Document:

This Note is a Global Security within
the meaning of the Indenture hereinafter referred to and is registered in the
name of the Depository named below or a nominee of the
Depository.  This Note is not exchangeable for Notes registered in the
name of a Person other than the Depository or its nominee except in the limited
circumstances described herein and in the Indenture, and no transfer of this
Note (other than a transfer of this Note as a whole by the Depository to a
nominee of the Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository) may be registered except in the limited
circumstances described herein.

    

    Unless this certificate is presented
by an authorized representative of The Depository Trust Company, a New York
corporation (the “Depository”), to the Company or its agent for registration of
transfer, exchange, or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of the Depository (and any payment is made to Cede & Co. or
to such other entity as is requested by an authorized representative of the
Depository), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede &
Co., has an interest herein.

    

    

    CITIGROUP
INC.

    5.500%
Notes due October 15, 2014

    
      	
              REGISTERED

            	
              REGISTERED

            

    

    

     CUSIP:
172967EZ0

     ISIN:
US172967EZ03

     Common
Code: 045445488

    

    
      	
              No.
      R-______

            	
              $________________

            
	 
      	 
      

    

    CITIGROUP INC., a Delaware
corporation (the “Company”, which term includes any successor Person under the
Indenture), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of $____________ on October 15, 2014 and to pay
interest thereon from and including September 24, 2009 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semi-annually, on April 15 and October 15 of each year, commencing April 15,
2010 at the rate of 5.500% per annum, until the principal hereof is paid or made
available for payment.  The interest so payable, and punctually paid
or duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Note is registered at the
close of business on the Record Date for such interest, which shall be the April
1 and October 1 (whether or not a Business Day) immediately preceding such
Interest Payment Date.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the holder on such Record Date and may either be paid to the Person
in whose name this Note is registered at the close of business on a subsequent
Record Date, such subsequent Record Date to be not less than five days prior to
the date of payment of such defaulted interest, notice whereof shall be given to
holders of Notes of this series not less than 15 days prior to such subsequent
Record Date, or be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Notes of this
series may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in the Indenture.

    

    Interest
hereon will be calculated on the basis of a 360-day year comprised of twelve
30-day months.

    

    If either
an Interest Payment Date or the Maturity of the Notes falls on a day that is not
a Business Day, such Interest Payment Date or Maturity will be the next
succeeding Business Day.  If a date for payment of interest or
principal on the Notes falls on a day that is not a business day in the place of
payment, such payment will be made on the next succeeding business day in such
place of payment as if made on the date the payment was due.  No
interest will accrue on any amounts payable for the period from and after the
due date for payment of such principal or interest.

    

    For these purposes, “Business Day”
means any day which is a day on which commercial banks settle payments and are
open for general business in The City of New York.

    

    Payment of the principal of and
interest on this Note will be made at the office or agency of the Trustee
maintained for that purpose in The City of New York.

    

    Reference is hereby made to the
further provisions of this Note set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set forth at this
place.

    

    Unless the certificate of
authentication hereon has been executed by the Trustee or by an authenticating
agent on behalf of the Trustee by manual signature, this Note shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    IN WITNESS WHEREOF, the Company has
caused this instrument to be duly executed under its corporate
seal.

    

    Dated:  September
24, 2009

    

    

    
      	 
      	
              CITIGROUP
      INC.

            
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	
              By:_________________________________

            
	 
      	
              Title:
      Treasurer

            

    

    

    

    

    

    ATTEST:

    

    By:___________________________

    Title:  Assistant
Secretary

    

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    This is one of the Notes of the
series issued under the within-mentioned Indenture.

    

    Dated:  September
24, 2009

    

    

    
      	 
      	
              THE
      BANK OF NEW YORK MELLON,

            
	 
      	
              as
      Trustee

            
	 
      	 
      
	 
      	 
      
	 
      	
              By:_________________________________

            
	 
      	
              Name:

            
	 
      	
              Title:

            
	 
      	 
      
	 
      	 
      
	 
      	
              -or-

            
	 
      	 
      
	 
      	 
      
	 
      	
              CITIBANK,
      N.A.,

            
	 
      	
              as
      Authenticating Agent

            
	 
      	 
      
	 
      	 
      
	 
      	
              By:_________________________________

            
	 
      	
              Name:

            
	 
      	
              Title:

            

    

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    This Note is one of a duly authorized
issue of Securities of the Company (the “Notes”), issued and to be issued in one
or more series under the Indenture, dated as of March 15, 1987 (as amended and
supplemented to date, the “Indenture”), between the Company and The Bank of New
York Mellon, formerly known as The Bank
of New York, as Trustee (the “Trustee”, which term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the holders of the Notes and of the terms upon which the Notes are,
and are to be, authenticated and delivered.  This Note is one of the
series designated on the face hereof, initially limited in aggregate principal
to $2,000,000,000.

    

    If an event of default (as defined in
the Indenture) with respect to Notes of this series shall occur and be
continuing, the principal of the Notes of this series may be declared due and
payable in the manner and with the effect provided in the
Indenture.

    

    The Indenture contains provisions for
defeasance at any time of the entire indebtedness of this Note upon compliance
by the Company with certain conditions set forth in Sections 11.03 and 11.04
thereof, which provisions apply to this Note.

    

    The Indenture contains provisions
permitting the Company and the Trustee, without the consent of the holders of
the Securities, to establish, among other things, the form and terms of any
series of Securities issuable thereunder by one or more supplemental indentures,
and, with the consent of the holders of not less than 66 2/3% in aggregate
principal amount of Securities at the time outstanding which are affected
thereby, to modify the Indenture or any supplemental indenture or the rights of
the holders of Securities of such series to be affected, provided that no such
modification will (i) extend the fixed maturity of any Securities, reduce the
rate or extend the time of payment of interest thereon, reduce the principal
amount thereof or the premium, if any, thereon, reduce the amount of the
principal of Original Issue Discount Securities payable on any date, change the
currency in which Securities are payable, or impair the right to institute suit
for the enforcement of any such payment on or after the maturity thereof,
without the consent of the holder of each Security so affected, or (ii) reduce
the aforesaid percentage of Securities of any series the consent of the holders
of which is required for any such modification without the consent of the
holders of all Securities of such series then outstanding, or (iii) modify,
without the written consent of the Trustee, the rights, duties or immunities of
the Trustee.

    

    No reference herein to the Indenture
and no provision of this Note or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
principal of and interest on this Note at the times, place and rate, and in the
coin or currency, herein prescribed.

    

    This Note is a Global Security
registered in the name of a nominee of the Depository.  This Note is
exchangeable for Notes registered in the name of a person other than the
Depository or its nominee only in the limited circumstances hereinafter
described.  Unless and until it is exchanged in whole or in part for
definitive Notes in certificated form, this Note may not be transferred except
as a whole by the Depository to a nominee of the Depository or by a nominee of
the Depository to the Depository or another nominee of the
Depository.

     

    
      
         

      

      
        R-1

        
          

        

      

      
         

      

    

    
 

    The Notes represented by this Global
Security are exchangeable for definitive Notes in certificated form of like
tenor as such Notes in denominations of $1,000 and whole multiples of $1,000 in
excess thereof only if (i) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for the Notes or (ii) the
Depository ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, as amended, or (iii) the Company in its sole discretion
decides to allow the Notes to be exchanged for definitive Notes in registered
form.  Any Notes that are exchangeable pursuant to the preceding
sentence are exchangeable for certificated Notes issuable in authorized
denominations and registered in such names as the Depository shall
direct.  As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of definitive Notes in certificated
form is registrable in the register maintained by the Company in The City of New
York for such purpose, upon surrender of the definitive Note for registration of
transfer at the office or agency of the registrar, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the registrar duly executed by, the holder thereof or his attorney
duly authorized in writing, and thereupon one or more new Notes of this series
and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or
transferees.  Subject to the foregoing, this Note is not exchangeable,
except for a Global Security or Global Securities of this issue of the same
principal amount to be registered in the name of the Depository or its
nominee.

    

    No service charge shall be made for any
such registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.

    

    Prior to due presentment of this Note
for registration of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name this Note is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.

    

    The Company will pay additional amounts
(“Additional Amounts”) to the beneficial owner of any Note that is a non-United
States person in order to ensure that every net payment on such Note will not be
less, due to payment of U.S. withholding tax, than the amount then due and
payable.  For this purpose, a “net payment” on a Note means a payment
by the Company or a paying agent, including payment of principal and interest,
after deduction for any present or future tax, assessment or other governmental
charge of the United States. These Additional Amounts will constitute additional
interest on the Note.

    

    The Company will not be required to pay
Additional Amounts, however, in any of the circumstances described in items (1)
through (13) below.

     

    
      
         

      

      
        R-2

        
          

        

      

      
         

      

    

    
 

    
      	
               
      

            	
              (1)

            	
              Additional
      Amounts will not be payable if a payment on a Note is reduced as a result
      of any tax, assessment or other governmental charge that is imposed or
      withheld solely by reason of the beneficial
  owner:

            

    

    

    
      	
               
      

            	
              (a)

            	
              having
      a relationship with the United States as a citizen, resident or
      otherwise;

            

    

    
      	
               
      

            	
              (b)

            	
              having
      had such a relationship in the past
or

            

    

    
      	
               
      

            	
              (c)

            	
              being
      considered as having had such a
relationship.

            

    

    

    
      	
               
      

            	
              (2)

            	
              Additional
      Amounts will not be payable if a payment on a Note is reduced as a result
      of any tax, assessment or other governmental charge that is imposed or
      withheld solely by reason of the beneficial
  owner:

            

    

    

    
      	
               
      

            	
              (a)

            	
              being
      treated as present in or engaged in a trade or business in the United
      States;

            

    

    
      	
               
      

            	
              (b)

            	
              being
      treated as having been present in or engaged in a trade or business in the
      United States in the past or

            

    

    
      	
               
      

            	
              (c)

            	
              having
      or having had a permanent establishment in the United
    States.

            

    

    

    
      	
               
      

            	
              (3)

            	
              Additional
      Amounts will not be payable if a payment on a Note is reduced as a result
      of any tax, assessment or other governmental charge that is imposed or
      withheld in whole or in part by reason of the beneficial owner being or
      having been any of the following (as such terms are defined in the
      Internal Revenue Code of 1986, as
amended):

            

    

    

    
      	
               
      

            	
              (a)

            	
              personal
      holding company;

            

    

    
      	
               
      

            	
              (b)

            	
              foreign
      personal holding company;

            

    

    
      	
               
      

            	
              (c)

            	
              foreign
      private foundation or other foreign tax-exempt
    organization;

            

    

    
      	
               
      

            	
              (d)

            	
              passive
      foreign investment company;

            

    

    
      	
               
      

            	
              (e)

            	
              controlled
      foreign corporation or

            

    

    
      	
               
      

            	
              (f)

            	
              corporation
      which has accumulated earnings to avoid United States federal income
      tax.

            

    

    

    
      	
               
      

            	
              (4)

            	
              Additional
      Amounts will not be payable if a payment on a Note is reduced as a result
      of any tax, assessment or other governmental charge that is imposed or
      withheld solely by reason of the beneficial owner owning or having owned,
      actually or constructively, 10 percent or more of the total combined
      voting power of all classes of stock of the Company entitled to vote or by
      reason of the beneficial owner being a bank that has invested in a Note as
      an extension of credit in the ordinary course of its trade or
      business.

            

    

    

    For
purposes of items (1) through (4) above, “beneficial owner” means a fiduciary,
settlor, beneficiary, member or shareholder of the holder if the holder is an
estate, trust, partnership, limited liability company, corporation or other
entity, or a person holding a power over an estate or trust administered by a
fiduciary holder.

     

    
      
         

      

      
        R-3

        
          

        

      

      
         

      

    

    
 

    
      	
               
      

            	
              (5)

            	
              Additional
      Amounts will not be payable to any beneficial owner of a Note that is
      a:

            

    

    

    
      	
               
      

            	
              (a)

            	
              fiduciary;

            

    

    
      	
               
      

            	
              (b)

            	
              partnership;

            

    

    
      	
               
      

            	
              (c)

            	
              limited
      liability company or

            

    

    
      	
               
      

            	
              (d)

            	
              other
      fiscally transparent entity

            

    

    

    
      	
               
      

            	
              or
      that is not the sole beneficial owner of the Note, or any portion of the
      Note. However, this exception to the obligation to pay Additional Amounts
      will only apply to the extent that a beneficiary or settlor in relation to
      the fiduciary, or a beneficial owner or member of the partnership, limited
      liability company or other fiscally transparent entity, would not have
      been entitled to the payment of an Additional Amount had the beneficiary,
      settlor, beneficial owner or member received directly its beneficial or
      distributive share of the payment.

            

    

    

    
      	
               
      

            	
              (6)

            	
              Additional
      Amounts will not be payable if a payment on a Note is reduced as a result
      of any tax, assessment or other governmental charge that is imposed or
      withheld solely by reason of the failure of the beneficial owner or any
      other person to comply with applicable certification, identification,
      documentation or other information reporting requirements. This exception
      to the obligation to pay Additional Amounts will only apply if compliance
      with such reporting requirements is required by statute or regulation of
      the United States or by an applicable income tax treaty to which the
      United States is a party as a precondition to exemption from such tax,
      assessment or other governmental
charge.

            

    

    

    
      	
               
      

            	
              (7)

            	
              Additional
      Amounts will not be payable if a payment on a Note is reduced as a result
      of any tax, assessment or other governmental charge that is collected or
      imposed by any method other than by withholding from a payment on a Note
      by  the Company or a paying
agent.

            

    

    

    
      	
               
      

            	
              (8)

            	
              Additional
      Amounts will not be payable if a payment on a Note is reduced as a result
      of any tax, assessment or other governmental charge that is imposed or
      withheld by reason of a change in law, regulation, or administrative or
      judicial interpretation that becomes effective more than 15 days after the
      payment becomes due or is duly provided for, whichever occurs
      later.

            

    

    

    
      	
               
      

            	
              (9)

            	
              Additional
      Amounts will not be payable if a payment on a Note is reduced as a result
      of any tax, assessment or other governmental charge that is imposed or
      withheld by reason of the presentation by the beneficial owner of a Note
      for payment more than 30 days after the date on which such payment becomes
      due or is duly provided for, whichever occurs
  later.

            

    

    

    
      	
               
      

            	
              (10)

            	
              Additional
      Amounts will not be payable if a payment on a Note is reduced as a result
      of any:

            

    

     

    
      
         

      

      
        R-4

        
          

        

      

      
         

      

    

    
 

    
      	
               
      

            	
              (a)

            	
              estate
      tax;

            

    

    
      	
               
      

            	
              (b)

            	
              inheritance
      tax;

            

    

    
      	
               
      

            	
              (c)

            	
              gift
      tax;

            

    

    
      	
               
      

            	
              (d)

            	
              sales
      tax;

            

    

    
      	
               
      

            	
              (e)

            	
              excise
      tax;

            

    

    
      	
               
      

            	
              (f)

            	
              transfer
      tax;

            

    

    
      	
               
      

            	
              (g)

            	
              wealth
      tax;

            

    

    
      	
               
      

            	
              (h)

            	
              personal
      property tax or

            

    

    
      	
               
      

            	
              (i)

            	
              any
      similar tax, assessment, withholding, deduction or other governmental
      charge.

            

    

    

    
      	
               
      

            	
              (11)

            	
              Additional
      Amounts will not be payable if a payment on a Note is reduced as a result
      of any tax, assessment, or other governmental charge required to be
      withheld by any paying agent from a payment of principal or interest on a
      Note if such payment can be made without such withholding by any other
      paying agent.

            

    

    

    
      	
               
      

            	
              (12)

            	
              Additional
      amounts will not be payable if a payment on a Note is reduced as a result
      of any tax, assessment or other governmental charge that is required to be
      made pursuant to any European Union directive on the taxation of savings
      income or any law implementing or complying with, or introduced to conform
      to, any such directive.

            

    

    

    
      	
               
      

            	
              (13)

            	
              Additional
      Amounts will not be payable if a payment on a Note is reduced as a result
      of any combination of items (1) through (12)
  above.

            

    

    

    Except as specifically provided herein,
the Company will not be required to make any payment of any tax, assessment or
other governmental charge imposed by any government or a political subdivision
or taxing authority of such government.

    

    As used in this Note, “United States
person” means:

    

    
      	
               
      

            	
              (a)

            	
              any
      individual who is a citizen or resident of the United
    States;

            

    

    
      	
               
      

            	
              (b)

            	
              any
      corporation, partnership or other entity created or organized in or under
      the laws of the United States;

            

    

    
      	
               
      

            	
              (c)

            	
              any
      estate if the income of such estate falls within the federal income tax
      jurisdiction of the United States regardless of the source of such income
      and

            

    

    
      	
               
      

            	
              (d)

            	
              any
      trust if a United States court is able to exercise primary supervision
      over its administration and one or more United States persons have the
      authority to control all of the substantial decisions of the
      trust.

            

    

    

    Additionally, “non-United States
person” means a person who is not a United States person, and “United States”
means the states of the United States of America and the District of Columbia,
but excluding its territories and its possessions.

     

    
      
         

      

      
        R-5

        
          

        

      

      
         

      

    

     

    Except as
provided below, the Notes may not be redeemed prior to maturity.

    

    (1)           The
Company may, at its option, redeem the Notes if:

    

    
      	
               
      

            	
              (a)

            	
              the
      Company becomes or will become obligated to pay Additional Amounts as
      described above;

            

    

    
      	
               
      

            	
              (b)

            	
              the
      obligation to pay Additional Amounts arises as a result of any change in
      the laws, regulations or rulings of the United States, or an official
      position regarding the application or interpretation of such laws,
      regulations or rulings, which change is announced or becomes effective on
      or after September 17, 2009 and

            

    

    
      	
               
      

            	
              (c)

            	
              the
      Company determines, in its business judgment, that the obligation to pay
      such Additional Amounts cannot be avoided by the use of reasonable
      measures available to it, other than substituting the obligor under the
      Notes or taking any action that would entail a material cost to the
      Company.

            

    

    

    
      	
               
      

            	
              (2)

            	
              The
      Company may also redeem the Notes, at its option,
  if:

            

    

    

    
      	
               
      

            	
              (a)

            	
              any
      act is taken by a taxing authority of the United States on or after
      September 17, 2009, whether or not such act is taken in relation to the
      Company or any affiliate, that results in a substantial probability that
      the Company will or may be required to pay Additional Amounts as described
      above;

            

    

    
      	
               
      

            	
              (b)

            	
              the
      Company determines, in its business judgment, that the obligation to pay
      such Additional Amounts cannot be avoided by the use of reasonable
      measures available to it, other than substituting the obligor under the
      Notes or taking any action that would entail a material cost to the
      Company and

            

    

    
      	
               
      

            	
              (c)

            	
              the
      Company receives an opinion of independent counsel to the effect that an
      act taken by a taxing authority of the United States results in a
      substantial probability that the Company will or may be required to pay
      the Additional Amounts described under above, and delivers to the Trustee
      a certificate, signed by a duly authorized officer, stating that based on
      such opinion the Company is entitled to redeem the Notes pursuant to their
      terms.

            

    

    

    Any
redemption of the Notes as set forth in clauses (1) or (2) above shall be in
whole, and not in part, and will be made at a redemption price equal to 100% of
the principal amount of the Notes Outstanding plus accrued interest thereon to
the date of redemption.  Holders shall be given not less than 30 days
nor more than 60 days prior notice by the Trustee of the date fixed for such
redemption.

    

    All terms used in this Note which are
defined in the Indenture shall have the meanings assigned to them in the
Indenture.  The Notes are governed by the laws of the State of New
York.

     

    
      
         

      

      
        R-6Unassociated Document

    EXECUTION
COPY

    

    SECOND
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

     

    Dated as
of September 21, 2009

     

    $75,000,000

     

    THE
LENDERS NAMED HEREIN,

     

    as
Lenders

     

    and

     

    BANK OF
AMERICA, N.A.,

     

    as Agent
and Lender

     

    and

     

    HOUSTON
WIRE & CABLE COMPANY,

     

    as
Guarantor

     

    and

     

    HWC WIRE
& CABLE COMPANY,

     

    as
Borrower

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE
OF CONTENTS

     

    
      
        
          
            	 
      	 
      	 
      	
                    Page

                  
	 
      	 
      	 
      
	
                    1.

                  	
                    CREDIT
      FACILITY

                  	
                    1

                  
	 
      	 
      	 
      	 
      
	 
      	
                    1.1

                  	
                    Revolving
      Credit Loans

                  	
                    1

                  
	 
      	
                    1.2

                  	
                    Intentionally
      Omitted

                  	
                    3

                  
	 
      	
                    1.3

                  	
                    Letters
      of Credit; LC Guaranties

                  	
                    3

                  
	 
      	 
      	 
      
	
                    2.

                  	
                    INTEREST,
      FEES AND CHARGES

                  	
                    5

                  
	 
      	 
      	 
      
	 
      	
                    2.1

                  	
                    Interest

                  	
                    5

                  
	 
      	
                    2.2

                  	
                    Computation
      of Interest and Fees

                  	
                    5

                  
	 
      	
                    2.3

                  	
                    LIBOR
      Option

                  	
                    5

                  
	 
      	
                    2.4

                  	
                    Letter
      of Credit and LC Guaranty Fees

                  	
                    7

                  
	 
      	
                    2.5

                  	
                    Unused
      Line Fee

                  	
                    7

                  
	 
      	
                    2.6

                  	
                    Collection
      Charges

                  	
                    8

                  
	 
      	
                    2.7

                  	
                    Audit
      and Appraisal Fees

                  	
                    8

                  
	 
      	
                    2.8

                  	
                    Reimbursement
      of Expenses

                  	
                    8

                  
	 
      	
                    2.9

                  	
                    Bank
      Charges

                  	
                    9

                  
	 
      	
                    2.10

                  	
                    Capital
      Adequacy Charge

                  	
                    9

                  
	 
      	
                    2.11

                  	
                    Payment
      of Charges

                  	
                    9

                  
	 
      	 
      	 
      
	
                    3.

