**EXHIBIT 10.1**

**REGISTRATION RIGHTS AGREEMENT**

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

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

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

WHEREAS, theparties hereto desire to enter into this Agreement, which sets forth the termsof certain registration rights applicable to the Registrable Securities (asdefined below).

NOW, THEREFORE, inconsideration of the premises and the mutual promises herein contained, and forother good and valuable consideration, the receipt and adequacy of which areacknowledged, the parties agree as follows:

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

(a)           “Affiliate” means, with respect toany person, any other person who, directly or indirectly, is in control of, iscontrolled 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 ofRegistrable Securities.

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

(d)           “Registrable Securities” means theCommon Stock as presently constituted, any stock or other securities into whichor for which such Common Stock may hereafter be changed, converted orexchanged, and any other securities issued to holders of such Common Stock (orshares into which or for which such shares are so changed, converted orexchanged) upon any reclassification, share combination, share subdivision,share dividend, merger, consolidation or similar transaction or event, providedthat such securities shall cease to be Registrable Securities (i) if aregistration statement with respect to the sale of such securities shall havebecome effective under the Securities Act and such securities shall have beendisposed 

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of in accordance with the plan of distribution set forth in suchregistration statement, (ii) such securities shall have been distributedpursuant to Rule 144, or (iii) subsequent to the seventh anniversary of theclosing of the Public Offering (subject to the specific extensions specifiedherein).

(e)           “Registration Expenses” means thefollowing reasonable expenses in connection with any registration of securitiespursuant to this Agreement: (i) SEC filing fees; (ii) the fees, disbursementsand expenses of the Company’s counsel and accountants in connection with theregistration of the Offered Registrable Securities under the Securities Act;(iii) all expenses in connection with the preparation, printing and filing ofthe registration statement, all preliminary and final prospectuses and allamendments and supplements thereto, the mailing and delivering of copiesthereof to any Holders, underwriters and dealers and all expenses incidental todelivery of the Offered Registrable Securities; (iv) the cost of producing bluesky or legal investment memoranda; (v) all expenses in connection with thequalification of the Offered Registrable Securities for offering and sale understate securities laws, including the fees and disbursements of counsel for theunderwriters or Holders in connection with such qualification and any blue skyand legal investment memoranda; (vi) any fees payable to the NationalAssociation of Securities Dealers, Inc. in connection with its review of theterms of the sale of the Offered Registrable Securities; (vii) transfer agents’,depositaries’ and registrars’ fees and the fees of any other agent appointed inconnection with such registration; (viii) all security engraving and securityprinting expenses; (ix) all fees and expenses payable in connection with thelisting of the Registrable Securities on each securities exchange or quotationsystem on which the Common Stock is then listed; and (x) any one time paymentfor directors and officers insurance directly related to such offering,provided the insurer provides a separate statement for such payment.

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

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

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

2.             Demand Registration.

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

(i)            if(A) prior to receipt of a request for registration pursuant to this Section2(a), the Company was planning an immediate offering of 

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securities by the Company and (B) within five business days afterreceipt of such request, the managing underwriter of such planned offeringadvises the Company in writing (with a copy to the Holder requestingregistration) that, in such firm’s good faith opinion, a registration at thetime and on the terms requested would materially and adversely affect thepreviously planned offering, then the Company shall not be required to effect aregistration pursuant to this Section 2(a) until the earliest of (1) the abandonmentof 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) ofsuch offering from any person in connection therewith or (4) 180 days afterreceipt by the Holder requesting registration of the managing underwriter’swritten opinion referred to above in this subsection (i);

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

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

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

(i)            aregistration requested by a Holder pursuant to Section 2(a) shall not be deemedto have been effected (and, therefore, not requested) (A) unless theregistration statement filed in connection therewith has become effective, (B)if, after such registration statement has become effective, it is interferedwith by any stop order, injunction or other order or requirement of the SEC or othergovernmental agency or court for any reason other than a misrepresentation oran 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 becompletely distributed in accordance with the plan of distribution set forththerein or (C) if the conditions to closing specified in the purchase agreementor underwriting agreement entered into in connection with such registration arenot satisfied (other than by reason of an act or omission by such Holder) orwaived by the underwriters;

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

(iii)          nothingherein shall modify the obligation of a Holder (other than Code) to pay theRegistration Expenses incurred in connection with any withdrawn registration.

