ex10_1.htm


    
      

    

    Execution
      Copy

    


    THIRTEENTH
      AMENDMENT TO AMENDED AND RESTATED

    LOAN
      AND SECURITY AGREEMENT

    


    THIRTEENTH
      AMENDMENT, dated as of September 28, 2007 to the Amended and Restated Loan
      and
      Security Agreement, dated as of May 22, 2000, among HWC Wire & Cable Company
      (formerly known as Houston Wire & Cable Company) (“Borrower”), the lenders
      named therein (“Lenders”) and Bank of America, N.A. (“Bank of America”) as
      successor-in-interest to Fleet Capital Corporation, as agent for said Lenders
      (Bank of America, in such capacity, “Agent”).  Said Amended and
      Restated Loan and Security Agreement, as amended by a certain First Amendment
      to
      Amended and Restated Loan and Security Agreement by and among Borrower, Lenders
      and Agent dated as of July 13, 2000, by a certain Second Amendment to Amended
      and Restated Loan and Security Agreement by and among Borrower, Lenders and
      Agent dated May 30, 2001, by a certain Third Amendment to Amended and
      Restated Loan and Security Agreement by and among Borrower, Lenders and Agent
      dated October 22, 2001, by a certain Fourth Amendment to Amended and
      Restated Loan and Security Agreement by and among Borrower, Lenders and Agent
      dated December 31, 2002, by a certain Fifth Amendment to Amended and Restated
      Loan and Security Agreement by and among Borrower, Lenders and Agent dated
      November 19, 2003, by a certain Sixth Amended to Amended and Restated Loan
      and
      Security Agreement dated as of May 26, 2005 by and among Borrower, Lenders
      and
      Agent, by a certain Seventh Amendment to Amended and Restated Loan and Security
      Agreement dated December 14, 2005 by and among Borrower, Agent and Lenders,
      by a
      certain Eighth Amendment to Amended and Restated Loan and Security Agreement
      dated December 30, 2005 by and among Borrower, Agent and Lenders, by a certain
      Ninth Amendment to Amended and Restated Loan and Security Agreement dated May
      23, 2006 by and among Borrower, Agent and Lenders, by a certain Tenth Amendment
      to Amended and Restated Loan and Security Agreement dated as of November 3,
      2006
      by and among Borrower, Agent and Lenders, by a certain Eleventh Amendment to
      Amendment of Restated Loan and Security Agreement dated as of July 31, 2007
      by
      and among Borrower, Agent and Lenders and by a certain Twelfth Amendment to
      Amended and Restated Loan and Security Agreement dated August 3, 2007 by and
      among Borrower, Lenders and Agent and as it may be further amended, is
      hereinafter referred to as the “Loan Agreement.”  The terms used
      herein and not otherwise defined shall have the meanings attributed to them
      in
      the Loan Agreement.  References to Agent and/or any Lender shall
      include Agent’s or such Lender’s predecessor(s)-in-interest.

    


    WHEREAS,
      Lenders, Agent and Borrower desire to make certain amendments and modifications
      to the Loan Agreement.

    


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

    


    1.           Additional
      and Amended Definitions.  The following definitions of “Thirteenth
      Amendment” and “Thirteenth Amendment Effective Date” are hereby inserted into
Exhibit A to the Loan Agreement.  The definitions of
“Applicable Margin,” “Maximum Revolving Loan” and “Total Credit Facility” are
      hereby deleted from Exhibit A to the Loan Agreement and the following are
      restated in their stead:


    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    


    *      *      *

    


    “Applicable
      Margin– from the Thirteenth Amendment Effective Date to, but not including,
      the first Adjustment Date (as hereinafter defined) the percentages set forth
      below with respect to the Base Rate Revolving Credit Portion, the LIBOR
      Revolving Credit Portion and the Unused Line Fee:

    


    


    
      	
              Base
                Rate Revolving Credit Portion

            	
              0%

            
	
