CONSENT TO LOAN AND SECURITY AGREEMENT
THIS CONSENT TO LOAN AND SECURITY AGREEMENT (this “Consent”) is entered into as
of this 30th day of September, 2015 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
(“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 and 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”);
WHEREAS, Lawson Products, Inc., a company incorporated pursuant to the laws of
Ontario (“Lawson Products Ontario”), a wholly-owned subsidiary of Lawson
Products Delaware, has informed Lender that it desires to purchase from West
Coast Fasteners Ltd., a company incorporated pursuant to the laws of British
Columbia (“Seller”), and Seller desires to sell to Lawson Products Ontario,
pursuant to the terms and conditions of that certain Asset Purchase Agreement by
and among Seller, the other parties thereto, and Lawson Products Ontario dated
as of September 23, 2015 (the “Purchase Agreement,” a true, correct and complete
copy of which is attached hereto as Exhibit A), the Purchased Assets (as such
term is defined in the Purchase Agreement) (such asset purchase by Lawson
Products Ontario, the “Purchase Transaction”);
WHEREAS, Borrowers have requested that Lender provide certain consents as set
forth herein; and
WHEREAS, Lender is willing to provide such consents subject to the terms,
conditions and other provisions hereof.
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 Consent, 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
Consent, is incorporated herein by this reference as though the same were set
forth in its entirety. 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    Consent to Purchase Transaction. Notwithstanding Section 13.4, of
the Loan Agreement , effective solely upon satisfaction of each of the
conditions precedent set forth in Section 3 below, in reliance upon the
representations and warranties of the Loan Parties set forth in this Consent and
subject to the other terms and conditions of this Consent, Lender hereby
consents to the Purchase Transaction as set forth in the Purchase Agreement. The
foregoing consent is expressly limited to the specific transactions described in
this Section 2, and shall not be deemed or otherwise construed to constitute a
consent to any other transaction, whether or not similar to the transaction
described in this Section 2. Lender has granted

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the consent set forth in this Section 2 in this particular instance and in light
of the facts and circumstances that presently exist, and the grant of such
consent shall not constitute a course of dealing or impair Lender’s right to
withhold any similar consent or waiver in the future.

Section 3    Conditions Precedent. The effectiveness of this Consent is subject
to satisfaction of the following conditions:

(a)    Lender shall have received a fully executed copy of this Consent;

(b)    Lender shall have received a fully executed copy of the Purchase
Agreement and any and all documents, agreements and instruments executed and/or
delivered in connection therewith (collectively, the “Purchase Documents”), in
each case in form and substance reasonably acceptable to Lender; and

(c)    The representations and warranties set forth in Section 5 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 Consent, 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 prior to, or after giving effect
to, the Purchase Transaction;

(c)    Each Loan Party has the power and authority to execute, deliver and
perform its obligations under this Consent 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
Consent 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 Consent 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.

(f)    A true, correct and complete copy of any and all Purchase Documents has
been delivered to Lender by the Loan Parties prior to the date hereof.

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

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attorneys’ fees, in connection with the evaluation, negotiation, preparation,
execution and delivery of this Consent.

Section 6    Entire Agreement. This Consent 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 Consent 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 Consent 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 Consent or any instrument or agreement required hereunder.

Section 9    Counterparts. This Consent 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 Consent 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
Consent, 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 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 PAGE FOLLOWS]

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(Signature Page to Consent 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
 
 
Executive Vice President and Chief Financial Officer
 
 
 
 
BARON DIVESTITURE COMPANY, an Illinois corporation

 
By:
/s/ Ronald J. Knutson
 
 
Ronald J. Knutson
 
 
Executive Vice President and Chief Financial Officer

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(Signature Page to Consent to Loan and Security Agreement)

LENDER:
THE PRIVATEBANK AND TRUST COMPANY

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