                  	
                    LOAN
      ADMINISTRATION

                  	
                    10

                  
	 
      	 
      	 
      	 
      
	 
      	
                    3.1

                  	
                    Manner
      of Borrowing Revolving Credit Loans

                  	
                    10

                  
	 
      	
                    3.2

                  	
                    Payments

                  	
                    11

                  
	 
      	
                    3.3

                  	
                    Mandatory
      and Voluntary Prepayments

                  	
                    12

                  
	 
      	
                    3.4

                  	
                    Application
      of Payments and Collections

                  	
                    13

                  
	 
      	
                    3.5

                  	
                    All
      Loans to Constitute One Obligation

                  	
                    13

                  
	 
      	
                    3.6

                  	
                    Loan
      Account

                  	
                    13

                  
	 
      	
                    3.7

                  	
                    Statements
      of Account

                  	
                    13

                  
	 
      	 
      	 
      
	
                    4.

                  	
                    TERM
      AND TERMINATION

                  	
                    14

                  
	 
      	 
      	 
      	 
      
	 
      	
                    4.1

                  	
                    Term
      of Agreement

                  	
                    14

                  
	 
      	
                    4.2

                  	
                    Termination

                  	
                    14

                  
	 
      	 
      	 
      
	
                    5.

                  	
                    SECURITY
      INTERESTS

                  	
                    14

                  
	 
      	 
      	 
      	 
      
	 
      	
                    5.1

                  	
                    Security
      Interest in Collateral

                  	
                    14

                  
	 
      	
                    5.2

                  	
                    Lien
      Perfection; Further Assurances

                  	
                    15

                  
	 
      	
                    5.3

                  	
                    Safekeeping
      of Collateral

                  	
                    16

                  
	 
      	
                    5.4

                  	
                    Lien
      on Realty

                  	
                    16

                  
	 
      	 
      	 
      
	
                    6.

                  	
                    COLLATERAL
      ADMINISTRATION

                  	
                    16

                  
	 
      	 
      	 
      	 
      
	 
      	
                    6.1

                  	
                    General

                  	
                    16

                  
	 
      	
                    6.2

                  	
                    Administration
      of Accounts

                  	
                    17

                  
	 
      	
                    6.3

                  	
                    Administration
      of Inventory

                  	
                    18

                  

          

        

      

    

    
      
         

      

      
        i

        
          

        

      

      
         

      

    

    TABLE
OF CONTENTS

    (continued)

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          	 
      	 
      	 
      	
                                                  Page

                                                
	 	 	 	 
	 
      	
                                                  6.4

                                                	
                                                  Administration
      of Equipment

                                                	
                                                  18

                                                
	 
      	
                                                  6.5

                                                	
                                                  Payment
      of Charges

                                                	
                                                  19

                                                
	 	 	 
	
                                                  7.

                                                	
                                                  REPRESENTATIONS
      AND WARRANTIES

                                                	
                                                  19

                                                
	 	 	 
	 
      	
                                                  7.1

                                                	
                                                  General
      Representations and Warranties

                                                	
                                                  19

                                                
	 
      	
                                                  7.2

                                                	
                                                  Continuous
      Nature of Representations and Warranties

                                                	
                                                  25

                                                
	 
      	
                                                  7.3

                                                	
                                                  Survival
      of Representations and Warranties

                                                	
                                                  25

                                                
	 	 	 
	
                                                  8.

                                                	
                                                  COVENANTS
      AND CONTINUING AGREEMENTS

                                                	
                                                  25

                                                
	 	 	 
	 
      	
                                                  8.1

                                                	
                                                  Affirmative
      Covenants

                                                	
                                                  25

                                                
	 
      	
                                                  8.2

                                                	
                                                  Negative
      Covenants

                                                	
                                                  27

                                                
	 
      	
                                                  8.3

                                                	
                                                  Specific
      Financial Covenants

                                                	
                                                  31

                                                
	 	 	 
	
                                                  9.

                                                	
                                                  CONDITIONS
      PRECEDENT

                                                	
                                                  31

                                                
	 	 	 
	 
      	
                                                  9.1

                                                	
                                                  Documentation

                                                	
                                                  31

                                                
	 
      	
                                                  9.2

                                                	
                                                  No
      Default

                                                	
                                                  31

                                                
	 	 	 
	
                                                  10.

                                                	
                                                  EVENTS
      OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT

                                                	
                                                  32

                                                
	 	 	 
	 
      	
                                                  10.1

                                                	
                                                  Events
      of Default

                                                	
                                                  32

                                                
	 
      	
                                                  10.2

                                                	
                                                  Acceleration
      of the Obligations

                                                	
                                                  34

                                                
	 
      	
                                                  10.3

                                                	
                                                  Other
      Remedies

                                                	
                                                  34

                                                
	 
      	
                                                  10.4

                                                	
                                                  Remedies
      Cumulative; No Waiver

                                                	
                                                  36

                                                
	 	 	 
	
                                                  11.

                                                	
                                                  AGENT

                                                	
                                                  36

                                                
	 	 	 
	 
      	
                                                  11.1

                                                	
                                                  Power
      of Attorney; Authorization and Action

                                                	
                                                  36

                                                
	 
      	
                                                  11.2

                                                	
                                                  Agent’s
      Reliance, Etc

                                                	
                                                  36

                                                
	 
      	
                                                  11.3

                                                	
                                                  Bank
      of America and Affiliates

                                                	
                                                  37

                                                
	 
      	
                                                  11.4

                                                	
                                                  Lender
      Credit Decision

                                                	
                                                  37

                                                
	 
      	
                                                  11.5

                                                	
                                                  Indemnification

                                                	
                                                  37

                                                
	 
      	
                                                  11.6

                                                	
                                                  Successor
      Agent

                                                	
                                                  38

                                                
	 	 	 
	
                                                  12.

                                                	
                                                  MISCELLANEOUS

                                                	
                                                  38

                                                
	 	 	 
	 
      	
                                                  12.1

                                                	
                                                  Power
      of Attorney

                                                	
                                                  38

                                                
	 
      	
                                                  12.2

                                                	
                                                  Indemnity

                                                	
                                                  39

                                                
	 
      	
                                                  12.3

                                                	
                                                  Modification
      of Agreement; Sale of Interest

                                                	
                                                  39

                                                
	 
      	
                                                  12.4

                                                	
                                                  Severability

                                                	
                                                  43

                                                
	 
      	
                                                  12.5

                                                	
                                                  Successors
      and Assigns

                                                	
                                                  43

                                                
	 
      	
                                                  12.6

                                                	
                                                  Cumulative
      Effect; Conflict of Terms

                                                	
                                                  43

                                                
	 
      	
                                                  12.7

                                                	
                                                  Execution
      in Counterparts

                                                	
                                                  43

                                                
	 
      	
                                                  12.8

                                                	
                                                  Notice

                                                	
                                                  43

                                                
	 
      	
                                                  12.9

                                                	
                                                  Credit
      Inquiries

                                                	
                                                  44

                                                

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        ii

        
          

        

      

      
         

      

    

    TABLE
OF CONTENTS

    (continued)

    

    
      
        
          
            
              
                
                  	 	 	 	
                          Page

                        
	 	 	 	 
	 
      	
                          12.10

                        	
                          Time
      of Essence

                        	
                          44

                        
	 
      	
                          12.11

                        	
                          Entire
      Agreement

                        	
                          44

                        
	 
      	
                          12.12

                        	
                          Interpretation

                        	
                          44

                        
	 
      	
                          12.13

                        	
                          Confidentiality

                        	
                          44

                        
	 
      	
                          12.14

                        	
                          GOVERNING
      LAW; CONSENT TO FORUM

                        	
                          45

                        
	 
      	
                          12.15

                        	
                          WAIVERS
      BY BORROWER

                        	
                          46

                        
	 
      	
                          12.16

                        	
                          Publicity

                        	
                          46

                        
	 
      	
                          12.17

                        	
                          No
      Novation

                        	
                          46

                        

                

              

            

          

        

      

    

    
      
         

      

      
        iii

        
          

        

      

      
         

      

    

    
      EXECUTION
COPY

    

     

    SECOND
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

     

    THIS SECOND AMENDED LOAN AND SECURITY
AGREEMENT is made as of this 21st day of September, 2009, by and among
HWC WIRE & CABLE
COMPANY, a Delaware corporation (“Borrower”), with its chief
executive office and principal place of business at 10201 N.  Loop
East, Houston, Texas 77029; the lenders who are signatories hereto (“Lenders”) and BANK OF AMERICA, N.A., (“Bank of America”), a national
banking association with an office at 135 South LaSalle Street, 4th Floor,
Chicago, Illinois 60603, as agent for Lenders hereunder (Bank of America, in
such capacity, being “Agent”).  Capitalized
terms used in this Agreement have the meanings assigned to them in Appendix A,
General Definitions.  Accounting terms not otherwise specifically
defined herein shall be construed in accordance with GAAP consistently
applied.

     

    WHEREAS, Borrower (then known
as Houston Wire & Cable Company), Agent’s predecessor-in-interest, Fleet
Capital Corporation, and the lender signatories thereto entered into a certain
Amended and Restated Loan and Security Agreement dated May 22, 2000 (said
Amended and Restated Loan and Security Agreement as amended from time to time,
the “2000 Loan Agreement”); and

     

    WHEREAS, Borrower, Lenders and
Agent desire to amend and restate the 2000 Loan Agreement pursuant to the terms
and conditions hereof.

     

    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:

     

    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.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    (B)           The
Revolving Credit Loans shall be evidenced by promissory notes to be executed and
delivered by Borrower at the time of the initial Revolving Credit Loan, the form
of which is attached hereto and made a part hereof as Exhibit 1.1.1
(the “Revolving Credit Notes”).  Each Revolving Credit Note shall be
payable to the order of a Lender and shall represent the obligation of Borrower
to pay the amount of such Lender’s Revolving Credit Loan Commitment or, if less,
the aggregate unpaid principal amount of all Revolving Credit Loans made by such
Lender to Borrower with interest thereon as prescribed in Section 2.1.1.

     

    (C)           Insofar
as Borrower may request and Lenders may be willing in their sole and absolute
discretion to make Revolving Credit Loans to Borrower at a time when the unpaid
balance of Revolving Credit Loans exceeds, or would exceed with the making of
any such Revolving Credit Loan, the Borrowing Base (any such Loan or Loans being
herein referred to individually as an “Overadvance” and collectively as
“Overadvances”), Agent shall enter such Overadvances as debits in the Loan
Account.  All Overadvances shall be repaid on demand, shall be secured
by the Collateral and shall bear interest as provided in this Agreement for
Revolving Credit Loans generally.  Any Overadvance to be made by
Lenders pursuant to the terms hereof shall be made by Lenders ratably in
accordance with their Revolving Credit Percentages.  Overadvances in
the aggregate amount of Five Hundred Thousand Dollars ($500,000) or less may,
unless a Default or Event of Default has occurred and is continuing, be made in
the sole and absolute discretion of Agent.  Overadvances in an
aggregate amount of more than Five Hundred Thousand Dollars ($500,000) but less
than One Million Dollars ($1,000,000) may, unless a Default or an Event of
Default has occurred and is continuing, be made in the sole and absolute
discretion of Required Lenders.  Overadvances in an aggregate amount
of One Million Dollars ($1,000,000) or more and Overadvances to be made after
the occurrence and during the continuation of a Default or an Event of Default
shall require the consent of all Lenders.  The forgoing
notwithstanding, in no event, unless otherwise consented to by all Lenders,
(x) shall any Overadvances be outstanding for more than sixty (60)
consecutive days, (y) after all outstanding Overadvances have been repaid,
shall Agent or Lenders make any additional Overadvances unless sixty (60) days
or more have expired since the last date on which any Overadvances were
outstanding or (z) shall Overadvances be outstanding on more than ninety
(90) days within any one hundred eighty day (180) period.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    1.1.2                  Swingline
Loans.  In order to reduce the frequency of transfers from
Lenders to Agent if there are more than one Lender, Agent, in its sole
discretion, may, from its own funds, make Revolving Credit Loans on behalf of
Lenders; provided that the aggregate amount of any such Revolving Credit Loans
so made by Agent shall not at anytime exceed Three Million Dollars
($3,000,000).  Any such Revolving Credit Loan made by Agent on behalf
of Lenders is sometimes hereinafter referred to as a “Swingline
Loan.”  In such event, the Lenders on behalf of whom Agent made the
Revolving Credit Loan shall reimburse Agent for the amount of Revolving Credit
Loan so made on its behalf, on a weekly (or more frequent basis as determined by
Agent, in its sole discretion) basis and the entire amount of interest
attributable to such Revolving Credit Loan for the period from the date on which
said Revolving Credit Loan was made by Agent on such Lender’s behalf until Agent
is reimbursed by such Lender, shall be paid to Agent.  All Swingline
Loans shall be included in the Base Rate Revolving Portion of the Loans and
shall bear interest as provided in Section 2.1.1
thereof.

     

    1.1.3                  Use of
Proceeds.  The Revolving Credit Loans shall be used solely for
Borrower’s general operating and capital needs and for other corporate purposes
in a manner consistent with the provisions of this Agreement and all applicable
laws.

     

    1.2          Intentionally
Omitted.

     

    1.3          Letters of Credit; LC
Guaranties.

     

    (A)           Subject
to all of the terms and conditions of this Agreement, if requested to do so by
Borrower, Agent shall, on behalf of Lenders, issue its, or cause to be issued
Bank’s, Letters of Credit for the account of Borrower or shall execute LC
Guaranties by which Lenders shall guaranty the payment or performance by
Borrower of its reimbursement obligation with respect to Letters of Credit
issued for Borrower’s account by Bank or Agent; provided that the
aggregate face amount of all Letters of Credit and LC Guaranties outstanding at
any time shall not exceed Ten Million Dollars ($10,000,000) and no Letter of
Credit may have an expiration date that is after sixty days prior to the
Commitment Termination Date, unless Borrower provides, on or prior to the
Commitment Termination Date, Agent with cash collateral for said Letter of
Credit or LC Guaranty, in a manner and amount acceptable to
Agent.  Further, the expiration date of any Trade Letter of Credit
shall be not more than 180 days after the issuance thereof and the expiration
date of any Standby Letter of Credit shall not be more than one year after the
date of issuance thereof (although any such Standby Letter of Credit shall be
renewable for an additional one-year period in accordance with the terms
hereof).  Any amounts paid by Agent or any Lender under any LC
Guaranty or in connection with any Letter of Credit (i) shall become part
of the Obligations, (ii) unless paid by Borrower pursuant to Section 1.3(C)
below, shall be paid from the proceeds of a Revolving Credit Loan requested
pursuant to Section 3.1.1
below, to the extent Lenders are required to make Revolving Credit Loans
pursuant to the terms hereof and (iii) otherwise, shall be payable on
demand.  In no event shall Agent, Bank or Lenders be required to issue
or cause to be issued Letters of Credit or LC Guaranties at any time there
exists a Default or an Event of Default.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (B)           Immediately
upon the issuance of each Letter of Credit by Agent or Bank or LC Guaranty by
Agent hereunder, each Lender shall be deemed to have automatically, irrevocably
and unconditionally purchased from Agent an undivided interest and participation
in and to such Letter of Credit or LC Guaranty, the obligations of Borrower in
respect thereof and the liability of Agent thereunder in an amount equal to the
amount available for drawing under such Letter of Credit or, in the case of a LC
Guaranty, the amount guaranteed thereunder, multiplied by such Lender’s
Revolving Credit Percentage.  Agent will notify each Lender promptly
upon presentation to it of a draw under a Letter of Credit or a demand for
payment under a LC Guaranty.  On a weekly basis, or more frequently if
requested by Agent, each Lender shall make payment to Agent in immediately
available funds, of an amount equal to such Lender’s pro rata share of the amount
of any payment made by Agent in respect to any Letter of Credit or LC
Guaranty.  The obligation of each Lender to reimburse Agent under this
Section 1.3
shall be unconditional, continuing, irrevocable and absolute, except in respect
of indemnity claims arising out of Agent’s willful misconduct.  In the
event that any Lender fails to make payment to Agent of any amount due under
this Section 1.3,
Agent shall be entitled to receive, retain and apply against such obligation the
principal and interest otherwise payable to such Lender hereunder until Agent
receives such payment from such Lender or such obligation is otherwise fully
satisfied; provided, however, that nothing
contained in this sentence shall relieve such Lender of its obligation to
reimburse the Agent for such amount in accordance with this Section 1.3(B).

     

    (C)           Borrower
agrees, unconditionally, irrevocably and absolutely, to pay immediately to
Agent, for the account of Lenders, the amount drawn under a Letter of Credit or
paid pursuant to a LC Guaranty.  If Borrower at any time fails to make
such payment in accordance with the terms of this Agreement, Borrower shall be
deemed to have elected to borrow from the Lenders on such date Revolving Credit
Loans equal in aggregate amount to the amount paid by Agent or the issuing
Lender, as the case may be, under such Letter of Credit or LC
Guaranty.  The provisions of Section 1.3(A)
and (B)
notwithstanding, in the event that any Lender is prohibited by any Legal
Requirement from issuing or participating in any LC Guaranty (or portion
thereof), then Agent shall issue such LC Guaranty (or such Lender’s portion
thereof) in lieu of such Lender and such Lender shall not be deemed to have a
participation therein.  In such event, any payments received by Agent
pursuant to Section 1.3(C)
of the Loan Agreement which would otherwise be paid by Agent to such Lender
shall be retained by Agent to reimburse Agent for any amounts paid by Agent in
respect to the LC Guaranty (or portion thereof) Agent issued in lieu of such
Lender.

     

    (D)           Agent
shall give prompt telephone, telex or facsimile notice to each Lender of each
issuance of, or amendment to, a Letter of Credit specifying the effective date
of the Letter of Credit or amendment, the amount, the beneficiary, and the
expiration date of the Letter of Credit, in each case as established originally
or through the relevant amendment, as applicable, each Lender’s pro rata participation in
such Letter of Credit and whether Agent has classified the Letter of Credit as a
commercial, performance, or financial letter of credit for regulatory reporting
purposes.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    2.           INTEREST,
FEES AND CHARGES

     

    2.1          Interest.

     

    2.1.1                  Rate of
Interest.  Interest shall accrue on the principal amount of the
Base Rate Revolving Credit Portion outstanding at the end of each day at a
fluctuating rate per annum equal to the Base Rate plus the Applicable
Margin for the Base Rate Revolving Credit Portion.  Said rate of
interest shall increase or decrease by an amount equal to any increase or
decrease in the Base Rate, effective as of the opening of business on the day
that such change in the Base Rate occurs.  If Borrower properly
exercises the LIBOR Option as provided in Section 2.3,
interest shall accrue on the principal amount of the LIBOR Revolving Credit
Portion outstanding at the end of each day at a rate per annum equal to the
Applicable Margin plus the LIBOR Rate
applicable to each LIBOR Revolving Credit Portion for the corresponding LIBOR
Period.

     

    2.1.2                  Default Rate of
Interest.  At the option of Agent or Required Lenders, upon and
after the occurrence of an Event of Default, and during the continuation
thereof, the principal amount of all Loans shall bear interest at a rate per
annum equal to 2.0% plus the interest
rate otherwise applicable thereto (the “Default Rate”).

     

    2.1.3                  Maximum
Interest.  In no event whatsoever shall the aggregate of all
amounts deemed interest hereunder or under the Revolving Credit Notes and
charged or collected pursuant to the terms of this Agreement or pursuant to the
Revolving Credit Notes exceed the highest rate permissible under any law which a
court of competent jurisdiction shall, in a final determination, deem applicable
hereto.  If any provisions of this Agreement or the Revolving Credit
Notes are in contravention of any such law, such provisions shall be deemed
amended to conform thereto.

     

    2.2          Computation of Interest and
Fees.  Interest, Letter of Credit and LC Guaranty fees and
unused line fees hereunder shall be calculated daily and shall be computed on
the actual number of days elapsed over a year of 360 days.  For the
purpose of computing interest hereunder, all items of payment received by Agent
shall be deemed applied by Agent on account of the Obligations (subject to final
payment on such items) on the first Business Day after receipt by Agent of such
items in Agent’s account located in New York, New York.

     

    2.3          LIBOR
Option.

     

    (i)           Upon
the conditions that:  (1) Agent shall have received a LIBOR
Request from Borrower at least 3 Business Days prior to the first day of the
LIBOR Period requested, (2) there shall have occurred no change in
applicable law which would make it unlawful for any Lender to obtain deposits of
U.S.  dollars in the London interbank foreign currency deposits
market, (3) as of the date of the LIBOR Request and the first day of the
LIBOR Period, there shall exist no Event of Default, (4) Agent is able to
determine the LIBOR Rate in respect of the requested LIBOR Period or each Lender
is able to obtain deposits of U.S.  dollars in the London interbank
foreign currency deposits market in the applicable amounts and for the requested
LIBOR Period, and (5) as of the first date of the LIBOR Period, there are
no more than five outstanding LIBOR Portions including the LIBOR Portion being
requested; then interest on the LIBOR Portion requested during the LIBOR Period
requested will be based on the applicable LIBOR Rate.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (ii)           Each
LIBOR Request shall be irrevocable and binding on Borrower.  Borrower
shall indemnify Lenders for any loss, penalty or expense incurred by Lenders due
to failure on the part of Borrower to fulfill, on or before the date specified
in any LIBOR Request, the applicable conditions set forth in this Agreement or
due to the prepayment of the applicable LIBOR Portion prior to the last day of
the applicable LIBOR Period, including, without limitation, any loss (excluding
loss of anticipated profits) or expense incurred by reason of the liquidation or
redeployment of deposits or other funds acquired by Lenders to fund or maintain
the requested LIBOR Portion.

     

    (iii)           If
any Legal Requirement shall (1) make it unlawful for any Lender to fund
through the purchase of U.S.  dollar deposits any LIBOR Portion or
otherwise give effect to its obligations as contemplated under this Section 2.3, or
(2) shall impose on any Lender any costs based on or measured by the excess
above a specified level of the amount of a category of deposits or other
liabilities of such Lender which includes deposits by reference to which the
LIBOR Rate is determined as provided herein or a category of extensions of
credit or other assets of such Lender which includes any LIBOR Portion or
(3) shall impose on such Lender any restrictions (not already taken into
account under statutory reserves) on the amount of such a category of
liabilities or assets which such Lender may hold, then, in each such case, Agent
may, by notice thereof to Borrower, terminate the LIBOR Option.  Any
LIBOR Portion subject thereto shall immediately bear interest thereafter at the
rate and in the manner provided for Base Rate Portions pursuant to Section 2.1.1.  Borrowers
shall indemnify any such Lender against any loss, penalty or expense incurred by
such Lender due to liquidation or redeployment of deposits or other funds
acquired such Lender to fund or maintain any LIBOR Portion that is terminated
under this paragraph.