              LIBOR
                Revolving Credit Portion

            	
              1.00%

            
	
              Unused
                Line Fee

            	
              0.20%

            


    

    


    The
      percentages set forth above will be adjusted on the first day of the month
      following delivery by Borrower to Agent of the financial statements required
      to
      be delivered pursuant to subsection 8.1.3(ii) of the Agreement for
      each December 31, March 31, June 30 and September 30 during the Term,
      commencing with the month ending September 30, 2007 (each such date an
“Adjustment Date”), effective prospectively, by reference to the applicable
“Financial Measurement” (as defined below) for the four quarters most recently
      ending in accordance with the following:

     

    
      	
              Financial
                Measurement

            	 	
              Base
                Rate

              Revolving
                Credit

              Portion

            	 	
              LIBOR

              Revolving
                Credit

              Portion

            	 	
              Unused
                Line Fee

            
	 	 	 	 	 	 	 
	
              >
                1.25 to 1

            	 	
              0%

            	 	
              1.50%

            	 	
              0.25%

            
	
              <
                1.25 to 1, but> 0.75 to 1

            	 	
              0%

            	 	
              1.25%

            	 	
              0.225%

            
	
              <
                0.75 to 1

            	 	
              0%

            	 	
              1.00%

            	 	
              0.20%

            


    

    


    provided
      that, (i) if Borrower’s audited financial statements for any fiscal year
      delivered pursuant to subsection 8.1.3(i) of the Agreement reflect a
      Financial Measurement that yields a higher Applicable Margin than that yielded
      by the financial statements previously delivered pursuant to
      subsection 8.1.3(ii) of the Agreement for such fiscal year, the Applicable
      Margin shall be readjusted retroactively for the period that was incorrectly
      calculated and (ii) if Borrower fails to deliver the financial statements
      required to be delivered pursuant to subsection 8.1.3(i) or
      subsection 8.1.3(ii) of the Agreement on or before the due date thereof,
      the interest rate shall automatically adjust to the highest interest rate set
      forth above, effective prospectively from such due date until that date on
      which
      such financial statements are so delivered to Agent.  For purposes
      hereof, “Financial Measurement” shall mean the Debt to EBITDA
      Ratio.

    


    *      *      *

    


    Maximum
      Revolving Loan– Seventy-Five Million Dollars ($75,000,000).

    


    *      *      *


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    


    Total
      Credit Facility– Seventy-Five Million Dollars ($75,000,000).

    


    *      *      *

    


    Thirteenth
      Amendment– that certain Thirteenth Amendment to Amended and Restated Loan
      and Security Agreement dated as of September 28, 2007 by and among Borrower,
      Agent and Lenders.

    


    *      *      *

    


    Thirteenth
      Amendment Effective Date– the date on which the conditions precedent to the
      effectiveness of the Thirteenth Amendment are satisfied.”

    


    2.           Total
      Credit Facility.  The first paragraph of Section 1 of the Loan
      Agreement is hereby deleted and the following is inserted in its
      stead:

    


    “1.           CREDIT
      FACILITY.

    


    Subject
      to the terms and conditions of, and in reliance upon the representations and
      warranties made in, this Agreement and the other Loan Documents, Lenders agree
      to make a credit facility of up to Seventy-Five Million Dollars ($75,000,000)
      available upon Borrower’s request therefor, as follows:”

    


    *      *      *

    


    3.           Revolving
      Loans.  Section 1.1.1(A) of the Loan Agreement is hereby deleted
      and the following is inserted in its stead:

    


    “1.1           Revolving
      Credit Loans.

