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EXHIBIT 10.4
NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
THE SECURITIES
LAWS OF ANY STATE. NEITHER THIS WARRANT NOR THE SHARES ISSUABLE
UPON EXERCISE OF
THIS WARRANT MAY BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF
SUCH REGISTRATION OR AN EXEMPTION THEREFROM. IN ADDITION, THE
TRANSFER OF THIS
WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT IS
SUBJECT TO THE
CONDITIONS SPECIFIED IN ARTICLE 10 OF THE SECURITIES PURCHASE
AGREEMENT DATED
OCTOBER 2, 2006 AMONG BELL MICROPRODUCTS INC., THE TEACHERS'
RETIREMENT SYSTEM
OF ALABAMA AND THE EMPLOYEES' RETIREMENT SYSTEM OF ALABAMA (THE
"SECURITIES
PURCHASE AGREEMENT"). NO TRANSFER OF THIS WARRANT OR THE SHARES
ISSUABLE UPON
EXERCISE OF THIS WARRANT SHALL BE VALID OR EFFECTIVE UNTIL SUCH
CONDITIONS HAVE
BEEN FULFILLED. A COPY OF THE SECURITIES PURCHASE AGREEMENT IS ON
FILE AND MAY
BE INSPECTED AT THE PRINCIPAL EXECUTIVE OFFICE OF THE ISSUER. THE
HOLDER OF THIS
WARRANT, BY ACCEPTANCE OF THIS WARRANT, AGREES TO BE BOUND BY THE
PROVISIONS OF
THE SECURITIES PURCHASE AGREEMENT.
WARRANT
OF
BELL MICROPRODUCTS INC.
October 2, 2006
("Issuance Date")
For value received, The Teachers' Retirement System of Alabama and
The
Employees' Retirement System of Alabama (collectively and
individually, and
jointly and severally, "Investor") is entitled to purchase from
Bell
Microproducts Inc., a California corporation, or its successor (the
"Company")
at any time on or before the fifth anniversary of the Issuance
Date, One Hundred
Twenty-Five Thousand (125,000) shares of Common Stock (defined
below) (such
shares of Common Stock being hereinafter referred to as the
"Warrant Shares").
The exercise price of this Warrant shall be $5.15 per share (the
"Warrant
Exercise Price"). The number of Warrant Shares and the Warrant
Exercise Price
are subject to adjustment as set forth herein. As used herein, the
term "Holder"
means Investor, or any record holder or holders of the Warrant
Shares issued
upon exercise, whether in whole or in part, of the Warrant.
This Warrant is subject to the following provisions, terms and
conditions:
1. DEFINITION. The term "Common Stock" shall mean the Company's
authorized common shares, any additional common shares which may be
authorized
in the future by the Company, and any stock into which such common
shares may
hereafter be changed.
2. EXERCISE; ISSUANCE OF THE WARRANT SHARES.
(a) The rights represented by this Warrant may be exercised by
the
Holder, in whole but not in part and not as to a fractional share
of Common
Stock, by written notice of exercise delivered to the Company
accompanied by the
surrender of this Warrant (properly endorsed if
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required) at the principal office of the Company and upon payment
of an amount
equal to the Warrant Exercise Price for such shares to the Company,
in the form
of cash, certified check, bank draft, or securities previously
issued by the
Company to the Holder valued at such securities' then fair market
value. The
Company agrees that the Warrant Shares so purchased shall be and
are deemed to
be issued as of the close of business on the date on which this
Warrant shall
have been surrendered and payment made for such Warrant Shares as
provided in
this subsection (a). Certificates for the Warrant Shares so
purchased shall be
delivered to the Holder as soon as practicable after the rights
represented by
this Warrant shall have been so exercised. Notwithstanding the
foregoing,
however, the Company shall not be required to deliver any
certificates for the
Warrant Shares, except in accordance with the provisions and
subject to the
limitations of Section 6 below.
