EXHIBIT 10.1


REGISTRATION RIGHTS AGREEMENT


REGISTRATION
RIGHTS AGREEMENT (this “Agreement”), dated as of June 20, 2006, between CODE,
HENNESSY & SIMMONS II, L.P., a Delaware limited partnership (“Code”), and
HOUSTON WIRE & CABLE COMPANY, a Delaware corporation (the “Company”).


WHEREAS, Code is
the owner of 12,700,821 shares of the Company’s issued and outstanding shares
of common stock, par value $0.001 per share (“Common Stock”), and the Company,
Code and certain other selling stockholders have determined to offer to the
public up to 9,775,000 shares of the Common Stock, in a primary and secondary
offering (the “Public Offering”).


WHEREAS, Code and
the Company are parties to an Investors Securities Agreement with certain
investors and Executive Securities Agreements with certain employees and former
employees of the Company, pursuant to which such investors and certain of such
employees and former employees (collectively, the “Pre-IPO Stockholders”) have
certain piggyback registration rights applicable to the shares of Common Stock
owned by them.


WHEREAS, the
parties hereto desire to enter into this Agreement, which sets forth the terms
of certain registration rights applicable to the Registrable Securities (as
defined below).


NOW, THEREFORE, in
consideration of the premises and the mutual promises herein contained, and for
other good and valuable consideration, the receipt and adequacy of which are
acknowledged, the parties agree as follows:


1.             Certain Definitions.  As used in this Agreement, the following initially
capitalized terms shall have the following meanings:


(a)           “Affiliate” means, with respect to
any person, any other person who, directly or indirectly, is in control of, is
controlled by or is under common control with the former person.


(b)           “Holder” means Code and any “transferee”
(as such term is defined in Section 11) which is the beneficial owner of
Registrable Securities.


(c)           “Offered Registrable Securities”
means, with respect to any registration pursuant to Section 2 or 3, the
Registrable Securities proposed to be disposed of by any Holder in the offering
that is the subject of such registration.


(d)           “Registrable Securities” means the
Common Stock as presently constituted, any stock or other securities into which
or for which such Common Stock may hereafter be changed, converted or
exchanged, and any other securities issued to holders of such Common Stock (or
shares into which or for which such shares are so changed, converted or
exchanged) upon any reclassification, share combination, share subdivision,
share dividend, merger, consolidation or similar transaction or event, provided
that such securities shall cease to be Registrable Securities (i) if a
registration statement with respect to the sale of such securities shall have
become effective under the Securities Act and such securities shall have been
disposed 













of in accordance with the plan of distribution set forth in such
registration statement, (ii) such securities shall have been distributed
pursuant to Rule 144, or (iii) subsequent to the seventh anniversary of the
closing of the Public Offering (subject to the specific extensions specified
herein).


(e)           “Registration Expenses” means the
following reasonable expenses in connection with any registration of securities
pursuant to this Agreement: (i) SEC filing fees; (ii) the fees, disbursements
and expenses of the Company’s counsel and accountants in connection with the
registration of the Offered Registrable Securities under the Securities Act;
(iii) all expenses in connection with the preparation, printing and filing of
the registration statement, all preliminary and final prospectuses and all
amendments and supplements thereto, the mailing and delivering of copies
thereof to any Holders, underwriters and dealers and all expenses incidental to
delivery of the Offered Registrable Securities; (iv) the cost of producing blue
sky or legal investment memoranda; (v) all expenses in connection with the
qualification of the Offered Registrable Securities for offering and sale under
state securities laws, including the fees and disbursements of counsel for the
underwriters or Holders in connection with such qualification and any blue sky
and legal investment memoranda; (vi) any fees payable to the National
Association of Securities Dealers, Inc. in connection with its review of the
terms of the sale of the Offered Registrable Securities; (vii) transfer agents’,
depositaries’ and registrars’ fees and the fees of any other agent appointed in
connection with such registration; (viii) all security engraving and security
printing expenses; (ix) all fees and expenses payable in connection with the
listing of the Registrable Securities on each securities exchange or quotation
system on which the Common Stock is then listed; and (x) any one time payment
for directors and officers insurance directly related to such offering,
provided the insurer provides a separate statement for such payment.


(f)            “Rule 144” means Rule 144
promulgated under the Securities Act, or any successor rule to similar effect.


(g)           “SEC” means the United States
Securities and Exchange Commission.


(h)           “Securities Act” means the Securities
Act of 1933, as amended, or any successor statute.