     

    (iv)           Each
Lender shall receive payments of amounts of principal of and interest with
respect to the LIBOR Portions free and clear of, and without deduction for, any
Taxes.  If (1) any Lender shall be subject to any Tax in respect
of any LIBOR Portion or any part thereof or (2) Borrower shall be required
to withhold or deduct any Tax from any such amount, the LIBOR Rate applicable to
such LIBOR Portion shall be adjusted by Agent to reflect all additional costs
incurred by such Lender in connection with the payment by such Lender or the
withholding by Borrower of such Tax and such Borrower shall provide Agent with a
statement detailing the amount of any such Tax actually paid by
Borrower.  Determination by Agent of the amount of such costs shall,
in the absence of manifest error, be conclusive.  If after any such
adjustment any part of any Tax paid by any such Lender is subsequently recovered
by such Lender, such Lender shall reimburse Borrower to the extent of the amount
so recovered.  A certificate of an officer of the effected Lender
setting forth the amount of such recovery and the basis therefor shall, in the
absence of manifest error, be conclusive.

     

    
      
        
        

      

      
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    (v)           Each
Lender agrees to take such actions as may be commercially reasonable to mitigate
the adverse effects to Borrower as provided in clauses (iii) and (iv) of Section 2.3
above or Section 2.10
below; provided that no Lender shall be required to incur any costs or expense
in respect to any such mitigation.

     

    2.4          Letter of Credit and LC
Guaranty Fees.  (A) Borrower shall pay to Agent either for
its own benefit or the ratable benefit of Lenders, as provided
below:

     

    (i)           for
Standby Letters of Credit and LC Guaranties of Standby Letters of Credit, a fee
equal to the annualized LC Percent of the aggregate face amount of such Letters
of Credit and LC Guaranties outstanding from time to time during the term of
this Agreement, plus all normal and
customary charges associated with the issuance thereof as set forth on Exhibit 2.4
hereof, payable upon the issuance of such Letter of Credit or LC Guaranty and an
additional fee equal to the annualized LC Percent of the face amount of such
Letter of Credit or LC Guaranty payable upon each renewal or extension
thereof.  All such fees and charges shall be deemed fully earned and
shall be due and payable upon issuance, renewal or extension (as the case may
be) of each such Letter of Credit or LC Guaranty and shall not be subject to
rebate or proration upon the termination of this Agreement for any reason;
and

     

    (ii)           for
Trade Letters of Credit and LC Guaranties of Trade Letters of Credit, a fee
equal to the annualized LC Percent of the face amount of each such Letter of
Credit or LC Guaranty, plus the normal and
customary charges associated with the issuance thereof as set forth on Exhibit 2.4
hereof, payable upon the issuance of such Letter of Credit or execution of such
LC Guaranty and an additional fee equal to the annualized LC Percent of the face
amount of such Letter of Credit or LC Guaranty payable upon each renewal or
extension thereof.  All of such fees and charges shall be fully earned
and due and payable upon issuance, renewal or extension (as the case may be) of
each such Letter of Credit or LC Guaranty, and shall not be subject to rebate or
proration upon the termination of this Agreement for any reason.

     

    (B)           Charges
set forth on Exhibit 2.4
shall be paid to Agent for its own benefit.  All other fees payable in
connection with Letters of Credit and LC Guaranties shall be paid to Agent for
the ratable benefit of Lenders.

     

    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.

     

    
      
        
        

      

      
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    2.6          Collection
Charges.  If items of payment are received by Agent at a time
when there are no Revolving Credit Loans outstanding, such items of payment
shall be subject to a collection charge equal to one day’s interest on the
amount thereof at the rate then applicable to Revolving Credit Loans, which
collection charges shall be payable on the first Business Day of each
month.

     

    2.7          Audit and Appraisal
Fees.  Borrower shall pay to Agent reasonable audit and
appraisal fees in accordance with Agent’s current schedule of fees in effect
from time to time (at Closing Date, $1,000 per day per person) in connection
with audits and appraisals of Borrower’s books and records and such other
matters as Agent shall deem reasonably appropriate, plus all
out-of-pocket expenses incurred by Agent in connection with such audits and
appraisals.  Audit fees shall be payable on the first day of the month
following the date of issuance by Agent of a request for payment thereof to
Borrower.

     

    2.8          Reimbursement of
Expenses.

     

    2.8.1                  Administration
and Enforcement Expenses.  If, at any time or times regardless of
whether or not an Event of Default then exists, Agent, any Lender (in respect to
clauses (iii) and (iv) only) incurs legal or accounting expenses or any
other costs or out-of-pocket expenses in connection with (i) the
negotiation and preparation of this Agreement or any of the other Loan
Documents, any amendment of or modification of this Agreement or any of the
other Loan Documents (ii) the administration of this Agreement or any of
the other Loan Documents and the transactions contemplated hereby and thereby;
(iii) any litigation, contest, dispute, suit, proceeding or action (whether
instituted by Agent, any Lender, Borrower or any other Person) in any way
relating to the Collateral, this Agreement or any of the other Loan Documents or
Borrower’s affairs; (iv) any attempt to enforce any rights of Agent or any
Lender against Borrower or any other Person which may be obligated to Agent or
any Lender by virtue of this Agreement or any of the other Loan Documents,
including, without limitation, the Account Debtors; or (v) any attempt to
inspect, verify, protect, preserve, restore, collect, sell, liquidate or
otherwise dispose of or realize upon the Collateral; then all such reasonable
legal and accounting expenses, other reasonable costs and out-of-pocket expenses
of Agent or any Lender shall be charged to Borrower.  All amounts
chargeable to Borrower under this Section 2.8
shall be Obligations secured by all of the Collateral, shall be payable on
demand to Agent or the applicable Lender, as the case may be, and shall bear
interest from the date such demand is made until paid in full at the rate
applicable to Base Rate Revolving Credit Portions from time to
time.  Costs and expenses charged to Borrower pursuant to this Section 2.8.1
shall not be duplicative of costs and expenses charged to Borrowers pursuant to
Section 2.7
above.  The foregoing notwithstanding, Borrower shall not be required
to reimburse Agent or any Lender for any expenses or costs incurred by Agent or
any Lender in any litigation, contest, dispute, suit, proceeding or action in
which Borrower, pursuant to a final non-applicable order from a  court
of competent jurisdiction, are the prevailing party.

     

    2.8.2                  Collateral Protection
Expenses.  All expenses of protecting, storing, warehousing,
insuring, handling, maintaining and shipping the Collateral, any and all excise,
property, sales, and use taxes imposed by any state, federal, or local authority
on any of the Collateral or in respect of the sale thereof shall be borne and
paid by Borrower.  If Borrower fails to promptly pay any portion
thereof when due, Agent may, at its option, but shall not be required to, pay
the same and charge Borrower therefor.

     

    
      
        
        

      

      
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    2.9          Bank
Charges.  Borrower shall pay to Agent, on demand, any and all
fees, costs or expenses which Agent or any Lender pays to a bank or other
similar institution arising out of or in connection with (i) the forwarding
to any Borrower or any other Person on behalf of Borrower, by Agent or any
Lender, of proceeds of loans made by Lenders to Borrower pursuant to this
Agreement and (ii) the depositing for collection, by Agent or any Lender of
any check or item of payment received or delivered to Agent or any Lender on
account of the Obligations.

     

    2.10          Capital Adequacy
Charge.  In the event that any Lender (an “Affected Lender”)
shall have determined that the adoption (effected after the date hereof) of any
law, rule or regulation regarding capital adequacy, or any change therein or in
the interpretation or application thereof or compliance by any such Affected
Lender with any request or directive regarding capital adequacy (whether or not
having the force of law) from any central bank or governmental authority, does
or shall have the effect of reducing the rate of return on such Affected
Lender’s capital as a consequence of its obligations hereunder to a level below
that which such Affected Lender could have achieved but for such adoption,
change or compliance (taking into  consideration such Affected
Lender’s policies with respect to capital adequacy) by an amount deemed by such
Affected Lender, in its reasonable discretion, to be material, then from time to
time, after submission by such Affected Lender to Borrower of a written demand
therefor, which demand shall be made within sixty (60) days of such reduction,
Borrower shall pay to such Affected Lender such additional amount or amounts as
will compensate such Affected Lender for such reduction.  A
certificate of such Affected Lender claiming entitlement to payment as set forth
above shall be conclusive in the absence of manifest error.  Such
certificate shall set forth the nature of the occurrence giving rise to such
payment, the additional amount or amounts to be paid to such Affected Lender,
and the method by which such amounts were determined.  In determining
such amount, such Affected Lender may use any reasonable averaging and
attribution methods.  Each Lender and Agent agrees to allocate any
such cost increase among its similarly situated customers in good faith and on
an equitable basis; provided, however, that any
such Affected Lender shall not be entitled to such amounts unless similar
assessments are imposed by such Affected Lender on other comparable borrowers of
such Affected Lender.  In the event that the provisions of this Section 2.10 or
Section 2.3(iv)
result in the effective interest rates being charged to Borrower being
increased, on a per annum basis, by more than one quarter percent (1/4%),
Borrower may require any such Affected Lender (other than Bank of America) or
any Lender (other than Bank of America) subject to a Tax under Section 2.3(iv)
to sell and transfer all its interest in this Agreement and its Revolving Credit
Note and Revolving Credit Loan Commitments to a substitute Lender (who shall be
reasonably acceptable to Agent and Borrower) for a price in cash equal to
principal balance of such Affected or other Lender’s outstanding Loans plus all accrued but
unpaid interest thereon plus all accrued but
unpaid fees due any such Affected or other Lender under the terms
hereof.  Any such sale and transfer shall be made pursuant to the
terms of Section 12.3
hereof.  Any Lender who becomes an Affected Lender or who incurs
additional Taxes in respect to Section 2.3(iii)
or 2.3(iv)
above, shall give Borrower prompt written notice of such fact.

     

    2.11          Payment of
Charges.  All amounts chargeable to Borrower under Section 2 and
under Section 6.1.3
hereof shall be Obligations secured by all of the Collateral, shall be payable
on demand and shall bear interest from the date such advance was made until paid
in full at the rate applicable to Base Rate Revolving Credit Portions from time
to time.

     

    
      
        
        

      

      
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    3.       
    LOAN ADMINISTRATION.

     

    3.1          Manner of Borrowing
Revolving Credit Loans.  Borrowings under the credit facility
established pursuant to Section 1 hereof
shall be as follows:

     

    3.1.1                  Loan
Requests.  (A) A request for a Revolving Credit Loan shall be
made, or shall be deemed to be made, in the following
manner:  (i) Borrower may give Agent a Notice of Revolving Credit
Loan, in which notice Borrower shall specify the amount of the proposed
borrowing and the proposed borrowing date, provided, however, that no such
request may be made at a time when there exists a Default or an Event of
Default; and (ii) the becoming due of any amount required to be paid under
this Agreement, whether as interest or for any other Obligation, shall be deemed
irrevocably to be a request for a Revolving Credit Loan on the due date in the
amount required to pay such interest or other Obligation.  As an
accommodation to Borrower, Agent may permit telephonic requests for loans and
electronic transmittal of instructions, authorizations, agreements or reports to
Agent by Borrower.  Unless Borrower specifically directs Agent in
writing not to accept or act upon telephonic or electronic communications from
Borrower, Agent shall have no liability to Borrower for any loss or damage
suffered by any Borrower as a result of Agent’s honoring of any requests,
execution of any instructions, authorizations or agreements or reliance on any
reports communicated to it telephonically or electronically and purporting to
have been sent to Agent by Borrower and Agent shall have no duty to verify the
origin of any such communication or the authority of the person sending
it.  Except as otherwise provided in Section 2.3 and
subject to the provisions of Section 1.1.2,
each Revolving Credit Loan shall be made on notice, given not later than
11:00 a.m. (Milwaukee time) on the Business Day of the proposed Revolving
Credit Loan by Borrower to Agent, which shall give to each Lender prompt written
notice thereof by telecopier, telex or cable.  Each such notice (a
“Notice of Revolving Credit Loan”) shall be in writing or by telephone to Agent
at (262) 207-3347, confirmed immediately in writing, specifying therein the
requested date and amount of such Revolving Credit Loan.  Each Lender
shall, not later than 2:00 p.m. (Milwaukee time) on each requested date,
wire to a bank designated by Agent the amount of that Lender’s Revolving Credit
Percentage of the requested Revolving Credit Loan.  Agent shall,
before 2:30 P.M. (Milwaukee time) on the date of the proposed Revolving Credit
Loan, subject to the provisions hereof, wire to a bank designated by Borrower
and reasonably acceptable to Agent, the amount of such Revolving Credit Loan to
the extent received from the Lenders.  The failure of any Lender to
make the Revolving Credit Loan to be made by it shall not relieve any other
Lender of its obligation hereunder to make its Revolving Credit
Loan.  Neither Agent nor any other Lender shall be responsible for the
failure of any other Lender to make the Revolving Credit Loan to be made by such
other Lender.

     

    (B)           Defaulting
Lender.  Agent may (but shall not be required to), in its
discretion, retain payments or other funds received by Agent that are to be
provided to a Defaulting Lender hereunder, and may apply such funds to such
Lender’s defaulted obligations or readvance the funds to Borrower in accordance
with this Agreement.  The failure of any Lender to fund a Loan, to
make any payment in respect of any Letter of Credit or LC Guaranty or to
otherwise perform its obligations hereunder shall not relieve any other
Lender.  Lenders and Agent agree (which agreement is solely among the,
and not for the benefit of or enforceable by Borrower) that, solely for purposes
of determining a Defaulting Lender’s right to vote on matters relating to the
Loan Documents and to share in payments, fees and Collateral proceeds
thereunder, a Defaulting Lender shall not be deemed to be a “Lender” until all
its defaulted obligations have been cured.

     

    
      
        
        

      

      
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    3.1.2                  Disbursement.  Borrower
hereby irrevocably authorizes Agent to disburse the proceeds of each Revolving
Credit Loan requested, or deemed to be requested, pursuant to this Section 3.1.2 as
follows:  (i) the proceeds of each Revolving Credit Loan shall be
disbursed by Agent in lawful money of the United States of America in
immediately available funds by wire transfer to such bank account as may be
agreed upon by Borrower and Agent from time to time or elsewhere if pursuant to
a written direction from Borrower; and (ii) the proceeds of each Revolving
Credit Loan requested under Section 3.1.1(ii)
shall be disbursed by Agent by way of direct payment of the relevant interest or
other Obligation.

     

    3.1.3                  Letter of Credit and LC
Guaranty Requests.  A request for a Letter of Credit or LC
Guaranty shall be made in the following manner:  Borrower may give
Agent and Bank a written notice of its request for the issuance of a Letter of
Credit or LC Guaranty, not later than 11:00 a.m. Milwaukee time, one
Business Day before the proposed issuance date thereof, in which notice Borrower
shall specify the proposed issuer and issuance date; provided, that no
such request may be made at a time when there exists a Default or Event of
Default.  Such request shall be accompanied by an executed application
and reimbursement agreement in form and substance satisfactory to the Person
being asked to issue the Letter of Credit or LC Guaranty, as well as any
required corporate resolutions.

     

    3.2          Payments.  Except
where evidenced by notes or other instruments issued or made by Borrower to
Lenders and accepted by Lenders specifically containing payment provisions which
are in conflict with this Section 3.2 (in
which event the conflicting provisions of said notes or other instruments shall
govern and control), the Obligations shall be payable as follows:

     

    3.2.1                  Principal.  Principal
payable on account of Revolving Credit Loans shall be payable by Borrower to
Agent for the ratable benefit of Lenders immediately upon the earliest of
(i) the receipt by Agent or Borrower of any proceeds of any of the
Collateral, to the extent of said proceeds, except that, so long as no Default
or Event of Default exists, if, after application of the proceeds to the Base
Rate Revolving Credit Portion, any remaining  Loans outstanding at the
time of receipt by any Borrower or Agent of any such proceeds are LIBOR
Revolving Portions outstanding, then Borrower may at its option direct that such
proceeds be held by Agent in a non-interest bearing cash collateral account
maintained by Agent to be applied to the payment of principal on the last day of
the LIBOR Period applicable to each LIBOR Portion in the order of maturity or
Borrower  may place such proceeds in an interest bearing account
provided that such account is pledged to Agent, for its benefit and the ratable
benefit of Lenders, in a manner reasonably satisfactory to Agent; (ii) the
occurrence of an Event of Default in consequence of which Agent or Required
Lenders elect(s) to accelerate the maturity and payment of the Obligations, or
(iii) termination of this Agreement pursuant to Section 4
hereof; provided, however, that if an
Overadvance shall exist at any time, Borrowers shall, on demand, repay the
Overadvance.

     

    
      
        
        

      

      
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    3.2.2                  Interest.

     

    (i)           Base Rate
Portion.  Interest accrued on Base Rate Portions shall be due
and payable on the earliest of (1) the first calendar day of each month
(for the immediately preceding month), computed through the last calendar day of
the preceding month, (2) the occurrence of an Event of Default in
consequence of which Agent or Required Lenders elect(s) to accelerate the
maturity and payment of the Obligations or (3) termination of this
Agreement pursuant to Section 4
hereof.

     

    (ii)           LIBOR
Portion.  Interest accrued on each LIBOR Portion shall be due
and payable on each LIBOR Interest Payment Date and on the earliest of
(1) the last day of the LIBOR Period applicable to such LIBOR Portion,
(2) the occurrence of an Event of Default in consequence of which Agent or
Required Lenders elect to accelerate the maturity and payment of the Obligations
or (3) termination of this Agreement pursuant to Section 4
hereof.

     

    3.2.3                  Costs, Fees and
Charges.  Costs, fees and charges payable pursuant to this
Agreement shall be payable by Borrowers as and when provided in Section 2
hereof, to Agent for its benefit and/or the ratable benefit of Lenders or to any
other Person designated by Lender in writing.

     

    3.2.4                  Other
Obligations.  The balance of the Obligations requiring the
payment of money, if any, shall be payable by Borrowers to Agent for its benefit
and/or the ratable benefit of Lenders as and when provided in this Agreement,
the Notes, the Other Agreements or the Security Documents, or on demand,
whichever is later.

     

    3.3          Mandatory and Voluntary
Prepayments.

     

    3.3.1                  Proceeds of Sale, Loss,
Destruction or Condemnation of Collateral.  Except as provided
below or in Section 6.4.2
hereof, if Borrower sells any of the Collateral, or if any of the Collateral is
lost or destroyed or taken by condemnation, Borrower shall pay to Agent for the
ratable benefit of Lenders, unless otherwise agreed by Required Lenders, as and
when received by Borrower and as a mandatory prepayment of the Loans, as herein
provided, a sum equal to the net cash proceeds (including insurance payments)
received by Borrower from such sale, loss, destruction or
condemnation.  The applicable prepayment shall be applied to reduce
the outstanding principal balance of the Revolving Credit Loans.

     

    3.3.2                  Other Mandatory
Prepayments.  (A) Except as provided below, if Borrower
receives any proceeds from any tax refunds, indemnity payments or pension
reversions, Borrower shall pay to Agent for the ratable benefit of Lenders, as
and when received by Borrower and as a mandatory prepayment of the Loans, a sum
equal to the proceeds of such tax refund, indemnity payment or pension reversion
so received by Borrower.  The foregoing notwithstanding, if Borrower
receives any indemnity payment which effectively reimburses Borrower for a cost
or expense incurred or to be incurred by Borrower, then the proceeds of such
indemnity payment paid over to Agent pursuant to the preceding sentence shall be
applied against outstanding Revolving Credit Loans.

     

    
      
        
        

      

      
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    (B)           Borrower
shall make a mandatory prepayment of the Loans in the amount of the net proceeds
received by Borrower from any offering or sale of its debt or equity
Securities.

     

    (C)           Any
applicable prepayment made pursuant to Section 3.3.2(a)
or (b) above
shall be applied to reduce the outstanding principal balance of the Revolving
Credit Loans.

     

    3.3.3                  Voluntary
Prepayments.  Borrower may voluntarily prepay, without penalty,
premium or other charge, other than LIBOR breakage fees or administrative fees,
any of the Loans at any time during the Original Term.

     

    3.4          Application of Payments and
Collections.  All items of payment received by Agent by 12:00
noon, Chicago time, on any Business Day shall be deemed received on that
Business Day.  All items of payment received after 12:00 noon, Chicago
time, on any Business Day shall be deemed received on the following Business
Day.  For the purpose of computing interest hereunder, all items of
payment received by Agent shall be deemed applied by Agent on an account of the
Obligations (subject to final payment of such items) on the first Business Day
after receipt of such item in immediately good funds.  Borrower
irrevocably waives the right to direct the application of any and all payments
and collections at any time or times hereafter received by Agent from or on
behalf of Borrower, and Borrower does hereby irrevocably agree that Agent shall,
after the occurrence and during the continuation of an Event of Default, have
the continuing exclusive right to apply and reapply any and all such payments
and collections received at any time or times hereafter by Agent or its agent
against the Obligations, in such manner as Agent may deem advisable,
notwithstanding any entry by Agent upon any of its books and
records.  If as the result of collections of Accounts as authorized by
Section 6.2.6
hereof a credit balance exists in the Loan Account, such credit balance shall
not accrue interest in favor of Borrower, but shall be available to Borrower at
any time or times for so long as no Default or Event of Default
exists.

     

    3.5          All Loans to Constitute One
Obligation.  The Loans shall constitute one general Obligation
of Borrower, and shall be secured by Agent’s Lien for its benefit and the
ratable benefit of Lenders upon all of the Collateral.

     

    3.6          Loan
Account.  Agent shall enter all Loans as debits to the Loan
Account and shall also record in the Loan Account all payments made by Borrower
on any Obligations and all proceeds of Collateral which are finally paid to
Agent or any Lender, and may record therein, in accordance with customary
accounting practice, other debits and credits, including interest and all
charges and expenses properly chargeable to Borrower.

