Exhibit 10.1

 

TENTH AMENDMENT TO AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT

TENTH AMENDMENT, dated as of November 3, 2006 to the Amended and Restated Loan
and Security Agreement, dated as of May 22, 2000, among HWC Wire & Cable Company
(formerly known as Houston Wire & Cable Company) (“Borrower”), the lenders named
therein (“Lenders”) and Bank of America, N.A. (“Bank of America”) as
successor-in-interest to Fleet Capital Corporation, as agent for said Lenders
(Bank of America, in such capacity, “Agent”).  Said Amended and Restated Loan
and Security Agreement, as amended by a certain First Amendment to Amended and
Restated Loan and Security Agreement by and among Borrower, Lenders and Agent
dated as of July 13, 2000, by a certain Second Amendment to Amended and Restated
Loan and Security Agreement by and among Borrower, Lenders and Agent dated May
30, 2001, by a certain Third Amendment to Amended and Restated Loan and Security
Agreement by and among Borrower, Lenders and Agent dated October 22, 2001, by a
certain Fourth Amendment to Amended and Restated Loan and Security Agreement by
and among Borrower, Lenders and Agent dated December 31, 2002, by a certain
Fifth Amendment to Amended and Restated Loan and Security Agreement by and among
Borrower, Lenders and Agent dated November 19, 2003, by a certain Sixth Amended
to Amended and Restated Loan and Security Agreement dated as of May 26, 2005 by
and among Borrower, Lenders and Agent, by a certain Seventh Amendment to Amended
and Restated Loan and Security Agreement dated December 14, 2005 by and among
Borrower, Agent and Lenders, by a certain Eighth Amendment to Amended and
Restated Loan and Security Agreement dated December 30, 2005 by and among
Borrower, Agent and Lenders and by a certain Ninth Amendment to Amended and
Restated Loan and Security Agreement dated May 23, 2006 by and among Borrower,
Agent and Lenders and as it may be further amended, 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.  References to Agent
and/or any Lender shall include Agent’s or such Lender’s
predecessor(s)-in-interest.

WHEREAS, Lenders, Agent and Borrower 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.             Additional and Amended Definitions.  The following definitions of
“Tenth Amendment” and “Tenth Amendment Effective Date” are hereby inserted in
Appendix A to the Loan Agreement; the definitions of “Applicable Margin,”
“Maximum Revolving Loan” and “Total Credit Facility” are hereby deleted from
Appendix A and the following are inserted in their stead:

“Applicable Margin – from the Tenth Amendment Effective Date to, but not
including, the first Adjustment Date (as hereinafter defined) the percentages
set forth

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below with respect to the Base Rate Revolving Credit Portion, the LIBOR
Revolving Credit Portion and the Unused Line Fee:

Base Rate Revolving Credit Portion

 

0

%

LIBOR Revolving Credit Portion

 

0.75

%

Unused Line Fee

 

0.20

%

The percentages set forth above will be adjusted on the first day of the month
following delivery by Borrower to Agent of the financial statements required to
be delivered pursuant to subsection 8.1.3(ii) of the Agreement for each December
31, March 31, June 30 and September 30 during the Term, commencing with the
month ending December 31, 2006 (each such date an “Adjustment Date”), effective
prospectively, by reference to the applicable “Financial Measurement” (as
defined below) for the four quarters most recently ending in accordance with the
following:

Financial
Measurement

 

Base Rate
Revolving Credit
Portion

 

LIBOR
Revolving Credit
Portion

 

Unused Line Fee

 

 

 

 

 

 

 

 

 

> 1.25 to 1

 

0

%

1.25

%

0.25

%

< 1.25 to 1, but > 0.75 to 1

 

0

%

1.00

%

0.225

%

< 0.75 to 1

 

0

%

0.75

%

0.20

%

provided that, (i) if Borrower’s audited financial statements for any fiscal
year delivered pursuant to subsection 8.1.3(i) of the Agreement reflect a
Financial Measurement that yields a higher Applicable Margin than that yielded
by the financial statements previously delivered pursuant to
subsection 8.1.3(ii) of the Agreement for such fiscal year, the Applicable
Margin shall be readjusted retroactively for the period that was incorrectly
calculated and (ii) if Borrower fails to deliver the financial statements
required to be delivered pursuant to subsection 8.1.3(i) or subsection 8.1.3(ii)
of the Agreement on or before the due date thereof, the interest rate shall
automatically adjust to the highest interest rate set forth above, effective
prospectively from such due date until that date on which such financial
statements are so delivered to Agent.  For purposes hereof, “Financial
Measurement” shall mean the Debt to EBITDA Ratio.”