2.             Demand Registration.


(a)           At any time and from time to time
prior to the seventh anniversary of the closing of the Public Offering, upon
written notice from a Holder in the manner set forth in Section 12(h)
requesting that the Company effect the registration under the Securities Act of
any or all of such Holder’s Registrable Securities, which notice shall specify
the intended method or methods of disposition of such Registrable Securities,
the Company shall use its best efforts to effect, in the manner set forth in
Section 5, the registration under the Securities Act of such Registrable
Securities for disposition in accordance with the intended method or methods of
disposition stated in such request, provided that:


(i)            if
(A) prior to receipt of a request for registration pursuant to this Section
2(a), the Company was planning an immediate offering of 



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securities by the Company and (B) within five business days after
receipt of such request, the managing underwriter of such planned offering
advises the Company in writing (with a copy to the Holder requesting
registration) that, in such firm’s good faith opinion, a registration at the
time and on the terms requested would materially and adversely affect the
previously planned offering, then the Company shall not be required to effect a
registration pursuant to this Section 2(a) until the earliest of (1) the abandonment
of such planned offering, (2) 90 days after the completion of such offering,
(3) the termination of any “hold back” period obtained by the underwriter(s) of
such offering from any person in connection therewith or (4) 180 days after
receipt by the Holder requesting registration of the managing underwriter’s
written opinion referred to above in this subsection (i);


(ii)           if,
while a registration request is pending pursuant to this Section 2(a), the
Company determines in good faith that (A) the filing of a registration
statement would require the disclosure of material information that the Company
has a bona fide business purpose for preserving as confidential or (B) the
Company then is unable to comply with SEC requirements applicable to the
requested registration, the Company may delay effecting a registration pursuant
to this Section 2(a) until the earlier of (1) the date upon which such material
information is otherwise disclosed to the public or ceases to be material, or
the Company is able to comply with applicable SEC requirements, as the case may
be, and (2) 45 days after the Company makes such good faith determination,
provided that the Company shall not be permitted to delay a requested
registration in reliance on this clause (ii) more than once in any 24-month
period; and


(iii)          the
Company shall not be obligated to file a registration statement relating to a
registration requested pursuant to this Section 2(a): (A) within six months
after the effective date of any other registration statement filed in response
to a request pursuant to this Section 2(a); (B) if such registration request is
for a number of Registrable Securities representing less than 7.5% of the then
issued and outstanding common equity of the Company (unless the Holders making
the demand own at least 5% of the issued and outstanding common equity of the
Company and the demand is for all their Registrable Securities) or (C) if the
aggregate number of Registrable Securities owned by all Holders represents less
than 5% of the issued and outstanding common equity of the Company.


(b)           Notwithstanding any other provision
of this Agreement to the contrary:


(i)            a
registration requested by a Holder pursuant to Section 2(a) shall not be deemed
to have been effected (and, therefore, not requested) (A) unless the
registration statement filed in connection therewith has become effective, (B)
if, after such registration statement has become effective, it is interfered
with by any stop order, injunction or other order or requirement of the SEC or other
governmental agency or court for any reason other than a misrepresentation or
an omission by such Holder and, as a result thereof, 90% or 



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more of the Registrable Securities requested to be registered cannot be
completely distributed in accordance with the plan of distribution set forth
therein or (C) if the conditions to closing specified in the purchase agreement
or underwriting agreement entered into in connection with such registration are
not satisfied (other than by reason of an act or omission by such Holder) or
waived by the underwriters;


(ii)           a registration requested by a Holder
pursuant to Section 2(a) and later withdrawn at the request of such Holder,
whether prior to or after the effectiveness of the related registration
statement, shall be deemed to have been effected (and, therefore, requested),
provided that, where a request is withdrawn prior to the filing of a
registration statement with the SEC, such Holder can require the Company to
disregard for purposes of Section 2(a)(iii) one such requested registration in
any six month period; and


(iii)          nothing
herein shall modify the obligation of a Holder (other than Code) to pay the
Registration Expenses incurred in connection with any withdrawn registration.


(c)           In the event that any registration
requested pursuant to Section 2(a) shall involve, in whole or in part, an
underwritten offering, the requesting Holder shall have the right to designate
an underwriter reasonably satisfactory to the Company as the lead managing
underwriter, and the Company shall have the right to designate one underwriter
reasonably satisfactory to the Holder as a co-manager of such underwritten
offering.