     

    3.7          Statements of
Account.  Agent will account to Borrower monthly with a
statement of Loans, charges and payments made pursuant to this Agreement, and
such account rendered by Agent shall be deemed final, binding and conclusive,
absent demonstrable error, upon Borrower unless Agent is notified by Borrower in
writing to the contrary within 45 days of the date each accounting is mailed to
Borrower.  Such notice shall only be deemed an objection to those
items specifically objected to therein.

     

    
      
        
        

      

      
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    4.      
     TERM AND TERMINATION

     

    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 for a period of four years from the
date hereof, through and including September 21, 2013 (the “Original Term”),
unless terminated as provided in Section 4.2
hereof.

     

    4.2          Termination.

     

    4.2.1                  Termination by
Lender.  Agent or Required Lenders may terminate this Agreement
with notice (or in respect to Events of Default arising under Section 10.1.10
without notice) after the occurrence of an Event of Default resulting in the
Obligations being declared due and payable.

     

    4.2.2                  Termination by
Borrower.  Upon at least 10 days prior written notice to Agent,
Borrower may, at its option, terminate this Agreement; provided, however, no such
termination shall be effective until Borrower have paid all of the Obligations
in immediately available funds and all Letters of Credit and LC Guaranties have
expired or have been cash collateralized to Agent’s satisfaction.  Any
notice of termination given by Borrower shall be irrevocable unless Required
Lenders otherwise agree in writing, and Lenders shall have no obligation to make
any Loans or issue or procure any Letters of Credit or LC Guaranties on or after
the termination date stated in such notice.  Borrower may elect to
terminate this Agreement in its entirety only.  No section of this
Agreement or type of Loan available hereunder may be terminated
singly.

     

    4.2.3                  Effect of
Termination.  All of the Obligations shall be immediately due
and payable upon the termination date stated in any notice of termination of
this Agreement.  All undertakings, agreements, covenants, warranties
and representations of Borrowers contained in the Loan Documents shall survive
any such termination and Agent shall retain its Liens in the Collateral and all
of its rights and remedies under the Loan Documents notwithstanding such
termination until Borrower has paid the Obligations to Agent and Lenders, in
full, in immediately available funds.  Notwithstanding the payment in
full of the Obligations, Agent shall not be required to terminate its security
interests in the Collateral unless, with respect to any loss or damage Agent or
any Lender may incur as a result of dishonored checks or other items of payment
received by Agent or any Lender from any Borrower or any Account Debtor and
applied to the Obligations, Agent shall, at its option, (i) have received a
customary written indemnity and release agreement, executed by Borrower and by
any Person whose loans or other advances to Borrower are used in whole or in
part to satisfy the Obligations, indemnifying Agent and Lenders from any such
loss or damage; or (ii) have retained such monetary reserves for such
period of time as Agent, in its reasonable discretion, may deem necessary to
protect Agent and Lenders from any such loss or damage.

     

    5.      
     SECURITY INTERESTS

     

    5.1          Security Interest in
Collateral.  To secure the prompt payment and performance to
Agent and Lenders of the Obligations, Borrower hereby grants to Agent for its
benefit and the ratable benefit of Lenders a continuing Lien upon all of
Borrower’s assets (excluding the real Property at 10201 North Loop East,
Houston, Texas), including all of the following Property and interests in
Property of Borrower, whether now owned or existing or hereafter created,
acquired or arising and wheresoever located:

     

    
      
        
        

      

      
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            	(i)	Accounts;
	 	 	 
	 	(ii)	Inventory;
	 	 	 
	 	(iii)	Equipment;
	 	 	 
	 	(iv)	General
      Intangibles;
	 	 	 
	 	(v)	Investment
      Property;
	 	 	 
	 	(vi)	All monies and other
      Property of any kind now or at any time or times hereafter in the
      possession or under the control of Agent or any Lender or a bailee or
      Affiliate of Agent or any Lender;
	 	 	 
	 	(vii)	All accessions to,
      substitutions for and all replacements, products and cash and non-cash
      proceeds of (i) through (vi) above, including, without limitation,
      proceeds of and unearned premiums with respect to insurance policies
      insuring any of the Collateral; and
	 	 	 
	 	(viii)	All books and
      records (including, without limitation, customer lists, credit files,
      computer programs, print-outs, and other computer materials and records)
      of Borrower pertaining to any of (i) through (vii) above.
	 	 	 

    

            

    Notwithstanding
the foregoing, Collateral shall not include:  (1) any licenses or
permits, the encumbrance of which would violate any law, statute or regulation;
or (2) any material contract rights (including, without limitation, any
contracts or leases), the encumbrance of which would violate the terms of the
agreements establishing such rights; provided that
Borrower shall use reasonable good faith efforts to obtain any necessary consent
to enable any such contract right to be included within the
Collateral.

     

    5.2          Lien Perfection; Further
Assurances.  Borrower shall execute such UCC financing
statements as are required by the Code and such other instruments, assignments
or documents as are necessary to perfect Agent’s Lien upon any of the Collateral
and shall take such other action as may be required to perfect or to continue
the perfection of Agent’s Lien upon the Collateral.  Unless prohibited
by applicable law, Borrower hereby authorizes Agent to execute and file any such
financing statement on Borrower’s behalf.  The parties agree that a
carbon, photographic or other reproduction of this Agreement shall be sufficient
as a financing statement and may be filed in any appropriate office in lieu
thereof.  At Agent’s request, Borrower shall also promptly execute or
cause to be executed and shall deliver to Agent any and all documents,
instruments and agreements deemed necessary by Agent to give effect to or carry
out the terms or intent of the Loan Documents.

     

    
      
        
        

      

      
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    5.3          Safekeeping of
Collateral.  Agent shall not be liable or responsible in any
way for the safekeeping of any of the Collateral or for any loss or damage
thereto (except for reasonable care in the custody thereof while any Collateral
is in Agent’s actual possession) or for any diminution in the value thereof, or
for any act or default of any warehouseman, carrier, forwarding agency, or other
person whomsoever, but the same shall be at Borrower’s sole risk.

     

    5.4          Lien on
Realty.  Agent and Lender agree to release its Lien created by
the Mortgage.  If Borrower shall acquire at any time or times
hereafter any interest in other real Property (other than leasehold interests in
sales offices and the real Property hereto date subject to the Mortgage),
Borrower agrees promptly to execute and deliver to Agent, for its benefit and
the ratable benefit of Lenders, as additional security and Collateral for the
Obligations, deeds of trust, security deeds, mortgages or other collateral
assignments reasonably satisfactory in form and substance to Agent and its
counsel (herein collectively referred to as “New Mortgages”) covering such real
Property.  Each New Mortgage shall be duly recorded (at Borrower’s
expense) in each office where such recording is required to constitute a valid
Lien on the real Property covered thereby.  In respect to each New
Mortgage, Borrower shall deliver to Agent, at Borrower’s expense, mortgagee
title insurance policies issued by a title insurance company reasonably
satisfactory to Agent insuring Agent, as mortgagee; such policies shall be in
form and substance reasonably satisfactory to Agent and shall insure a valid
first Lien in favor of Agent for its benefit and the ratable benefit of Lenders,
on the Property covered thereby, subject only to those exceptions reasonably
acceptable to Agent and its counsel.  Borrower shall also deliver to
Agent such other documents, including, without limitation, ALTA Surveys, as
Agent and its counsel may reasonably request relating to the real Property
subject to any such New Mortgage.

     

    6.     
      COLLATERAL ADMINISTRATION

     

    6.1          General.

     

    6.1.1                  Location of
Collateral.  All Collateral, other than Inventory in transit,
Equipment being repaired in the ordinary course of business consistent with past
practice at outside locations and motor vehicles, will at all times be kept by
Borrower and its Subsidiaries at one or more of the locations set forth in Exhibit 6.1.1
hereto and shall not, without the prior written approval of Agent, be moved
therefrom except, prior to an Event of Default and Agent’s or Required Lenders’
acceleration of the maturity of the Obligations in consequence thereof, for
(i) sales of Inventory in the ordinary course of business; and
(ii) removals in connection with dispositions of Equipment that are
authorized by Section 6.4.2
hereof.

     

    6.1.2                  Insurance of
Collateral.  Borrower shall maintain and pay for insurance upon
all Collateral wherever located and with respect to Borrower’s business,
covering casualty, hazard, public liability and such other risks in such amounts
and with such insurance companies as are reasonably satisfactory to
Agent.  Borrower shall deliver the originals (or reasonable facsimiles
thereof) of such policies to Agent with satisfactory lender’s loss payable
endorsements, naming Agent as loss payee, assignee or additional insured, as
appropriate.  Each policy of insurance or endorsement shall contain a
clause requiring the insurer to give not less than 30 days prior written notice
to Agent in the event of cancellation of the policy for any reason whatsoever
and a clause specifying that the interest of Agent shall not be impaired or
invalidated by any act or neglect of Borrower or the owner of the Property or by
the occupation of the premises for purposes more hazardous than are permitted by
said policy.  If Borrower fails to provide and pay for such insurance,
Agent may, at its option, but shall not be required to, procure the same and
charge Borrower therefor.  Borrower agrees to deliver to Agent,
promptly as rendered, true copies of all reports made in any reporting forms to
insurance companies.

    
      
         

      

      
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      6.1.3           Protection of
Collateral.  All expenses of protecting, storing, warehousing,
insuring, handling, maintaining and shipping the Collateral, any and all excise,
property, sales, and use taxes imposed by any state, federal, or local authority
on any of the Collateral or in respect of the sale thereof shall be borne and
paid by Borrower.  If Borrower fails to promptly pay any portion
thereof when due, Agent may, at its option, but shall not be required to, pay
the same and charge Borrower therefor.

       

      6.2          Administration of
Accounts.

       

      6.2.1           Borrowing Base
Certificate.  On or before the 25th day of
each month from and after the date hereof, Borrower shall deliver to Agent a
Schedule of Accounts and a Borrowing Base Certificate, which Borrowing Base
Certificate shall be in the form attached hereto as Exhibit 6.2.1, as of
the last day of the immediately preceding month, 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 monthly.  In the event that Borrower is required to
furnish Borrower Base Certificates more frequently than monthly, Agent and
Lenders acknowledge that Inventory and Eligible Inventory amounts shall only be
updated monthly.  “Schedule of Accounts” shall mean an aged trial
balance of Accounts in a form reasonably acceptable to Agent.

       

      6.2.2           Discounts, Allowances,
Disputes.  If Borrower grants any discounts, allowances or
credits that are not shown on the face of the invoice for the Account involved,
Borrower shall report such discounts, allowances or credits, as the case may be,
to Agent as part of the next required Schedule of Accounts.  If any
amounts due and owing in excess of $100,000 are in dispute between Borrower and
any Account Debtor, Borrower shall provide Agent with written notice thereof at
the time of submission of the next Schedule of Accounts, explaining in
detail the reason for the dispute, all claims related thereto and the amount in
controversy.  Upon and during the continuation of an Event of Default,
Agent shall have the right to settle or adjust all disputes and claims directly
with the Account Debtor and to compromise the amount or extend the time for
payment of the Accounts upon such terms and conditions as Agent may deem
advisable, and to charge the costs and expenses thereof, including attorney’s
fees, to Borrower.

       

      6.2.3           Taxes.  If
an Account includes a charge for any tax payable by Borrower to any governmental
taxing authority, Agent is authorized, in its sole discretion, to pay the amount
thereof to the proper taxing authority for the account of Borrower and to charge
Borrower therefor, provided, however that Agent
shall not be liable for any taxes to any governmental taxing authority that may
be due by Borrower.

       

      6.2.4           Account
Verification.  Whether or not a Default or an Event of Default
has occurred, any of Agent’s officers, employees or agents shall have the right,
at any time or times hereafter, in the name of Agent, any designee of Agent or
Borrower, to verify the validity, amount or any other matter relating to any
Accounts by mail, telephone, telegraph or otherwise.  Borrower shall
cooperate fully with Agent in an effort to facilitate and promptly conclude any
such verification process.  Agent agrees to conduct any such
verification in a commercially reasonable manner.

      
        
           

        

        
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      6.2.5           Maintenance of Dominion
Account.  Borrower shall maintain a Dominion Account pursuant
to a lockbox or other arrangement acceptable to Agent with
Bank.  Borrower shall issue to any such banks an irrevocable letter of
instruction directing such banks to deposit all payments or other remittances
received in the lockbox to the Dominion Account for application on account of
the Obligations.  All funds deposited in the Dominion Account shall
immediately become the property of Agent and Borrower shall obtain the agreement
by such banks in favor of Agent to waive any offset rights against the funds so
deposited.  Agent assumes no responsibility for such lockbox
arrangement, including, without limitation, any claim of accord and satisfaction
or release with respect to deposits accepted by any bank
thereunder.

       

      6.2.6           Collection of Accounts,
Proceeds of Collateral.  To expedite collection, Borrower shall
endeavor in the first instance to make collection of its Accounts for
Agent.  All remittances received by Borrower on account of Accounts,
together with the proceeds of any other Collateral, shall be held as Agent’s
property by Borrower as trustee of an express trust for Agent’s benefit and
Borrower shall immediately deposit same in kind in the Dominion
Account.  Agent retains the right at all times after the occurrence of
a Default or an Event of Default to notify Account Debtors that Accounts have
been assigned to Agent and to collect Accounts directly in its own name and to
charge the collection costs and expenses, including attorneys’ fees to
Borrower.

       

      6.3          Administration of
Inventory.

       

      6.3.1           Records and Reports of
Inventory.  Borrower shall keep accurate and complete records
of its Inventory.  Borrower shall furnish to Agent Inventory reports
in form and detail satisfactory to Agent at such times as Agent may request not
later than the 25th day of
such month.  Said Inventory reports shall be included within the
Borrowing Base Certificates.  Borrower shall conduct a physical
inventory no less frequently than annually and shall provide to Agent a report
based on each such physical inventory promptly thereafter, together with such
supporting information as Agent shall reasonably request.

       

      6.4          Administration of
Equipment.

       

      6.4.1           Records and Schedules of
Equipment.  Borrower shall keep accurate records itemizing and
describing the kind, type, quality and quantity of its Equipment and all
dispositions made in accordance with Section 6.4.2
hereof, and shall furnish Agent with a current schedule containing the foregoing
information on at least an annual basis and more often if requested by
Agent.  Immediately on request therefor by Agent, Borrower shall
deliver to Agent any and all evidence of ownership, if any, of any of the
Equipment.

      
        
           

        

        
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      6.4.2           Dispositions of
Equipment.  Borrower will not sell, lease or otherwise dispose
of or transfer any of the Equipment or any part thereof without the prior
written consent of Required Lenders; provided, however, that the
foregoing restriction shall not apply, for so long as no Default or Event of
Default exists, to (i) dispositions of Equipment which, in the aggregate
during any consecutive twelve-month period, has a fair market value or book
value, whichever is less, of $100,000 or less, provided that all proceeds
thereof are remitted to Agent for application to the Loans as provided in Section 3.3.1,
or (ii) replacements of Equipment that is substantially worn, damaged or
obsolete with Equipment of like kind, function and value or with better or more
efficient Equipment, provided that the replacement Equipment shall be acquired
not later than 180 days after the disposition of the Equipment that is to be
replaced, the replacement Equipment shall be free and clear of Liens other than
Permitted Liens that are not Purchase Money Liens, and Borrower shall have given
Agent at least 5 days prior written notice of such disposition.

       

      6.5          Payment of
Charges.  All amounts chargeable to Borrower under Section 6 hereof
shall be Obligations secured by all of the Collateral, shall be payable on
demand and shall bear interest from the date such advance was made until paid in
full at the rate applicable to Revolving Credit Loans from time to
time.

       

      7.            REPRESENTATIONS
AND WARRANTIES

       

      7.1          General Representations and
Warranties.  To induce Agent and Lenders to enter into this
Agreement and to make advances hereunder, Borrower warrants, represents and
covenants to Agent and Lenders that:

       

      7.1.1           Organization and
Qualification.  Each of Borrower and its Subsidiaries is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation.  Each of Borrower and its
Subsidiaries is duly qualified and is authorized to do business and is in good
standing as a foreign corporation in each state or jurisdiction listed on Exhibit 7.1.1
hereto and in all other states and jurisdictions where the character of its
Properties or the nature of its activities make such qualification necessary in
which the failure of Borrower or any of its Subsidiaries to be so qualified
would have a material adverse effect on the financial condition, business or
Properties of Borrower or any of its Subsidiaries.

       

      7.1.2           Corporate Power and
Authority.  Each of Borrower and its Subsidiaries is duly
authorized and empowered to enter into, execute, deliver and perform this
Agreement and each of the other Loan Documents to which it is a
party.  The execution, delivery and performance of this Agreement and
each of the other Loan Documents have been duly authorized by all necessary
corporate action and do not and will not (i) require any consent or
approval of the shareholders of Borrower or any of its Subsidiaries;
(ii) contravene Borrower’s or any of its Subsidiaries’ charter, articles or
certificate of incorporation or by-laws; (iii) violate, or cause Borrower
or any of its Subsidiaries to be in default under, any provision of any law,
rule, regulation, order, writ, judgment, injunction, decree, determination or
award in effect having applicability to Borrower or any of its Subsidiaries;
(iv) result in a breach of or constitute a default under any material
indenture or loan or credit agreement or any other agreement, lease or
instrument to which Borrower or any of its Subsidiaries is a party or by which
it or its Properties may be bound or affected; or (v) result in, or
require, the creation or imposition of any Lien (other than Permitted Liens)
upon or with respect to any of the Properties now owned or hereafter acquired by
Borrower or any of its Subsidiaries.

      
        
           

        

        
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      7.1.3           Legally Enforceable
Agreement.  This Agreement is, and each of the other Loan
Documents when delivered under this Agreement will be, a legal, valid and
binding obligation of each of Borrower and its Subsidiaries enforceable against
it in accordance with its respective terms except as may be provided under
applicable bankruptcy, insolvency, reorganization, moratorium, equity or
redemption or similar laws affecting creditors’ rights generally, and the
discretion of the court before which any proceeding thereof may be brought or
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law), including the availability of
specific equitable remedies.

       

      7.1.4           Capital
Structure.  Exhibit 7.1.4
hereto states (i) the correct name of each of the Subsidiaries of Borrower,
its jurisdiction of incorporation and the percentage of its Voting Stock owned
by Borrower, (ii) the name of each of Borrower’s corporate or joint venture
Affiliates and the nature of the affiliation excluding Affiliates that are
unrelated to Borrower’s business or operations, (iii) the number, nature
and holder of all outstanding Securities of Borrower and each Subsidiary of
Borrower and (iv) the number of authorized, issued and treasury shares of
Borrower and each Subsidiary of Borrower.  Borrower has good title to
all of the shares it purports to own of the stock of each of its Subsidiaries,
free and clear in each case of any Lien other than Permitted
Liens.  All such shares have been duly issued and are fully paid and
non-assessable.  Except as set forth on Exhibit 7.1.4,
there are no outstanding options to purchase, or any rights or warrants to
subscribe for, or any commitments or agreements to issue or sell, or any
Securities or obligations convertible into, or any powers of attorney relating
to, shares of the capital stock of Borrower or any of its
Subsidiaries.

       

      7.1.5           Corporate
Names.  Neither Borrower nor any of its Subsidiaries has been
known as or used any corporate, fictitious or trade names except those listed on
Exhibit 7.1.5
hereto.  Within the last five years, except as set forth on Exhibit 7.1.5 or
in respect to the Acquisition, neither Borrower nor any of its Subsidiaries has
been the surviving corporation of a merger or consolidation or acquired all or
substantially all of the assets of any Person.

       

      7.1.6           Business Locations; Agent
for Process.  Each of Borrower’s and its Subsidiaries’ chief
executive office and other places of business are as listed on Exhibit 6.1.1
hereto.  During the preceding one-year period, neither Borrower nor
any of its Subsidiaries has had an office, place of business or agent for
service of process other than as listed on Exhibit 6.1.1.  Except
as shown on Exhibit 6.1.1,
no Inventory is stored with a bailee, warehouseman or similar party, nor is any
Inventory consigned to any Person.

       

      7.1.7           Title to Properties;
Priority of Liens.  Each of Borrower and its Subsidiaries has
good, indefeasible and marketable title to and fee simple ownership of, or valid
and subsisting leasehold interests in, all of its real Property (other than the
real Property commonly known as 10201 North Loop East (10201 NLE), Houston,
Texas and good title to all of the Collateral and all of its other Property, in
each case, free and clear of all Liens except Permitted
Liens.  Borrower has paid or discharged all lawful claims in
accordance with good business practice which, if unpaid, might become a Lien
against any of Borrower’s Properties that is not a Permitted
Lien.  The Liens granted to Lender under Section 5 hereof
are first priority Liens, subject only to Permitted Liens or as otherwise
provided in Section
5.4.

      
        
           

        

        
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      7.1.8           Accounts.  Agent
may rely, in determining which Accounts are Eligible Accounts, on all statements
and representations made by Borrower with respect to any Account or
Accounts.  Unless otherwise indicated in writing to Agent, with
respect to each Account:

       

      (i)           It
is genuine and in all respects what it purports to be, and it is not evidenced
by a judgment;

       

      (ii)          It
arises out of a completed, bona fide sale and
delivery of goods or rendition of services by Borrower in the ordinary course of
its business and in accordance with the terms and conditions of all purchase
orders, contracts or other documents relating thereto and forming a part of the
contract between Borrower and the Account Debtor;

       

      (iii)         It
is for a liquidated amount maturing as stated in the duplicate invoice covering
such sale or rendition of services, a copy or computer disc or file of which has
been furnished or is available to Agent;

       

      (iv)         Such
Account, and Lender’s security interest therein, is not, and will not (by
voluntary act or omission of Borrower) be in the future, subject to any offset,
Lien, deduction, defense, dispute, counterclaim or any other adverse condition
except for disputes resulting in returned goods where the amount in controversy
is deemed by Agent to be immaterial, and each such Account is absolutely owing
to Borrower and is not contingent in any respect or for any reason;

       

      (v)  
       Borrower has made no agreement with
any Account Debtor thereunder for any extension, compromise, settlement or
modification of any such Account or any deduction therefrom, except discounts or
allowances which are granted by Borrower in the ordinary course of its business
for prompt payment and which are reflected in the calculation of the net amount
of each respective invoice related thereto and are reflected in the Schedules of
Accounts submitted to Agent pursuant to Section 6.2.1
hereof;

       

      (vi)         There
are no facts, events or occurrences which in any way impair the validity or
enforceability of any Accounts or tend to reduce the amount payable thereunder
from the face amount of the invoice and statements delivered to Agent with
respect thereto;

       

      (vii)        To
the best of Borrower’s knowledge, the Account Debtor thereunder (1) had the
capacity to contract at the time any contract or other document giving rise to
the Account was executed and (2) such Account Debtor is Solvent;
and

       

      (viii)       To
the best of Borrower’s knowledge, there are no proceedings or actions which are
threatened or pending against any Account Debtor thereunder which might result
in any material adverse change in such Account Debtor’s financial condition or
the collectibility of such Account.