(c)           In the event that any registrationrequested pursuant to Section 2(a) shall involve, in whole or in part, anunderwritten offering, the requesting Holder shall have the right to designatean underwriter reasonably satisfactory to the Company as the lead managingunderwriter, and the Company shall have the right to designate one underwriterreasonably satisfactory to the Holder as a co-manager of such underwrittenoffering.

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

3.             Piggyback Registration.  At any time prior to the seventh anniversaryof the closing of the Public Offering, if the Company proposes to register anyshares of Common Stock or any other of its common equity securities(collectively, “Other Securities”) under the Securities Act (other than aregistration on Form S-4 or Form S-8 or any successor form thereto), whether ornot for sale for its own account, in a manner which would permit registrationof Registrable Securities for sale for cash to the public under the SecuritiesAct, it will give prompt written notice to each Holder of its intention to doso at least ten business days prior to the anticipated filing date of theregistration statement relating to such registration.  Such notice shall offer each Holder theopportunity to include in such registration statement such number ofRegistrable Securities as such Holder may request.  Upon the written request of any Holder madewithin five business days after the receipt of the Company’s notice (whichrequest shall specify 

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the number of Registrable Securities proposed to bedisposed of and the intended method of disposition), the Company shall effect,in connection with the registration of the Other Securities and in the mannerset forth in Section 5, the registration under the Securities Act of allRegistrable Securities which the Company has been so requested to register, tothe extent required to permit the disposition of such Registrable Securities inaccordance with the intended method of disposition, provided that:

(a)           if, at any time after giving writtennotice of its intention to register any securities and prior to the effectivedate of the related registration statement, the Company shall determine for anyreason not to register or to delay registration of such securities, the Companymay, at its election, so notify the Holder in writing, whereupon (i) in thecase of a determination not to register, the Company shall be relieved of itsobligation to register any Registrable Securities in connection with suchregistration, and (ii) in the case of a determination to delay registration,the Company shall be permitted to delay registration of any RegistrableSecurities requested to be included in such registration for the same period asthe delay in registering such Other Securities.

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

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Securities) that such managing underwriter advises, allocated pro rataamong the Other Holders and the Holders on the basis of the number ofsecurities (including Registrable Securities) requested to be included thereinby each Other Holder and each Holder, subject to the rights of the Pre-IPOStockholders under the Investors Securities Agreement and Executive SecuritiesAgreements, in each case as in effect on the date hereof;

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

(d)           no registration of RegistrableSecurities effected under this Section 3 shall relieve the Company of itsobligation to effect a registration of Registrable Securities pursuant toSection 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 byCode pursuant to Section 2.  Each Holder(other than Code), by accepting Registrable Securities, agrees to pay allRegistration Expenses with respect to an offering pursuant to Section 2, prorata based on the number of Registrable Securities included in such offering byeach Holder (excluding Code), except to the extent the Company causes shares tobe registered for itself or another party pursuant to Section 2(d), in whichevent the Company or such other party shall pay the incremental expenses ofincluding such shares in the offering. The Company agrees to pay all Registration Expenses with respect to anoffering pursuant to Section 3, except for the incremental expenses ofincluding Registrable Securities of a Holder (other than Code) in suchoffering, which incremental expenses shall be paid by such Holder.  All Registration Expenses to be paid by aHolder shall be paid within 30 days of the delivery of a statement from theCompany, such statements to be delivered not more frequently than once every 60days.  In an underwritten offering, eachparty (including Code) shall be responsible for underwriting discounts andcommissions payable with respect to the securities sold by such party.