    


    1.1.1   Loans
      and
      Reserves.  (A) Loans and Reserves.  The aggregate amount of
      the Revolving Credit Loans to be made by each Lender (such Lender’s “Revolving
      Credit Loan Commitment”), pursuant to the terms hereof, shall be the amount set
      below such Lender’s name on the signature pages hereof.  The aggregate
      principal amount of the Revolving Credit Loan Commitments is Seventy-Five
      Million Dollars ($75,000,000).  The percentage equal to the quotient
      of (x) each Lender’s Revolving Credit Loan Commitment, divided by (y) the
      aggregate of all Revolving Credit Loan Commitments, is that Lender’s “Revolving
      Credit Percentage”.  Subject to all of the terms and conditions of
      this Agreement, each Lender agrees, for so long as no Default or Event of
      Default exists, to make Revolving Credit Loans to Borrower from time to time,
      as
      requested by Borrower in accordance with the terms of Section 3.1 hereof, up
      to
      a maximum principal amount at any time outstanding equal to the product of
      (A)
      the Borrowing Base at such time multiplied by (B) such Lender’s Revolving Credit
      Percentage.  It is expressly understood and agreed that Agent and
      Lenders may use the Borrowing Base as a maximum ceiling on Revolving Credit
      Loans outstanding to Borrower at any time.  If the unpaid balance of
      the Revolving Credit Loans should exceed the ceiling so determined or any other
      limitation set forth in this Agreement, such Revolving Credit Loans shall
      nevertheless constitute Obligations that are secured by the Collateral and
      entitled to all the benefits thereof.  In no event shall Lenders be
      required to make a Revolving Credit Loan at any time that there exists a Default
      or an Event of Default.  Agent shall have the right to establish
      reserves in such amounts, and with respect to such matters, as Agent shall
      deem
      necessary or appropriate in the reasonable exercise of Agent’s credit judgment,
      against the amount of Revolving Credit Loans which Borrower may otherwise
      request under this Section 1.1.1., including, without limitation, with respect
      to (i) price adjustments, damages, unearned discounts, returned products or
      other matters for which credit memoranda are issued in the ordinary course
      of
      Borrower’s business; (ii) shrinkage, spoilage and obsolescence of Inventory;
      (iii) slow moving Inventory; (iv) other sums chargeable against Borrower’s Loan
      Account as Revolving Credit Loans under any section of this Agreement; (v)
      amounts owing by Borrower to any Person to the extent secured by a Lien on,
      or
      trust over, any Property of Borrower; and (vi) such other matters, events,
      conditions or contingencies from time to time hereunder as to which Agent,
      in
      its reasonable credit judgment, determines reserves should be established from
      time to time hereunder.”


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    


    4.           Distribution.  Subsection
      8.2.7 of the Loan Agreement is hereby deleted and the following is inserted
      in
      its stead:

    


    “8.2.7  Distributions.  Declare
      or make, or permit any Subsidiary of Borrower to declare or make, any
      Distributions, except that:

    


    (a)           Subsidiaries
      of Borrower may make Distributions to Borrower with respect to their common
      Stock;

    


    (b)           Borrower
      may pay dividends to Guarantor in an amount sufficient to maintain the corporate
      existence of Guarantor, to pay income taxes and to pay the reasonable
      out-of-pocket expenses of Guarantor and audit fees and expenses, not to exceed
      $100,000 per annum in the aggregate;

    


    (c)           Borrower
      may pay dividends to Guarantor for further distribution to its stockholders
      in
      an amount not to exceed the lesser of (x) income taxes on phantom income
      incurred on the issuance of payment-in-kind notes with respect to the Guarantor
      Subordinated Debt or (y) $125,000 per year;

    


    (d)           Borrower
      may pay dividends to Guarantor of up to $100,000 in each Fiscal Year to
      repurchase the capital stock of employees who die or terminate their employment
      with Borrower; and

    


    (e)           Borrower
      may make Distributions to Guarantor to permit Guarantor to pay dividends on
      Guarantor’s common Stock so long as after giving effect to any such
      Distribution, (i) no Event of Default shall have occurred and is continuing,
      (ii) the aggregate amount of all such Distributions made within the most
      recently ended twelve month period plus the amount of the proposed Distribution
      does not exceed, within any twelve month period, $10,000,000, and (iii)
      Availability was or will not be less than $15,000,000 at any time within the
      90
      days immediately prior to the date of such Distribution or after giving effect
      to such Distribution and any pending Distribution for declared but unpaid
      dividends or common Stock repurchases.