*      *      *

Maximum Revolving Loan- Forty-Five Million Dollars ($45,000,000).

*      *      *

Tenth Amendment – that certain Tenth Amendment to Amended and Restated Loan and
Security Agreement dated as of November 3, 2006 by and among Borrower, Agent and
Lenders.

*      *      *

2

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Tenth Amendment Effective Date – the date on which the conditions precedent to
the effectiveness of the Tenth Amendment are satisfied.

*      *      *

Total Credit Facility - Forty-Five Million Dollars ($45,000,000).

*      *      *

2.             Total Credit Facility.  The first paragraph of Section 1 of the
Loan Agreement is hereby deleted and the following is inserted in its stead:

“1.           CREDIT FACILITY.

Subject to the terms and conditions of, and in reliance upon the representations
and warranties made in, this Agreement and the other Loan Documents, Lenders
agree to make a credit facility of up to Forty-Five Million Dollars
($45,000,000) available upon Borrower’s request therefor, as follows:”

*      *      *

3.             Revolving Loans.  Section 1.1.1(A) of the Loan Agreement is
hereby deleted and the following is inserted in its stead:

“1.1         Revolving Credit Loans.

1.1.1        Loans and Reserves.  (A) Loans and Reserves.  The aggregate amount
of the Revolving Credit Loans to be made by each Lender (such Lender’s
“Revolving Credit Loan Commitment”), pursuant to the terms hereof, shall be the
amount set below such Lender’s name on the signature pages hereof.  The
aggregate principal amount of the Revolving Credit Loan Commitments is
Forty-Five Million Dollars ($45,000,000).  The percentage equal to the quotient
of (x) each Lender’s Revolving Credit Loan Commitment, divided by (y) the
aggregate of all Revolving Credit Loan Commitments, is that Lender’s “Revolving
Credit Percentage”.  Subject to all of the terms and conditions of this
Agreement, each Lender agrees, for so long as no Default or Event of Default
exists, to make Revolving Credit Loans to Borrower from time to time, as
requested by Borrower in accordance with the terms of Section 3.1 hereof, up to
a maximum principal amount at any time outstanding equal to the product of (A)
the Borrowing Base at such time multiplied by (B) such Lender’s Revolving Credit
Percentage.  It is expressly understood and agreed that Agent and Lenders may
use the Borrowing Base as a maximum ceiling on Revolving Credit Loans
outstanding to Borrower at any time.  If the unpaid balance of the Revolving
Credit Loans should exceed the ceiling so determined or any other limitation set
forth in this Agreement, such Revolving Credit Loans shall nevertheless
constitute Obligations that are secured by the Collateral and entitled to all
the benefits thereof.  In no event shall Lenders be required to make a Revolving
Credit Loan at any time that there exists a Default or an Event of Default. 
Agent

3

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shall have the right to establish reserves in such amounts, and with respect to
such matters, as Agent shall deem necessary or appropriate in the reasonable
exercise of Agent’s credit judgment, against the amount of Revolving Credit
Loans which Borrower may otherwise request under this Section 1.1.1., including,
without limitation, with respect to (i) price adjustments, damages, unearned
discounts, returned products or other matters for which credit memoranda are
issued in the ordinary course of Borrower’s business; (ii) shrinkage, spoilage
and obsolescence of Inventory; (iii) slow moving Inventory; (iv) other sums
chargeable against Borrower’s Loan Account as Revolving Credit Loans under any
section of this Agreement; (v) amounts owing by Borrower to any Person to the
extent secured by a Lien on, or trust over, any Property of Borrower; and (vi)
such other matters, events, conditions or contingencies from time to time
hereunder as to which Agent, in its reasonable credit judgment, determines
reserves should be established from time to time hereunder.”

4.             Unused Line Fee.  Section 2.5 of the Loan Agreement is hereby
deleted and the following is inserted in its stead:

“2.5         Unused Line Fee.  Borrower shall pay to Agent for the ratable
benefit of Lenders a fee equal to the Applicable Margin per annum of the average
monthly amount by which the Maximum Revolving Loan exceeds the sum of the
outstanding principal balance of the Revolving Credit Loans (exclusive of
Swingline Loans) plus the LC Amount.  The unused line fee shall be payable
monthly in arrears on the first day of each calendar month hereafter.”

5.             Term.  Section 4.1 of the Loan Agreement is hereby deleted and
the following is inserted in its stead:

“4.1         Term of Agreement.  Subject to Agent’s and Lender’s right to cease
making Loans to Borrower upon or after the occurrence of any Default or Event of
Default, this Agreement shall be in effect from the date hereof, through and
including May 21, 2010 (the “Original Term”), unless terminated as provided in
Section 4.2 hereof.”