(d)           The Company shall have the right to
include additional securities offered for the account of any person (including
the Company) in any registration of Registrable Securities requested by a
Holder pursuant to Section 2(a); provided that the Company shall not have the
right to include such additional securities to the extent the managing
underwriter of the offering advises such Holder in writing (with a copy to the
Company) that, in such firm’s good faith opinion, registration of such
additional securities would materially and adversely affect the offering and
sale of the Offered Registrable Securities then contemplated by such Holder,
except that Code shall be required to include Registrable Securities owned by
the Pre-IPO Stockholders to the extent required by the Investors Securities
Agreement and Executive Securities Agreements, in each case as in effect on the
date hereof.


3.             Piggyback Registration.  At any time prior to the seventh anniversary
of the closing of the Public Offering, if the Company proposes to register any
shares of Common Stock or any other of its common equity securities
(collectively, “Other Securities”) under the Securities Act (other than a
registration on Form S-4 or Form S-8 or any successor form thereto), whether or
not for sale for its own account, in a manner which would permit registration
of Registrable Securities for sale for cash to the public under the Securities
Act, it will give prompt written notice to each Holder of its intention to do
so at least ten business days prior to the anticipated filing date of the
registration statement relating to such registration.  Such notice shall offer each Holder the
opportunity to include in such registration statement such number of
Registrable Securities as such Holder may request.  Upon the written request of any Holder made
within five business days after the receipt of the Company’s notice (which
request shall specify 



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the number of Registrable Securities proposed to be
disposed of and the intended method of disposition), the Company shall effect,
in connection with the registration of the Other Securities and in the manner
set forth in Section 5, the registration under the Securities Act of all
Registrable Securities which the Company has been so requested to register, to
the extent required to permit the disposition of such Registrable Securities in
accordance with the intended method of disposition, provided that:


(a)           if, at any time after giving written
notice of its intention to register any securities and prior to the effective
date of the related registration statement, the Company shall determine for any
reason not to register or to delay registration of such securities, the Company
may, at its election, so notify the Holder in writing, whereupon (i) in the
case of a determination not to register, the Company shall be relieved of its
obligation to register any Registrable Securities in connection with such
registration, and (ii) in the case of a determination to delay registration,
the Company shall be permitted to delay registration of any Registrable
Securities requested to be included in such registration for the same period as
the delay in registering such Other Securities.


(b)           (i) if the registration referred to
in the first sentence of this Section 3 is to be an underwritten primary
registration on behalf of the Company, and the managing underwriter advises the
Company in writing that, in the good faith opinion of such managing
underwriter, such offering would be materially and adversely affected by the
inclusion therein of the Registrable Securities requested to be included, the
Company shall include in such registration: (A) first, all securities the
Company proposes to sell for its own account (“Company Securities”), (B)
second, up to the full number of Registrable Securities held by Code and the
Pre-IPO Stockholders (“Code/Management Securities”) in excess of the number or
dollar amount of securities the Company proposes to sell that, in the good
faith opinion of such managing underwriter, can be sold without materially and
adversely affecting such offering (and, if less than the full number of
Code/Management Securities, allocated among Code and the Pre-IPO Stockholders
in accordance with the terms of the Investors Securities Agreement and
Executive Securities Agreements, in each case as in effect on the date hereof),
(C) third, up to the full number of Registrable Securities (other than
Code/Management Securities) in excess of the number or dollar amount of Company
Securities and Code/Management Securities that, in the good faith opinion of
such managing underwriter, can be sold without materially and adversely
affecting such offering (and, if less than the full number of such Registrable
Securities, allocated pro rata among the Holders of such Registrable Securities
(other than Code/Management Securities) on the basis of the number of
securities requested to be included therein by each such Holder) and (D)
fourth, an amount of other securities, if any, requested to be included therein
in excess of the number or dollar amount of Company Securities, Code/Management
Securities and other Registrable Securities that, in the good faith opinion of
such managing underwriter, can be sold without materially and adversely
affecting such offering (allocated among the holders of such other securities
in such proportions as such holders and the Company may agree); and (ii) if the
registration referred to in the first sentence of this Section 3 is to be an
underwritten secondary registration on behalf of holders of securities of the
Company other than Registrable Securities (the “Other Holders”), and the
managing underwriter advises the Company in writing that, the good faith
opinion of such managing underwriter, such offering would be materially and
adversely affected by the inclusion therein of the Registrable Securities
requested to be included, the Company shall include in such registration the
amount of securities (including Registrable 



