Document:

FIRST
        AMENDMENT TO 

      THE
        CREDIT FACILITY AGREEMENT

      

      This
        First Amendment to the Credit Facility Agreement (this “Amendment”) is entered
        into and effective as of November 3, 2006 by and among Solar Power, Inc.,
        a
        California corporation (“SPI-California”) and Solar Power, Inc., formerly Welund
        Fund, Inc., a Nevada corporation (“SPI-Nevada”). SPI-Nevada and SPI-California
        are also each individually referred to herein as a “Party” and collectively as
        the “Parties.”

      

      RECITALS

      

      WHEREAS,
        SPI-Nevada and SPI-California are parties to that certain Credit Facility
        Agreement dated as of September 19, 2006 (the “Credit Facility
        Agreement”);

      

      WHEREAS,
        SPI-Nevada and SPI-California desire to amend the Credit Facility Agreement
        to
        increase the maximum amount available under the revolving line of credit
        from
        $2,000,000 to $2,500,000; and 

      

      WHEREAS,
        capitalized terms not otherwise defined herein shall have the meanings ascribed
        to them in the Credit Facility Agreement.

      

      AGREEMENT

      

      NOW,
        THEREFORE, in consideration of the foregoing premises, the mutual agreements
        set
        forth below, and other good and valuable consideration, the receipt and
        sufficiency of which is hereby acknowledged, the parties hereby agree as
        follows:

      

      1.   Section
        1
        of the Credit Facility Agreement is hereby amended and restated as
        follows:

      

      “1.
    Purpose.

      

      Welund
        and SPI are parties to a certain Agreement and Plan of Merger dated as of
        August
        23, 2006, by and among Welund, SPI and Welund Acquisition Corp. (the “Merger
        Sub”), a Nevada corporation and wholly owned subsidiary of Welund (the “Merger
        Agreement”). Pursuant to the Merger Agreement, the parties contemplate that SPI
        will merge into the Merger Sub with SPI as the surviving entity (the “Merger”).
        Welund has conducted a private placement offering in the aggregate amount
        of
        $16,000,000 in order to raise working capital to be used by SPI upon the
        consummation of the Merger. SPI is currently in need of working capital.
        Welund
        desires to provide working capital to SPI and SPI desires to draw upon the
        Welund commitment to provide a revolving line of credit for up to an aggregate
        of Two Million Five Hundred Thousand Dollars ($2,500,000) for such purposes,
        pursuant to the terms and conditions of this Agreement.”

      

      2.
  The
        definition of “Revolving Loan Commitment” under Section 2 of the Credit Facility
        Agreement is hereby amended and restated as follows:

      

      “Revolving
        Loan Commitment”
means
        the commitment of Welund to make one or more Revolving Loans hereunder during
        the Revolving Loan Availability Period, expressed as an amount representing
        the
        maximum aggregate principal amount of the Revolving Loans to be made by Welund
        which shall be outstanding at any one time hereunder. The aggregate amount
        of
        the Revolving Loan Commitment is $2,500,000.”

      

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      

      3.   Section
        1
        of the Form of Promissory Note, attached as Exhibit
        A
        to the
        Credit Facility Agreement is hereby amended and restated as
        follows:

      

      “1.  Obligation.
        The
        Borrower hereby promises to pay to the order of Lender or Holder on or before
        the Maturity Date, at Lender's principal place of business, or at such other
        place as Holder may direct, the principal sum of TWO MILLION FIVE HUNDRED
        THOUSAND Dollars ($2,500,000.00) or so much thereof as may be advanced and
        outstanding, together with all interest accrued on unpaid principal, to be
        computed on each Advance from the date of its disbursement to Borrower, at
        a
        rate equal to eight percent (8%) simple interest per annum, as provided in
        the
        Credit Agreement. The outstanding principal amount of this Note, together
        with
        accrued interest thereon, shall be due and payable in full on the Maturity
        Date.
        The outstanding unpaid principal balance of this Note at any time shall be
        the
        total principal amounts advanced hereunder by Holder less the amounts of
        payments of principal made hereon by Borrower, which balance may be endorsed
        hereon from time to time by Holder in accordance with Section 2.”