6.             Borrowing Base Certificate.  Section 6.2.1 of the Loan Agreement
is hereby deleted and the following is inserted in its stead:

“6.2.1      Borrowing Base Certificate.  On or before the 30th (20th with
respect to monthly deliveries) day of each quarter (month, if average
Availability for the most recently ended 30-day period is less than Ten Million
Dollars ($10,000,000) from and after the date hereof, Borrower shall deliver to
Agent a Borrowing Base Certificate in the form attached hereto as Exhibit C as
of the last day of the immediately preceding quarter (or month, as applicable),
with such supporting materials as Agent shall reasonably request.  If Borrower
deems advisable, Borrower shall execute and deliver to Agent Borrowing Base
Certificates more frequently than quarterly (or monthly, as applicable).”

4

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7.             Financial Covenants.  Exhibits O and Q to the Loan Agreement are
hereby deleted and Exhibits O and Q attached to this Tenth Amendment and
incorporated into the Loan Agreement hereby are inserted in their stead.

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

(a)           Agent shall have received each of the following documents, each in
form and substance acceptable to Agent:

(i)            Copy of this Tenth Amendment, duly executed by Borrower,
Guarantor, Agent and each Lender;

(ii)           Amended and Restated Revolving Credit Notes in the forms attached
hereto and incorporated herein as Exhibits A-1 and A-2 attached to this Tenth
Amendment executed by Borrower; and

(iii)          Copies of resolutions of the Board of Directors of Borrower
authorizing this Tenth Amendment certified as true and correct by the Secretary
of Borrower.

The date on which all of the conditions precedent listed above are satisfied or
waived is hereinafter referred to as the “Tenth Amendment Effective Date.” 
After the Tenth Amendment Effective Date, Lenders shall deliver to Borrower the
Revolving Credit Notes and Term Notes previously executed and delivered by
Borrower to Lenders, which Notes shall be marked “Amended and Superceded.”

9.             Signature Block.  The signature block to the Loan Agreement is
hereby amended to read as the signature block to this Tenth Amendment.

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

11.           Governing Law.  This Tenth 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.

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

5

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13.           No Novation.  The amended and restated Revolving Credit Notes to
be delivered pursuant to this Tenth Amendment replace and supercede those
certain promissory notes in the principal amount of $27,500,000 and $27,500,000,
respectively, dated December 30, 2005 (the “Original Notes”) and the execution
and delivery of such amended and restated Revolving Credit Notes shall not
constitute (a) an extinguishment of the indebtedness of Borrower to the
applicable Lender evidenced by the Original Notes or (b) a novation of any such
indebtedness or any of the Original Notes.

(Signature Page Follows)

6

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(Signature Page to Tenth Amendment to Amended and Restated
Loan and Security Agreement)

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

 

HWC WIRE & CABLE COMPANY, as
Borrower

 

HOUSTON WIRE & CABLE COMPANY,
as Guarantor

 

 

 

 

 

 

By:

/s/ Nicol G. Graham

 

 

By:

/s/ Charles Sorrentino

 

Name:

Nicol G. Graham

 

 

Name:

Charles Sorrentino

 

Title:

V.P. & CFO

 

 

Title:

President & CEO

 

 

 

THE CIT GROUP/BUSINESS CREDIT,
INC., as a Lender

 

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

 

 

 

 

 

 

By:

/s/ Chad Ramsey

 

 

By:

/s/ Sandra J. Evans

 

Name:

Chad Ramsey

 

 

Name:

Sandra J. Evans

 

Title:

Vice President

 

 

Title:

Senior Vice President

 

 

 

 

 

 

 

 

Revolving Loan Commitment:  $20,000,000

 

Revolving Loan Commitment:  $25,000,000

 

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EXHIBIT A-1

AMENDED AND RESTATED REVOLVING CREDIT NOTE

 

$25,000,000

Amended and Restated
As of November     , 2006
Chicago, Illinois

 

FOR VALUE RECEIVED, the undersigned, (hereinafter “Borrower”), hereby PROMISES
TO PAY to the order of Bank of America, N.A., a national banking association
(“Lender”), or its registered assigns, at the principal office of Bank of
America, N.A., as agent for such Lender, or at such other place in the United
States of America as the holder of this Note may designate from time to time in
writing, in lawful money of the United States of America and in immediately
available funds, the principal amount of Twenty-Five Million Dollars
($25,000,000), or such lesser principal amount as may be outstanding pursuant to
the Loan Agreement (as hereinafter defined) with respect to the Revolving Credit
Loan, together with interest on the unpaid principal amount of this Note
outstanding from time to time.