      
        
           

        

        
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      7.1.9           Equipment.  The
Equipment is in good operating condition and repair, and all necessary
replacements of and repairs thereto shall be made so that the value and
operating efficiency of the Equipment shall be maintained and preserved, in all
material respects, reasonable wear and tear excepted.  Borrower will
not permit any of the Equipment to become affixed to any real Property leased to
Borrower so that an interest arises therein under the real estate laws of the
applicable jurisdiction unless the landlord of such real Property has executed a
landlord waiver or leasehold mortgage in favor of and in form acceptable to
Agent, and Borrower will not permit any of the Equipment to become an accession
to any personal Property other than Equipment that is subject to first priority
(except for Permitted Liens) Liens in favor of Agent for its benefit and the
ratable benefit of Lenders.

       

      7.1.10         Financial Statements; Fiscal
Year.  The Consolidated and consolidating balance sheets of
Guarantor and such other Persons described therein (including the accounts of
Guarantor and all Subsidiaries of Guarantor (including Borrower) for the
respective periods during which a Subsidiary relationship existed) as of
December 31, 2008 and June 30, 2009, and the related statements of income,
changes in stockholder’s equity, and changes in financial position for the
periods ended on such dates, have been prepared in accordance with GAAP, and
present fairly the financial positions of Guarantor, Borrower and such Persons
at such dates and the results of Guarantor’s, Borrower’s and such Person’s
operations for such periods.  The fiscal year of Guarantor and each of
its Subsidiaries (including Borrower) ends on December 31 of each
year.

       

      7.1.11         Full
Disclosure.  The financial statements referred to in Section 7.1.10
hereof do not, nor does this Agreement or any other written statement of
Borrower to Agent, contain any untrue statement of a material fact or omit a
material fact necessary to make the statements contained therein or herein not
misleading.  As of the Closing Date, there is no fact which Borrower
has failed to disclose to Agent in writing which materially affects adversely or
so far as Borrower can now reasonably foresee, will materially affect adversely
the Properties, business, prospects, profits or condition (financial or
otherwise) of Borrower or any of its Subsidiaries or the ability of Borrower or
its Subsidiaries to perform this Agreement or the other Loan
Documents.

       

      7.1.12         Solvent Financial
Condition.  Each of Borrower and its Subsidiaries is now and,
after giving effect to the Loans to be made, at all times will be,
Solvent.  The Acquisition and other transactions contemplated hereby
do not constitute a “fraudulent conveyance” or other voidable transactions under
any applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors’ rights generally.

       

      7.1.13         Surety
Obligations.  Neither Borrower nor any of its Subsidiaries is
obligated as surety or indemnitor under any surety or similar bond or other
contract issued or entered into any agreement to assure payment, performance or
completion of performance of any undertaking or obligation of any Person, except
as provided in Exhibit
7.1.13 or with respect to performance bonds given in the ordinary course
of business so long as the amount of Indebtedness (contingent or otherwise) (a)
with respect to any such bonds does not at any time exceed $5,000,000 with
respect to any one bond or related series of bonds or (b) the greater of
(x) $25,000,000 and (y) an amount equal to ten percent (10%) of Borrower’s
net sales for the most recently ended four fiscal quarters, in the
aggregate.

      
        
           

        

        
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      7.1.14         Taxes.  Borrower’s
federal tax identification number is 74-2400498.  The federal tax
identification number of each of Borrower’s Subsidiaries is shown on Exhibit 7.1.14
hereto.  Borrower and each of its Subsidiaries has filed all federal,
state and local tax returns and other reports it is required by law to file and
has paid, or made provision for the payment of, all taxes, assessments, fees,
levies and other governmental charges upon it, its income and Properties as and
when such taxes, assessments, fees, levies and charges that are due and payable,
unless and to the extent any thereof are being actively contested in good faith
and by appropriate proceedings and Borrower maintains reasonable reserves on its
books therefor.  The provision for taxes on the books of Borrower and
its Subsidiaries are adequate for all years not closed by applicable statutes,
and for its current fiscal year.

       

      7.1.15         Brokers.  There
are no claims for brokerage commissions, finder’s fees or investment banking
fees in connection with the transactions contemplated by this
Agreement.

       

      7.1.16         Patents, Trademarks,
Copyrights and Licenses.  Each of Borrower and its Subsidiaries
owns or possesses all the patents, trademarks, service marks, trade names,
copyrights and licenses necessary for the present and planned future conduct of
its business without any known conflict with the rights of
others.  All such patents, trademarks, service marks, trade names,
registered copyrights and licenses are listed on Exhibit 7.1.16
hereto.

       

      7.1.17         Governmental
Consents.  Each of Borrower and its Subsidiaries has, and is in
good standing with respect to, all governmental consents, approvals, licenses,
authorizations, permits, certificates, inspections and franchises necessary to
continue to conduct its business as heretofore or proposed to be conducted by it
and to own or lease and operate its Properties as now owned or leased by
it.

       

      7.1.18         Compliance with
Laws.  Each of Borrower and its Subsidiaries has duly complied
with and its Properties, business operations and leaseholds are in compliance
with, the provisions of all federal, state and local laws, rules and regulations
applicable to Borrower or such Subsidiary, as applicable, its Properties or the
conduct of its business except where the failure to so comply would not
reasonably be expected to have a material adverse effect on Borrower’s business,
assets or prospects, and there have been no citations, notices or orders of
noncompliance issued to Borrower or any of its Subsidiaries under any such law,
rule or regulation, which in any case would reasonably be expected to have a
material adverse effect on Borrower’s business, assets or
prospects.  Each of Borrower and its Subsidiaries has established and
maintains an adequate monitoring system to insure that it remains in compliance
with all federal, state and local laws, rules and regulations applicable to
it.  No Inventory has been produced in violation of the Fair Labor
Standards Act (29 U.S.C. §201 et seq.) as
amended.

       

      7.1.19         Restrictions.  To
the best of Borrower’s knowledge, neither Borrower nor any of its Subsidiaries
is a party or subject to any contract, agreement, or charter or other corporate
restriction, which materially and adversely affects its business or the use or
ownership of any of its Properties.  Neither Borrower nor any of its
Subsidiaries is a party or subject to any contract or agreement which restricts
its right or ability to incur Indebtedness, other than as set forth on Exhibit 7.1.19
hereto, none of which prohibit the execution of or compliance with this
Agreement or the other Loan Documents by Borrower or any of its Subsidiaries, as
applicable.

      
        
           

        

        
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      7.1.20         Litigation.  Except
as set forth on Exhibit 7.1.20
hereto, there are no actions, suits, proceedings or investigations pending, or
to the knowledge of Borrower, threatened, against or affecting Borrower or any
of its Subsidiaries, or the business, operations, Properties, prospects, profits
or condition of Borrower or any of its Subsidiaries, which could reasonably be
expected to have a material adverse effect on Borrower’s business, assets or
prospects.  Neither Borrower nor any of its Subsidiaries is in default
with respect to any order, writ, injunction, judgment, decree or rule of any
court, governmental authority or arbitration board or tribunal, which default
could reasonably be expected to have a material adverse effect on Borrower’s
business, assets or prospects.

       

      7.1.21         No
Defaults.  No event has occurred which would constitute a
Default or an Event of Default.  Neither Borrower nor any of its
Subsidiaries is in default, and no event has occurred and no condition exists
which constitutes, or which with the passage of time or the giving of notice or
both would constitute, a default in the payment of any Indebtedness to any
Person for Money Borrowed having a principal amount of $150,000 or
more.

       

      7.1.22         Leases.  Exhibit 7.1.22(a)
hereto is a complete listing of all capitalized leases of Borrower and its
Subsidiaries and Exhibit 7.1.22(b)
hereto is a complete listing of all operating leases of Borrower and its
Subsidiaries.  Each of Borrower and its Subsidiaries is in full
compliance with all of the terms of each of its respective capitalized and
operating leases, except where the failure to so comply would not reasonably be
expected to have a material adverse effect on Borrower’s business, assets or
prospects.

       

      7.1.23         Pension
Plans.  Except as disclosed on Exhibit 7.1.23
hereto, neither Borrower nor any of its Subsidiaries has any
Plan.  Borrower and each of its Subsidiaries is in full compliance, in
all material respects, with the requirements of ERISA and the regulations
promulgated thereunder with respect to each Plan.  No fact or
situation that could result in a material adverse change in the financial
condition of Borrower or any of its Subsidiaries exists in connection with any
Plan.  Neither Borrower nor any of its Subsidiaries has any material
withdrawal liability in connection with a Multiemployer Plan.

       

      7.1.24         Trade
Relations.  There exists no actual or threatened termination,
cancellation or limitation of, or any modification or change in, the business
relationship between Borrower or any of its Subsidiaries and any customer or any
group of customers whose purchases individually or in the aggregate are material
to the business of Borrower or any of its Subsidiaries, or with any material
supplier, and there exists no present condition or state of facts or
circumstances which would materially affect adversely Borrower or any of its
Subsidiaries or prevent Borrower or any of its Subsidiaries from conducting such
business after the consummation of the transaction contemplated by this
Agreement in substantially the same manner in which it has heretofore been
conducted.

       

      7.1.25         Labor
Relations.  Except as described on Exhibit 7.1.25
hereto, neither Borrower nor any of its Subsidiaries is a party to any
collective bargaining agreement.  There are no grievances, disputes or
controversies with any union or any other organization of Borrower’s or any of
its Subsidiaries’ employees, or threats of strikes, work stoppages or any
asserted pending demands for collective bargaining by any union or organization
which, in any case, would reasonably be expected to have a material adverse
affect on Borrower’s business, assets or prospects.

      
        
           

        

        
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      7.2           Continuous Nature of
Representations and Warranties.  Each representation and
warranty contained in this Agreement and the other Loan Documents, unless made
solely as of a specific date, shall be continuous in nature and shall remain
accurate, complete and not misleading at all times during the term of this
Agreement, except for changes in the nature of Borrower’s or its Subsidiaries’
business or operations that would render the information in any Exhibit attached
hereto either inaccurate, incomplete or misleading, so long as Agent has
consented to such changes or such changes are expressly permitted by this
Agreement or such changes could not reasonably be expected to have a material
adverse effect on Borrower’s business, assets or prospects.  Further,
Borrower shall have the right to amend and update the Exhibits attached hereto
so long as any such amendment or modification does not disclose any fact or
circumstance that would reasonably be expected to have a material adverse effect
on Borrower’s business, assets or prospects.

       

      7.3           Survival of Representations
and Warranties.  All representations and warranties of Borrower
contained in this Agreement or any of the other Loan Documents shall survive the
execution, delivery and acceptance thereof by Agent and the parties thereto and
the closing of the transactions described therein or related
thereto.

       

      8.           COVENANTS
AND CONTINUING AGREEMENTS

       

      8.1          Affirmative
Covenants.  During the term of this Agreement, and thereafter
for so long as there are any Obligations owing to Agent or any Lender, Borrower
covenants that, unless otherwise consented to by Required Lenders in writing, it
shall:

       

      8.1.1           Visits and
Inspections.  Permit representatives of Agent or any Lender,
from time to time, as often as may be reasonably requested, but only during
normal business hours, to visit and inspect the Properties of Borrower and each
of its Subsidiaries, inspect, audit and make extracts from its books and
records, and discuss with its officers, its employees and its independent
accountants, Borrower’s and each of its Subsidiaries’ business, assets,
liabilities, financial condition, business prospects and results of
operations.  So long as no Default or Event of Default has occurred
and is continuing, Agent and Lenders agree to give Borrower reasonable notice of
any such visit or inspection.

       

      8.1.2           Notices.  Promptly
notify Agent in writing of the occurrence of any event or the existence of any
fact which renders any representation or warranty in this Agreement or any of
the other Loan Documents inaccurate, incomplete or misleading.

       

      8.1.3           Financial
Statements.  Keep, and cause each Subsidiary to keep, adequate
records and books of account with respect to its business activities in which
proper entries are made in accordance with good business practice and, to the
extent applicable, GAAP reflecting all its financial transactions; and cause to
be prepared and furnished to Agent and Lenders the following (all to be prepared
in accordance with GAAP applied on a consistent basis, unless Guarantor’s
certified public accountants concur in any change therein and such change is
disclosed to Agent and Lenders and is consistent with GAAP):

       

      
        
           

        

        
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      (i)           not
later than 120 days after the close of each fiscal year of Guarantor,
unqualified audited (in respect to the Consolidated financial statements only)
financial statements of Guarantor and its Subsidiaries (including Borrower) as
of the end of such year, on a Consolidated and consolidating basis, certified by
a firm of independent certified (in respect to the Consolidated financial
statements only) public accountants of recognized standing selected by Guarantor
but acceptable to Agent (except for a qualification for a change in accounting
principles with which the accountant concurs);

       

      (ii)          not
later than 30 days after the end of each month hereafter, including the last
month of Guarantor’s fiscal year, unaudited interim financial statements of
Guarantor and its Subsidiaries (including Borrower) as of the end of such month
and of the portion of Borrower’s financial year then elapsed, on a Consolidated
and consolidating basis, certified by the principal financial officer of
Guarantor as prepared in accordance with GAAP and fairly presenting the
Consolidated financial position and results of operations of Guarantor and its
Subsidiaries (including Borrower) for such month and period subject only to
changes from audit and year-end adjustments and except that such statements need
not contain notes;

       

      (iii)         promptly
after the sending or filing thereof, as the case may be, copies of any proxy
statements, financial statements or reports which Borrower or Guarantor has made
available to its shareholders and copies of any regular, periodic and special
reports or registration statements which Borrower files with the Securities and
Exchange Commission or any governmental authority which may be substituted
therefor, or any national securities exchange;

       

      (iv)   
     promptly after the filing thereof, copies of any
annual report to be filed with ERISA in connection with each Plan;
and

       

      (v)          such
other data and information (financial and otherwise) as Agent, from time to
time, may reasonably request, bearing upon or related to the Collateral or
Guarantor’s, Borrower’s and each of their Subsidiaries’ financial condition or
results of operations.

       

      Concurrently
with the delivery of the financial statements described in clause (i) of this
Section 8.1.3,
Borrower shall forward to Agent a copy of the accountants’ letter to Borrower’s
management that is prepared in connection with such financial
statements.  Concurrently with the delivery of the financial
statements described in clauses (i) and (ii) of this Section 8.1.3,
Borrower shall cause to be prepared and furnished to Agent a Compliance
Certificate in the form of Exhibit 8.1.3
hereto executed on behalf of Borrower by the Chief Financial Officer of
Borrower.

      
        
           

        

        
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      Borrower
authorizes Agent or its designated representatives to communicate directly with
its independent certified public accountants and authorizes those accountants to
disclose to Agent any and all financial statements and other supporting
financial documents and schedules.  At or before the initial Closing
Date, Borrower shall deliver a letter addressed to such accountants instructing
them to comply with the provisions of this Section 8.1.3.  Further
within five (5) days after the earlier of the last day of each fiscal year of
Borrower and the date Borrower engaged independent certified public accountants
to audit Borrower’s financial statements, Borrower shall deliver to such
independent certified public accountants a letter from Borrower addressed to
such independent certified public accountants indicating that it is a primary
intention of Borrower in engaging such accountants that Agent relies upon such
financial statements of Borrower and its Subsidiaries.

       

      8.1.4           Landlord and Storage
Agreements.  Provide Agent with copies of all agreements
between Borrower or any of its Subsidiaries and any landlord or warehouseman
which owns any premises at which any Inventory may, from time to time, be
kept.  In respect  to any lease entered into after the
Closing Date (other than leases for sales offices) or leases entered into by
Borrower prior to the closing of the Acquisition, Borrower shall provide Agent
with landlord waivers or bailee letters with respect to such leased
premises.  Such landlord waivers or bailee letters shall be in a form
supplied by Agent to Borrower with such reasonable revisions as are customarily
accepted by Agent or by similar financial institutions in similar financial
transactions.

       

      8.1.5           Projections.  No
later than the first day of each fiscal year of Borrower, deliver to Agent and
Lenders Projections of Borrower for the forthcoming 2 years, quarter by quarter,
and for the forthcoming fiscal year, month by month.

       

      8.1.6           Future
Subsidiaries.  Promptly notify Agent upon any Person becoming a
Subsidiary and, if such Person is not a Foreign Subsidiary, cause it to guaranty
the Obligations (or to become a co-borrower hereunder) in a manner satisfactory
to Agent, and to execute and deliver such documents, instruments and agreements
and to take such other actions as Agent shall require to evidence and perfect a
Lien in favor of Agent (for the benefit of Lenders) on all assets of such
Person, including delivery of such legal opinions, in form and substance
satisfactory to Agent, as it shall deem appropriate.

       

      8.2          Negative
Covenants.  During the term of this Agreement, and thereafter
for so long as there are any Obligations to Lender, Borrower covenants that,
unless Required Lenders has first consented thereto in writing, it will
not:

       

      8.2.1           Mergers; Consolidations;
Acquisitions.  Except for Permitted Acquisitions, merge or
consolidate, or permit any Subsidiary of Borrower to merge or consolidate, with
any Person; nor acquire, nor permit any of its Subsidiaries to acquire, all or
any substantial part of the Properties of any Person.

       

      8.2.2           Loans.  Make,
or permit any Subsidiary of Borrower to make, any loans or other advances of
money (other than for salary, travel advances, advances against commissions and
other similar advances in the ordinary course of business) to any
Person.

       

      8.2.3           Total
Indebtedness.  Create, incur, assume, or suffer to exist, or
permit any Subsidiary of Borrower to create, incur or suffer to exist, any
Indebtedness, except:

       

      (i)           Obligations
owing to Agent and Lenders;

      
        
           

        

        
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      (ii)          Indebtedness
of any Subsidiary of Borrower to Borrower;

       

      (iii)         accounts
payable to trade creditors and current operating expenses (other than for Money
Borrowed) which are not aged more than 120 days from billing date or more than
60 days from the due date, in each case incurred in the ordinary course of
business and paid within such time period, unless the same are being actively
contested in good faith and by appropriate and lawful proceedings; and Borrower
or such Subsidiary shall have set aside such reserves, if any, with respect
thereto as are required by GAAP and deemed adequate by Borrower or such
Subsidiary and its independent accountants;

       

      (iv)         Obligations
to pay Rentals permitted by Section 8.2.13;

       

      (v)      
   Permitted Purchase Money Indebtedness;

       

      (vi)      
  contingent liabilities arising out of endorsements of checks and
other negotiable instruments for deposit or collection in the ordinary course of
business;

       

      (vii)        Capital
Lease Obligations to the extent permitted by Section 8.2.8 in
an aggregate principal amount of not more than $750,000;

       

      (viii)     
 Indebtedness in respect to deferred taxes;

       

      (ix)         Indebtedness
relating to compensation owed to Borrower’s employees for services rendered in
the ordinary course of business;

       

      (x)          all
unfunded pension and other employee benefit plan obligations and liabilities but
only to the extent they are permitted to remain unfunded under applicable
law;

       

      (xi)   
     insurance reserves created in the ordinary course
of business; and

       

      (xii)   
     Indebtedness not included in paragraphs (i)
through (xii) above which does not exceed at any time, in the aggregate, the sum
of $500,000.

       

      8.2.4           Affiliate
Transactions.  Enter into, or be a party to, or permit any
Subsidiary of Borrower to enter into or be a party to, any transaction with any
Affiliate of Borrower or stockholder, except in the ordinary course of and
pursuant to the reasonable requirements of Borrower’s or such Subsidiary’s
business and upon fair and reasonable terms which are fully disclosed to Agent
and are no less favorable to Borrower than would obtain in a comparable arm’s
length transaction with a Person not an Affiliate or stockholder of Borrower or
such Subsidiary.

      
        
           

        

        
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      8.2.5           Limitation on
Liens.  Create or suffer to exist, or permit any Subsidiary of
Borrower to create or suffer to exist, any Lien upon any of its Property, income
or profits, whether now owned or hereafter acquired, except:

       

      (i)           Liens
at any time granted in favor of Agent for its benefit and the ratable benefit of
Lenders;

       

      (ii)          Liens
for taxes (excluding any Lien imposed pursuant to any of the provisions of
ERISA) not yet due, or being contested in the manner described in Section 7.1.14
hereto, but only if in Agent’s judgment such Lien does not adversely affect
Agent’s rights or the priority of Agent’s Lien in the Collateral;

       

      (iii)         Liens
arising in the ordinary course of Borrower’s business by operation of law or
regulation, but only if payment in respect of any such Lien is not at the time
required and such Liens do not, in the aggregate, materially detract from the
value of the Property of Borrower or materially impair the use thereof in the
operation of Borrower’s business;

       

      (iv)         Purchase
Money Liens securing Permitted Purchase Money Indebtedness;

       

      (v)   
      Liens securing Indebtedness of one of
Borrower’s Subsidiaries to Borrower or another such Subsidiary;

       

      (vi)         Liens
securing Capital Lease Obligations to the extent the underlying Capital Lease
Obligation is permitted by the terms of this Agreement;

       

      (vii)        such
other Liens as appear on Exhibit 8.2.5
hereto; and

       

      (viii)       Liens
on certain Inventory granted to Prairie State Generating Company LLC and/or
Bechtel Power Corporation subject to and to the extent provided in that certain
consent letter dated December 8, 2008 from Agent to Borrower, a copy of which is
attached to Exhibit
8.2.5.

       

      (ix)         such
other Liens as Required Lenders may hereafter approve in writing.