      

      4.
  The
        parties hereby agree that the upon the consummation of the proposed merger
        of
        SPI and Dale Renewables Consulting, Inc., a California corporation (“DRCI”), as
        collateral for the advances made by SPI under the Revolving Loan Commitment,
        SPI-Nevada shall have a security interest in all assets of DRCI acquired
        by SPI
        or otherwise transferred to SPI. 

      

      5.
  Except
        as
        expressly modified by the provisions hereof, the Credit Facility Agreement
        is in
        all respects ratified and confirmed, and shall continue in full force and
        effect
        in accordance with its terms. To the extent that there are any inconsistencies
        between this Amendment and the Credit Facility Agreement, the terms and
        provisions of this Amendment shall prevail.

      

      6.
  The
        Credit Facility Agreement and this Amendment, taken as a whole, shall supersede
        any and all agreements, either oral or written, between the Parties with
        respect
        to their subject matter. Each Party acknowledges that no representations,
        inducements, promises, or agreements, orally or otherwise, have been made
        by any
        Party or anyone acting on behalf of any Party, which are not embodied herein,
        in
        the Credit Facility Agreement and that no other agreement, statement, or
        promise
        shall be valid or binding. 

       

      7.
  This
        Amendment may be executed in one or more counterparts (including by facsimile)
        each of which when so executed will be deemed an original and all of which,
        when
        taken together, will constitute one and the same agreement. 

      

      

      

      

      (BALANCE
        OF PAGE INTENTIONALLY LEFT BLANK)

      

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      

      IN
        WITNESS WHEREOF, the Parties have executed this Amendment as of the date
        first
        above written.

      

      

      
        	 	
                SOLAR
                  POWER, INC.,
                  a
                  California corporation

              
	 	 
	 	 
	 	
                By:
                  /s/ Stephen
                  C.
                  Kircher                                      
                  

              
	 	
                Name:
                  Stephen
                  C.
                  Kircher                                      
                  

              
	 	
                Title:
                  President                                                        
                  

              
	 	 
	 	 
	 	
                SOLAR
                  POWER, INC.,
                  a
                  Nevada corporation

              
	 	 
	 	 
	 	
                By:
                  /s/ Steve
                  P. Strasser                                          
                  

              
	 	
                Name:
                  Steve
                  P.
                  Strasser                                         
                  

              
	 	
                Title:
                  President                                                        
                  

              

      

      

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       3Exhibit 10.1

 

TENTH AMENDMENT TO AMENDED AND RESTATED

LOAN AND SECURITY AGREEMENT

TENTH AMENDMENT, dated as
of November 3, 2006 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 and by a certain Ninth Amendment to Amended and Restated Loan and
Security Agreement dated May 23, 2006 by and among Borrower, Agent and Lenders
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 “Tenth Amendment”
and “Tenth Amendment Effective Date” are hereby inserted in Appendix A to the
Loan Agreement; the definitions of “Applicable Margin,” “Maximum Revolving Loan”
and “Total Credit Facility” are hereby deleted from Appendix A and the following
are inserted in their stead:

“Applicable Margin – from the Tenth 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

  	
   

  	
  0.75

  	
  %

  
	
  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 December 31, 2006 (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

  	
  %

  	
  1.25

  	
  %

  	
  0.25

  	
  %

  
	
  <
  1.25 to 1, but > 0.75 to 1

  	
   

  	
  0

  	
  %

  	
  1.00

  	
  %

  	
  0.225

  	
  %

  
	
  < 0.75 to 1

  	
   

  	
  0

  	
  %

  	
  0.75

  	
  %

  	
  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- Forty-Five
Million Dollars ($45,000,000).

*      *      *

Tenth Amendment – that certain Tenth
Amendment to Amended and Restated Loan and Security Agreement dated as of
November 3, 2006 by and among Borrower, Agent and Lenders.

*      *     
*

 2
 

 

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

*      *     
*

Total Credit Facility
- Forty-Five Million Dollars ($45,000,000).

*      *     
*

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
Forty-Five Million Dollars ($45,000,000) 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 Forty-Five Million Dollars
($45,000,000).  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

 3
 

 

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.”

