Exhibit 10.1





Exhibit 10.1




CONSENT, WAIVER AND THIRD AMENDMENT TO CREDIT AGREEMENT




CONSENT, WAIVER AND THIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as
of September 1, 2010, is executed by and among LAWSON PRODUCTS, INC., a Delaware corporation
(“Lawson”), which has its chief executive office located at 1666 E. Touhy Avenue, Des Plaines,
Illinois 60018, various subsidiaries of Lawson listed on the signature pages hereto (Lawson and the
subsidiaries are referred to collectively herein as the “Borrower” or the
“Borrowers”), THE PRIVATEBANK AND TRUST COMPANY both as a lender and as agent (in such
capacity, the “Agent”), for itself and all other lenders from time to time a party hereto
(“Lenders”), located at 120 South LaSalle Street, Chicago, Illinois 60603-3400, and all
other Lenders.



WHEREAS, the Agent, Lawson and certain subsidiaries of Lawson (together with Lawson,
collectively, the “Original Borrowers”), entered into a Credit Agreement, dated as of
August 21, 2009, among the Original Borrowers, the Agent and the Lenders, and on December 2, 2009,
Lawson Products, Inc., an Illinois corporation and newly-formed wholly-owned subsidiary of Lawson
(“Lawson IL”), became a party to such agreement as a Borrower (herein, as the same may be
amended, modified or supplemented from time to time, the “Credit Agreement”); and



WHEREAS, the Borrowers consummated an internal reorganization pursuant to which several of the
Borrowers were merged into Lawson IL and assets of certain of the Borrowers were transferred among
the Borrowers; and



WHEREAS, the Borrowers, the Lenders and the Agent entered into a Consent, Waiver and First
Amendment to Credit Agreement dated as of December 31, 2009; and



WHEREAS, the Borrowers, the Lenders and the Agent entered into a Second Amendment to Credit
Agreement dated as of January 29, 2010; and



WHEREAS, the Borrowers have informed the Agent that they intend to consummate the sale of
certain assets and liabilities of Assembly Component Systems, Inc., an Illinois corporation
(“ACS”), during the third quarter of Lawson’s fiscal 2010 (the “Sale”); and



WHEREAS, the Borrowers, the Lenders and the Agent wish to enter into this Amendment to (i)
confirm each Lender’s and the Agent’s consent to the Sale, (ii) waive any and all Events of Default
arising or occurring under the Credit Agreement or any other Loan Document solely in connection
with the Sale and (iii) amend the Credit Agreement to account for the Sale and otherwise as set
forth herein.



NOW THEREFORE, in consideration of the premises and the mutual covenants hereinafter contained
in this Amendment, the parties hereto hereby agree as follows:




1. Incorporation of the Agreement. All capitalized terms which are not defined
hereunder shall have the same meanings as set forth in the Credit Agreement, and the Credit
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 Credit Agreement are inconsistent with the amendments set forth in Paragraph 2
below, such terms and provisions shall be deemed superseded hereby. Except as


 


 









 





specifically set forth herein, the Credit Agreement and the other Loan Documents shall remain in
full force and effect and the provisions thereof shall be binding on the parties hereto.



2. Amendments to the Credit Agreement. The parties hereto hereby amend the
Credit Agreement, effective as of the date hereof as follows:



The first sentence of Section 4.1 of the Credit Agreement is deleted and substituted
therefor is the following:




“The Revolving Loans shall be evidenced by Revolving Notes (together
with all renewals, extensions, modifications or substitutions thereof,
the “Revolving Notes”) in the form at Exhibit A attached hereto, duly
executed by each Borrower and payable to the order of each Lender
according to such Lender’s Revolving Loan Commitment.”



3. Representations and Warranties.




	 	(a)	 	The representations and warranties set forth in
Section 7 of the Credit Agreement shall be deemed remade and
affirmed by the Borrowers in all material respects, as of the date hereof;
provided that representations and warranties referencing a particular date
other than a general date of execution shall be true and correct as of such
date; provided, further, that any and all references to the Credit
Agreement in such representations and warranties shall be deemed to include
this Amendment.

	 
	 	(b)	 	The Borrowers represent and warrant that no Event of
Default has occurred and is continuing.






4. Consent; Waiver. Notwithstanding any terms or provisions of the Credit
Agreement to the contrary, this Amendment serves as evidence of the Agent’s and each Lender’s (i)
consent to Sale and each of the transactions necessary to consummate the Sale and (ii) waiver of
any and all Events of Default arising or occurring under the Credit Agreement or any other Loan
Document, solely as a result of the Sale. The consent and waiver provided herein shall be limited
to the matter set forth herein. Except as otherwise provided herein, all provisions, terms and
conditions of the Credit Agreement remain in full force and effect after giving effect to the Sale.



5. Fees and Expenses. The Borrowers shall pay or reimburse the Agent for all
reasonable costs and expenses, including, without limitation, legal expenses and reasonable
attorneys’ fees (for outside counsel) incurred by the Agent, or for which the Agent becomes
obligated, in connection with the negotiation, preparation, and closing of this Amendment.



6. Delivery of Documents/Information. This Amendment shall be effective on
the date hereof upon receipt by Agent of the last of the following: (i) a fully executed copy of this
Amendment, and (ii) Borrowers’ payment to Agent of all invoiced fees and expenses and the
modification fee provided in paragraph 5 above.


