Exhibit 10.1

 

THIRD AMENDMENT TO FOURTH AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT

 

THIRD AMENDMENT, dated as of December 10, 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 amended by that certain Second Amendment to Fourth Amended and
Restated Loan and Security Agreement dated as of March 12, 2019, as hereby
amended and modified by this Third 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 “Letter of
Credit Subline,” “Third Amendment”, “Third Amendment Effective Date”, and
“Trigger Period” are hereby amended or inserted into Section 1.1 of the Loan
Agreement in appropriate alphabetical order, as the case may be. 

 

Letter of Credit Subline:  $5,000,000.

 

Third Amendment:  that certain Third Amendment to Fourth Amended and Restated
Loan and Security Agreement dated as of December 10, 2019 by and among the
Agent, Lenders and Borrowers and consented to by Guarantor.

 

Third Amendment Effective Date:  as defined in Section 8 of the Third Amendment.

 

Trigger Period:  the period (a) commencing on the day that an Event of Default
occurs, or Availability is less than the greater of $11,500,000 and ten percent
(10%) of the Revolver Commitments at any time; and (b) continuing until, during
the preceding 60 consecutive days, no Event of Default has existed and
Availability has been greater than the greater of $11,500,000 and ten percent
(10%) of the Revolver Commitments at all times; provided, however, that Trigger
Periods shall not terminate more than twice within any Fiscal Year.

 

2.              Increase to Revolver Commitment.  Schedule 1.1 to the Loan
Agreement is hereby deleted in its entirety and replaced with Schedule 1.1
attached hereto.

 

 

 

3.             Rates of Payment.  Section 2.1.7 is hereby deleted and the
following is inserted in its place. 

 

“2.1.7     Increase in Revolver Commitments.  Borrowers may request an increase
in Revolver Commitments from time to time upon notice to Agent, as long as (a)
the requested increase is in a minimum amount of $10,000,000 and is offered on
the same terms as existing Revolver Commitments, except for a closing fee
specified by Borrowers, (b) increases under this Section do not exceed
$35,000,000 in the aggregate and no more than three (3) increases are made, and
(c) no reduction in Commitments pursuant to Section 2.1.4 has occurred prior to
the requested increase.  Agent shall promptly notify Lenders of the requested
increase and, within 10 Business Days thereafter, each Lender shall notify Agent
if and to what extent such Lender commits to increase its Revolver Commitment. 
Any Lender not responding within such period shall be deemed to have declined an
increase.  If Lenders fail to commit to the full requested increase, Eligible
Assignees may issue additional Revolver Commitments and become Lenders
hereunder.  Agent may allocate, in its discretion, the increased Revolver
Commitments among committing Lenders and, if necessary, Eligible Assignees. 
Provided the conditions set forth in Section 6.2 are satisfied, total Revolver
Commitments shall be increased by the requested amount (or such lesser amount
committed by Lenders and Eligible Assignees) on a date agreed upon by Agent and
Borrower Agent, but no later than 45 days following Borrowers’ increase
request.  Agent, Borrowers, and new and existing Lenders shall execute and
deliver such documents and agreements as Agent deems appropriate to evidence the
increase in and allocations of Revolver Commitments.  On the effective date of
an increase, the Revolver Loans and other exposures under the Revolver
Commitments shall be reallocated among Lenders, and settled by Agent if
necessary, in accordance with Lenders’ adjusted shares of such Commitments.”

 

4.              Inspections; Appraisals.  Subsection 10.1.1(b) is hereby deleted
and the following is inserted in its place

 

“(b)         Reimburse Agent for all charges, costs and expenses of Agent in
connection with (i) examinations of any Obligor’s books and records or any other
financial or Collateral matters as Agent deems appropriate, up to one time per
Loan Year; and (ii) appraisals of Inventory up to one time per Loan Year;
provided, however, that if during any Loan Year, Availability is less than the
greater of $23,000,000 and twenty percent (20%) of Revolver Commitments then
Borrowers shall reimburse Agent for all charges, cash and expenses of Agent in
connection with one additional examination and one additional appraisal within
such Loan Year; provided, however, that if an examination or appraisal is
initiated during a Default or Event of Default, all charges, costs and expenses
relating thereto shall be reimbursed by Borrowers without regard to such
limits.  Borrowers agree to pay Agent’s then standard charges for examination
activities, including charges for Agent’s internal examination and appraisal
groups, as well as the charges of any third party used for such purposes.”

 

5.             Schedule 9.1.4 (Names and Capital Structure).  Schedule 9.1.4 to
the Loan Agreement is hereby deleted in its entirety and replaced with Schedule
9.1.4 attached hereto.

 

6.             Fees.  In order to induce Agent and Lenders to enter into this
Third Amendment, Borrowers agree to pay to Agent the closing fee set forth in
that certain Amended and Restated Fee Letter as of even date herewith.

 

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 Third 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 Third Amendment;

 

 

 

(ii)        Borrower shall have executed and delivered to Agent and Lenders a
duly executed Amended and Restated Revolver Note and an Amended and Restated Fee
Letter, each in form and substance acceptable to Agent;

 

(iii)       Each Borrower and Guarantor 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 Third
Amendment, and the names of the officers of such Borrower authorized to sign
this Third Amendment, together with a sample of the true signature of each such
officer; and

 

(iv)       Each Borrower shall have paid to the Agent for the ratable benefit of
Lenders the closing fee referred to in Section 6 of this Third Amendment. 

 

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

 

10.           Governing Law.  This Third 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 Third Amendment may be executed in any number
of separate counterparts, each of which shall, collectively and separately,
constitute one agreement.

 

IN WITNESS WHEREOF, this Third 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 10th day of December, 2019:

 

HOUSTON WIRE & CABLE COMPANY, as Guarantor

 

By:

/s/ James L. Pokluda III

 

Name: James L. Pokluda III

Title: President and Chief Executive Officer

 

 
 

 

SCHEDULE 1.1
to
Fourth Amended and Restated Loan and Security Agreement

 

COMMITMENTS OF LENDERS

 

Lender

Revolver Commitment

Total Commitments

 

 

 

Bank of America, N.A.

$115,000,000

$115,000,000

 

 

 

 

SCHEDULE 9.1.4
to
Fourth Amended and Restated Loan and Security Agreement

 

NAMES AND CAPITAL STRUCTURE

 

1.The corporate names, jurisdictions of incorporation, and authorized and issued
Equity Interests of each Borrower and Subsidiary are as follows:

 

Name  Jurisdiction  Number and Class of
Authorized Shares  Number and Class
of Issued Shares HWC Wire & Cable Company   Delaware  Common: 1,000  100      
     PFI, LLC  Rhode Island  N/A  N/A

 

2.The record holders of Equity Interests of each Borrower and Subsidiary are as
follows:

 

Name  Class of Stock  Number of Shares  Record Owner HWC Wire & Cable Company 
Common  100  Houston Wire & Cable Company            PFI, LLC  N/A  Sole Member 
HWC Wire & Cable Company

 

3.All agreements binding on holders of Equity Interests of Borrowers and
Subsidiaries with respect to such interests are as follows:

 

None

 

4.In the five years preceding the Third Amendment Effective Date, neither any
Borrower nor any Subsidiary has acquired any substantial assets from any other
Person nor been the surviving entity in a merger or combination, except:

 

Effective December 28, 2016, PFI, LLC was the surviving entity in a merger of
Vertex Corporate Holdings, Inc. and Vertex-PFI, Inc. into PFI, LLC