       

      8.2.6           Intentionally
Omitted.

       

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

       

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

      
        
           

        

        
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      (ii)          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;

       

      (iii)         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;

       

      (iv)         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

       

      (v)          Borrower
may make Distributions to Guarantor to permit Guarantor to pay dividends on
Guarantor’s common Stock or make repurchases of 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) Borrower’s Fixed Charge Coverage
Ratio for the most recently ended twelve month period for which financial
statements are available, computed on a pro forma basis treating any such
Distribution as a Fixed Charge made within such period, equals or exceeds 1.10
to 1, 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.

       

      8.2.8           Capital
Expenditures.  Make Capital Expenditures (including, without
limitation, by way of capitalized leases but excluding amounts that would be
classified as Capital Expenditures as a result of a Permitted Acquisition)
which, in the aggregate, as to Borrower and its Subsidiaries, exceed $1,000,000
during any fiscal year of Borrower; provided, however, that the
unused portion of the Capital Expenditure allowance may be carried over to the
immediately succeeding fiscal year only, to be used in such succeeding fiscal
year but only after the entire Capital Expenditure allowance for such succeeding
year has been used.  No unused Capital Expenditure allowance may be
carried over to any fiscal year other than the immediately succeeding fiscal
year.

       

      8.2.9           Disposition of
Assets.  Sell, lease or otherwise dispose of any of, or permit
any Subsidiary of Borrower to sell, lease or otherwise dispose any of, its
Properties, including any disposition of Property as part of a sale and
leaseback transaction, to or in favor of any Person, except (i) sales of
Inventory in the ordinary course of business for so long as no Event of Default
exists hereunder, (ii) a transfer of Property to Borrower by a Subsidiary
of Borrower or (iii) dispositions expressly authorized by this Agreement,
including dispositions of unneeded Property with a non-material
value.

       

      8.2.10         Stock of
Subsidiaries.  Permit any of its Subsidiaries to issue any
additional shares of its capital stock except director’s qualifying
shares.

      
        
           

        

        
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      8.2.11         Bill-and-Hold Sales,
Etc.  Make a sale to any customer on a bill-and-hold,
guaranteed sale, sale and return, sale on approval or consignment basis, or any
sale on a repurchase or return basis.

       

      8.2.12         Restricted
Investment.  Make or have, or permit any Subsidiary of Borrower
to make or have, any Restricted Investment.

       

      8.2.13         Leases.  Become,
or permit any of its Subsidiaries to become, a lessee under any operating lease
(other than a lease under which Borrower or any of its Subsidiaries is lessor)
of Property if the aggregate Rentals payable during any current or future period
of 12 consecutive months under the lease in question and all other leases under
which Borrower or any of its Subsidiaries is then lessee would exceed Three
Million Five Hundred Thousand Dollars ($3,500,000).  The term
“Rentals” means, as of the date of determination, all payments which the lessee
is required to make by the terms of any lease.

       

      8.2.14           Tax
Consolidation.  File or consent to the filing of any
consolidated income tax return with any Person other than Guarantor or
Subsidiary of Borrower.

       

      8.3          Specific Financial
Covenants.  During the term of this Agreement, and thereafter
for so long as there are any Obligations to Agent and/or Lenders, Borrower
covenants that they will be in full compliance with each of the financial
covenants set forth on Exhibit 8.3
hereto.  If GAAP changes from the basis used in preparing the audited
financial statements delivered to Agent by Borrower on or before the Closing
Date, Borrower will provide Agent with certificates demonstrating compliance
with such financial covenants and will include, at the election of Borrower or
upon the request of Agent, calculations setting forth the adjustments necessary
to demonstrate how Borrower is in compliance with such financial covenants based
upon GAAP as in effect on the Closing Date.

       

      9.            CONDITIONS
PRECEDENT

       

      Notwithstanding
any other provision of this Agreement or any of the other Loan Documents, and
without affecting in any manner the rights of Agent or Lenders under the other
sections of this Agreement, neither any Lender nor Agent shall not be required
to make the Loans contemplated to be made on the Closing Date under this
Agreement unless and until each of the following conditions has been and
continues to be satisfied:

       

      9.1           Documentation.  Agent
shall have received, in form and substance satisfactory to Agent and its
counsel, a duly executed copy of this Agreement and the other Loan Documents,
together with such additional documents, instruments and certificates as Agent
and its counsel shall reasonably require in connection therewith, including all
documents, instruments, agreements and schedules listed in the Schedule of
Documents attached hereto and incorporated herein as Exhibit 9.1, all
in form and substance satisfactory to Agent and its counsel.

       

      9.2           No
Default.  No Default or Event of Default shall
exist.

       

      
        
           

        

        
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      10.           EVENTS
OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT

       

      10.1        Events of
Default.  The occurrence of one or more of the following events
shall constitute an “Event of Default”:

       

      10.1.1         Payment of Interest,
Principal and Fees.  Borrower shall fail to pay any interest or
principal due in respect to outstanding Revolving Credit Loans or any fees
payable in respect to unused Revolving Credit Loans or outstanding Letters of
Credit or LC Guaranties on the due date thereof (whether due at stated maturity,
on demand, upon acceleration or otherwise) and such failure shall continue for
five (5) days after the applicable due date.  Borrower acknowledges
that, to the extent of Availability, such interest, principal and fees shall be
paid by advances of Revolving Credit Loans pursuant to Section 3.1.1.

       

      10.1.2         Payment of Other
Obligations.  Borrower shall fail to pay any of the Obligations
(other than interest and principal due in respect to outstanding Revolving
Credit Loans or any fees payable in respect to unused Revolving Credit Loans or
outstanding Letters of Credit or LC Guaranties) on or within ten (10) days after
the due date for such Obligation (whether due at stated maturity, on demand,
upon acceleration or otherwise).

       

      10.1.3         Misrepresentations.  Any
representation, warranty or other statement made or furnished to Agent or
Lenders by or on behalf of Borrower or any Subsidiary of Borrower in this
Agreement, any of the other Loan Documents or any instrument, certificate or
financial statement furnished in compliance with or in reference thereto proves
to have been false or misleading in any material respect when made or furnished
or when reaffirmed pursuant to Section 7.2
hereof.

       

      10.1.4         Breach of Specific
Covenants.  Borrower shall fail or neglect to perform, keep or
observe any covenant contained in Sections 5.2
(Lien Protection; Further Assurances), 5.4 (Lien on Realty),
6.1.1 (Location
of Collateral), 6.2 (Administration
of Accounts), 8.1.1 (Visits and
Inspections), 8.1.3 (Financial
Statements), 8.2 (Negative
Covenants) or 8.3 (Specific
Financial Covenants) hereof on the date that Borrower is required to perform,
keep or observe such covenant.

       

      10.1.5         Breach of Other
Covenants.  Borrower shall fail or neglect to perform, keep or
observe any covenant contained in this Agreement (other than a covenant which is
dealt with specifically elsewhere in Section 10.1
hereof) and the breach of such other covenant is not cured to Required Lenders’
satisfaction within 15 days after the sooner to occur of Borrower’s receipt of
notice of such breach from Agent or the date on which such failure or neglect
first becomes known to any officer of Borrower.

       

      10.1.6         Default Under Security
Documents/Other Agreements.  Any event of default shall occur
under, or Borrower shall default in the performance or observance of any term,
covenant, condition or agreement contained in, any of the Security Documents or
the Other Agreements and such default shall continue beyond any applicable grace
period.

       

      10.1.7         Other
Defaults.  There shall occur any default or event of default on
the part of Borrower under any agreement, document or instrument to which
Borrower is a party or by which Borrower or any of its Property is bound,
creating or relating to any Indebtedness (other than the Obligations) with an
aggregate principal amount of $100,000 or more if the payment or maturity of
such Indebtedness is accelerated in consequence of such event of default or
demand for payment of such Indebtedness is made.

      
        
           

        

        
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      10.1.8         Uninsured
Losses.  Any loss, theft, damage or destruction of any of the
Collateral in an amount in excess of $500,000 or more not fully covered (subject
to such deductibles as Agent shall have permitted) by insurance.

       

      10.1.9         Adverse
Changes.  There shall occur any material adverse change in the
financial condition or business prospects of Borrower.

       

      10.1.10       Insolvency and Related
Proceedings.  Borrower shall cease to be Solvent or shall
suffer the appointment of a receiver, trustee, custodian or similar fiduciary,
or shall make an assignment for the benefit of creditors, or any petition for an
order for relief shall be filed by or against Borrower under the Bankruptcy Code
(if against Borrower, the continuation of such proceeding for more than 60
days), or Borrower shall make any offer of settlement, extension or composition
to its unsecured creditors generally.

       

      10.1.11         Business
Disruption:  Condemnation.  There shall occur a
cessation of a substantial part of the business of Borrower or any Subsidiary of
Borrower for a period which significantly affects Borrower’s capacity to
continue its business, on a profitable basis; or Borrower or any Subsidiary of
Borrower shall suffer the loss or revocation of any license or permit now held
or hereafter acquired by Borrower which is necessary to the continued or lawful
operation of its business; or Borrower shall be enjoined, restrained or in any
way prevented by court, governmental or administrative order from conducting all
or any material part of its business affairs; or any material lease or agreement
pursuant to which Borrower leases, uses or occupies any Property shall be
canceled or terminated prior to the expiration of its stated term; or any
material part of the Collateral shall be taken through condemnation or the value
of such Property shall be impaired through condemnation, where, in each case,
such event is reasonably expected to have a material adverse effect on
Borrower’s business, assets or prospects.

       

      10.1.12       Change of Ownership and
Liens on Stock.  Guarantor shall cease, on a collective basis,
to own and control, beneficially and of record, all of the issued and
outstanding capital Stock of Borrower.  A Change of Control shall
occur with respect to Guarantor.

       

      10.1.13       ERISA.  A
Reportable Event shall occur which Agent, in its sole discretion, shall
determine in good faith constitutes grounds for the termination by the Pension
Benefit Guaranty Corporation of any Plan or for the appointment by the
appropriate United States district court of a trustee for any Plan, or if any
Plan shall be terminated or any such trustee shall be requested or appointed, or
if Borrower or any Subsidiary of Borrower is in “default” (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer
Plan resulting from Borrower’s or such Subsidiary’s complete or partial
withdrawal from such Plan.

      
        
           

        

        
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      10.1.14       Challenge to
Agreement.  Borrower, any Subsidiary of Borrower, or any
Affiliate of any of them, shall challenge or contest in any action, suit or
proceeding the validity or enforceability of this Agreement, or any of the other
Loan Documents, the legality or enforceability of any of the Obligations or the
perfection or priority of any Lien granted to Lender.

       

      10.1.15       Judgments.  Any
money judgments, writ of attachment or similar processes are issued or rendered
against Borrower or any Subsidiary of Borrower or any of their respective
Property in an amount of $500,000 or more for any single judgment, attachment or
process or $1,000,000 or more for all such judgments, attachments or processes
in the aggregate, in each case in excess of any applicable insurance with
respect to which the insurer has admitted liability and which judgment,
attachment or process is not stayed, released or discharged within 30
days.  Any non-money judgment (or any non-monetary portion of a
judgment) shall be issued or rendered against Borrower and such judgment is
reasonably expected to have a material adverse effect on Borrower’s business,
assets or prospects and such judgment is not stayed, released or discharged
within 30 days.

       

      10.2         Acceleration of the
Obligations.  Upon the occurrence of an Event of Default and
during the continuance thereof, Agent may and shall, at the request of Required
Lenders, (i) without notice, terminate this facility with respect to
further Revolving Credit Loans and Letters of Credit and LC Guaranties,
whereupon no Revolving Credit Loans may be made hereunder and no Letters of
Credit or LC Guaranties may be issued hereunder, and/or (ii) with notice,
declare all Obligations to be forthwith due and payable, whereupon all
Obligations shall become and be due and payable, without presentment, demand,
protest or further notice of any kind, all of which are expressly waived by
Borrowers; provided, however, that upon
the occurrence of an Event of Default specified in Section 10.1.10
hereof, the Obligations shall become due and payable without declaration, notice
or demand by Agent.

       

      Agent
shall take such action with respect to any Default or Event of Default as shall
be directed by the Required Lenders; provided that, unless and until Agent shall
have received such directions, Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable and in the best interests of Agent
and Lenders taken as a whole, including any action (or the failure to act)
pursuant to the Loan Documents.

       

      10.3         Other
Remedies.  Upon and after the occurrence of an Event of
Default, Agent and/or Lenders shall have and may exercise from time to time the
following rights and remedies:

       

      10.3.1         All
of the rights and remedies of a secured party under the Code or under other
applicable law, and all other legal and equitable rights to which Agent or
Lenders may be entitled, all of which rights and remedies shall be cumulative
and shall be in addition to any other rights or remedies contained in this
Agreement or any of the other Loan Documents, and none of which shall be
exclusive.

       

      10.3.2         The
right to take immediate possession of the Collateral, and to (i) require
Borrower to assemble the Collateral, at Borrower’s expense, and make it
available to Agent at a place designated by Agent which is reasonably convenient
to both parties, and (ii) enter any premises where any of the Collateral
shall be located and to keep and store the Collateral on said premises until
sold (and if said premises be the Property of Borrower, Borrower agrees not to
charge Agent for storage thereof).

      
        
           

        

        
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      10.3.3         The
right to sell or otherwise dispose of all or any Collateral in its then
condition, or after any further manufacturing or processing thereof, at public
or private sale or sales, with such notice as may be required by law, in lots or
in bulk, for cash or on credit, all as Agent, in its sole discretion, may deem
advisable.  Borrower agrees that 10 days written notice to Borrower of
any public or private sale or other disposition of Collateral shall be
reasonable notice thereof, and such sale shall be at such locations as Agent may
designate in said notice.  Agent shall have the right to conduct such
sales on Borrower’s premises, without charge therefor, and such sales may be
adjourned from time to time in accordance with applicable law.  Agent
shall have the right to sell, lease or otherwise dispose of the Collateral, or
any part thereof, for cash, credit or any combination thereof, and Agent and
Lenders may purchase all or any part of the Collateral at public or, if
permitted by law, private sale and, in lieu of actual payment of such purchase
price, may set off the amount of such price against the
Obligations.  The proceeds realized from the sale of any Collateral
may be applied, after allowing 2 Business Days for collection, first to the
costs, expenses and attorneys’ fees incurred by Agent in collecting the
Obligations, in enforcing the rights of Agent under the Loan Documents and in
collecting, retaking, completing, protecting, removing, storing, advertising for
sale, selling and delivering any Collateral, second to the interest due upon any
of the Obligations; and third, to the principal of the
Obligations.  If any deficiency shall arise, Borrower shall remain
liable to Agent and Lenders therefor.

       

      10.3.4         Agent
is hereby granted a license or other right to use, without charge, Borrower’s
labels, patents, copyrights, rights of use of any name, trade secrets, trade
names, trademarks and advertising matter, or any Property of a similar nature,
as it pertains to the Collateral, in advertising for sale and selling any
Collateral and Borrower’s rights under all licenses and all franchise agreements
shall inure to Agent’s and Lenders’ benefit.

       

      10.3.5         Agent
or Required Lenders may, at its or their option, require Borrower to deposit
with Agent funds equal to the LC Amount and, if Borrower fails to promptly make
such deposit, Lenders may advance such amount as a Revolving Credit Loan
(whether or not an Overadvance is created thereby).  Each such
Revolving Credit Loan shall be secured by all of the Collateral and shall bear
interest and be payable at the same rate and in the same manner as Base Rate
Revolving Credit Portions.  Any such deposit or advance shall be held
by Agent as a reserve to fund future payments on such LC Guaranties and future
drawings against such Letters of Credit.  At such time as all LC
Guaranties have been paid or terminated and all Letters of Credit have been
drawn upon or expired any amounts remaining in such reserve shall be applied
against any outstanding Obligations, or, if all Obligations have been
indefeasibly paid in full, returned to Borrowers.

      
        
           

        

        
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      10.4         Remedies Cumulative; No
Waiver.  All covenants, conditions, provisions, warranties,
guaranties, indemnities, and other undertakings of Borrower contained in this
Agreement and the other Loan Documents, or in any document referred to herein or
contained in any agreement supplementary hereto or in any schedule given to
Agent or any Lenders or contained in any other agreement between Agent and/or
Lenders and Borrower, heretofore, concurrently, or hereafter entered into, shall
be deemed cumulative to and not in derogation or substitution of any of the
terms, covenants, conditions, or agreements of Borrower herein
contained.  The failure or delay of Agent or Lenders to require strict
performance by Borrower of any provision of this Agreement or to exercise or
enforce any rights, Liens, powers, or remedies hereunder or under any of the
aforesaid agreements or other documents or security or Collateral shall not
operate as a waiver of such performance, Liens, rights, powers and remedies, but
all such requirements, Liens, rights, powers, and remedies shall continue in
full force and effect until all Loans and all other Obligations owing or to
become owing from Borrower to Agent and/or Lenders shall have been fully
satisfied.  None of the undertakings, agreements, warranties,
covenants and representations of Borrower contained in this Agreement or any of
the other Loan Documents and no Event of Default by Borrower under this
Agreement or any other Loan Documents shall be deemed to have been suspended or
waived by Agent or Lenders, unless such suspension or waiver is by an instrument
in writing specifying such suspension or waiver and is signed by a duly
authorized representative of Agent, Lenders or Required Lenders (as applicable)
and directed to Borrower.

       

      11.          AGENT

       

      11.1         Power of Attorney;
Authorization and Action.  Each Lender hereby appoints and
authorizes Agent to take such action on its behalf and to exercise such powers
under this Agreement, and the other Loan Documents as are delegated to Agent by
the terms hereof and thereof, together with such powers as are reasonably
incidental thereto.  As to any matters not expressly provided for by
this Agreement and the other Loan Documents (including, without limitation,
enforcement or collection of the Notes), Agent shall not be required to exercise
any discretion or take any action, but shall be required to act or to refrain
from acting (and shall be fully protected in so acting or refraining from
acting) upon the instructions of the Required Lenders, and such instructions
shall be binding upon all Lenders; provided,  however, that Agent
shall not be required to take any action which exposes Agent to personal
liability or which is contrary to this Agreement or the other Loan Documents or
applicable law.  Agent agrees to give each Lender promptly a copy of
each notice given to it by Borrower pursuant to the terms of this Agreement and
the other Loan Documents.

      
        
           

        

        
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    11.2         Agent’s Reliance,
Etc.  Neither Agent nor any of its directors, officers, agents
or employees shall be liable for any action taken or omitted to be taken by it
or them under or in connection with this Agreement or the other Loan Documents,
except for its or their own gross negligence or willful
misconduct.  Without limitation of the generality of the foregoing,
Agent:  (i) may treat the payee of any Note as the holder thereof
until Agent receives written notice of the assignment or transfer thereof signed
by such payee and in form satisfactory to Agent; (ii) may consult with
legal counsel, independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts; (iii) makes no warranty or representations to any Lender and shall
not be responsible to any Lender for any statements, warranties or
representations made in or in connection with this Agreement or the other Loan
Documents; (iv) shall not have any duty beyond Agent’s customary practices
to ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions of this Agreement or the other Loan Documents on
the part of Borrowers or to inspect the property (including the books and
records) of Borrowers; (v) shall not be responsible to any Lender for the
due execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; and (vi) shall incur no
liability under or in respect of this Agreement or the other Loan Documents by
acting upon any notice, consent, certificate or other instrument or writing
(which may be by facsimile, telegram, cable or telex) believed in good faith by
it to be genuine and signed or sent by the proper party or parties.

     

    11.3         Bank of America and
Affiliates.  With respect to its commitment hereunder to make
Revolving Credit Loans and to issue or procure Letters of Credit and LC
Guaranties, Bank of America shall have the same rights and powers under this
Agreement and the other Loan Documents as any other Lender and may exercise the
same as though it were not Agent; and the term “Lender” or “Lenders” shall,
unless otherwise expressly indicated, include Bank of America in its individual
capacity.  Bank of America and its Affiliates may lend money to, and
generally engage in any kind of business with, Borrowers, any of their
Subsidiaries and any Person who may do business with or own securities of any
Borrower or any such Subsidiary, all as if Bank of America were not Agent and
without any duty to account therefor to Lenders.

     

    11.4         Lender Credit
Decision.  Each Lender acknowledges that it has, independently
and without reliance upon Agent or any other Lender and based on the financial
statements referred to in Section 7.1.10
and such other documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement.  Each
Lender also acknowledges that it will, independently and without reliance upon
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement.

     

    11.5         Indemnification.  Lenders
agree to indemnify Agent (to the extent not reimbursed by Borrowers), ratably
according to the respective principal amounts of the Notes then held by each of
them, from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against Agent in any way relating to or arising out of this Agreement or any
other Loan Document or any action taken or omitted by Agent under this
Agreement, provided that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from Agent’s gross negligence or
willful misconduct.  Without limitation of the foregoing, each Lender
agrees to reimburse Agent promptly upon demand for its ratable shares of any
out-of-pocket expenses (including reasonable counsel fees) incurred by Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and each other Loan Document, to the
extent that Agent is not reimbursed for such expenses by Borrower.

     

    
      
        
        

      

      
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    11.6         Successor
Agent.  Agent may resign at any time by giving written notice
thereof to Lenders and Borrower.  Upon any such resignation, the
Required Lenders shall have the right to appoint a successor Agent which shall
be reasonably acceptable to Borrower.  If no successor Agent shall
have been so appointed by the Required Lenders, and shall have accepted such
appointment, within 30 days after the retiring Agent’s giving notice of
resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent, which shall be a commercial bank or financial institution
organized under the laws of the United States of America or of any state thereof
and having a combined capital and surplus of at least Five Hundred Million
Dollars ($500,000,000) and which shall be reasonably acceptable to
Borrower.  Upon the acceptance of any appointment as Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations under
this Agreement and the other Loan Documents.  After any retiring
Agent’s resignation hereunder as Agent, the provisions of this Section 11 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement and the other Loan Documents.

     

    12.           MISCELLANEOUS

     

    12.1         Power of
Attorney.

     

    Borrower
hereby irrevocably designates, makes, constitutes and appoints Agent (and all
Persons designated by Agent) as Borrower’s true and lawful attorney (and
agent-in-fact) and Agent, or Agent’s agent, may, without notice to Borrower and
in Borrower’s or Agent’s name, but at the cost and expense of
Borrower:

     

    12.1.1                  At
such time or times after the occurrence and during the continuance of a Default
or an Event of Default as Agent or said agent, in its sole discretion, may
determine, endorse any Borrower’s name on any checks, notes, acceptances,
drafts, money orders or any other evidence of payment or proceeds of the
Collateral which come into the possession of Agent or under Agent’s
control.

