8-K

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): December 20, 2006

Bell Microproducts Inc.
__________________________________________
(Exact name of registrant as specified in its charter)

California	0-21528	94-3057566
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
1941 Ringwood Avenue, San Jose, California		95131-1721
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: 408-451-9400

Not Applicable
______________________________________________
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On December 19, 2006, Bell Microproducts Inc. (the "Company") announced the results of its consent solicitation relating to its $109,850,000 outstanding 3 ¾ % Convertible Subordinated Notes, Series B due 2024 (the "Notes"). Holders of $109,475,000 of the Notes (which is in excess of the requisite majority of the outstanding principal amounts) have consented to a waiver of defaults arising from the failure to file all reports and other information and documents which it is required to file with the SEC and the trustee. Further, these holders have agreed to amend the indenture governing the Notes (the "Indenture") to eliminate any provision that would trigger a default for the failure to file or deliver any reports required to be filed with the SEC or the trustee or the failure to comply with Section 314 of the Trust Indenture Act of 1939, as amended, and to add a provision for a special interest payment to holders of Notes if an eligible tender offer is not completed prior to February 1, 2007 (the "Ame ndments").

On December 20, 2006, the Company and Wells Fargo Bank, N.A., as trustee under the Indenture, executed a First Supplemental Indenture amending the Indenture, and such First Supplemental Indenture, which incorporates the Amendments described above, became effective on December 20, 2006. The foregoing is intended to be a summary of the terms of the Supplemental Indenture and is qualified in its entirety by reference to the Supplemental Indenture, attached to this Current Report on Form 8-K as Exhibit 10.1 and incorporated by reference as if fully set forth herein.

Item 3.03 Material Modifications to Rights of Security Holders.

Reference is made to the disclosure made under Item 1.01 of this Current Report on Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(a) Financial statements: None.

(b) Pro forma financial information: None.

(c) Shell company transactions: None.

(d) Exhibits:
Exhibit 4.1 - First Supplemental Indenture dated December 20, 2006
Exhibit 99.1 - Press release dated December 19, 2006

SIGNATURES

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 hereunto duly authorized.

	Bell Microproducts Inc.
December 21, 2006	By:	James E. Illson
		Name: James E. Illson
		Title: Chief Operating Officer, President of Americas and Chief Financial Officer

Exhibit Index

Exhibit No.	Description
4.1	First Supplemental Indenture dated December 20, 2006
99.1	Press release dated December 19, 2006

EX-4.1

EXHIBIT 4.1

FIRST SUPPLEMENTAL INDENTURE

This FIRST SUPPLEMENTAL INDENTURE (the “Supplemental Indenture”), dated as of December 20, 2006, is between Bell Microproducts Inc., a California corporation (the “Company”), and Wells Fargo Bank, N.A., a national banking association organized and existing under the laws of the United States, as Trustee (the “Trustee”). Capitalized terms used herein and not otherwise defined shall have the meaning given to them in the Indenture (as herein defined).

RECITALS

WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture, dated as of December 21, 2004 (the “Indenture”), providing for the issuance of an aggregate principal amount of $109,850,000 of 3 3/4% Convertible Subordinated Notes, Series B due 2024 (the “Notes”);

WHEREAS, Sections 8.4 and 11.2 of the Indenture provide, among other things, that Holders of a majority in aggregate principal amount of the Securities then outstanding (the “Majority Holders”) may (i) waive an existing default or Event of Default and its consequences and (ii) that the Company and the Trustee may amend or supplement the Indenture with the written consent of the Majority Holders, respectively;

WHEREAS, the Company intends to amend certain provisions in the Indenture (the “Proposed Amendments”);

WHEREAS, the Majority Holders have consented to the Proposed Amendments; and

WHEREAS, Section 11.6 of the Indenture authorizes the Trustee to execute any amendment to the Indenture and the Company hereby requests the Trustee join with it in the execution and delivery of this Supplemental Indenture.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

ARTICLE I
Amendments to the Indenture

Section 1.01. Amendments.

(a) The language in Section 6.2 of the Indenture shall be deleted and the covenant heretofore made by the Company in Section 6.2 relating to the filing and delivery of reports with the SEC and the Trustee shall be of no further force or effect.

(b) The following language shall be added to the end of Section 8.1(a)(3):

“, except that the Company’s failure to comply with Section 314 of the TIA by failing to deliver to the Trustee any reports it is required to file with the SEC shall not be deemed a failure to comply with any of the terms, covenants or agreements contained in the Securities or this Indenture that would constitute a Default or Event of Default under this Indenture.” 

(c) The following language shall be added following the first paragraph of Section 1 of the Global Security that is attached to the Indenture as Exhibit A:

“In addition to any other payment required by the Securities and the Indenture, if the Company has not commenced and held open an Eligible Tender Offer, the Company shall make a one-time payment of special interest equal to 8.5% of the principal amount of the Securities (the “Special Interest”) to all Holders on the next interest payment date following a failure by the Company to consummate an Eligible Tender Offer. An “Eligible Tender Offer” is one that the Company has commenced and held open for at least twenty business days, and in which the Company has repurchased, prior to February 1, 2007, all Notes validly tendered at a price of at least $1,000.00 plus accrued and unpaid interest up to, but not including, the date the Notes are redeemed, for each $1,000.00 principal amount of Notes validly tendered. Other than as provided in the preceding two sentences, Special Interest shall be paid in the same manner that regular interest is paid under the Indenture and the Securities. The Company shall advise the Trustee in writing upon in the event (i) the Company has consummated an Eligible Tender Offer or (ii) the Company is obligated to make the Special Interest payment.”