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    


    (f)           On
      or prior to August 30, 2009, Borrower may make Distributions to Guarantor to
      permit Guarantor to make repurchases of, Guarantor’s common Stock so long as
      after giving Guarantors  effect to any such Distribution, (i) no Event
      of Default shall have occurred and is continuing, (ii) the aggregate amount
      of
      all such Distributions does not exceed $50,000,000, and (iii) Availability
      was
      or will not be less than $15,000,000 at any time within the 90 days immediately
      prior to the date of such Distribution or after giving effect to such
      Distribution and any pending Distributions for declared but unpaid dividends
      or
      common Stock repurchases.

    


    5.           Fee.  In
      order to induce Bank of America, as a Lender, to increase its Revolving Loan
      Commitment by $20,000,000, Borrower agrees to pay to Agent, for the benefit
      of
      Bank of America, a fee in the amount of $20,000.  Said fee shall be
      due and payable and fully earned and non-refundable on the date
      hereof.

    


    6.           Conditions
      Precedent.  This Thirteenth Amendment shall become effective upon
      satisfaction of each of the following conditions precedent:

    


    (a)           Agent
      shall have received each of the following documents, each in form and substance
      acceptable to Agent:

    


    (i)           Copy
      of this Thirteenth Amendment, duly executed by Borrower, Guarantor, Agent and
      each Lender;

    


    (ii)           Amended
      and Restated Revolving Credit Notes in the forms attached hereto and
      incorporated herein as Exhibits A-1 and A-2 attached to this Thirteenth
      Amendment executed by Borrower; and

    


    (iii)           Copies
      of resolutions of the Board of Directors of Borrower authorizing this Thirteenth
      Amendment certified as true and correct by the Secretary of
      Borrower.

    


    The
      date
      on which all of the conditions precedent listed above are satisfied or waived
      is
      hereinafter referred to as the “Thirteenth Amendment Effective
      Date.”  After the Thirteenth Amendment Effective Date, Lenders shall
      deliver to Borrower the Revolving Credit Notes and Term Notes previously
      executed and delivered by Borrower to Lenders, which Notes shall be marked
      “Amended and Superceded.”

    


    7.           Signature
      Block.  The signature block to the Loan Agreement is hereby
      amended to read as the signature block to this Thirteenth
      Amendment.


    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    


    8.           Continuing
      Effect.  Except as otherwise specifically set out herein, the
      provisions of the Loan Agreement shall remain in full force and
      effect.

    


    9.           Governing
      Law.  This Thirteenth Amendment and the obligations arising
      hereunder shall be governed by, and construed and enforced in accordance with,
      the laws of the State of Illinois applicable to contracts made and performed
      in
      such state, without regard to the principles thereof regarding conflict of
      laws.

    


    10.           Counterparts.  This
      Thirteenth Amendment may be executed in any number of separate counterparts,
      each of which shall, collectively and separately, constitute one
      agreement.

    


    11.           No
      Novation.  The amended and restated Revolving Credit Notes to be
      delivered pursuant to this Thirteenth Amendment replace and supercede those
      certain promissory notes in the principal amount of $35,000,000 and $20,000,000,
      respectively, each dated August 3, 2007 (the “Original Notes”) and the execution
      and delivery of such amended and restated Revolving Credit Notes shall not
      constitute (a) an extinguishment of the indebtedness of Borrower to the
      applicable Lender evidenced by the Original Notes or (b) a novation of any
      such
      indebtedness or any of the Original Notes.

