Exhibit 10.1

SECOND AMENDMENT TO FOURTH AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT

SECOND AMENDMENT, dated as of March 12, 2019, to the Fourth Amended and Restated
Loan and Security Agreement, dated as of October 1, 2015, among HWC Wire & Cable
Company (“Borrower Agent”), PFI, LLC (as successor by merger to Vertex Corporate
Holdings, Inc. and Vertex-PFI, Inc.) (“PFI, LLC” and together with Borrower
Agent, individually a “Borrower” and collectively “Borrowers”), Houston Wire &
Cable Company (“Guarantor”), the lenders or lender named therein (“Lenders”) and
Bank of America, N.A. (“Bank of America”), as agent for said Lenders (Bank of
America, in such capacity, “Agent”). Said Fourth Amended and Restated Loan and
Security Agreement, as amended by that certain First Amendment to Fourth Amended
and Restated Loan and Security Agreement dated as of October 3, 2016, as hereby
amended and modified by this Second Amendment to Fourth Amended and Restated
Loan and Security Agreement and as may be further amended and modified from time
to time, is hereinafter referred to as the “Loan Agreement.” The terms used
herein and not otherwise defined shall have the meanings attributed to them in
the Loan Agreement.

WHEREAS, Lenders, Agent and Borrowers desire to make certain amendments and
modifications to the Loan Agreement;

NOW THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained and contained in the Loan Agreement, the parties hereto
hereby agree as follows:

1.                  Amended and Additional Definitions. The definitions of
“Accounts Formula Amount”, “Applicable Margin”, “Borrowing Base”, “Inventory
Formula Amount”, “Revolver Termination Date”, “Second Amendment”, and “Second
Amendment Effective Date”, are hereby amended or inserted into Section 1.1 of
the Loan Agreement in appropriate alphabetical order, as the case may be.

Accounts Formula Amount: the sum of (x) 85% of the Value of Eligible Accounts,
plus (y) 85% of the Value of Eligible Foreign Accounts, provided that the
aggregate Value of Eligible Foreign Accounts shall not exceed $1,500,000.

Applicable Margin: with respect to any Type of Loan, the margin set forth below,
as determined by average Availability for the most recently ended Fiscal
Quarter:

Level Availability

Base Rate

Revolver

Loans

LIBOR

Revolver

Loans

I > $40,000,000 0.00% 1.00% II < $40,000,000, but > $25,000,000 0.00% 1.25% III
< $25,000,000 0.00% 1.50%

 

 

 

Borrowing Base: on any date of determination, an amount equal to the lesser of
(a) the aggregate amount of Revolver Commitments, minus the L/C Reserve; or (b)
sum of the Accounts Formula Amount, plus the Inventory Formula Amount, minus the
Availability Reserve.

Inventory Formula Amount: the sum of (x) the lesser of (i) 70% of the Value of
Eligible Inventory or (ii) 90% of the NOLV Percentage of the Value of Eligible
Inventory, plus (y) the lesser of (i) 70% of the Value of Eligible In-Transit
Inventory or (ii) 90% of the NOLV Percentage of the Value of Eligible In-Transit
Inventory.

Revolver Termination Date: March 12, 2024.

Second Amendment: that certain Second Amendment to Fourth Amended and Restated
Loan and Security Agreement dated as of March 12, 2019 by and among the Agent,
Lenders and Borrowers and consented to by Guarantor.

Second Amendment Effective Date: as defined in Section 7 of the Second
Amendment.

2.                  Deleted Definitions. The definitions of “FILO Account
Percentage”, “FILO Amount”, “FILO Applicable Manager”, “FILO Applicable Margin”,
“FILO Borrowing Base”, “FILO Inventory Percentage”, “FILO Loans”, “Modified
Availability”, “Vertex Eligible Accounts”, “Vertex Eligible Foreign Accounts”,
“Vertex Eligible Inventory”, “Vertex Entities”, “Vertex Field Exam Completion
Date”, and “Vertex Inventory Field Exam and Appraisal Completion Date” are
hereby deleted from Section 1.1 of the Loan Agreement.