This Note is one of the Revolving Credit Notes referred to in, and issued
pursuant to, that certain Amended and Restated Loan and Security Agreement dated
as of May 22, 2000 by and among Borrower, the lender signatories thereto
(including Lender) and Fleet Capital Corporation, the predecessor-in-interest to
Bank of America, N.A. (“Bank of America”), as agent for such Lenders (Bank of
America in such capacity “Agent”) (hereinafter amended from time to time, the
“Loan Agreement”), and is entitled to the benefit and security of the Loan
Agreement.  All of the terms, covenants and conditions of the Loan Agreement and
the Security Documents are hereby made a part of this Note and are deemed
incorporated herein in full.  All capitalized terms herein, unless otherwise
defined, unless otherwise specifically defined in this Note, shall have the
meanings ascribed to them in the Loan Agreement.

The principal amount of the indebtedness evidenced hereby shall be payable in
the amounts and on the dates specified in the Loan Agreement and, if not sooner
paid in full, on the Commitment Termination Date, unless the term hereof is
extended in accordance with the Loan Agreement.  Interest thereon shall be paid
until such principal amount is paid in full at such interest rates and at such
times as are specified in the Loan Agreement.

Upon and after the occurrence, and during the continuation, of an Event of
Default, this Note shall or may, as provided in the Loan Agreement, become or be
declared immediately due and payable.

The right to receive principal of, and stated interest on, this Note may only be
transferred in accordance with the provisions of the Loan Agreement.

Demand, presentment, protest and notice of nonpayment and protest are hereby
waived by Borrower.

A-1-1

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This Note shall be interpreted, governed by, and construed in accordance with,
the internal laws of the State of Illinois.

HWC WIRE & CABLE COMPANY

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

A-1-2

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EXHIBIT A-2

AMENDED AND RESTATED REVOLVING CREDIT NOTE

$20,000,000

Amended and Restated
As of November       , 2006
Chicago, Illinois

 

FOR VALUE RECEIVED, the undersigned, (hereinafter “Borrower”), hereby PROMISES
TO PAY to the order of The CIT Group/Business Credit, Inc., a New York
corporation (“Lender”), or its registered assigns, at the principal office of
Bank of America, N.A., as agent for such Lender, or at such other place in the
United States of America as the holder of this Note may designate from time to
time in writing, in lawful money of the United States of America and in
immediately available funds, the principal amount of Twenty Million Dollars
($20,000,000), or such lesser principal amount as may be outstanding pursuant to
the Loan Agreement (as hereinafter defined) with respect to the Revolving Credit
Loan, together with interest on the unpaid principal amount of this Note
outstanding from time to time.

This Note is one of the Revolving Credit Notes referred to in, and issued
pursuant to, that certain Amended and Restated Loan and Security Agreement dated
as of May 22, 2000 by and among Borrower, the lender signatories thereto
(including Lender) and Fleet Capital Corporation, the predecessor-in-interest to
Bank of America, N.A. (“Bank of America”), as agent for such Lenders (Bank of
America in such capacity “Agent”) (hereinafter amended from time to time, the
“Loan Agreement”), and is entitled to the benefit and security of the Loan
Agreement.  All of the terms, covenants and conditions of the Loan Agreement and
the Security Documents are hereby made a part of this Note and are deemed
incorporated herein in full.  All capitalized terms herein, unless otherwise
defined, unless otherwise specifically defined in this Note, shall have the
meanings ascribed to them in the Loan Agreement.

The principal amount of the indebtedness evidenced hereby shall be payable in
the amounts and on the dates specified in the Loan Agreement and, if not sooner
paid in full, on the Commitment Termination Date, unless the term hereof is
extended in accordance with the Loan Agreement.  Interest thereon shall be paid
until such principal amount is paid in full at such interest rates and at such
times as are specified in the Loan Agreement.

Upon and after the occurrence, and during the continuation, of an Event of
Default, this Note shall or may, as provided in the Loan Agreement, become or be
declared immediately due and payable.

The right to receive principal of, and stated interest on, this Note may only be
transferred in accordance with the provisions of the Loan Agreement.

Demand, presentment, protest and notice of nonpayment and protest are hereby
waived by Borrower.

A-2-1

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This Note shall be interpreted, governed by, and construed in accordance with,
the internal laws of the State of Illinois.