    


    (Signature
      Page Follows)


    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    


    (Signature
      Page to Thirteenth Amendment to Amended and Restated

    Loan
      and Security Agreement)

    


    IN
      WITNESS WHEREOF, this Thirteenth Amendment has been duly executed as of the
      first day written above.

    


    


    
      	
              HWC
                WIRE & CABLE COMPANY, as

              Borrower

            	 	
              HOUSTON
                WIRE & CABLE COMPANY,

              as
                Guarantor

            
	 	 	 	 	 
	 	 	 	 	 
	
              By:

            	/s/
              Nicol G. Graham	 	
              By:

            	/s/
              Charles A. Sorrentino
	
              Name:

            	Nicol.
              G. Graham	 	
              Name:

            	Charles
              A. Sorrentino
	
              Title:

            	Vice
              President & Chief Financial Officer	 	
              Title:

            	President
              and Chief Executive Officer
	 	 	 	
               

            	 
	
              THE
                CIT GROUP/BUSINESS CREDIT, INC., as a Lender

            	 	
              BANK
                OF AMERICA, N.A., as Agent and a Lender

            
	 	 	 	 	 
	 	 	 	 	 
	
              By:

            	/s/
              Alan R. Schnacke	 	
              By:

            	/s/
              Sandra J. Evans
	
              Name:

            	Alan
              R. Schnacke	 	
              Name:

            	Sandra
              J. Evans
	
              Title:

            	Vice
              President	 	
              Title:

            	Senior
              Vice President
	 	 	 	
               

            	 
	
              Revolving
                Loan Commitment:  $20,000,000

            	 	
              Revolving
                Loan
                Commitment:  $55,000,000

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    EXHIBIT
      A-1

    


    AMENDED
      AND RESTATED REVOLVING CREDIT NOTE

    


    


    
      	
              $55,000,000

            	
              Amended
                and Restated

              As
                of September __, 2007

              Chicago,
                Illinois

            


    

    


    FOR
      VALUE
      RECEIVED, the undersigned, (hereinafter “Borrower”), hereby PROMISES TO PAY to
      the order of Bank of America, N.A., a national banking association (“Lender”),
      or its registered assigns, at the principal office of Bank of America, N.A.,
      as
      agent for such Lender, or at such other place in the United States of America
      as
      the holder of this Note may designate from time to time in writing, in lawful
      money of the United States of America and in immediately available funds, the
      principal amount of Fifty-Five Million Dollars ($55,000,000), or such lesser
      principal amount as may be outstanding pursuant to the Loan Agreement (as
      hereinafter defined) with respect to the Revolving Credit Loan, together with
      interest on the unpaid principal amount of this Note outstanding from time
      to
      time.

    


    This
      Note
      is one of the Revolving Credit Notes referred to in, and issued pursuant to,
      that certain Amended and Restated Loan and Security Agreement dated as of
      May 22, 2000 by and among Borrower, the lender signatories thereto
      (including Lender) and Fleet Capital Corporation, the predecessor-in-interest
      to
      Bank of America, N.A. (“Bank of America”), as agent for such Lenders (Bank of
      America in such capacity “Agent”) (hereinafter amended from time to time, the
“Loan Agreement”), and is entitled to the benefit and security of the Loan
      Agreement.  All of the terms, covenants and conditions of the Loan
      Agreement and the Security Documents are hereby made a part of this Note and
      are
      deemed incorporated herein in full.  All capitalized terms herein,
      unless otherwise defined, unless otherwise specifically defined in this Note,
      shall have the meanings ascribed to them in the Loan Agreement.

    


    The
      principal amount of the indebtedness evidenced hereby shall be payable in the
      amounts and on the dates specified in the Loan Agreement and, if not sooner
      paid
      in full, on the Commitment Termination Date, unless the term hereof is extended
      in accordance with the Loan Agreement.  Interest thereon shall be paid
      until such principal amount is paid in full at such interest rates and at such
      times as are specified in the Loan Agreement.

