --
Glenn E. Penisten 6,310,560 -- 56,775 --
Gordon A. Campbell 6,309,060 -- 58,275 --
Jon H. Beedle 5,848,183 -- 519,152 --
Edward L. Gelbach 6,309,860 -- 57,475 --
2. Amendments of the Company's Amended and Restated 1988 Incentive Stock
Plan to (i) increase the number of shares of Common Stock available for
grant by 300,000 shares.
For Against Abstention Nonvotes
--- ------- ---------- --------
5,067,007 762,604 26,183 511,541
3. Ratification of the appointment of Price Waterhouse LLP as the
Company's independent accountants for the current fiscal year ending
December 31, 1997.
For Against Abstention Nonvotes
--- ------- ---------- --------
6,344,319 11,300 11,716 --
10
<PAGE>
Item 6. Exhibits and Reports
(a) Exhibits:
27. Financial Data Schedule for the six months ended June
30, 1997.
99. Third Amendment to Second Amended and Restated Credit
Agreement
(b) Reports on Form 8-K:
None
11
<PAGE>
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: August 14, 1997
BELL MICROPRODUCTS INC.
By: Bruce M. Jaffe
---------------------------------
Sr. Vice President of Finance and
Operations and Chief Financial
Officer
By: Remo E. Canessa
---------------------------------
Vice President of Finance, Corporate
Controller and Secretary
(Principal Accounting Officer)
12
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 2,240
<SECURITIES> 0
<RECEIVABLES> 78,569
<ALLOWANCES> 3,279
<INVENTORY> 94,791
<CURRENT-ASSETS> 177,256
<PP&E> 16,505
<DEPRECIATION> 5,692
<TOTAL-ASSETS> 195,015
<CURRENT-LIABILITIES> 59,928
<BONDS> 59,233
0
0
<COMMON> 86
<OTHER-SE> 75,768
<TOTAL-LIABILITY-AND-EQUITY> 195,015
<SALES> 256,104
<TOTAL-REVENUES> 256,104
<CGS> 226,331
<TOTAL-COSTS> 226,331
<OTHER-EXPENSES> 20,238
<LOSS-PROVISION> 482
<INTEREST-EXPENSE> 2,070
<INCOME-PRETAX> 6,983
<INCOME-TAX> 2,933
<INCOME-CONTINUING> 4,050
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,050
<EPS-PRIMARY> .45
<EPS-DILUTED> .45
</TABLE>
EXECUTION COPY
THIRD AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS THIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(this "Amendment") , dated as of June 17, 1997, 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, as amended by that certain
First Amendment to Second Amended and Restated Credit Agreement dated as of June
25, 1996, and as further amended by that certain Second Amendment to Second
Amended and Restated Credit Agreement dated as of September 30, 1996 (the
"Credit Agreement").
B. Borrower has requested the Banks and Agent to amend the Credit
Agreement in certain respects and to increase the revolving line of credit.
C. The Banks and Agent are willing so to amend the Credit Agreement and
increase the revolving line of credit 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
<PAGE>
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 paragraph 4 below, the Credit Agreement is hereby amended as follows:
(a) Subparagraph 2.01 (a) is amended by changing the reference
to the Revolving Loan Maturity Date appearing in the seventh line
thereof from "May 31, 1998" to "May 31, 1999".
(b) Clause (ii) of Subparagraph 5.02 (m) is amended to read in
its entirety as follows:
(ii) Its Working Capital to be less than $55,000,000
at any time;
(c) Clause (iii) of Subparagraph 5.02 (m) is amended to read
in its entirety as follows:
(iii) Its Tangible Net Worth to be less than the sum
on any date of determination of (1) $65,000,000 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);
(d) Schedule I is amended to read in its entirety as set forth
on Exhibit A attached hereto.
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 Third
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;
(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. Third Amendment Effective Date. The amendments effected by paragraph
2 above shall become effective on June 17, 1997 (the "Third Amendment Effective
Date"), subject to receipt by the Banks and Agent on or prior to the Third
Amendment
2
<PAGE>
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) A new Revolving Loan Note made payable to each Bank in an
amount equal to each such Bank's increased Revolving Loan Commitment,
duly executed by Borrower;
(c) A Certificate of the Secretary of Borrower, dated the
Third Amendment Effective Date, certifying (i) that the Certificate of
Incorporation and Bylaws of Borrower, in the forms 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; (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; (iii) that there are no proceedings for the dissolution or
liquidation of Borrower (commenced or threatened); and (iv) the
incumbency, signatures and authority of the officers of Borrower
authorized to execute, deliver and perform the Amendment;
(d) A Certificate of Good Standing (or comparable certificate)
for Borrower, certified as of a recent date prior to the Third
Amendment Effective Date by the Secretary of State of California;
(e) A written opinion of Wilson, Sonsini, Goodrich & Rosati,
outside counsel to Borrower, dated the Third Amendment Effective Date
and addressed to Agent and each Bank, in the form of Exhibit B hereto;
and
(f) Payment of all fees and expenses of Agent's counsel
through the Third Amendment Effective Date; and
(g) 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.