 


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7. Release of ACS. The Agent and each Lender hereby agrees and acknowledges
that effective immediately following consummation the Sale, (i) ACS shall no longer be a Borrower
under the Credit Agreement or a Grantor under the Security Agreement or otherwise be bound by, or a
party to, any of the Loan Documents, (ii) ACS shall be deemed released and discharged from any and
all liabilities and obligations under the Loan Documents and (iii) all security interests and other
liens granted to or held by the Agent in any assets or property of ACS as security for the
Obligations shall be deemed released and discharged, without recourse or warranty. The Agent agrees
and acknowledges that upon the consummation of the Sale the Agent shall execute and return to
Lawson such releases of liens, discharges, terminations and other release documentation reasonably
requested by Lawson to evidence the release of the Agent’s liens and security interests in all of
the assets and property of ACS.



8. Continuing Effect. Except as otherwise specifically set out herein, the
provisions of the Credit Agreement and each of the Loan Documents shall remain in full force and
effect. The Borrowers have heretofore executed and delivered to the Agent certain Loan Documents
and the Borrowers hereby acknowledge and agree that, notwithstanding the execution and delivery of
this Amendment, the Loan Documents remain in full force and effect after giving effect to the
amendments set forth in this Amendment and the rights and remedies of the Agent and the Lenders
thereunder, the obligations of each Borrower thereunder and the liens and security interests
created and provided for thereunder remain in full force and effect and shall not be affected,
impaired or discharged hereby. Nothing herein contained shall affect or impair the priority of the
liens and security interests created and provided for in the Loan Documents as to the indebtedness
which would be secured thereby prior to giving effect to this Amendment and which remains secured
thereby after giving effect to this Amendment. Any and all references to the Credit Agreement in
each of the Loan Documents shall be deemed to refer to and include this Amendment.



9. Headings. The headings of this Amendment are for the purposes of reference
only and shall not affect the construction of the Amendment.



10. Counterparts. This Amendment may be executed by one or more of the parties
to this Amendment on any number of separate counterparts
and all of said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed counterpart of this Amendment by facsimile or electronic mail
shall be equally as effective as delivery of a manually executed counterpart of this Amendment. Any
party delivering an executed counterpart of this Amendment by facsimile or electronic mail shall
also deliver a manually executed counterpart of this Amendment, but the failure to deliver a
manually executed counterpart shall not affect the validity, enforceability, or binding effect of
this Amendment.



11. Governing Law. This Amendment shall be governed by and construed in
accordance with the internal laws (as opposed to the conflict of law provisions) of the State of
Illinois.



[SIGNATURE PAGES FOLLOW]



 


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(Signature Page to Third Amendment to Credit Agreement)




IN WITNESS WHEREOF, the Borrowers, the Agent and each Lender have executed this Amendment as of the
date first above written.



	 	 	 	 	 	 	 	 	 	 	 
	BORROWERS:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	LAWSON PRODUCTS, INC.,	 	LAWSON PRODUCTS, INC.,
	a Delaware corporation	 	an Illinois corporation
	 
	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Ron Knutson	 	By:	 	/s/ Ron Knutson
	 	 	 	 	 	 	 
	 

	 	Name:
	 	Ron Knutson
	 	 	 	Name:
	 	Ron Knutson
	 

	 	Its:
	 	Senior Vice President and

Chief Financial Officer
	 	 	 	Its:
	 	Senior Vice President and

Chief Financial Officer
	 
	 	 	 	 	 	 	 	 	 	 
	DRUMMOND AMERICAN LLC,	 	CRONATRON WELDING SYSTEMS LLC,
	an Illinois limited liability company	 	a North Carolina limited liability company
	 
	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Ron Knutson	 	By:	 	/s/ Ron Knutson
	 	 	 	 	 	 	 
	 

	 	Name:
	 	Ron Knutson
	 	 	 	Name:
	 	Ron Knutson
	 

	 	Its:
	 	Senior Vice President and

Chief Financial Officer
	 	 	 	Its:
	 	Senior Vice President and

Chief Financial Officer
	 
	 	 	 	 	 	 	 	 	 	 
	RUTLAND TOOL & SUPPLY CO.,

a Nevada Corporation	 	AUTOMATIC SCREW MACHINE
PRODUCTS COMPANY, INC.,

an Alabama corporation
	 
	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Ron Knutson	 	By:	 	/s/ Ron Knutson
	 	 	 	 	 	 	 
	 

	 	Name:
	 	Ron Knutson
	 	 	 	Name:
	 	Ron Knutson
	 

	 	Its:
	 	Senior Vice President and

Chief Financial Officer
	 	 	 	Its:
	 	Senior Vice President and

Chief Financial Officer
	 
	 	 	 	 	 	 	 	 	 	 
	ASSEMBLY COMPONENT SYSTEMS, INC.,

an Illinois corporation	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Ron Knutson	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	Ron Knutson	 	 	 	 	 	 
	 

	 	Its:
	 	Senior Vice President and

Chief Financial Officer	 	 	 	 	 	 





 


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(Signature Page to Third Amendment to Credit Agreement)




	 	 	 	 	 
	AGENT:



THE PRIVATEBANK AND TRUST COMPANY

 	 	 
	By:  	/s/ Thomas G. Estey
 	 	 
	 	Name:  	Thomas G. Estey 	 	 
	 	Its:        Managing Director 	 	 
	 
	LENDER:



THE PRIVATEBANK AND TRUST COMPANY

 	 	 
	By:  	/s/ Thomas G. Estey
 	 	 
	 	Name:  	Thomas G. Estey 	 	 
	 	Its:        Managing Director 	 	 




 


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