HWC WIRE & CABLE COMPANY

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

A-2-2

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EXHIBIT O

COMPLIANCE CERTIFICATE

[Letterhead of Borrower]

                    , 200  

 

 

 

 

 

 

 

 

 

The undersigned, the chief financial officer of HWC Wire & Cable Company, a
Delaware corporation (“Borrower”), gives this certificate to Bank of America,
N.A. in accordance with the requirements of Section 8.1.2 of that certain Loan
and Security Agreement dated May 22, 2000, among Borrower, the lender
signatories thereto (“Lenders”) and Bank of America, N.A. (“Bank of America”), a
national banking association, as successor-in-interest to Fleet Capital
Corporation, as agent for such Lenders (Bank of America, in such capacity,
“Agent”).  Capitalized terms used in this Certificate, unless otherwise defined
herein, shall have the meanings ascribed to them in the Loan Agreement.

1.             Based upon my review of the balance sheets and statements of
income of Borrower for the [fiscal year] [monthly period] ending
                    , 200  , copies of which are attached hereto, I hereby
certify that:

(a)           average Availability for the 30 day period ending
                     is $                    ;

(b)           Fixed Charge Coverage Ratio for the period between
                       and                    is             to 1 (if
applicable);

(c)           Capital Expenditures during the period and for the fiscal year to
date total $                     and $                    , respectively.

2.             No Default exists on the date hereof, other than: 
                                            
                                                                                  
[if none, so state]; and

3.             No Event of Default exists on the date hereof, other than
                                      
                                                                                  
[if none, so state].

Very truly yours,

 

Chief Financial Officer

 

O-1

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EXHIBIT Q

FINANCIAL COVENANTS

Consolidated Net Income – with respect to any fiscal period of Guarantor
determined in accordance with GAAP on a consolidated basis; provided, however,
Consolidated Net Income shall not include (a) the income (or loss) of any Person
(other than a subsidiary of Guarantor) in which Guarantor or any of its
respective wholly-owned subsidiaries had an ownership interest unless received
in a cash distribution or requiring the payment of cash; (b) the income (or
loss) of any Person accrued prior to the date it became a Subsidiary of
Guarantor or is merged into or consolidated with Guarantor; (c) all amounts
included in determining net income (or loss) in respect of the write-up of
assets on or after the Closing Date, including the subsequent amortization or
expensing of the written-up portion of the assets; (d) extraordinary gains as
defined under GAAP and extraordinary non-cash losses and (e) gains (or losses)
from asset dispositions (other than sales of inventory).

Debt to EBITDA Ratio – at any date, the ratio of (i) aggregate Indebtedness for
Money Borrowed as of such date to (ii) EBITDA for the most recently ended four
fiscal quarters, all as determined for Borrower and its Subsidiaries on a
Consolidated basis and in accordance with GAAP.

EBITDA – with respect to any fiscal period, the sum of Guarantor’s Consolidated
Net Income plus amounts deducted in determining Consolidated Net Income in
respect of:  (a) any provision for (or less any benefit from) income taxes
whether current or deferred; (b) amortization and depreciation expense; and
(c) interest expense for such period, all as determined in accordance with GAAP.

Fixed Charge Coverage Ratio – with respect to any period of determination, the
ratio of (i) the remainder of EBITDA of Guarantor for such period less any
provision for income taxes (plus any benefit from) included in the determination
of Consolidated Net Income, but excluding changes in long-term and short-term
deferred tax assets and liabilities, less non-financed Capital Expenditures to
(ii) Fixed Charges.

Fixed Charges – for any period of determination, the sum of (a) scheduled
principal payments on Indebtedness for Money Borrowed (excluding the Seller
Note) (including the principal portion of scheduled payments of Capital Lease
Obligations), (b) Interest Expense included in the determination of Consolidated
Net Income, but excluding any interest paid in kind, with respect to
Indebtedness for Money Borrowed and (c) payments made within the applicable
period in respect of that Non-Competition Agreement dated on or about May 22,
2000 by and between Borrower and T.H. Cabling L.P., a Texas limited partnership
and Kent Electronics Corporation, a Texas corporation.

Interest Expense – with respect to any fiscal period, the interest expense
incurred for such period as determined in accordance with GAAP.

Q-1

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COVENANTS

Fixed Charge Coverage Ratio – If Availability for the most recently ended 30 day
period is less than Ten Million Dollars ($10,000,000), Borrower shall not permit
the Fixed Charge Coverage Ratio for the most recently ended twelve month period
ending on a March 31, June 30, September 30 or December 31 to be less than 1.10
to 1.

Q-2

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