(b) For purposes
of this Section 2, the "fair market value" of a
security issued by the Company as of a particular date shall be its
"market
price," as follows:
(i) if the security is listed on the Nasdaq Global Select
Market, Nasdaq Global Market, Nasdaq Capital Market, or an
established
stock exchange, then the average of the prices of such security at
the
close of the regular trading session of such market or exchange for
the
10 business days immediately preceding such date, or
(ii) if the security is not so listed on the Nasdaq Global
Select Market, Nasdaq Global Market, Nasdaq Capital Market, or
an
established stock exchange, then the average of the closing "bid"
and
"asked" prices quoted by the OTC Bulletin Board, the National
Quotation
Bureau, or any comparable reporting service for the 10 business
days
immediately preceding such date, or
(iii) if the security is not publicly traded as of such date,
the per share value as determined by the Company's Board of
Directors.
3. COVENANTS OF THE COMPANY. The Company covenants and agrees that
all
Warrant Shares that may be issued upon the exercise of this Warrant
will, upon
issuance, be duly authorized and issued, fully paid, nonassessable
and free from
all taxes, liens and charges with respect to the issuance thereof.
The Company
further covenants and agrees that until expiration of this Warrant,
the Company
will at all times have authorized, and reserved for the purpose of
issuance or
transfer upon exercise of this Warrant, a sufficient number of
shares of Common
Stock to provide for the exercise of this Warrant.
4. ANTIDILUTION ADJUSTMENTS. The foregoing provisions are,
however,
subject to the following:
(a) In case the Company shall at any time subdivide its
outstanding
Common Stock into a greater number of shares or declare a dividend
payable in
Common Stock, the Warrant Exercise Price in effect immediately
prior to such
subdivision shall be proportionately reduced and the number of
Warrant Shares
purchasable pursuant to this Warrant shall be proportionately
increased, and
conversely, in case the outstanding Common Stock shall be combined
into a
smaller number of shares, the Warrant Exercise Price in effect
immediately prior
to such
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combination shall be proportionately increased and the number of
shares
of Common Stock purchasable upon the exercise of this Warrant shall
be
proportionately reduced.
(b) If any capital reorganization or reclassification of the
capital
stock of the Company, or consolidation or merger of the Company
with another
corporation, or the sale of all or substantially all of its assets
to another
corporation shall be effected in such a way that holders of Common
Stock shall
be entitled to receive stock, securities or assets ("Substituted
Property") with
respect to or in exchange for such Common Stock, then, as a
condition of such
reorganization, reclassification, consolidation, merger or sale,
the Holder
shall have the right to purchase and receive upon the basis and
upon the terms
and conditions specified in this Warrant and in lieu of the Common
Stock of the
Company immediately theretofore purchasable and receivable upon the
exercise of
the rights represented hereby, such Substituted Property as would
have been
issued or delivered to the Holder if it had exercised this Warrant
and had
received upon exercise of this Warrant the Common Stock prior to
such
reorganization, reclassification, consolidation, merger or
sale.
5. NO VOTING RIGHTS. This Warrant shall not entitle the Holder to
any
voting rights or other rights as a shareholder of the Company.
6. TRANSFERABILITY; NOTICE OF TRANSFER OF WARRANTS OR RESALE OF
WARRANT
SHARES. The Holder, by acceptance hereof, represents and warrants
that (a)
Holder is acquiring this Warrant for Holder's own account for
investment
purposes only and not with a view to its resale or distribution and
(b) Holder
has no present intention to resell or otherwise dispose of all or
any part of
this Warrant (however, inasmuch as Holder is a public retirement
fund, Holder
may be required in certain circumstances to dispose of all or a
part of this
Warrant to satisfy its fiduciary obligations). Other than pursuant
to
registration under federal and state securities laws or an
exemption from such
registration, the availability of which the Company shall determine
in its sole
discretion, (y) the Company will not accept the exercise of this
Warrant or
issue certificates for Warrant Shares and (z) neither this Warrant
nor any
Warrant Shares may be sold, pledged, assigned or otherwise
disp