ARTICLE II
Conditions; Effectiveness

Section 2.01 Conditions and Effectiveness. The Supplemental Indenture shall become effective upon execution and delivery by the Company and the Trustee.

ARTICLE III
Miscellaneous

Section 3.01 Indenture Ratified. Except as otherwise provided herein, the Indenture is in all respects ratified and confirmed, and all of the terms, provisions and conditions thereof shall be and remain in full force and effect.

Section 3.02 Counterparts. This Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.

Section 3.03 Trustee Not Responsible. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which are made solely by the Company.

Section 3.04 Governing Law. This Supplemental Indenture will be governed by, and construed in accordance with, the laws of the State of New York.

Section 3.05 Successors. All agreements in this Supplemental Indenture of the Company or the Trustee shall bind their respective successors and assigns.

Section 3.06 Severability. In case any provisions in this Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

*****remainder of page intentionally left blank—signature page to follow*****

IN WITNESS WHEREOF, the undersigned, being duly authorized, have executed this Supplemental Indenture on behalf of the respective parties hereto as of the date first above written.

BELL MICROPRODUCTS INC.

By: /s/ W. Donald Bell

Name: W. Donald Bell
Title: Chief Executive Officer

By: /s/ James E. Illson
Name: James E. Illson
Title: Chief Financial Officer, Chief
Operating Officer and
President of the Americas

WELLS FARGO BANK, N.A.

By: Thomas M. Korsman
Name: Thomas M. Korsman
Title: Vice President

Exhibit 99.1

Bell Microproducts

Bell Microproducts Announces Results of Consent Solicitation; Obtains Noteholder Waivers and Proceeds With Tender Offering

SAN JOSE, Calif., Dec. 19 /PRNewswire-FirstCall/ — Bell Microproducts Inc. (Nasdaq: BELM) (the “Company”) today announced the results of its consent solicitation relating to its $109,850,000 outstanding 3 3/4 % Convertible Subordinated Notes, Series B due 2024 (the “Notes”). Holders of $109,475,000 aggregate principal amount of the outstanding Notes (which is in excess of the requisite majority of the outstanding principal amount) have consented to a waiver of defaults arising from the failure to file all reports and other information and documents which it is required to file with the SEC and the trustee. Further, these holders have agreed to amend the indenture to eliminate any provision that would trigger a default for the failure to file or deliver any reports required to be filed with the SEC or the trustee, and to add a provision for a special interest payment to holders of Notes if an eligible tender offer for the outstanding Notes is not completed prior to February 1, 2007.

Information Regarding the Tender Offer

On December 13, 2006, the Company commenced a tender offer for the Notes that is intended to qualify as an eligible tender offer under the amended indenture. Credit Suisse is acting as the Dealer Manager for the tender offer for the Notes. Questions regarding the tender offer may be directed to Credit Suisse at 800-820-1653 (toll-free) or at 212-538-0013. Global Bondholder Services Corporation will act as the Information Agent for the tender offer for Notes. Requests for documents related to the tender offers may be directed to Global Bondholder Services Corporation at 866-924-2200 (toll-free) or at 212-430-3774.

This announcement shall not constitute an offer to purchase or a solicitation of an offer to sell any securities. The tender offer is being made only through an Offer to Purchase and related materials. Holders of the Notes should read carefully the Offer to Purchase and related materials because they contain important information. Bell Micro has mailed a copy of the applicable Offer to Purchase to each holder of the Notes on the applicable record date for mailing. In addition, holders of the Notes and investors may obtain a free copy of the Tender Offer Statement on Schedule TO, the Offer to Purchase and other documents that Bell Micro has filed with the SEC relating to the tender offer at the SEC’s website at www.sec.gov . These materials contain important information and holders of the Notes are urged to read them carefully prior to making any decision with respect to the tender offer.

About Bell Microproducts

Bell Microproducts is an international, value-added distributor of a wide range of high-tech products, solutions and services, including storage systems, servers, software, computer components and peripherals, as well as maintenance and professional services. An industry-recognized specialist in storage products, this Fortune 1000 company is one of the world’s largest storage-centric value-added distributors.

Bell Microproducts is uniquely qualified with deep technical and application expertise to service a broad range of information technology needs. From design to deployment, its products are available at any level of integration, from components to subsystem assemblies and fully-integrated, tested and certified system solutions. More information can be found in the Company’s SEC filings, or by visiting the Bell Microproducts Web site at www.bellmicro.com .

Safe Harbor Statement

This release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, which include the Company’s intentions with respect to its tender offer involve known and unknown risks and uncertainties which could cause actual results or facts to differ materially from such statements for a variety of reasons including, but not limited to the risks described from time to time in the Company’s reports to the Securities and Exchange Commission (including the Company’s Annual Report on Form 10-K). Additional risk factors, which are described in more detail in the Offer to Purchase, may include:

• the risk that we will not be able to complete financing for the Offer to Purchase;

• the ultimate outcome and timing of our financial statement restatement process, including the stock option review;

• risks arising from material weaknesses in our internal control over financial reporting;

• potential adverse effects to our financial condition, results of operations or prospects as a result of any required adjustments to prior period financial statements, and the incurrence of costs related to the restatement and consent solicitation processes and the tender offer;

• risks associated with our inability to prepare and timely file financial statements;

• potential adverse effects if there are additional adverse accounting-related developments;

• potential adverse developments from enforcement actions that may be commenced by regulatory agencies, including delisting of our common stock from the Nasdaq Global Market;

• potential downgrades in the credit ratings of our securities; and

• risks associated with our business operations as identified in our SEC filings.

Investors should take such risks into account when making investment decisions. Shareholders, Noteholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The Company undertakes no obligation to update publicly or revise any forward-looking statements.

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