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Securities) that such managing underwriter advises, allocated pro rata
among the Other Holders and the Holders on the basis of the number of
securities (including Registrable Securities) requested to be included therein
by each Other Holder and each Holder, subject to the rights of the Pre-IPO
Stockholders under the Investors Securities Agreement and Executive Securities
Agreements, in each case as in effect on the date hereof;


(c)           the Company shall not be required to
effect any registration of Registrable Securities under this Section 3
incidental to the registration of any of its securities in connection with any
merger, acquisition, exchange offer, subscription offer, dividend reinvestment
plan or stock option or other executive or employee benefit or compensation
plan; and


(d)           no registration of Registrable
Securities effected under this Section 3 shall relieve the Company of its
obligation to effect a registration of Registrable Securities pursuant to
Section 2.


4.             Expenses. 
The Company shall pay all Registration Expenses, including the fees,
disbursements and expenses of Code’s counsel, with respect to any offering by
Code pursuant to Section 2.  Each Holder
(other than Code), by accepting Registrable Securities, agrees to pay all
Registration Expenses with respect to an offering pursuant to Section 2, pro
rata based on the number of Registrable Securities included in such offering by
each Holder (excluding Code), except to the extent the Company causes shares to
be registered for itself or another party pursuant to Section 2(d), in which
event the Company or such other party shall pay the incremental expenses of
including such shares in the offering. 
The Company agrees to pay all Registration Expenses with respect to an
offering pursuant to Section 3, except for the incremental expenses of
including Registrable Securities of a Holder (other than Code) in such
offering, which incremental expenses shall be paid by such Holder.  All Registration Expenses to be paid by a
Holder shall be paid within 30 days of the delivery of a statement from the
Company, such statements to be delivered not more frequently than once every 60
days.  In an underwritten offering, each
party (including Code) shall be responsible for underwriting discounts and
commissions payable with respect to the securities sold by such party.


5.             Registration and Qualification.  If and whenever the Company is required to
use its best efforts to effect the registration of any Registrable Securities
under the Securities Act as provided in Section 2 or 3, the Company shall:


(a)           prepare and file a registration
statement under the Securities Act relating to the Offered Registrable
Securities as soon as practicable, but in no event later than 45 days (60 days
if the applicable registration form is other than Form S-3) after the date
notice is given, and use its best efforts to cause the same to become effective
within 90 days after the date notice is given (120 days if the applicable
registration form is other than Form S-3);


(b)           prepare and file with the SEC such
amendments to the registration statement, such preliminary and final
prospectuses and such amendments and supplements thereto as may be necessary to
keep such registration statement effective for 60 days (or, in the case of an
underwritten offering, such shorter time period as the underwriters may
require);



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(c)           furnish to the Holders and to any
underwriter of such Offered Registrable Securities such number of conformed
copies of such registration statement and of each amendment thereto (in each
case including all exhibits), such number of copies of the prospectus included
in such registration statement (including each preliminary prospectus and any
summary prospectus) and any supplements thereto, and such other documents as
the Holders or such underwriter may reasonably request in order to facilitate
the public sale of the Offered Registrable Securities, and a copy of any and
all transmittal letters or other correspondence to, or received from, the SEC
or any other governmental agency or self-regulatory body or other body having
jurisdiction (including any domestic or foreign securities exchange) relating
to such offering;


(d)           use its best efforts to register or
qualify all Offered Registrable Securities under the securities or blue sky
laws of such jurisdictions as the Holders or any underwriter of such Offered
Registrable Securities shall request, and use its best efforts to obtain all
appropriate registrations, permits and consents required in connection therewith,
and do any and all other acts and things which may be necessary or advisable to
enable the Holders or any such underwriter to consummate the disposition in
such jurisdictions of the Offered Registrable Securities; provided that the
Company shall not for any such purpose be required to register or qualify
generally to do business as a foreign corporation in any jurisdiction where it
is not so qualified, to subject itself to taxation in any jurisdiction where it
is not so subject, or to consent to general service of process in any
jurisdiction;


(e)           (i) use its best efforts to furnish
an opinion of counsel for the Company addressed to the underwriters and dated
the date of the closing under the underwriting agreement (if any), and (ii) use
its best efforts to furnish a “comfort” letter addressed to the underwriters,
and signed by the independent public accountants who have audited the Company’s
financial statements included in such registration statement, in each such case
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) as are customarily covered in
opinions of issuer’s counsel and in accountants’ letters delivered to
underwriters in underwritten public offerings of securities;


