SEVENTH AMENDMENT
TO LOAN AND SECURITY AGREEMENT
THIS SEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is
entered into as of this 14th day of February, 2017 by and among THE PRIVATEBANK
AND TRUST COMPANY (“Lender”), LAWSON PRODUCTS, INC., a Delaware corporation
(“Lawson Products Delaware”), LAWSON PRODUCTS, INC., an Illinois corporation
(“Lawson Products Illinois”), BARON DIVESTITURE COMPANY, an Illinois corporation
(“Baron Divestiture”), and SANDALWOOD DIVESTITURE COMPANY, INC., an Alabama
corporation (f/k/a Automatic Screw Machine Products Company, Inc.) (“Sandalwood
Divestiture”; Lawson Products Delaware, Lawson Products Illinois, Baron
Divestiture and Sandalwood Divestiture are individually referred to herein each
as a “Borrower” and collectively as “Borrowers”).
W I T N E S S E T H:
WHEREAS, Lender, Borrowers and certain former affiliates of Borrowers are party
to that certain Loan and Security Agreement dated as of August 8, 2012 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Loan Agreement”); and
WHEREAS, each Borrower has requested that Lender amend certain provisions of the
Loan Agreement, and Lender is willing to do so subject to the terms and
conditions of this Amendment.
NOW, THEREFORE, for and in consideration of the premises and mutual agreements
herein contained and for the purposes of setting forth the terms and conditions
of this Amendment, the parties, intending to be bound, hereby agree as follows:
Section 1    Incorporation of the Loan Agreement. All capitalized terms which
are not defined hereunder shall have the same meanings as set forth in the Loan
Agreement, and the Loan Agreement, to the extent not inconsistent with this
Amendment, is incorporated herein by this reference as though the same were set
forth in its entirety. To the extent any terms and provisions of the Loan
Agreement are inconsistent with the amendments set forth in Section 2 below,
such terms and provisions shall be deemed superseded hereby. Except as
specifically set forth herein, the Loan Agreement and the other Loan Documents
shall remain in full force and effect and the provisions thereof shall be
binding on the parties hereto.
Section 2    Amendment of the Loan Agreement. Upon satisfaction of the
conditions precedent set forth in Section 3 of this Amendment and in reliance on
the representations and warranties made by the Loan Parties set forth herein,
the Loan Agreement is hereby amended as follows:
(a)    Section 1.1 of the Loan Agreement is hereby amended by inserting the
following new definitions in alphabetical order, to read as follows:
‟Bank Products Provider shall mean Wells Fargo Bank, National Association or any
other financial institution or provider selected from time to time by the Loan
Parties for purposes of providing credit or debit card services and other card
program services.
Wells Fargo Blocked Account Agreement shall have the meaning set forth in
Section 7.”

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(b)    The definition of ‟Excluded Accounts” set forth in Section 1.1 of the
Loan Agreement is hereby amended and restated in its entirety as follows:
‟Excluded Accounts shall mean, collectively, (a) local petty cash accounts
maintained by any Loan Party in proximity to their operations so long as the
aggregate balance on deposit in all such deposit accounts does not exceed
$250,000 in the aggregate at any time outstanding, (b)(i) deposit and securities
accounts required to be maintained by any Loan Party with a Bank Products
Provider in connection with debit cards and credit cards, and other card payment
products provided by such Bank Products Provider, and (ii) deposit and
securities accounts required to be maintained by any Loan Party with a provider
of cash management services to the extent Lender does not provide such cash
management services in connection with and in support for such cash management
services provided by such provider, provided that the total amount on deposit in
all such deposit and securities accounts described in this clause (b)(i) and
clause (b)(ii) does not exceed $1,500,000 in the aggregate at any time
outstanding.”
(c)    The definition of ‟Permitted Liens” set forth in Section 1.1 of the Loan
Agreement is hereby amended by (i) deleting the word ‟and” appearing immediately
prior to clause (ix), (ii) deleting the ‟.” at the end of such definition and
substituting ‟; and” therefor and (iii) inserting the following new clause (x)
at the end thereof as follows:
‟(x) liens and security interests (including rights of set-off against credit
balances) on any deposit or securities account maintained with any credit or
debit card issuer or processor, and any funds or securities held in such account
(provided that the aggregate amount of such funds and securities does not exceed
$1,500,000 in the aggregate at any time outstanding), and securing obligations
in respect of debit and credit cards, and other card payment products.”
(d)    Section 7 of the Loan Agreement is hereby amended and restated in its
entirety as follows:
“Section 7    Account Control Agreements. In the event that any one or more of
the Loan Parties delivers to Lender a deposit account control agreement or
blocked account agreement, in form and substance reasonably satisfactory to
Lender, in respect of any deposit or securities account(s), as the same may be
amended, restated, modified or supplemented from time to time, unless such
deposit account control agreement or blocked account agreement provides Lender
the immediate right to transfer the funds on deposit in such account to the
Lender and/or a collateral account designated by Lender that is maintained under
its sole dominion and control, Lender shall have the right, at the Lender’s
election in its sole discretion, only upon the occurrence and during the
continuance of an Event of Default, to provide notice of exercise of control and
transfer the funds on deposit in such account to the Lender and/or a collateral
account designated by Lender that is maintained under its sole dominion and
control; provided, however, that solely in respect of that certain Deposit
Account Control Agreement, dated as of February 14, 2017 (as the same may be
amended, restated, modified or supplemented from time to time,