    


    Upon
      and
      after the occurrence, and during the continuation, of an Event of Default,
      this
      Note shall or may, as provided in the Loan Agreement, become or be declared
      immediately due and payable.

    


    The
      right
      to receive principal of, and stated interest on, this Note may only be
      transferred in accordance with the provisions of the Loan
      Agreement.

    


    Demand,
      presentment, protest and notice of nonpayment and protest are hereby waived
      by
      Borrower.


    
      
        
        

      

      
        A-1-1

        
          

        

      

      
        
        

      

    


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

    


    
      	 	
              HWC
                WIRE & CABLE COMPANY

            
	 	
               

            	 
	 	 	 
	 	
              By:

            	 
	 	
              Name:

            	 
	 	
              Title:

            	 


    

     

    
      
        
        

      

      
        A-1-2

        
          

        

      

      
        
        

      

    


    EXHIBIT
      A-2

    


    AMENDED
      AND RESTATED REVOLVING CREDIT NOTE

    


    


    
      	
              $20,000,000

            	
              Amended
                and Restated

              As
                of September __, 2007

              Chicago,
                Illinois

            


    

    


    FOR
      VALUE
      RECEIVED, the undersigned, (hereinafter “Borrower”), hereby PROMISES TO PAY to
      the order of The CIT Group/Business Credit, Inc., a New York corporation
      (“Lender”), or its registered assigns, at the principal office of Bank of
      America, N.A., as agent for such Lender, or at such other place in the United
      States of America as the holder of this Note may designate from time to time
      in
      writing, in lawful money of the United States of America and in immediately
      available funds, the principal amount of Twenty Million Dollars ($20,000,000),
      or such lesser principal amount as may be outstanding pursuant to the Loan
      Agreement (as hereinafter defined) with respect to the Revolving Credit Loan,
      together with interest on the unpaid principal amount of this Note outstanding
      from time to time.

    


    This
      Note
      is one of the Revolving Credit Notes referred to in, and issued pursuant to,
      that certain Amended and Restated Loan and Security Agreement dated as of
      May 22, 2000 by and among Borrower, the lender signatories thereto
      (including Lender) and Fleet Capital Corporation, the predecessor-in-interest
      to
      Bank of America, N.A. (“Bank of America”), as agent for such Lenders (Bank of
      America in such capacity “Agent”) (hereinafter amended from time to time, the
“Loan Agreement”), and is entitled to the benefit and security of the Loan
      Agreement.  All of the terms, covenants and conditions of the Loan
      Agreement and the Security Documents are hereby made a part of this Note and
      are
      deemed incorporated herein in full.  All capitalized terms herein,
      unless otherwise defined, unless otherwise specifically defined in this Note,
      shall have the meanings ascribed to them in the Loan Agreement.

    


    The
      principal amount of the indebtedness evidenced hereby shall be payable in the
      amounts and on the dates specified in the Loan Agreement and, if not sooner
      paid
      in full, on the Commitment Termination Date, unless the term hereof is extended
      in accordance with the Loan Agreement.  Interest thereon shall be paid
      until such principal amount is paid in full at such interest rates and at such
      times as are specified in the Loan Agreement.

    


    Upon
      and
      after the occurrence, and during the continuation, of an Event of Default,
      this
      Note shall or may, as provided in the Loan Agreement, become or be declared
      immediately due and payable.

    


    The
      right
      to receive principal of, and stated interest on, this Note may only be
      transferred in accordance with the provisions of the Loan
      Agreement.

    


    Demand,
      presentment, protest and notice of nonpayment and protest are hereby waived
      by
      Borrower.


    
      
        
        

      

      
        A-2-1

        
          

        

      

      
        
        

      

    


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

    


    
      	 	
              HWC
                WIRE & CABLE COMPANY

            
	 	
               

            	 
	 	
               

            	 
	 	
              By:

            	 
	 	
              Name:

            	 
	 	
              Title:

            	 


    

     

     

     A-2-2