     

    12.1.2                  At
such time or times upon or after the occurrence and during the continuance of an
Event of Default as Agent or its agent in its sole discretion may
determine:  (i) demand payment of the Accounts from the Account
Debtors, enforce payment of the Accounts by legal proceedings or otherwise, and
generally exercise all of Borrower’s rights and remedies with respect to the
collection of the Accounts; (ii) settle, adjust, compromise, discharge or
release any of the Accounts or other Collateral or any legal proceedings brought
to collect any of the Accounts or other Collateral, each in a commercially
reasonable manner under the circumstances; (iii) sell or assign any of the
Accounts and other Collateral upon such terms, for such amounts and at such time
or times as Agent deems advisable; (iv) take control, in any manner, of any
item of payment or proceeds relating to any Collateral; (v) prepare, file
and sign Borrower’s name to a proof of claim in bankruptcy or similar document
against any Account Debtor or to any notice of lien, assignment or satisfaction
of lien or similar document in connection with any of the Collateral;
(vi) receive, open and dispose of all mail addressed to Borrower and notify
postal authorities to change the address for delivery thereof to such address as
Agent may designate; (vii) endorse the name of Borrower upon any of the
items of payment or proceeds relating to any Collateral and deposit the same to
the account of Agent on account of the Obligations; (viii) endorse the name
of Borrower upon any chattel paper, document, instrument, invoice, freight bill,
bill of lading or similar document or agreement relating to the Accounts,
Inventory and any other Collateral; (ix) use Borrower’s stationery and sign
the name of Borrower to verifications of the Accounts and notices thereof to
Account Debtors; (x) use the information recorded on or contained in any
data processing equipment and computer hardware and software relating to the
Accounts, Inventory, Equipment and any other Collateral; (xi) make and
adjust claims under policies of insurance; and (xii) do all other acts and
things necessary, in Agent’s determination, to fulfill Borrower’s obligations
under this Agreement.

    
      
         

      

      
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    The power
of attorney granted hereby shall constitute a power coupled with an interest and
shall be irrevocable.

     

    12.2         Indemnity.  Borrower
hereby agrees to indemnify Agent and Lenders and hold Agent and Lenders harmless
from and against any liability, loss, damage, suit, action or proceeding ever
suffered or incurred by Agent and Lenders (including reasonable attorneys fees
and legal expenses) as the result of Borrower’s failure to observe, perform or
discharge Borrower’s duties hereunder.  In addition, Borrower shall
defend Agent and Lenders against and save it harmless from all claims of any
Person with respect to the Collateral (except those resulting from the
negligence or intentional misconduct of Agent or any Lender).  Without
limiting the generality of the foregoing, these indemnities shall extend to any
claims asserted against Agent or any Lender by any Person under any
Environmental Laws or similar laws by reason of any Borrower’s or any other
Person’s failure to comply with laws applicable to solid or hazardous waste
materials or other toxic substances.  Notwithstanding any contrary
provision in this Agreement, the obligation of Borrower under this Section 12.2
shall survive the payment in full of the Obligations and the termination of this
Agreement.

     

    12.3         Modification of Agreement;
Sale of Interest.

     

    (A)           The
Loan Documents constitute the complete agreement between the parties with
respect to the subject matter hereof and may not be modified, altered or amended
except by an agreement in writing signed by Borrowers, Required Lenders or all
Lenders as required by the terms hereof, and, if required by the terms hereof,
Agent.  Borrower may not sell, assign or transfer any of the Loan
Documents or any portion thereof, including without limitation, Borrower’s
rights, title, interests, remedies, powers and duties hereunder or
thereunder.  Borrower hereby consents to Agent’s and any Lender’s sale
of participation, assignment, transfer or other disposition in accordance with
the terms hereof, at any time or times, of any of the Loan Documents or of any
portion thereof or interest therein, including, without limitation, Agent’s and
any Lender’s rights, title, interests, remedies, powers or duties thereunder,
whether evidenced in writing or not; Borrower agrees that it will use
commercially reasonable efforts to assist and cooperate with Agent and any
Lender in any manner reasonably requested by Agent or such Lender to effect the
sale of participation in or assignment of any of the Loan Documents or of any
portion thereof or interest therein, including, without limitation, review of
appropriate disclosure documents or placement memoranda and executing
appropriate amendments to the signature pages hereto to reflect the addition of
any Lender and such Lender’s respective commitments.  In addition,
Borrower will make its management available to meet with potential Lenders or
Participating Lenders from time to time as reasonably requested by
Agent.  The foregoing notwithstanding, except with respect to sales,
assignments or transfers to Affiliates under common control pursuant to which
the selling, assigning or transferring Lender retains its voting rights, no
Lender shall sell participation or assign, transfer or otherwise dispose of any
of the Loan Documents or any portion thereof or interest therein, without the
prior written consent of Agent, which consent shall be unreasonably withheld or
delayed.

    
      
         

      

      
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    (B)           In
respect to any assignment by a Lender of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Revolving Loan
Commitment, the Revolving Credit Loans owed to it and the Revolving Credit Note
held by it) (i) each such assignment shall be of a uniform, and not a
varying, percentage of all rights and obligations, (ii) except in the case
of an assignment of all of a Lender’s rights and obligations under this
Agreement, (A) the aggregate amount of the Revolving Loan Commitment of the
assigning Lender being assigned pursuant to each such assignment (determined as
of the date of the Assignment and Acceptance with respect to such assignment)
shall in no event be less than $5,000,000, and in integral multiples of
$1,000,000 thereafter, or such lesser amount as to which Borrowers and Agent may
consent to and (B) after giving effect to each such assignment, the amount
of the Revolving Loan Commitment of the assigning Lender shall in no event be
less than $5,000,000, (iii) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance, an Assignment and
Acceptance in the form of Exhibit 12.3(B)
hereto (an “Assignment and Acceptance”), together with any Revolving Credit Note
subject to such assignment and a processing and recordation fee of $3,500, and
(iv) any Lender may without the consent of Borrowers or the Agent, and
without paying any fee, assign to any Affiliate of such Lender that is a bank or
financial institution all of its rights and obligations under this
Agreement.  The foregoing notwithstanding, no Person may become a
Lender or a Participating Lender hereunder, unless such Person is a financial
institution having stockholders’ equity (or the equivalent) of at least One
Hundred Million Dollars ($100,000,000).  Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in such Assignment and Acceptance (x) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and (y) the Lender assignor thereunder
shall, to the extent that rights and obligations hereunder have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of the remaining portion of an assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto).  If, pursuant to this Section 12.3,
any interest in this Agreement or any Revolving Credit Loan, Letter of Credit or
LC Guaranty is transferred to any transferee which is organized under the laws
of any jurisdiction other than the United States or any state thereof, the
transferor Lender shall cause such transferee (other than any Participating
Lender), and shall cause any Participating Lender, concurrently with the
effectiveness of such transfer, (a) to represent to the transferor Lender
(for the benefit of the transferor Lender, Agent, and Borrower) that under
applicable law and treaties no Taxes will be required to be withheld by Agent,
Borrower or the transferor Lender with respect to any payments to be made to
such transferee in respect of the Revolving Credit Loans, Letters of Credit or
LC Guaranties, (b) to furnish to the transferor Lender, Agent and Borrower
either U.S.  Internal Revenue Service Form 4224 or
U.S.  Internal Revenue Service Form 1001 (wherein such transferee
claims entitlement to complete exemption form U.S.  federal
withholding tax on all interest payments hereunder), and (c) to agree (for
the benefit of the transferor Lender, Agent and Borrower) to provide the
transferor Lender, Agent and Borrower a new Form 4224 or Form 1001 upon the
obsolescence of any previously delivered form and comparable statements in
accordance with applicable U.S.  laws and regulations and amendments
duly executed and completed by such transferee, and to comply from time to time
with all applicable U.S.  laws and regulations with regard to such
withholding tax exemption.

    
      
         

      

      
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    (C)           In
the event any Lender assigns or otherwise transfers all or any part of its
Revolving Credit Note, any such Lender shall so notify Borrower and Borrower
shall, upon the request of such Lender, issue a new Revolving Credit Note in
exchange for the old Revolving Credit Note.

     

    (D)           Any
Lender may at any time sell to one or more commercial banks, financial
institutions, or other Persons not Affiliates of Borrower (a “Participating
Lender”) participating interests in any Loans, the commitments of that Lender
and the other interests of that Lender (the “originating Lender”) hereunder and
under the other Loan Documents; provided, however, that
(i) the originating Lender’s obligations under this Agreement shall remain
unchanged, (ii) the originating Lender shall remain solely responsible for
the performance of such obligations, (iii) Borrower and the Agent shall
continue to deal solely and directly with the originating Lender in connection
with the originating Lender’s rights and obligations under this Agreement and
the other Loan Documents, and (iv) no Lender shall grant any participation
under which the Participating Lender shall have rights to approve any amendment
to or waiver of this Agreement or the Loan Documents, except to the extent such
amendment or waiver would:  (A) extend the final maturity date
for payment of the Loans in which such Participating Lender is participating;
(B) reduce the interest rate or the amount of principal or fees applicable
to the Loans in which such Participating Lender is participating; or
(C) release all or substantially all of the Collateral, except as expressly
provided herein.  In those cases in which an originating Lender grants
rights to a Participating Lender to approve any amendment to or waiver of this
Agreement or the other Loan Documents respecting the matters described in
clauses (A) through (C) of the preceding sentence, the relevant participation
agreements shall provide for a voting mechanism whereby a majority of the amount
of such Lender’s portion of the Loans (irrespective of whether held by such
Lender or a Participating Lender) shall control the vote for all of such
Lender’s portion of the Loans.  In the case of any participation, the
Participating Lender shall not have any rights under this Agreement or any of
the other Loan Documents entered into in connection herewith (the Participating
Lender’s right against such Lender in respect of such participation to be those
set forth in the participation or other agreement executed by such Lender and
the Participating Lender relating thereto).  In no event shall any
Participating Lender grant a participation in its participation interest in the
Loans without the prior written consent of Agent, which approval shall not be
unreasonably withheld or delayed.  All amounts payable by the Borrower
hereunder shall be determined as if the originating Lender had not sold any such
participation, except that, if amounts outstanding under this Agreement are due
and unpaid, or shall have been declared or shall have become due and payable
upon the occurrence of an Event of Default, each Participating Lender shall be
deemed to have the right of set-off in respect of its participating interest in
amounts owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement.

    
      
         

      

      
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    (E)           Notwithstanding
any other provision in this Agreement, any Lender may at any time create a
security interest in, or pledge, all or any portion of its rights under and
interest in this Agreement in favor of any Federal Reserve Bank in accordance
with Regulation A of the Board or U.S.  Treasury Regulation 31 CFR
§203.14, and such Federal Reserve Bank may enforce such pledge or security
interest in any manner permitted under applicable law.

     

    (F)           No
amendment or waiver of any provision of this Agreement or the Notes or any other
Loan Document, including, without limitation, nor consent to any departure by
Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Required Lenders, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however:  (a) that
no amendment, waiver or consent shall, unless in writing and signed by each
Lender (other than a Defaulting Lender with respect to clauses (v), (vi) and
(vii)) affected thereby do any of the following:  (i) increase
the aggregate Revolving Loan Commitments or subject any Lender to any additional
obligations, (ii) reduce the principal of, or decrease the rate of interest
on, the Notes or other amount payable hereunder other than those payable only to
Bank of America in its capacity as Agent which may be reduced by Bank of America
unilaterally, (iii) postpone any date fixed for any payment of principal
of, or interest on, the Notes or other amounts payable hereunder, other than
those payable only to Bank of America in its capacity as Agent which may be
postponed by Bank of America unilaterally, (iv) reduce the aggregate unpaid
principal amount of the Notes, or the number of Lenders which shall be required
for the Lenders or any of them to take any action hereunder, (v) release or
discharge any Person liable for the performance of any obligations of Borrower
hereunder or under any of the Loan Documents except in accordance with the terms
of such Loan Documents or as otherwise permitted herein, (vi) increase the
advance rates contained in the definition of the Borrowing Base, (vii) to
the extent Agent’s or Lenders’ consent is required by the terms hereof, release
all or substantially all of the Collateral or (viii) amend this Section 12.3;
(b) that no amendment, waiver or consent shall be effective unless in
writing and signed by either Required Lenders or all Lenders, as required by the
terms hereof and, if such amendment, waiver or consent affects Agent or its
rights hereunder, Agent.

     

    (G)           The
foregoing notwithstanding, provided that no Event of Default has occurred and is
continuing, no Lender shall effect any transfer, assignment or participation of
its interests hereunder if the effect of any such transfer, assignment or
participation is to increase, in any material amount, Borrower’s costs or
obligations hereunder.

     

    (H)           If
a Lender (a) is a Defaulting Lender or (b) fails to give its consent to any
amendment, waiver or action for which consent of all Lenders was required and
Required Lenders consented, then, in addition to any other rights and remedies
that any Person may have, Agent may, by notice to such Lender within 120 days
after such event, require such Lender to assign all of its rights and
obligations under the Loan Documents to a replacement Lender (acceptable to
Borrower) specified by Agent, pursuant to appropriate Assignment and
Acceptance(s) and within 20 days after Agent’s notice.  Agent is
irrevocably appointed as attorney-in-fact to execute any such Assignment and
Acceptance if the Lender fails to execute same.  Such Lender shall be
entitled to receive, in cash, concurrently with such assignment, all amounts
owed to it under the Loan Documents, including all principal, interest and fees
through the date of assignment (but excluding any prepayment
charge).

    
      
         

      

      
        42

        
          

        

      

      
         

      

    

    12.4         Severability.  Wherever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Agreement.

     

    12.5         Successors and
Assigns.  This Agreement, the Other Agreements and the Security
Documents shall be binding upon and inure to the benefit of the successors and
assigns of Borrower and Agent and Lenders permitted under Section 12.3
hereof.

     

    12.6         Cumulative Effect; Conflict
of Terms.  The provisions of the Other Agreements and the
Security Documents are hereby made cumulative with the provisions of this
Agreement.  Except as otherwise provided in Section 3.2
hereof and except as otherwise provided in any of the other Loan Documents by
specific reference to the applicable provision of this Agreement, if any
provision contained in this Agreement is in direct conflict with, or
inconsistent with, any provision in any of the other Loan Documents, the
provision contained in this Agreement shall govern and control.

     

    12.7         Execution in
Counterparts.  This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which counterparts taken together shall constitute but one and the same
instrument.

     

    12.8         Notice.  Except
as otherwise provided herein, all notices, requests and demands to or upon a
party hereto, to be effective, shall be in writing and shall be sent by
certified or registered mail, return receipt requested, by personal delivery
against receipt, by overnight courier or by facsimile and, unless otherwise
expressly provided herein, shall be deemed to have been validly served, given or
delivered immediately when delivered against receipt, three Business Days after
deposit in the mail, postage prepaid, one Business Day after delivery to an
overnight courier or, in the case of facsimile notice, when sent, addressed as
follows:

     

    (A)           If
to Agent:

     

    Bank of
America, N.A.

    135 South
LaSalle Street, 4th
Floor

    Chicago,
Illinois  60603

    Attention:  Loan
Administration Manager

    Facsimile
No.:  (312) 904-7190

     

    With a
copy to:

     

    Vedder
Price PC

    222 North
LaSalle Street

    Suite
2600

    Chicago,
Illinois  60601

    Attention:  John
T. McEnroe

    Facsimile
No.:  (312) 609-5005

    
      
         

      

      
        43

        
          

        

      

      
         

      

    

    (B)           If
to Borrower:

     

    HWC
Wire & Cable Company

    10201 N.
Loop East

    Houston,
Texas  77029

    Attention:  Nicol
G. Graham

    Telecopier
No.:  (713) 609-2205

     

    With a
copy to:

     

    Sidley
Austin LLP

    One South
Dearborn

    Chicago,
Illinois  60603

    Attention:  Nancy
L. Kasko

    Telecopier
No.:  (312) 853-7036

     

    (C)           If
to any Lender, at its address indicated on the signature pages hereof or in a
notice to Borrower of an assignment of a Note,

     

    or to
such other address as each party may designate for itself by notice given in
accordance with this Section 12.8;
provided, however, that any
notice, request or demand to or upon Agent and/or Lender pursuant to Sections 3.1.1
or 4.2.2 hereof
shall not be effective until received by Agent and/or Lenders.

     

    12.9         Credit
Inquiries.  Borrower hereby authorizes and permits Agent to
respond to usual and customary credit inquiries from third parties concerning
such Borrower or any of its Subsidiaries.

     

    12.10       Time of
Essence.  Time is of the essence of this Agreement, the Other
Agreements and the Security Documents.

     

    12.11       Entire
Agreement.  This Agreement and the other Loan Documents,
together with all other instruments, agreements and certificates executed by the
parties in connection therewith or with reference thereto, embody the entire
understanding and agreement between the parties hereto and thereto with respect
to the subject matter hereof and thereof and supersede all prior agreements,
understandings and inducements, whether express or implied, oral or
written.

     

    12.12       Interpretation.  No
provision of this Agreement or any of the other Loan Documents shall be
construed against or interpreted to the disadvantage of any party hereto by any
court or other governmental or judicial authority by reason of such party having
or being deemed to have structured or dictated such provision.

    
      
         

      

      
        44

        
          

        

      

      
         

      

    

    12.13       Confidentiality.  Agent
and each Lender shall hold all nonpublic information obtained pursuant to the
requirements of this Agreement (including, without limitation, Borrower’s
ownership structure) in accordance with Agent’s and each Lenders’ customary
procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices and in any event may make
disclosures reasonably required by a prospective participant or assignee in
connection with the contemplated participation or assignment or as required or
requested by any governmental authority or representative thereof or pursuant to
legal process provided, however, that Agent
or any Lender shall require any potential participant or assignee to agree, in
writing, to comply with the provisions of this Section 12.13
prior to making any such disclosure to any such potential assignee or
participant.  Borrower acknowledges and agrees that Agent may provide
lending trade organizations information necessary and customary for inclusion in
league table measurements after the closing of the transactions contemplated
hereby.

     

    12.14       GOVERNING LAW; CONSENT TO
FORUM.  THIS AGREEMENT HAS BEEN NEGOTIATED, EXECUTED AND
DELIVERED IN AND SHALL BE DEEMED TO HAVE BEEN MADE IN CHICAGO,
ILLINOIS.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS; PROVIDED, HOWEVER, THAT IF ANY
OF THE COLLATERAL SHALL BE LOCATED IN ANY JURISDICTION OTHER THAN ILLINOIS, THE
LAWS OF SUCH JURISDICTION SHALL GOVERN THE METHOD, MANNER AND PROCEDURE FOR
FORECLOSURE OF AGENT’S LIEN UPON SUCH COLLATERAL AND THE ENFORCEMENT OF AGENT’S
OR LENDERS’ OTHER REMEDIES IN RESPECT OF SUCH COLLATERAL TO THE EXTENT THAT THE
LAWS OF SUCH JURISDICTION ARE DIFFERENT FROM OR INCONSISTENT WITH THE LAWS OF
ILLINOIS.  AS PART OF THE CONSIDERATION FOR NEW VALUE RECEIVED, AND
REGARDLESS OF ANY PRESENT OR FUTURE DOMICILE OR PRINCIPAL PLACE OF BUSINESS OF
BORROWER OR AGENT OR LENDERS, BORROWER HEREBY CONSENTS AND AGREES THAT THE
CIRCUIT COURT OF COOK COUNTY, ILLINOIS, OR, AT AGENT’S OPTION, THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION, SHALL
HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN
BORROWER AND AGENT AND LENDERS PERTAINING TO THIS AGREEMENT OR TO ANY MATTER
ARISING OUT OF OR RELATED TO THIS AGREEMENT.  BORROWER EXPRESSLY
SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT
COMMENCED IN ANY SUCH COURT, AND BORROWER HEREBY WAIVES ANY OBJECTION WHICH
BORROWER MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR
FORUM NON CONVENIENS AND HEREBY
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT.  BORROWER HEREBY WAIVES PERSONAL SERVICE OF
THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO BORROWER AT THE ADDRESS SET FORTH IN
THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE
EARLIER OF BORROWER’S ACTUAL RECEIPT THEREOF OR 3 DAYS AFTER DEPOSIT IN THE
U.S.  MAILS, PROPER POSTAGE PREPAID.  NOTHING IN THIS
AGREEMENT SHALL BE DEEMED OR OPERATE TO AFFECT THE RIGHT OF AGENT OR LENDERS TO
SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR TO PRECLUDE THE
ENFORCEMENT BY AGENT OR LENDERS OF ANY JUDGMENT OR ORDER OBTAINED IN SUCH FORUM
OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY OTHER
APPROPRIATE FORUM OR JURISDICTION.

    
      
         

      

      
        45

        
          

        

      

      
         

      

    

    12.15       WAIVERS BY
BORROWER.  BORROWER WAIVES (i) THE RIGHT TO TRIAL BY JURY
(WHICH AGENT AND LENDERS HEREBY ALSO WAIVE) IN ANY ACTION, SUIT, PROCEEDING OR
COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO ANY OF THE LOAN DOCUMENTS,
THE OBLIGATIONS OR THE COLLATERAL; (ii) EXCEPT AS OTHERWISE SPECIFICALLY
PROVIDED FOR HEREIN, PRESENTMENT, DEMAND AND PROTEST AND NOTICE OF PRESENTMENT,
PROTEST, DEFAULT, NON PAYMENT, MATURITY, RELEASE, COMPROMISE, SETTLEMENT,
EXTENSION OR RENEWAL OF ANY OR ALL COMMERCIAL PAPER, ACCOUNTS, CONTRACT RIGHTS,
DOCUMENTS, INSTRUMENTS, CHATTEL PAPER AND GUARANTIES AT ANY TIME HELD BY AGENT
OR ANY LENDER ON WHICH BORROWER MAY IN ANY WAY BE LIABLE AND HEREBY
RATIFIES AND CONFIRMS WHATEVER LENDER MAY DO IN THIS REGARD;
(iii) NOTICE PRIOR TO AGENT OR ANY LENDER TAKING POSSESSION OR CONTROL OF
THE COLLATERAL OR ANY BOND OR SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT
PRIOR TO ALLOWING AGENT OR LENDERS TO EXERCISE ANY OF AGENT’S OR LENDERS’
REMEDIES; (iv) THE BENEFIT OF ALL VALUATION, APPRAISEMENT AND EXEMPTION
LAWS; AND (v) NOTICE OF ACCEPTANCE HEREOF.  BORROWER ACKNOWLEDGES
THAT THE FOREGOING WAIVERS ARE EACH MATERIAL INDUCEMENT TO AGENT’S AND LENDERS’
ENTERING INTO THIS AGREEMENT AND THAT AGENT AND LENDERS ARE RELYING UPON THE
FOREGOING WAIVERS IN ITS FUTURE DEALINGS WITH BORROWER.  BORROWER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVERS WITH ITS
LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY
THE COURT.