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the “Wells Fargo Blocked Account Agreement”), by and among Wells Fargo Bank,
National Association, as first lien agent, Lawson Products, Inc., Lender, as
second lien agent, and Wells Fargo Bank, National Association, as the bank,
notwithstanding anything to the contrary set forth in the Wells Fargo Blocked
Account Agreement, (i) Lender shall have the right, at the Lender’s election in
its sole discretion, only upon the occurrence and during the continuance of an
Event of Default, to transfer the funds on deposit in such account to the Lender
and/or a collateral account designated by Lender that is maintained under its
sole dominion and control, and (ii) so long as no Event of Default has occurred
and is continuing, at any time when Lender is the ‟Controlling Agent” under and
as defined in the Wells Fargo Blocked Account Agreement, Lender shall transfer
the funds on deposit in such account as may be requested by any Loan Party.”
(e)    Section 12.10 of the Loan Agreement is hereby amended by amending and
restating the penultimate sentence of such Section in its entirety as follows:
‟Each Loan Party shall enter into agreements with Lender for all of its needs in
connection with cash management services; provided, however, that the Loan
Parties shall be permitted (a) to maintain credit and debit card services, and
other card payment products, with any Bank Products Provider, and in connection
therewith, to the extent required by any such provider, to open and maintain any
Excluded Accounts, and (b) obtain and maintain cash management services from
other providers to the extent that Lender does not provide such requested cash
management service and in connection therewith, to the extent required by any
such provider, to open and maintain any Excluded Accounts.”
Section 3    Conditions Precedent. The amendments set forth in Section 2 shall
be effective upon the satisfaction of all of the following conditions precedent,
each to the satisfaction of Lender in its sole discretion:
(a)    Lender shall have received a fully executed copy of this Amendment, in
form and substance reasonably acceptable to Lender, executed by each of the
Borrowers and Lender; and
(b)    The representations and warranties set forth in Section 4 below shall be
true and correct.
Section 4    Representations and Warranties. Each Loan Party hereby represents
and warrants, in each case after giving effect to this Amendment, to Lender as
follows:
(a)    The representations and warranties of each Loan Party in the Loan
Agreement and each of the other Loan Documents to which it is a party shall be
true and correct in all material respects (provided that if any representation
or warranty is by its terms qualified by concepts of materiality, such
representation or warranty shall be true and correct in all respects) on the
date hereof, except for representations and warranties that expressly relate to
an earlier date which must be true and correct as of such earlier date;
(b)    No Default or Event of Default exists;