(f)            immediately notify each Holder of
Offered Registrable Securities (each a “Selling Holder”) in writing (i) at any
time when a prospectus relating to a registration pursuant to Section 2 or 3 is
required to be delivered under the Securities Act of the happening of any
event, as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading, and (ii) of any request by the SEC or any other
regulatory body having jurisdiction for any amendment of or supplement to any
registration statement or other document relating to such offering, and in
either such case (i) or (ii) at the request of the Selling Holders, prepare and
furnish to the Selling Holders a reasonable number of copies of a supplement to
or an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of the Offered Registrable Securities, such
prospectus shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they are made,
not misleading;


 



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(g)           use its best efforts to list all
Offered Registrable Securities on each securities exchange and quotation system
on which the Common Stock is then listed; and


(h)           furnish unlegended certificates
representing ownership of the Registrable Securities being sold in such
denominations as shall be requested by the Selling Holders or the underwriters.


6.             Conversion of Other Securities, etc.  If Code offers any options, rights, warrants
or other securities issued by it or any other person that are offered with,
convertible into or exercisable or exchangeable for any Registrable Securities,
the Registrable Securities underlying such options, rights, warrants or other
securities shall be eligible for registration pursuant to Section 2 and Section
3.


7.             Underwriting; Due Diligence.


(a)           If requested by the underwriters for
any underwritten offering of Registrable Securities pursuant to a registration
requested under this Agreement, the Company shall enter into an underwriting
agreement with such underwriters that contains such representations and
warranties by the Company, and such other terms and provisions, as are
customarily contained in underwriting agreements with respect to secondary
distributions, including, without limitation, indemnities and contribution substantially
to the effect and to the extent provided in Section 8 and agreements to provide
opinions of counsel and accountants’ letters to the effect and to the extent
provided in Section 5(e).  The Selling
Holders shall be parties to any such underwriting agreement.  Such underwriting agreement shall also
contain such representations and warranties by the Selling Holders as are
customarily contained in underwriting agreements with respect to secondary
distributions.  The Selling Holders may
require that any additional securities included in an offering proposed by a
Holder be included on the same terms and conditions as the Offered Registrable
Securities included therein.


(b)           In the event that any registration
pursuant to Section 3 shall involve, in whole or in part, an underwritten
offering, the Company may require the Offered Registrable Securities included
in such registration to be included in such underwritten offering on the same
terms and conditions as shall be applicable to the other securities being sold
through underwriters under such registration. 
If requested by the underwriters for such underwritten offering, the
Selling Holders shall enter into an underwriting agreement with such
underwriters that contains such representations and warranties by the Selling
Holders, and such other terms and provisions, as are customarily contained in
underwriting agreements with respect to secondary distributions, including,
without limitation, indemnities and contribution substantially to the effect
and to the extent provided in Section 8. 
Such underwriting agreement shall also contain such representations and
warranties by the Company and such other person or entity for whose account
securities are being sold as are customarily contained in underwriting agreements
with respect to secondary distributions.


(c)           In connection with the preparation
and filing of each registration statement registering Registrable Securities
under the Securities Act, the Company shall give the Holders of such
Registrable Securities and the underwriters, if any, and their respective
counsel and accountants, such reasonable and customary access to its books and
records, and such 



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opportunities to discuss the business of the Company with its officers
and the independent public accountants who have certified the Company’s
financial statements, as shall be necessary, in the opinion of such Holder and
such underwriters or their respective counsel, to conduct a reasonable
investigation within the meaning of the Securities Act.