4.             Unused Line Fee. 
Section 2.5 of the Loan Agreement is hereby deleted and the following is
inserted in its stead:

“2.5         Unused
Line Fee.  Borrower shall pay to
Agent for the ratable benefit of Lenders a fee equal to the Applicable Margin
per annum of the average monthly amount by which the Maximum Revolving Loan
exceeds the sum of the outstanding principal balance of the Revolving Credit
Loans (exclusive of Swingline Loans) plus the LC Amount.  The unused line fee shall be payable monthly
in arrears on the first day of each calendar month hereafter.”

5.             Term. 
Section 4.1 of the Loan Agreement is hereby deleted and the following is
inserted in its stead:

“4.1         Term
of Agreement.  Subject to Agent’s and
Lender’s right to cease making Loans to Borrower upon or after the occurrence
of any Default or Event of Default, this Agreement shall be in effect from the
date hereof, through and including May 21, 2010 (the “Original Term”), unless
terminated as provided in Section 4.2 hereof.”

6.             Borrowing Base Certificate.  Section 6.2.1 of the Loan Agreement is hereby
deleted and the following is inserted in its stead:

“6.2.1      Borrowing
Base Certificate.  On or before the
30th (20th with respect to monthly deliveries) day of
each quarter (month, if average Availability for the most recently ended 30-day
period is less than Ten Million Dollars ($10,000,000) from and after the date
hereof, Borrower shall deliver to Agent a Borrowing Base Certificate in the
form attached hereto as Exhibit C as of the last day of the immediately
preceding quarter (or month, as applicable), with such supporting materials as
Agent shall reasonably request.  If
Borrower deems advisable, Borrower shall execute and deliver to Agent Borrowing
Base Certificates more frequently than quarterly (or monthly, as applicable).”

 4
 

 

7.             Financial Covenants.  Exhibits O and Q to the Loan
Agreement are hereby deleted and Exhibits O and Q attached to
this Tenth Amendment and incorporated into the Loan Agreement hereby are
inserted in their stead.

8.             Conditions Precedent.  This Tenth 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 Tenth 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 Tenth Amendment executed by Borrower; and

(iii)          Copies of resolutions of the Board of
Directors of Borrower authorizing this Tenth 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 “Tenth
Amendment Effective Date.”  After the
Tenth 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.”

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

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

11.           Governing Law.  This Tenth 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.

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

 5
 

 

13.           No Novation.  The amended and restated Revolving Credit
Notes to be delivered pursuant to this Tenth Amendment replace and supercede
those certain promissory notes in the principal amount of $27,500,000 and
$27,500,000, respectively, dated December 30, 2005 (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 Tenth Amendment to Amended and Restated

Loan and Security Agreement)

IN WITNESS WHEREOF, this Tenth 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 Sorrentino

  	
   

  
	
  Name:

  	
  Nicol G. Graham

  	
   

  	
   

  	
  Name:

  	
  Charles Sorrentino

  	
   

  
	
  Title:

  	
  V.P. & CFO

  	
   

  	
   

  	
  Title:

  	
  President & CEO

  	
   

  
											

 

 

	
  THE CIT GROUP/BUSINESS CREDIT,

  INC., as a Lender

  	
   

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

  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Chad Ramsey

  	
   

  	
   

  	
  By:

  	
  /s/ Sandra J. Evans

  	
   

  
	
  Name:

  	
  Chad Ramsey

  	
   

  	
   

  	
  Name:

  	
  Sandra J. Evans

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Revolving Loan Commitment:  $20,000,000

  	
   

  	
  Revolving Loan Commitment:  $25,000,000

  
											

 

 

EXHIBIT
A-1

AMENDED AND RESTATED REVOLVING
CREDIT NOTE

 

	
  $25,000,000

  	
  Amended and Restated

  As of November     , 2006

  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 Twenty-Five
Million Dollars ($25,000,000), 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 November       , 2006

  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

 

EXHIBIT
O

COMPLIANCE CERTIFICATE

[Letterhead of Borrower]

                    ,
200  

 

	
  

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

The undersigned, the chief financial officer of HWC
Wire & Cable Company, a Delaware corporation (“Borrower”), gives this
certificate to Bank of America, N.A. in accordance with the requirements of
Section 8.1.2 of that certain Loan and Security Agreement dated
May 22, 2000, among Borrower, the lender signatories thereto (“Lenders”)
and Bank of America, N.A. (“Bank of America”), a national banking association,
as successor-in-interest to Fleet Capital Corporation, as agent for
such Lenders (Bank of America, in such capacity, “Agent”).  Capitalized terms used in this Certificate,
unless otherwise defined herein, shall have the meanings ascribed to them in
the Loan Agreement.