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(c)    Each Loan Party has the power and authority to execute, deliver and
perform its obligations under this Amendment and each other document, agreement
and instrument executed by such Loan Party in connection with each of the
foregoing;
(d)    The execution, delivery and performance by each Loan Party of this
Amendment and each other document, agreement and instrument executed by such
Loan Party in connection with each of the foregoing have been duly authorized by
all necessary action; and
(e)    This Amendment and each other document, agreement and instrument executed
by each Loan Party in connection with each of the foregoing constitutes the
legal, valid and binding obligation of such Loan Party, enforceable against such
Loan Party in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, or similar laws affecting the enforcement
of creditor’s rights generally or by equitable principles relating to
enforceability.
Section 5    Fees and Expenses. Borrowers agree to pay on demand all reasonable
out-of-pocket costs and expenses of or incurred by Lender, including, but not
limited to, legal expenses and reasonable attorneys’ fees, in connection with
the evaluation, negotiation, preparation, execution and delivery of this
Amendment.
Section 6    Entire Agreement. This Amendment constitutes the entire agreement
of the parties hereto with respect to the subject matter hereof and supersedes
all other understandings, oral or written, with respect to the subject matter
hereof.
Section 7    No Modification; No Waiver. Except as expressly set forth herein,
nothing contained herein shall be deemed to constitute a waiver of compliance
with any term or condition contained in the Loan Agreement or any other Loan
Document or constitute a course of conduct or dealing among the parties. Except
as expressly stated herein, Lender reserves all rights, privileges and remedies
under the Loan Documents. All references in the Loan Documents to the Loan
Agreement shall be deemed to be references to the Loan Agreement, as modified
hereby. The execution, delivery and effectiveness of this Amendment shall not
operate as a waiver of any right, power or remedy of Lender under the Loan
Agreement or any of the Loan Documents.
Section 8    Severability. The illegality or unenforceability of any provision
of this Amendment or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Amendment or any instrument or agreement required hereunder.
Section 9    Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument. Delivery by facsimile or
electronic transmission of a portable document file (also known as a .pdf file)
of an executed counterpart signature page shall be effective as a manually
executed counterpart signature hereof.
Section 10    Governing Law; Other Waivers. This Amendment shall be governed and
construed in accordance with the internal laws of the State of Illinois.
Section 18.11 of the Loan Agreement is incorporated herein by reference, mutatis
mutandis.
Section 11    Release. In consideration of Lender’s agreements contained in this
Amendment, each Loan Party hereby irrevocably releases and forever discharges
Lender and its affiliates, subsidiaries, successors, assigns, directors,
officers, employees, agents, consultants and attorneys (each, a “Released
Person”) of and from any and all claims, suits, actions, investigations,
proceedings or demands, whether

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based in contract, tort, implied or express warranty, strict liability, criminal
or civil statute or common law of any kind or character, known or unknown, which
such Loan Party ever had or now has against Lender or any other Released Person
which relates, directly or indirectly, to any acts of omissions of Lender or any
other Released Person relating to the Loan Agreement or any other Loan Document
on or prior to the date hereof.
[SIGNATURE PAGES FOLLOW]

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(Signature Page to Seventh Amendment to Loan and Security Agreement)

IN WITNESS WHEREOF, the parties hereto have duly executed this Consent to Loan
and Security Agreement as of the date first above written.
BORROWERS:
LAWSON PRODUCTS, INC., a Delaware corporation

 
By:
/s/ Ronald J. Knutson
 
 
Ronald J. Knutson
 
 
Executive Vice President and Chief Financial Officer
 
 
 
 
LAWSON PRODUCTS, INC., an Illinois corporation
 
By:
/s/ Ronald J. Knutson
 
 
Ronald J. Knutson
 
 
Executive Vice President and Chief Financial Officer
 
 
 
 
SANDALWOOD DIVESTITURE COMPANY, INC., an Alabama corporation

 
By:
/s/ Ronald J. Knutson
 
 
Ronald J. Knutson
 
 
Vice President
 
 
 
 
BARON DIVESTITURE COMPANY, an Illinois corporation

 
By:
/s/ Ronald J. Knutson
 
 
Ronald J. Knutson
 
 
Vice President

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(Signature Page to Seventh Amendment to Loan and Security Agreement)

LENDER:
THE PRIVATEBANK AND TRUST COMPANY

 
By:
/s/ Joseph G. Fudacz
 
 
Joseph G. Fudacz
 
 
Managing Director