3.                  Accounting Standard for Capital Leases. The following
provision is hereby added to the end of Section 1.2 of the Loan Agreement:

“Notwithstanding the foregoing, all obligations of Borrowers that are or would
have been treated as operating leases as determined in accordance with GAAP
immediately prior to the issuance of the Accounting Standards Update 2016-02,
Leases (Topic 842) by the Financial Accounting Standards Board shall not be
treated as capital leases hereunder due to such issuance, whether or not such
obligations were in effect as of the date such update was issued and regardless
of whether GAAP requires such obligations to be treated as capitalized lease
obligations in the financial statements.”

4.                  Removal of FILO Loans. Section 2.1.8 of the Loan Agreement
is hereby deleted in its entirety.

5.                  Rates of Payment. Section 3.1.1(a) is hereby deleted and the
following is inserted in its place.

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“3.1.1.       Rates and Payment of Interest.

(a)       The Obligations shall bear interest (i) if a Base Rate Loan, at the
Base Rate in effect from time to time, plus the Applicable Margin; (ii) if a
LIBOR Loan, at LIBOR for the applicable Interest Period, plus the Applicable
Margin; and (iii) if any other Obligation (including, to the extent permitted by
law, interest not paid when due), at the Base Rate in effect from time to time,
plus the Applicable Margin for Base Rate Revolver Loans. Interest shall accrue
from the date the Loan is advanced or the Obligation is incurred or payable,
until paid by Borrowers. If a Loan is repaid on the same day made, one day’s
interest shall accrue.”

6.                  Amendment Fee. In order to induce Agent and Lenders to enter
into this Second Amendment, Borrowers agree to pay to Agent for the ratable
benefit of Lenders an amendment fee of $50,000. Such fee shall be due and
payable and shall be deemed fully earned and non-refundable on the Second
Amendment Effective Date.

7.                  Representations and Warranties. Borrowers hereby reaffirm
each of the warranties and representations contained in the Loan Agreement and
the Loan Documents as if each such representation and warranty were made on the
date hereof. Further, Borrowers represent and warrant to Agent and Lenders that
as of the date hereof, there are no existing and continuing Defaults or Events
of Default

8.                  Conditions Precedent. This Second Amendment shall become
effective upon satisfaction of each of the following conditions precedent:

(i)                 Borrowers, Guarantor, Agent and Lenders shall have executed
and delivered to each other this Second Amendment;

(ii)               Each Borrower shall have delivered to Agent a Certificate of
Secretary of such Borrower, together with true and correct copies of the
Certificate of Incorporation and By-laws, or the Articles of Organization and
Operating Agreement, of such Borrower, true and correct copies of the
Resolutions of the Board of Directors or the Sole Manager of such Borrower
authorizing or ratifying the execution, delivery, and performance of this Second
Amendment, and the names of the officers of such Borrower authorized to sign
this Second Amendment, together with a sample of the true signature of each such
officer; and

(iii)             Each Borrower shall have paid to the Agent for the ratable
benefit of Lenders the amendment fee referred to in Section 6 of this Second
Amendment.

The date on which each of such conditions precedent are satisfied or waived is
hereinafter referred to as the Second Amendment Effective Date.

9.                  Continuing Effect. Except as otherwise specifically set out
herein, the provisions of the Loan Agreement shall remain in full force and
effect.

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10.              Governing Law. This Second Amendment and the obligations
arising hereunder shall be governed by, and construed and enforced in accordance
with, the laws of the State of Illinois applicable to contracts made and
performed in such state, without regard to the principles thereof regarding
conflict of laws.

11.              Counterparts. This Second Amendment may be executed in any
number of separate counterparts, each of which shall, collectively and
separately, constitute one agreement.

IN WITNESS WHEREOF, this Second Amendment has been duly executed as of the first
day written above.

 

HWC WIRE & CABLE COMPANY, as a Borrower

By: /s/ Christopher Micklas

Name: Christopher Micklas

Title: Chief Financial Officer, Treasurer and Secretary

 

PFI, LLC, as a Borrower

By: /s/ James L. Pokluda III

Name: James L. Pokluda III

Title: President and Chief Executive Officer

 

 

BANK OF AMERICA, N.A., as Agent and a Lender

By: /s/ Ajay S. Jagsi

Name: Ajay S. Jagsi

Title: Vice President

ACCEPTED AND AGREED
to this 12th day of March, 2019:

HOUSTON WIRE & CABLE COMPANY, as Guarantor

By: /s/ James L. Pokluda III

Name: James L. Pokluda III

Title: President and Chief Executive Officer

 

 

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