1.             Based
upon my review of the balance sheets and statements of income of Borrower for
the [fiscal year] [monthly period] ending                     ,
200  , copies of which are attached hereto, I hereby certify that:

(a)           average
Availability for the 30 day period ending                     
is $                    ;

(b)           Fixed
Charge Coverage Ratio for the period between                       
and                   
is             to 1
(if applicable);

(c)           Capital
Expenditures during the period and for the fiscal year to date total $                    
and $                    ,
respectively.

2.             No
Default exists on the date hereof, other than: 
                                            
                                                                                  
[if none, so state]; and

3.             No
Event of Default exists on the date hereof, other than                                       
                                                                                  
[if none, so state].

Very truly yours,

 

Chief Financial Officer

 

 O-1

 

EXHIBIT
Q

FINANCIAL
COVENANTS

Consolidated Net Income – with
respect to any fiscal period of Guarantor determined in accordance with GAAP on
a consolidated basis; provided, however, Consolidated Net Income shall not
include (a) the income (or loss) of any Person (other than a subsidiary of
Guarantor) in which Guarantor or any of its respective wholly-owned
subsidiaries had an ownership interest unless received in a cash distribution
or requiring the payment of cash; (b) the income (or loss) of any Person
accrued prior to the date it became a Subsidiary of Guarantor or is merged into
or consolidated with Guarantor; (c) all amounts included in determining
net income (or loss) in respect of the write-up of assets on or after the
Closing Date, including the subsequent amortization or expensing of the
written-up portion of the assets; (d) extraordinary gains as defined under
GAAP and extraordinary non-cash losses and (e) gains (or losses) from
asset dispositions (other than sales of inventory).

Debt to EBITDA Ratio – at any date,
the ratio of (i) aggregate Indebtedness for Money Borrowed as of such date to
(ii) EBITDA for the most recently ended four fiscal quarters, all as determined
for Borrower and its Subsidiaries on a Consolidated basis and in accordance
with GAAP.

EBITDA – with respect to any fiscal
period, the sum of Guarantor’s Consolidated Net Income plus amounts deducted in
determining Consolidated Net Income in respect of:  (a) any provision for (or less any
benefit from) income taxes whether current or deferred; (b) amortization
and depreciation expense; and (c) interest expense for such period, all as
determined in accordance with GAAP.

Fixed Charge Coverage Ratio – with
respect to any period of determination, the ratio of (i) the remainder of
EBITDA of Guarantor for such period less any provision for income taxes
(plus any benefit from) included in the determination of Consolidated Net
Income, but excluding changes in long-term and short-term deferred tax assets
and liabilities, less non-financed Capital Expenditures to (ii) Fixed
Charges.

Fixed Charges – for any period of
determination, the sum of (a) scheduled principal payments on Indebtedness
for Money Borrowed (excluding the Seller Note) (including the principal portion
of scheduled payments of Capital Lease Obligations), (b) Interest Expense
included in the determination of Consolidated Net Income, but excluding any
interest paid in kind, with respect to Indebtedness for Money Borrowed and
(c) payments made within the applicable period in respect of that
Non-Competition Agreement dated on or about May 22, 2000 by and between
Borrower and T.H. Cabling L.P., a Texas limited partnership and Kent
Electronics Corporation, a Texas corporation.

Interest Expense – with respect to
any fiscal period, the interest expense incurred for such period as determined
in accordance with GAAP.

 Q-1
 

 

COVENANTS

Fixed Charge Coverage Ratio – If
Availability for the most recently ended 30 day period is less than Ten Million
Dollars ($10,000,000), Borrower shall not permit the Fixed Charge Coverage
Ratio for the most recently ended twelve month period ending on a March 31,
June 30, September 30 or December 31 to be less than 1.10 to 1.

 Q-2

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