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

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

(b)           prepare and file with the SEC suchamendments to the registration statement, such preliminary and finalprospectuses and such amendments and supplements thereto as may be necessary tokeep such registration statement effective for 60 days (or, in the case of anunderwritten offering, such shorter time period as the underwriters mayrequire);

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(c)           furnish to the Holders and to anyunderwriter of such Offered Registrable Securities such number of conformedcopies of such registration statement and of each amendment thereto (in eachcase including all exhibits), such number of copies of the prospectus includedin such registration statement (including each preliminary prospectus and anysummary prospectus) and any supplements thereto, and such other documents asthe Holders or such underwriter may reasonably request in order to facilitatethe public sale of the Offered Registrable Securities, and a copy of any andall transmittal letters or other correspondence to, or received from, the SECor any other governmental agency or self-regulatory body or other body havingjurisdiction (including any domestic or foreign securities exchange) relatingto such offering;

(d)           use its best efforts to register orqualify all Offered Registrable Securities under the securities or blue skylaws of such jurisdictions as the Holders or any underwriter of such OfferedRegistrable Securities shall request, and use its best efforts to obtain allappropriate registrations, permits and consents required in connection therewith,and do any and all other acts and things which may be necessary or advisable toenable the Holders or any such underwriter to consummate the disposition insuch jurisdictions of the Offered Registrable Securities; provided that theCompany shall not for any such purpose be required to register or qualifygenerally to do business as a foreign corporation in any jurisdiction where itis not so qualified, to subject itself to taxation in any jurisdiction where itis not so subject, or to consent to general service of process in anyjurisdiction;

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

(f)            immediately notify each Holder ofOffered Registrable Securities (each a “Selling Holder”) in writing (i) at anytime when a prospectus relating to a registration pursuant to Section 2 or 3 isrequired to be delivered under the Securities Act of the happening of anyevent, as a result of which the prospectus included in such registrationstatement, as then in effect, includes an untrue statement of a material factor omits to state a material fact required to be stated therein or necessary tomake the statements therein, in light of the circumstances under which theywere made, not misleading, and (ii) of any request by the SEC or any otherregulatory body having jurisdiction for any amendment of or supplement to anyregistration statement or other document relating to such offering, and ineither such case (i) or (ii) at the request of the Selling Holders, prepare andfurnish to the Selling Holders a reasonable number of copies of a supplement toor an amendment of such prospectus as may be necessary so that, as thereafterdelivered to the purchasers of the Offered Registrable Securities, suchprospectus shall not include an untrue statement of a material fact or omit tostate a material fact required to be stated therein or necessary to make thestatements therein, in light of the circumstances under which they are made,not misleading;

 

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

(h)           furnish unlegended certificatesrepresenting ownership of the Registrable Securities being sold in suchdenominations as shall be requested by the Selling Holders or the underwriters.

6.             Conversion of Other Securities, etc.  If Code offers any options, rights, warrantsor 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 othersecurities shall be eligible for registration pursuant to Section 2 and Section3.

7.             Underwriting; Due Diligence.

(a)           If requested by the underwriters forany underwritten offering of Registrable Securities pursuant to a registrationrequested under this Agreement, the Company shall enter into an underwritingagreement with such underwriters that contains such representations andwarranties by the Company, and such other terms and provisions, as arecustomarily contained in underwriting agreements with respect to secondarydistributions, including, without limitation, indemnities and contribution substantiallyto the effect and to the extent provided in Section 8 and agreements to provideopinions of counsel and accountants’ letters to the effect and to the extentprovided in Section 5(e).  The SellingHolders shall be parties to any such underwriting agreement.  Such underwriting agreement shall alsocontain such representations and warranties by the Selling Holders as arecustomarily contained in underwriting agreements with respect to secondarydistributions.  The Selling Holders mayrequire that any additional securities included in an offering proposed by aHolder be included on the same terms and conditions as the Offered RegistrableSecurities included therein.

