Execution Copy
 
THIRD AMENDMENT TO SECOND AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT
 
THIRD AMENDMENT, dated as of April 27, 2011, to the Second Amended and Restated
Loan and Security Agreement, dated as of September 21, 2009, among HWC Wire &
Cable Company (“Borrower”), 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 Second Amended and Restated Loan and
Security Agreement, as amended and modified 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 Borrower desire to make certain amendments and
modifications to the Loan Agreement;
 
WHEREAS, Southwest Wire Rope, LP, Southwest Wire Rope GP LLC and Southern Wire,
which became parties to the Loan Agreement pursuant to a Joinder Agreement dated
as of July 20, 2010, were merged into Borrower and ceased to exist effective
January 1, 2011; and
 
WHEREAS, Houston Wire & Cable Company (“Guarantor”) has guaranteed the
obligations of Borrower under 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
“Third Amendment” and “Third Amendment Effective Date” are hereby inserted into
Appendix A to the Loan Agreement.  The definitions of “Maximum Revolving Loan”
and “Total Credit Facility” are hereby deleted from Exhibit A to the Loan
Agreement and the following are inserted in their stead:
 
*      *      *
 
“Maximum Revolving Loan – Eighty-Five Million Dollars ($85,000,000) from the
First Amendment Effective Date until August 31, 2011 and Seventy-Five Million
Dollars ($75,000,000) from September 1, 2011 through the remainder of the Term.
 
*      *      *
 
Third Amendment – that certain Third Amendment to Loan Agreement dated as of
April 27, 2011 by and among Borrower, Agent and Lenders and acknowledged by
Guarantor.
 
*      *      *
 
 
 

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Third Amendment Effective Date – the date on which the conditions precedent to
the effectiveness of the Third Amendment are satisfied.
 
*      *      *
 
Total Credit Facility – Eighty-Five Million Dollars ($85,000,000), from the
Third Amendment Effective Date to August 31, 2011 and Seventy-Five Million
Dollars ($75,000,000) from September 1, 2011 through the remainder of the Term.”
 
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 the amount of the Total Credit Facility
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:
 
“1.1.1           Revolving Credit Loans.  (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 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 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.”
 
 
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4.           No Trigger Period.  Borrower, Agent and Lenders acknowledge and
agree that a Trigger Period shall not have been deemed to occur on or prior to
the Third Amendment Effective Date.
 
5.           Fee.  In order to induce Bank of America, as a Lender, to increase
its Revolving Loan Commitment by $10,000,000, Borrower agrees to pay to Agent,
for the benefit of Bank of America, a fee in the amount of $25,000.  Said fee
shall be due and payable and fully earned and non-refundable on the date hereof.
 
6.           Conditions Precedent.  This Third 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 Third Amendment, duly executed by Borrower,
Guarantor, Agent and each Lender;
 
(ii)          Amended and Restated Revolving Credit Note in the form attached
hereto and incorporated herein as Exhibit A-1 attached to this Third Amendment
executed by Borrower; and
 
(iii)         Copies of resolutions of the Boards of Directors of Borrower and
Guarantor authorizing this Third Amendment certified as true and correct by the
Secretary of Borrower and Guarantor.
 
(b)         Borrower shall have paid to Agent, for the benefit of Bank of
America, the fee referred to in Section 5 above.
 
The date on which all of the conditions precedent listed above are satisfied or
waived is hereinafter referred to as the “Third Amendment Effective
Date.”  After the Third Amendment Effective Date, Lenders shall deliver to
Borrower the Revolving Credit Note previously executed and delivered by Borrower
to Lenders, which Note shall be marked “Amended and Superseded.”
 
7.           Revolving Credit Loan Commitment.  Bank of America’s Revolving Loan
Commitment to the Loan Agreement is hereby amended to be as the amounts set
forth below its signature on this Third Amendment.
 
8.           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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9.           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.
 
10.         Counterparts.  This Third Amendment may be executed in any number of
separate counterparts, each of which shall, collectively and separately,
constitute one agreement.
 
11.         No Novation.  The amended and restated Revolving Credit Note to be
delivered pursuant to this Third Amendment replaces and supersedes that certain
promissory note in the principal amount of $75,000,000 dated September 21, 2007
(the “Original Note”) and the execution and delivery of such amended and
restated Revolving Credit Note shall not constitute (a) an extinguishment of the
indebtedness of Borrower to the applicable Lender evidenced by the Original Note
or (b) a novation of any such indebtedness of the Original Note.
 
(Signature Page Follows)
 
 
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(Signature Page to Third Amendment to Second Amended
and Restated Loan and Security Agreement)
 
IN WITNESS WHEREOF, this Third Amendment has been duly executed as of the first
day written above.

     
HWC WIRE & CABLE COMPANY, as
     
Borrower
             
By:
/s/ Nicol G. Graham
     
Name: Nicol G. Graham
     
Title: Vice President and CFO
             
BANK OF AMERICA, N.A., as Agent and a
     
Lender
             
By:
/s/ Steven J. Chalmers
     
Name: Steven J. Chalmers
     
Title: V.P.
             
Revolving Loan Commitment:  $85,000,000 from the Third Amendment Effective Date
until August 31, 2011 and $75,000,000 from September 1, 2011 through the
remainder of the Term
         
ACCEPTED AND AGREED
     
to this 27th day of April, 2011:
             
HOUSTON WIRE & CABLE COMPANY,
     
as Guarantor
             
By:
/s/ Charles A. Sorrentino
     
Name: Charles A. Sorrentino
     
Title: President and CEO
     

 
 
 

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EXHIBIT A-1
 
AMENDED AND RESTATED REVOLVING CREDIT NOTE

$85,000,000
Amended and Restated
 
As of April 27, 2011
 
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 Eighty-Five Million Dollars
($85,000,000), 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 Second Amended and Restated Loan and Security
Agreement dated as of September 21, 2009 by and among Borrower, the lender
signatories thereto (including Lender) and 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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(Signature Page to Amended and Restated Revolving Credit Note)

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

 
HWC WIRE & CABLE COMPANY, as
Borrower
     
By:
/s/ Nicol G. Graham
 
Name: Nicol G. Graham
 
Title: Vice President and CFO

 
 
A-1-2

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