8.             Indemnification
and Contribution.


(a)           In the case of each offering of
Registrable Securities made pursuant to this Agreement, the Company agrees to
indemnify and hold harmless each Holder, its officers and directors, each
underwriter of Registrable Securities so offered and each person, if any, who
controls any of the foregoing persons within the meaning of the Securities Act,
from and against any and all claims, liabilities, losses, damages, expenses and
judgments, joint or several, to which they or any of them may become subject,
under the Securities Act or otherwise, including any amount paid in settlement
of any litigation commenced or threatened, and shall promptly reimburse them,
as and when incurred, for any reasonable legal or other expenses incurred by
them in connection with investigating any claims and defending any actions,
insofar as such losses, claims, damages, liabilities or actions shall arise out
of, or shall be based upon, any untrue statement or alleged untrue statement of
a material fact contained in the registration statement (or in any preliminary
or final prospectus included therein) or any amendment thereof or supplement
thereto, or in any document incorporated by reference therein, or any omission
or alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however,
that the Company shall not be liable to a particular Holder in any such case to
the extent that any such loss, claim, damage, liability or action arises out
of, or is based upon, any untrue statement or alleged untrue statement, or any
omission, if such statement or omission shall have been made in reliance upon
and in conformity with information relating to such Holder furnished to the
Company in writing by or on behalf of such Holder specifically for use in the
preparation of the registration statement (or in any preliminary or final
prospectus included therein) or any amendment thereof or supplement
thereto.  Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of a
Holder and shall survive the transfer of such securities.  The foregoing indemnity agreement is in
addition to any liability which the Company may otherwise have to each Holder,
its officers and directors, underwriters of the Registrable Securities or any
controlling person of the foregoing; provided further, that, as to any
underwriter or any person controlling any underwriter, this indemnity does not
apply to any loss, liability, claim, damage or expense arising out of or based
upon any untrue statement or alleged untrue statement or omission or alleged
omission in any preliminary prospectus if a copy of a prospectus was not sent
or given by or on behalf of an underwriter to such person asserting such loss,
claim, damage, liability or action at or prior to the written confirmation of
the sale of the Registrable Securities as required by the Securities Act and
such untrue statement or omission had been corrected in such prospectus.


(b)           In the case of each offering made
pursuant to this Agreement, each Holder of Registrable Securities included in
such offering, by exercising its registration rights hereunder, agrees to
indemnify and hold harmless the Company, its officers and directors and each person,
if any, who controls any of the foregoing within the meaning of the Securities
Act (and if requested by the underwriters, each underwriter who participates in
the offering and each person, if any, who controls any such underwriter within
the meaning of the Securities Act), from and against any and all claims,
liabilities, losses, damages, expenses and judgments, joint or several, 



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to which they or any of them may become subject, under the Securities
Act or otherwise, including any amount paid in settlement of any litigation
commenced or threatened, and shall promptly reimburse them, as and when
incurred, for any legal or other expenses incurred by them in connection with
investigating any claims and defending any actions, insofar as any such losses,
claims, damages, liabilities or actions shall arise out of, or shall be based
upon, any untrue statement or alleged untrue statement of a material fact
contained in the registration statement (or in any preliminary or final
prospectus included therein) or any amendment thereof or supplement thereto, or
any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
but in each case only to the extent that such untrue statement of a material
fact is contained in, or such material fact is omitted from, information
relating to such Holder furnished in writing to the Company by or on behalf of
such Holder specifically for use in the preparation of such registration statement
(or in any preliminary or final prospectus included therein).  The foregoing indemnity is in addition to any
liability which such Holder may otherwise have to the Company, or any of its
directors, officers or controlling persons; provided, however, that, as to any
underwriter or any person controlling any underwriter, this indemnity does not
apply to any loss, liability, claim, damage or expense arising out of or based
upon any untrue statement or alleged untrue statement or omission or alleged
omission in any preliminary prospectus if a copy of a prospectus was not sent
or given by or on behalf of an underwriter to such person asserting such loss,
claim, damage, liability or action at or prior to the written confirmation of
the sale of the Registrable Securities as required by the Securities Act and
such untrue statement or omission had been corrected in such prospectus.


(c)           Each party indemnified under
paragraph (a) or (b) of this Section 8 shall, promptly after receipt of notice
of any claim or the commencement of any action against such indemnified party
in respect of which indemnity may be sought, notify the indemnifying party in
writing of the claim or the commencement thereof; provided that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party on account of the indemnity agreement
contained in paragraph (a) or (b) of this Section 8, except to the extent the
indemnifying party was prejudiced by such failure, and in no event shall
relieve the indemnifying party from any other liability which it may have to
such indemnified party.  If any such
claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any
other similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party.  After notice from the indemnifying party to
the indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 8 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof, other than
reasonable costs of investigation; provided that each indemnified party, its
officers and directors, if any, and each person, if any, who controls such
indemnified party within the meaning of the Securities Act shall have the right
to employ separate counsel reasonably approved by the indemnifying party to
represent them, if the named parties to any action (including any impleaded
parties) include both such indemnified party and an indemnifying party or an
affiliate of an indemnifying party, and such indemnified party shall have been
advised by counsel either (i) that there may be one or more legal defenses
available to such indemnified party that are different from or additional to
those available to such indemnifying party or such affiliate or (ii) that a
conflict may exist 