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

(c)           In connection with the preparationand filing of each registration statement registering Registrable Securitiesunder the Securities Act, the Company shall give the Holders of suchRegistrable Securities and the underwriters, if any, and their respectivecounsel and accountants, such reasonable and customary access to its books andrecords, and such 

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opportunities to discuss the business of the Company with its officersand the independent public accountants who have certified the Company’sfinancial statements, as shall be necessary, in the opinion of such Holder andsuch underwriters or their respective counsel, to conduct a reasonableinvestigation within the meaning of the Securities Act.

8.             Indemnificationand Contribution.

(a)           In the case of each offering ofRegistrable Securities made pursuant to this Agreement, the Company agrees toindemnify and hold harmless each Holder, its officers and directors, eachunderwriter of Registrable Securities so offered and each person, if any, whocontrols any of the foregoing persons within the meaning of the Securities Act,from and against any and all claims, liabilities, losses, damages, expenses andjudgments, joint or several, to which they or any of them may become subject,under the Securities Act or otherwise, including any amount paid in settlementof any litigation commenced or threatened, and shall promptly reimburse them,as and when incurred, for any reasonable legal or other expenses incurred bythem in connection with investigating any claims and defending any actions,insofar as such losses, claims, damages, liabilities or actions shall arise outof, or shall be based upon, any untrue statement or alleged untrue statement ofa material fact contained in the registration statement (or in any preliminaryor final prospectus included therein) or any amendment thereof or supplementthereto, or in any document incorporated by reference therein, or any omissionor alleged omission to state a material fact required to be stated therein ornecessary to make the statements therein not misleading; provided, however,that the Company shall not be liable to a particular Holder in any such case tothe extent that any such loss, claim, damage, liability or action arises outof, or is based upon, any untrue statement or alleged untrue statement, or anyomission, if such statement or omission shall have been made in reliance uponand in conformity with information relating to such Holder furnished to theCompany in writing by or on behalf of such Holder specifically for use in thepreparation of the registration statement (or in any preliminary or finalprospectus included therein) or any amendment thereof or supplementthereto.  Such indemnity shall remain infull force and effect regardless of any investigation made by or on behalf of aHolder and shall survive the transfer of such securities.  The foregoing indemnity agreement is inaddition to any liability which the Company may otherwise have to each Holder,its officers and directors, underwriters of the Registrable Securities or anycontrolling person of the foregoing; provided further, that, as to anyunderwriter or any person controlling any underwriter, this indemnity does notapply to any loss, liability, claim, damage or expense arising out of or basedupon any untrue statement or alleged untrue statement or omission or allegedomission in any preliminary prospectus if a copy of a prospectus was not sentor 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 ofthe sale of the Registrable Securities as required by the Securities Act andsuch untrue statement or omission had been corrected in such prospectus.

(b)           In the case of each offering madepursuant to this Agreement, each Holder of Registrable Securities included insuch offering, by exercising its registration rights hereunder, agrees toindemnify 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 SecuritiesAct (and if requested by the underwriters, each underwriter who participates inthe offering and each person, if any, who controls any such underwriter withinthe 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 SecuritiesAct or otherwise, including any amount paid in settlement of any litigationcommenced or threatened, and shall promptly reimburse them, as and whenincurred, for any legal or other expenses incurred by them in connection withinvestigating any claims and defending any actions, insofar as any such losses,claims, damages, liabilities or actions shall arise out of, or shall be basedupon, any untrue statement or alleged untrue statement of a material factcontained in the registration statement (or in any preliminary or finalprospectus included therein) or any amendment thereof or supplement thereto, orany omission or alleged omission to state therein a material fact required tobe 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 materialfact is contained in, or such material fact is omitted from, informationrelating to such Holder furnished in writing to the Company by or on behalf ofsuch 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 anyliability which such Holder may otherwise have to the Company, or any of itsdirectors, officers or controlling persons; provided, however, that, as to anyunderwriter or any person controlling any underwriter, this indemnity does notapply to any loss, liability, claim, damage or expense arising out of or basedupon any untrue statement or alleged untrue statement or omission or allegedomission in any preliminary prospectus if a copy of a prospectus was not sentor 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 ofthe sale of the Registrable Securities as required by the Securities Act andsuch untrue statement or omission had been corrected in such prospectus.