5. Effect of this Amendment. On and after the Third 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
3
<PAGE>
effectiveness of this Amendment shall not, except as expressly provided herein,
operate as a waiver of any right, power, or remedy of the Banks or Agent, nor
constitute a waiver of any provision of the Credit Agreement or any other Credit
Document.
6. 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) Headinqs. 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.
4
<PAGE>
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 & CEO
AGENT: SUMITOMO BANK OF CALIFORNIA
As Agent
By:
------------------------------------------
Name:
Title:
By:
------------------------------------------
Name:
Title:
BANKS: SUMITOMO BANK OF CALIFORNIA,
As a Bank
By:
------------------------------------------
Name:
Title:
By:
------------------------------------------
Name:
Title:
5
<PAGE>
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:
------------------------------------------
Name:
Title:
AGENT: SUMITOMO BANK OF CALIFORNIA
As Agent
By: /s/ S.C. Bellicini
------------------------------------------
Name: S.C. Bellicini
Title: V.P./Deputy Manager
By: /s/ Clark Warden
------------------------------------------
Name: Clark Warden
Title: SVP
BANKS: SUMITOMO BANK OF CALIFORNIA,
As a Bank
By: /s/ S.C. Bellicini
------------------------------------------
Name: S.C. Bellicini
Title: V.P./Deputy Manager
By: /s/ Clark Warden
------------------------------------------
Name: Clark Warden
Title: SVP
5
<PAGE>
UNION BANK OF CALIFORNIA, N.A., As a Bank
As a Bank
By: /s/ Frank B. Gwynn
----------------------------------------------
Name: Frank B. Gwynn
Title: Regional Manager
By: /s/ Kelly D. Takahashi
----------------------------------------------
Name: Kelly D. Takahashi
Title: Vice President
BANKBOSTON, N.A.,
(formerly known as The First National
Bank of Boston), As a Bank
By:
----------------------------------------------
Name:
Title:
COMERICA BANK-CALIFORNIA,
As a Bank
By:
----------------------------------------------
Name:
Title:
THE SUMITOMO BANK, LIMITED,
As a Bank
By:
----------------------------------------------
Name:
Title:
By:
----------------------------------------------
Name:
Title:
6
<PAGE>
UNION BANK OF CALIFORNIA, N.A., As a Bank
As a Bank
By:
----------------------------------------------
Name:
Title:
By:
----------------------------------------------
Name:
Title:
BANKBOSTON, N.A.,
(formerly known as The First National
Bank of Boston), As a Bank
By: /s/ Teresa Heller
----------------------------------------------
Name: Teresa Heller
Title: Director
COMERICA BANK-CALIFORNIA,
As a Bank
By:
----------------------------------------------
Name:
Title:
THE SUMITOMO BANK, LIMITED,
As a Bank
By:
----------------------------------------------
Name:
Title:
By:
----------------------------------------------
Name:
Title:
6
<PAGE>
UNION BANK OF CALIFORNIA, N.A., As a Bank
As a Bank
By:
----------------------------------------------
Name:
Title:
By:
----------------------------------------------
Name:
Title:
BANKBOSTON, N.A.,
(formerly known as The First National
Bank of Boston), As a Bank
By:
----------------------------------------------
Name:
Title:
COMERICA BANK-CALIFORNIA,
As a Bank
By: /s/ Scott T. Smith
----------------------------------------------
Name: Scott T. Smith
Title: Vice President
THE SUMITOMO BANK, LIMITED,
As a Bank
By:
----------------------------------------------
Name:
Title:
By:
----------------------------------------------
Name:
Title:
6
<PAGE>
UNION BANK OF CALIFORNIA, N.A., As a Bank
As a Bank
By:
----------------------------------------------
Name:
Title:
By:
----------------------------------------------
Name:
Title:
BANKBOSTON, N.A.,
(formerly known as The First National
Bank of Boston), As a Bank
By:
----------------------------------------------
Name:
Title:
COMERICA BANK-CALIFORNIA,
As a Bank
By:
----------------------------------------------
Name:
Title:
THE SUMITOMO BANK, LIMITED,
As a Bank
By: /s/ Carole A. Daley
----------------------------------------------
Name: Carole A. Daley
Title: Vice President and Manager
By: /s/ J. William Bloore
----------------------------------------------
Name: J. William Bloore
Title: Vice President
6