 10
 









between such indemnified party and such indemnifying party or such
affiliate, and in that event the fees and expenses of one such separate counsel
for all such indemnified parties shall be paid by the indemnifying party.  An indemnified party will not enter into any
settlement agreement that is not approved by the indemnifying party, such
approval not to be unreasonably withheld. 
The indemnifying party may not agree to any settlement of any such claim
or action that provides for any remedy or relief other than monetary damages
for which the indemnifying party shall be responsible hereunder without the
prior written consent of the indemnified party, which consent shall not be
unreasonably withheld.  In any action
hereunder as to which the indemnifying party has assumed the defense with
counsel reasonably satisfactory to the indemnified party, the indemnified party
shall continue to be entitled to participate in the defense thereof, with
counsel of its own choice, but, except as set forth above, the indemnifying
party shall not be obligated hereunder to reimburse the indemnified party for
the costs thereof.  In all instances, the
indemnified party shall cooperate fully with the indemnifying party or its
counsel in the defense of each claim or action.


If the
indemnification provided for in this Section 8 shall for any reason be
unavailable to an indemnified party in respect of any loss, claim, damage or
liability referred to herein, or any action in respect thereof, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, in such
proportion as shall be appropriate to reflect the relative fault of the
indemnifying party on the one hand and the indemnified party on the other with
respect to the statements or omissions which resulted in such loss, claim, damage
or liability, or action in respect thereof, as well as any other relevant
equitable considerations.  The relative
fault shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the indemnifying party on the
one hand or the indemnified party on the other, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such statement or omission, but not by reference to any indemnified
party’s stock ownership in the Company. 
In no event, however, shall a Holder be required to contribute in excess
of the amount of the net proceeds received by such Holder in connection with
the sale of Registrable Securities in the offering which is the subject of such
loss, claim, damage or liability.  For
purposes of this paragraph, the amount paid or payable by an indemnified party
as a result of the loss, claim, damage or liability, or action in respect
thereof, shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.


9.             Rule 144. 
Following the closing of the Public Offering, the Company shall take
such measures and file such information, documents and reports as shall be
required by the SEC as a condition to the availability of Rule 144 (or any
successor provision.)


10.           Holdback.


(a)           Each Holder agrees by acquisition of
Registrable Securities, if so required by the managing underwriter, not to
sell, make any short sale of, loan, grant any option for the 



 11
 









purchase of, effect any public sale or distribution of or otherwise
dispose of any securities of the Company during the 30 days prior to and the 90
days after the effective date of any underwritten registration pursuant to
Section 2 or 3 (or such shorter period as may be required by the underwriter),
except as part of such underwritten registration or pursuant to a private
sale.  The Company may place a legend and
impose stop transfer instructions on any certificate evidencing Registrable
Securities relating to the restrictions provided for in this Section 10.


(b)           The Company agrees, if so required by
the managing underwriter, not to sell, make any short sale of, loan, grant any
option for the purchase of (other than pursuant to employee benefit plans),
effect any public sale or distribution of or otherwise dispose of its equity
securities or securities convertible into or exchangeable or exercisable for
any such securities during the 30 days prior to and the 90 days after the
effective date of any underwritten registration pursuant to Section 2 or 3,
except as part of such underwritten registration and except pursuant to
registrations on Form S-4, Form S-8 or any successor or similar forms thereto.


11.           Transfer of Registration Rights.


(a)           On not less than 15 days prior
written notice to the Company, Code may transfer all or any portion of its
rights under this Agreement to any transferee of Registrable Securities representing
(i) at least 20% of the number of Registrable Securities held by Code as of the
date of this Agreement and (ii) if Code than owns less than 20% of its initial
holdings, all of Code’s remaining Registrable Securities (each, a “transferee”).  The notice to the Company need not contain
the names of the proposed transferee.  On
or before the later of the transfer of the registration rights and the transfer
of the underlying Registrable Securities, the Company shall receive a written
notice stating (to the extent not included in the notice of transfer of
registration rights) the name and address of any transferee of the registration
rights and identifying the number of Registrable Securities with respect to
which the rights under this Agreement are being transferred and the nature of
the rights so transferred.  Following any
such transfer, the term “Code,” as used in this Agreement (other than in this
Section 11, Section 3(b)(i)(2), Section 4 and Section 1(c)(iii)), shall be
deemed to include the transferee of such Registrable Securities, where
appropriate to assign the rights and obligations of Code hereunder.  Code and such transferees may exercise the
registration rights hereunder in such proportion and upon the demand of such
Holders as they shall agree among themselves, provided that in no event
shall the Company be required to effect more than one registration pursuant to
Section 2 in any six-month period, regardless of the number of Holders making a
request.