(c)           Each party indemnified underparagraph (a) or (b) of this Section 8 shall, promptly after receipt of noticeof any claim or the commencement of any action against such indemnified partyin respect of which indemnity may be sought, notify the indemnifying party inwriting of the claim or the commencement thereof; provided that the failure tonotify the indemnifying party shall not relieve it from any liability which itmay have to an indemnified party on account of the indemnity agreementcontained in paragraph (a) or (b) of this Section 8, except to the extent theindemnifying party was prejudiced by such failure, and in no event shallrelieve the indemnifying party from any other liability which it may have tosuch indemnified party.  If any suchclaim or action shall be brought against an indemnified party, and it shallnotify the indemnifying party thereof, the indemnifying party shall be entitledto participate therein and, to the extent that it wishes, jointly with anyother similarly notified indemnifying party, to assume the defense thereof withcounsel reasonably satisfactory to the indemnified party.  After notice from the indemnifying party tothe indemnified party of its election to assume the defense of such claim oraction, the indemnifying party shall not be liable to the indemnified partyunder this Section 8 for any legal or other expenses subsequently incurred bythe indemnified party in connection with the defense thereof, other thanreasonable costs of investigation; provided that each indemnified party, itsofficers and directors, if any, and each person, if any, who controls suchindemnified party within the meaning of the Securities Act shall have the rightto employ separate counsel reasonably approved by the indemnifying party torepresent them, if the named parties to any action (including any impleadedparties) include both such indemnified party and an indemnifying party or anaffiliate of an indemnifying party, and such indemnified party shall have beenadvised by counsel either (i) that there may be one or more legal defensesavailable to such indemnified party that are different from or additional tothose available to such indemnifying party or such affiliate or (ii) that aconflict may exist 

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

If theindemnification provided for in this Section 8 shall for any reason beunavailable to an indemnified party in respect of any loss, claim, damage orliability referred to herein, or any action in respect thereof, then eachindemnifying party shall, in lieu of indemnifying such indemnified party,contribute to the amount paid or payable by such indemnified party as a resultof such loss, claim, damage or liability, or action in respect thereof, in suchproportion as shall be appropriate to reflect the relative fault of theindemnifying party on the one hand and the indemnified party on the other withrespect to the statements or omissions which resulted in such loss, claim, damageor liability, or action in respect thereof, as well as any other relevantequitable considerations.  The relativefault shall be determined by reference to whether the untrue or alleged untruestatement of a material fact or omission or alleged omission to state amaterial fact relates to information supplied by the indemnifying party on theone hand or the indemnified party on the other, the intent of the parties andtheir relative knowledge, access to information and opportunity to correct orprevent such statement or omission, but not by reference to any indemnifiedparty’s stock ownership in the Company. In no event, however, shall a Holder be required to contribute in excessof the amount of the net proceeds received by such Holder in connection withthe sale of Registrable Securities in the offering which is the subject of suchloss, claim, damage or liability.  Forpurposes of this paragraph, the amount paid or payable by an indemnified partyas a result of the loss, claim, damage or liability, or action in respectthereof, shall be deemed to include any legal or other expenses reasonablyincurred by such indemnified party in connection with investigating ordefending any such action or claim. No person guilty of fraudulentmisrepresentation (within the meaning of Section 11(f) of the Securities Act)shall be entitled to contribution from any person who was not guilty of suchfraudulent misrepresentation.

9.             Rule 144. Following the closing of the Public Offering, the Company shall takesuch measures and file such information, documents and reports as shall berequired by the SEC as a condition to the availability of Rule 144 (or anysuccessor provision.)

10.           Holdback.

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

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purchase of, effect any public sale or distribution of or otherwisedispose of any securities of the Company during the 30 days prior to and the 90days after the effective date of any underwritten registration pursuant toSection 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 privatesale.  The Company may place a legend andimpose stop transfer instructions on any certificate evidencing RegistrableSecurities relating to the restrictions provided for in this Section 10.

(b)           The Company agrees, if so required bythe managing underwriter, not to sell, make any short sale of, loan, grant anyoption for the purchase of (other than pursuant to employee benefit plans),effect any public sale or distribution of or otherwise dispose of its equitysecurities or securities convertible into or exchangeable or exercisable forany such securities during the 30 days prior to and the 90 days after theeffective date of any underwritten registration pursuant to Section 2 or 3,except as part of such underwritten registration and except pursuant toregistrations 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 priorwritten notice to the Company, Code may transfer all or any portion of itsrights 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 thedate of this Agreement and (ii) if Code than owns less than 20% of its initialholdings, all of Code’s remaining Registrable Securities (each, a “transferee”).  The notice to the Company need not containthe names of the proposed transferee.  Onor before the later of the transfer of the registration rights and the transferof the underlying Registrable Securities, the Company shall receive a writtennotice stating (to the extent not included in the notice of transfer ofregistration rights) the name and address of any transferee of the registrationrights and identifying the number of Registrable Securities with respect towhich the rights under this Agreement are being transferred and the nature ofthe rights so transferred.  Following anysuch transfer, the term “Code,” as used in this Agreement (other than in thisSection 11, Section 3(b)(i)(2), Section 4 and Section 1(c)(iii)), shall bedeemed to include the transferee of such Registrable Securities, whereappropriate to assign the rights and obligations of Code hereunder.  Code and such transferees may exercise theregistration rights hereunder in such proportion and upon the demand of suchHolders as they shall agree among themselves, provided that in no eventshall the Company be required to effect more than one registration pursuant toSection 2 in any six-month period, regardless of the number of Holders making arequest.

(b)           After any such transfer, Code shallretain its rights under this Agreement with respect to all RegistrableSecurities retained by Code.

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

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12.           Miscellaneous.

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

(b)           Severability.  If any term or provision of this Agreement isheld 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 fullforce and effect and shall in no way be affected, impaired or invalidated, andeach of the parties shall use its best efforts to find and employ analternative means to achieve the same or substantially the same result as thatcontemplated by such term or provision.

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

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

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

(f)            Counterparts.  For the convenience of the parties, thisAgreement may be executed in any number of counterparts, each of which shall bedeemed to be an original but all of which together shall be one and the sameinstrument.

(g)           Amendment.  This Agreement may be amended only by awritten instrument duly executed by an authorized officer of each of theparties.

(h)           Notices.  Unless expressly provided herein, allnotices, claims, certificates, requests, demands and other communicationshereunder shall be in writing and shall be deemed 

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to be duly given (i) when personally delivered, (ii) if mailedregistered or certified mail, postage prepaid, return receipt requested , onthe date the return receipt is executed or the letter refused by the addresseeor its agent or (iii) if sent by overnight courier which delivers upon thesigned receipt of the addressee, on the date the receipt acknowledgment isexecuted 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 OBLIGATIONSOF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNEDBY THE INTERNAL LAWS OF THE STATE OF ILLINOIS.

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

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IN WITNESSWHEREOF, Code and the Company have caused this Agreement to be duly executed bytheir 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 |
|        |            |                                       |  |  |  |  |

 

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