(b)           After any such transfer, Code shall
retain its rights under this Agreement with respect to all Registrable
Securities retained by Code.


(c)           Upon the request of Code, the Company
shall execute a Registration Rights Agreement substantially similar to this
Agreement with each transferee or proposed transferee, and any demand
registrations granted to such transferee shall limit the demand registrations
to which Code is entitled under Section 2(a).



 12
 









12.           Miscellaneous.


(a)           Injunctions.  Each party acknowledges and agrees that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached.  Therefore, each
party shall be entitled to an injunction or injunctions to prevent breaches of
the provisions of this Agreement and to enforce specifically the terms and
provisions hereof in any court having jurisdiction, such remedy being in
addition to any other remedy to which such party may be entitled at law or in
equity.


(b)           Severability.  If any term or provision of this Agreement is
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms and provisions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
each of the parties shall use its best efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term or provision.


(c)           Further Assurances.  Subject to the specific terms of this
Agreement, each of the parties hereto shall make, execute, acknowledge and
deliver such other instruments and documents, and take all such other actions,
as may be reasonably required in order to effectuate the purposes of this
Agreement and to consummate the transactions contemplated hereby.


(d)           Waivers, etc.  No failure or delay on the part of either
party (or the intended third-party beneficiaries referred to herein) in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power.  No modification or
waiver of any provision of this Agreement nor consent to any departure
therefrom shall in any event be effective unless the same shall be in writing
and signed by an authorized officer of each of the parties, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given.


(e)           Entire Agreement.  This Agreement contains the final and
complete understanding of the parties with respect to its subject matter.  This Agreement supersedes all prior agreements
and understandings between the parties, whether written or oral, with respect
to the subject matter hereof.  The
paragraph headings contained in this Agreement are for reference purposes only,
and shall not affect in any manner the meaning or interpretation of this
Agreement.


(f)            Counterparts.  For the convenience of the parties, this
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original but all of which together shall be one and the same
instrument.


(g)           Amendment.  This Agreement may be amended only by a
written instrument duly executed by an authorized officer of each of the
parties.


(h)           Notices.  Unless expressly provided herein, all
notices, claims, certificates, requests, demands and other communications
hereunder shall be in writing and shall be deemed 



 13
 









to be duly given (i) when personally delivered, (ii) if mailed
registered or certified mail, postage prepaid, return receipt requested , on
the date the return receipt is executed or the letter refused by the addressee
or its agent or (iii) if sent by overnight courier which delivers upon the
signed receipt of the addressee, on the date the receipt acknowledgment is
executed or refused by the addressee or its agent:




	
  (iv)

  	
   

  	
  if to Code, to

   

  Code, Hennessy & Simmons II, L.P.

  c/o Code Hennessy & Simmons LLC

  10 South Wacker Drive

  Chicago, Illinois 60606

  Attention:   Peter Gotsch

  
	
   

  	
   

  	
   

  
	
  (v)

  	
   

  	
  if to the Company, to

   

  Houston Wire & Cable Company

  10201 North Loop East

  Houston, Texas 77029

  Attention:   Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
  (vi)

  	
   

  	
  if to a Holder of Registrable Securities, to the
  name and address as the same appear in the security transfer books of the
  Company or such other address as either party (or other Holders of
  Registrable Securities) may, from time to time, designate in a written notice
  in a like manner.

  






 


(i)            Governing Law.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED
BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS.


(j)            Assignment.  Except as provided herein, the parties may
not assign their rights under this Agreement. 
The Company may not delegate its obligations under this Agreement.



 14
 









IN WITNESS
WHEREOF, Code and the Company have caused this Agreement to be duly executed by
their authorized representative as of the date first above written.


	
  

  	
   

  	
  CODE, HENNESSY & SIMMONS II, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  CHS Management II, L.P., General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Code, Hennessy & Simmons, Inc., General Partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Andrew W. Code

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HOUSTON WIRE & CABLE COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Charles A. Sorrentino

  
							



 



 15