     

    12.16       Publicity.  Borrower
hereby consents to Agent’s use of the name or trade style of Borrower in any
announcements or advertisements relating to the completion of the transactions
contemplated hereby and the role played by Agent in providing financing to
Borrower hereunder in such media and in such manner as Agent, with the prior
written consent of Borrower, deems appropriate.

     

    12.17       No
Novation.  Notwithstanding anything to the contrary contained
herein, this Agreement is not intended to and does not serve to effect a
novation of the Obligations.  Instead, it is the express intention of
the parties hereto to reaffirm the indebtedness created under the 2000 Loan
Agreement which is evidenced by the notes provided for therein and secured by
the Collateral.  Borrower acknowledges and confirms that the liens and
security interests granted pursuant to the Loan Documents secured the
indebtedness, liabilities and obligations of Borrower to Agent and Lenders under
the 2000 Loan Agreement and that the term “Obligations” as used in the Loan
Documents (or any other terms used therein to describe or refer to the
indebtedness, liabilities and obligations of Borrower to Agent and Lenders)
includes, without limitation, the indebtedness, liabilities and obligations of
Borrower under the Notes to be delivered hereunder, and under the 2000 Loan
Agreement, as the same may be further amended, modified, supplemented or
restated from time to time.  The Loan Documents and all agreements,
instruments and documents executed or delivered in connection with any of the
foregoing shall each be deemed to be amended to the extent necessary to give
effect to the provisions of this Agreement.  Cross-references in the
Loan Documents to particular section numbers in the 2000 Loan Agreement shall be
deemed to be cross-references to the corresponding sections, as applicable, to
this Agreement.

     

    (Signature
Page Follows)

    
      
         

      

      
        46

        
          

        

      

      
         

      

    

    (Signature
Page to Second Amended and Restated

    Loan
and Security Agreement)

    

    IN WITNESS WHEREOF, this
Agreement has been duly executed in Chicago, Illinois, on the day and year
specified at the beginning of this Agreement.

     

    
      
        
          
            
              
                
                  	
                          
                            BORROWER:

                          

                        	
                          
                            HWC
      WIRE & CABLE COMPANY

                          

                        
	 
      	 
      
	 
      	
                          By:

                        	
                          /s/ Nicol G. Graham

                        
	 	
                          Name:
      

                        	 
	 	Title: 	VP
      & CFO

                

                 

              

            

          

        

      

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    	
                                                                            GUARANTOR:

                                                                          	
                                                                            HOUSTON
      WIRE & CABLE COMPANY

                                                                          
	 
      	 
      
	 
      	
                                                                            By:

                                                                          	/s/ Charles A. Sorrentino
	 	
                                                                            Name:
      

                                                                          	 
	 	Title: 	President
      &
CEO

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (Signature
Page to Second Amended and Restated

    Loan
and Security Agreement)

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        	 	
                                                Accepted
      in Chicago, Illinois

                                              
	 	 
	
                                                
                                                  AGENT
      AND LENDER:

                                                

                                              	
                                                
                                                  BANK
      OF AMERICA, N.A.

                                                

                                              
	 
      	 
      
	 
      	
                                                By:

                                              	
                                                /s/
      Steven J. Chalmers

                                              
	 	
                                                Name:
      

                                              	 
	 	Title: 	Vice
      President
	 	 	 
	 	 
	 	Address:
	 	
                                                135
      South LaSalle Street, 4th
      Floor

                                              
	 	Chicago,
      IL  60603
	 	
                                                Attention:  Loan
      Administration Manager

                                              
	 	
                                                Telecopier
      No.:  312.904.7190

                                              
	 	 
	 	
                                                Revolving
      Loan Commitment:

                                              
	 	
                                                $75,000,000

                                              

                                      

                                      

                                      
                                        
                                          
                                             

                                          

                                          
                                             

                                            
                                              

                                            

                                          

                                          
                                             

                                          

                                        

                                      

                                       

                                      APPENDIX
A

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    GENERAL
DEFINITIONS

     

    When used
in the Second Amended and Restated Loan and Security Agreement dated as of
September 21, 2009, by and among HWC Wire & Cable Company, the
lender signatories thereto (“Lenders”) and Bank of America, N.A. (“Bank of
America”) as agent for such Lenders (Bank of America, in such capacity “Agent”),
the following terms shall have the following meanings (terms defined in the
singular to have the same meaning when used in the plural and vice
versa):

     

    Account Debtor - any
Person who is or may become obligated under or on account of an
Account.

     

    Accounts - all
accounts, contract rights, chattel paper, instruments and documents, whether now
owned or hereafter created or acquired by Borrower or in which Borrower now has
or hereafter acquires any interest.

     

    Affiliate - a Person
(other than a Subsidiary):  (i) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or is under
common control with, a Person; (ii) which beneficially owns or holds 5% or
more of any class of the Voting Stock of a Person; or (iii) 5% or more of
the Voting Stock (or in the case of a Person which is not a corporation, 5% or
more of the equity interest) of which is beneficially owned or held by a Person
or a Subsidiary of a Person.

     

    Agreement – the
Second Amended and Restated Loan and Security Agreement referred to in the first
sentence of this Appendix A, all Exhibits thereto and this Appendix
A.

     

    ALTA Survey - a
survey prepared in accordance with the standards adopted by the American Land
Title Association and the American Congress on Surveying and Mapping in 1986,
known as the “Minimum Standard Detail Requirements of Land Title
Surveys”.  The ALTA Survey shall be in sufficient form to satisfy the
requirements of Chicago Title Insurance Company to provide extended coverage
over survey defects and shall also show the location of all easements,
utilities, and covenants of record, dimensions of all improvements,
encroachments from any adjoining property, and certify as to the location of any
flood plain area affecting the subject real estate.  The ALTA Survey
shall contain the following certification:  “To HWC Wire &
Cable Company, Bank of America, N.A., as agent, and Chicago Title Insurance
Company.  This is to certify that this map of plat and the survey on
which it is based were made in accordance with the “Minimum Standard Detail
Requirements for Land Title Surveys” jointly established and adopted by ALTA and
ACSM in 1986.  (signed (SEAL) License No. __________”.)

     

    Applicable Margin –
from the Closing 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

                  	 	 	1.25	%
	
                    Unused
      Line Fee

                  	 	 	0.20	%

          

        

      

    

     

    Appendix A

    Page 1

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    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, 2009 (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

                          	 
	 
      	 	 	 	 	 	 	 	 	 
	
                            <
      0.75 to 1

                          	 	 	0	%	 	 	1.25	%	 	 	0.20	%
	
                            > 0.75 to 1, but < 1.50 to
      1

                          	 	 	0	%	 	 	1.50	%	 	 	0.25	%
	
                            > 1.50 to 1

                          	 	 	0	%	 	 	1.75	%	 	 	0.30	%

                  

                

              

            

          

        

      

    

    

    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.

     

    Availability - the
amount of money which Borrower is entitled to borrow from time to time as
Revolving Credit Loans, such amount being the difference derived when the sum of
the principal amount of Revolving Credit Loans then outstanding (including any
amounts which Lender may have paid for the account of Borrower pursuant to any
of the Loan Documents and which have not been reimbursed by Borrower) is
subtracted from the Borrowing Base.  If the amount outstanding is
equal to or greater than the Borrowing Base, Availability is 0.

     

    Bank – Bank of
America, N.A.

     

    Base Rate – the rate
of interest announced or quoted by Bank from time to time as its prime rate for
commercial loans, whether or not such rate is the lowest rate charged by Bank to
its most preferred borrowers; and, if such prime rate for commercial loans is
discontinued by Bank as a standard, a comparable reference rate designated by
Bank as a substitute therefor shall be the Base Rate.

     

    Base Rate Revolving Credit
Portion - that portion of the Revolving Credit Loans not subject to a
LIBOR Option.

     

    Appendix A

    Page 2

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    Board - the Board of
Governors of the Federal Reserve System of the United States.

     

    Borrowing Base – as
at any date of determination thereof, an amount equal to the lesser
of:

     

    (i)           the
Maximum Revolving Loan at such date; or

     

    (ii)           an
amount equal to:

     

    (a)           up
to eighty-five percent (85%) of the net amount of Eligible Accounts outstanding
at such date;

     

    PLUS

     

    (b)           the
lesser of (A) sixty-five percent (65%) of the Value of Eligible Inventory; or
(B) eighty-five percent (85%) of the NOLV Percentage of the Value of Eligible
Inventory;

     

    MINUS
(subtract from the lesser of (i) or (ii) above)

     

    (iii)           an
amount equal to the sum of (A) any amount which Agent reasonably expects it may
be obligated to pay in the future for the account of Borrower, plus (B) the amount
of any reserve established by Agent pursuant to Section 1.1.1, plus (C) the LC
Amount.

     

    For
purposes hereof, the net amount of Eligible Accounts at any time shall be the
face amount of such Eligible Accounts less, to the extent not already deducted
in the calculation of Eligible Accounts, any and all returns, rebates, discounts
(which may, at Agent’s option, be calculated on shortest terms), credits,
allowances or excise taxes of any nature at any time issued, owing, claimed by
Account Debtors, granted, outstanding or payable in connection with such
Accounts at such time.  Further, the value of Eligible Inventory shall
be adjusted as of each date of calculation to reflect decreases in the Comex
market price of copper as reported on the London Metals Exchange, but only to
the extent that such decrease would result in a value less than current book
value.

     

    Business Day -
(i) when used with respect to the LIBOR Option, shall mean a day one which
dealings may be effected in deposits of United States dollars in the London
interbank foreign currency deposits market and on which the Agent is conducting
business and on which banks may conduct business in London, England, Chicago,
Illinois, and New York, New York and (ii) when used with respect to the
other provisions of this Agreement, shall mean any day that is not a Saturday, a
Sunday or a day on which banks are required or permitted to be closed either in
the State of Illinois or in the State of Wisconsin.

     

    Capital Expenditures
- expenditures made or liabilities incurred for the acquisition of any fixed
assets or improvements, replacements, substitutions or additions thereto which
have a useful life of more than one year, including the total principal portion
of Capitalized Lease Obligations.

     

    Appendix A

    Page 3

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    Capitalized Lease
Obligation - any Indebtedness represented by obligations under a lease
that is required to be capitalized for financial reporting purposes in
accordance with GAAP.

     

    Change of Control -
an event or series of events by which:

     

    (a)           any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act), other than any such “person” or “group” existing as of the
Closing Date, becomes the “beneficial owner” (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, provided that a
person shall be deemed to have “beneficial ownership” of all Securities that
such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of forty
percent (40%) or more of the combined voting power of Guarantor’s outstanding
Securities ordinarily having the right to vote at an election of directors;
or

     

    (b)           the
majority of the board of directors (or comparable governing body) of Guarantor
fails to consist of Continuing Directors or other substitutes therefor
acceptable to Agent.

     

    Closing Date - the
date on which all of the conditions precedent in Section 9 of the
Agreement are satisfied and the initial Loans are made.

     

    Code - the Uniform
Commercial Code as adopted and in force in the State of Illinois, as from time
to time in effect.

     

    Collateral - all of
the Property and interests in Property described in Section 5 of the
Agreement, and all other Property and interests in Property that now or
hereafter secure the payment and performance of any of the
Obligations.

     

    Commitment Termination
Date - the earliest of:  (i) September 21, 2013;
(ii) the date of termination of the commitment to make further Revolving
Credit Loans and pursuant to Section 4.2.1 or
4.2.2 hereof;
and (iii) the date of termination of the commitment to make further
Revolving Credit Loans pursuant to Section 10.2
hereof.

     

    Consolidated - the
consolidation in accordance with GAAP of the accounts or other items as to which
such term applies.

     

    Continuing Director –
with respect to any Person as of any date of determination, any member of the
board of directors of such Person, who (a) was a member of such board of
directors on the date of this Agreement, or (b) was nominated for election or
elected to such board of directors with the approval of the Continuing Directors
who were members of such board at the time of such nomination or
election.

     

    Default - an event or
condition the occurrence of which would, with the lapse of time or the giving of
notice, or both, become an Event of Default.

     

    Default Rate - as
defined in Section 2.1.2 of
the Agreement.

     

    Appendix A

    Page 4

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    Defaulting Lender –
any Lender that (a) fails to make any payment or provide funds to Agent or
Borrower as required hereunder or fails to perform its obligations under any
Loan Document, and such failure is not cured within one Business Day, or (b) is
the subject of any Insolvency Proceeding.

     

    Distribution - in
respect of any corporation means and includes:  (i) the payment
of any dividends or other distributions on capital stock of the corporation
(except distributions in such stock) and (ii) the redemption or acquisition
of Securities unless made contemporaneously from the net proceeds of the sale of
Securities.

     

    Dominion Account - a
special account of Agent for its benefit and the ratable benefit of Lenders
established by Borrower pursuant to the Agreement at a bank selected by
Borrower, but acceptable to Agent in its reasonable discretion, and over which
Agent shall have sole and exclusive access and control for withdrawal
purposes.

     

    Eligible Account - an
Account arising in the ordinary course of Borrower’s business from the sale of
goods or rendition of services which Agent, in its reasonable credit judgment,
deems to be an Eligible Account.  Without limiting the generality of
the foregoing, no Account shall be an Eligible Account if:

     

    (i)        
     it arises out of a sale made by Borrower to a
Subsidiary or an Affiliate of Borrower or to a Person controlled by an Affiliate
of Borrower; or

     

    (ii)       
     it is due or unpaid more than 90 days after
the original invoice date; or

     

    (iii)       
    25% or more of the Accounts from the Account Debtor are
not deemed Eligible Accounts hereunder; or

     

    (iv)           the
total unpaid Accounts of the Account Debtor exceed 20% of the net amount of all
Eligible Accounts, to the extent of such excess; or

     

    (v)      
     any covenant, representation or warranty contained
in the Agreement with respect to such Account has been breached; or

     

    (vi)           the
Account Debtor is also Borrower’s creditor or supplier, or the Account Debtor
has disputed liability with respect to such Account (to the extent of such
dispute), or the Account Debtor has made any claim with respect to any other
Account due from such Account Debtor to Borrower (to the extent of such claim),
or the Account is subject to a debit memo or a volume rebate (to the extent of
such volume rebate or debit memo) or the Account otherwise is or is reasonably
expected to become subject to any right of setoff by the Account Debtor;
or

     

    (vii)           the
Account Debtor has commenced a voluntary case under the federal bankruptcy laws,
as now constituted or hereafter amended, or made an assignment for the benefit
of creditors, or a decree or order for relief has been entered by a court having
jurisdiction in the premises in respect of the Account Debtor in an involuntary
case under the federal bankruptcy laws, as now constituted or hereafter amended,
or any other petition or other application for relief under the federal
bankruptcy laws has been filed against the Account Debtor, or if the Account
Debtor has failed, suspended business, ceased to be Solvent, or consented to or
suffered a receiver, trustee, liquidator or custodian to be appointed for it or
for all or a significant portion of its assets or affairs; or

    
       

      Appendix A

      Page 5

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (viii)         it
arises from a sale to an Account Debtor outside the United States, unless the
sale is on letter of credit, guaranty or acceptance terms in each case
acceptable to Agent in its sole discretion; or

     

    (ix)    
       it arises from a sale to the Account
Debtor on a bill-and-hold, guaranteed sale, sale-or-return, sale-on-approval,
consignment or any other repurchase or return basis; or

     

    (x)       
     the Account Debtor is the United States of America
or any department, agency or instrumentality thereof, unless Borrower assigns
its right to payment of such Account to Agent, in a manner satisfactory to Agent
so as to comply with the Assignment of Claims Act of 1940 (31 U.S.C. §203 et seq., as amended); or

     

    (xi)      
     the Account is subject to a Lien other than a
Permitted Lien or the Account is not at all times subject to Agent’s duly
perfected, first priority security interest; or

     

    (xii)           the
goods giving rise to such Account have not been delivered to and accepted by the
Account Debtor or the services giving rise to such Account have not been
performed by Borrower and accepted by the Account Debtor; or

     

    (xiii)          the
Account is evidenced by chattel paper or an instrument of any kind, or has been
reduced to judgment; or

     

    (xiv)          Borrower
has made any agreement with the Account Debtor for any deduction therefrom,
except for discounts or allowances which are made in the ordinary course of
business for prompt payment and which discounts or allowances are reflected in
the calculation of the face value of each invoice related to such Account;
or

     

    (xv)           Borrower
has made an agreement with the Account Debtor to extend the time of payment
thereof.

     

    Eligible Inventory -
such Inventory of Borrower (other than packaging materials, reels, shipping
containers and manufacturing supplies) which Agent, in its reasonable credit
judgment deems to be Eligible Inventory.  Without limiting the
generality of the foregoing, no Inventory shall be Eligible Inventory
if:

     

    (i)         
    it is not raw materials, work-in-process or finished
goods that is readily marketable;

     

    (ii)     
       it is not in good, new and saleable
condition;

     

    (iii)     
      it is slow-moving, obsolete or
unmerchantable;

     

    Appendix A

    Page 6

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    (iv)      
     it does not meet all standards imposed by any
governmental agency or authority;

     

    (v)        
    it does not conform in all respects to any covenants,
warranties and representations set forth in the Agreement;

     

    (vi)           it
is not at all times subject to Agent’s duly perfected, first priority security
interest and no other Lien except a Permitted Lien;

     

    (vii)           it
is not situated at a location in compliance with the Agreement and is not in
transit;

     

    (viii)         it
is defective Inventory;

     

    (ix)  
         it is Inventory located
off-site and in respect to which Inventory Borrower has not obtained Lien
releases and access waivers in form and substance acceptable to
Agent;

     

    (x)      
       it is consigned
Inventory;

     

    (xi)     
      it represents inter-company profit;
or

     

    (xii)           it
consists of Inventory of less than 100 foot lengths; or

     

    (xiii)          it
is packaging, reels or supplies.

     

    Environmental Laws -
all federal, state and local laws, rules, regulations, ordinances, programs,
permits, guidances, orders and consent decrees relating to health, safety and
environmental matters.

     

    Equipment - all
machinery, apparatus, equipment, fittings, furniture, fixtures, motor vehicles
and other tangible personal Property (other than Inventory) of every kind and
description used in Borrower’s operations or owned by Borrower or in which
Borrower has an interest, whether now owned or hereafter acquired by Borrower
and wherever located, and all parts, accessories and special tools and all
increases and accessions thereto and substitutions and replacements
therefor.

     

    ERISA - the Employee
Retirement Income Security Act of 1974, as amended, and all rules and
regulations from time to time promulgated thereunder.

     

    Event of Default - as
defined in Section 10.1 of
the Agreement.

     

    Exchange Act – the
Securities and Exchange Act of 1934, as amended from time to time.

     

    Foreign Subsidiary –
a Subsidiary that is a “controlled foreign corporation” under Section 957
of the Code, such that a guaranty by such Subsidiary of the Obligations or a
Lien on the assets of such Subsidiary to secure the Obligations would result in
material tax liability to Borrower.

    
       

      Appendix A

      Page 7

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    GAAP - generally
accepted accounting principles in the United States of America in effect from
time to time.

     

    General Intangibles -
all general intangibles of Borrower, whether now owned or hereafter created or
acquired by Borrower, including, without limitation, all choses in action,
causes of action, corporate or other business records, deposit accounts,
inventions, designs, patents, patent applications, trademarks, trade names,
trade secrets, goodwill, copyrights, registrations, licenses, franchises,
customer lists, tax refund claims, computer programs, all claims under
guaranties, security interests or other security held by or granted to Borrower
to secure payment of any of the Accounts by an Account Debtor, all rights to
indemnification and all other intangible property of every kind and nature
(other than Accounts).

     

    Guarantor – Houston
Wire & Cable Company, a Delaware corporation.

     

    Guaranty - the
Amended and Restated Continuing Guaranty Agreement which is to be executed by
Guarantor in form and substance satisfactory to Agent.

     

    Indebtedness - as
applied to a Person means, without duplication

     

    (i)           all
items which in accordance with GAAP would be included in determining total
liabilities as shown on the liability side of a balance sheet of such Person as
at the date as of which Indebtedness is to be determined, including, without
limitation, Capitalized Lease Obligations,

     

    (ii)           all
obligations of other Persons which such Person has guaranteed,

     

    (iii)           all
reimbursement obligations in connection with letters of credit or letter of
credit guaranties issued for the account of such Person, and

     

    (iv)           in
the case of Borrower (without duplication), the Obligations.

     

    Inventory - all of
Borrower’s inventory, whether now owned or hereafter acquired including, but not
limited to, all goods intended for sale or lease by Borrower, or for display or
demonstration; all work in process; all raw materials and other materials and
supplies of every nature and description used or which might be used in
connection with the manufacture, printing, packing, shipping, advertising,
selling, leasing or furnishing of such goods or otherwise used or consumed in
Borrower’s business; and all documents evidencing and General Intangibles
relating to any of the foregoing, whether now owned or hereafter acquired by
Borrower.

     

    Investment Property -
all of Borrower’s investment property, whether now owned or hereinafter acquired
by Borrower, including, without limitation, all securities (certificated or
uncertificated), securities accounts, securities entitlements, commodity
accounts and contracts.

     

    LC Amount - at any
time, the aggregate undrawn face amount of all Letters of Credit and LC
Guaranties then outstanding.

     

    
      Appendix
A

      Page
8

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      

    

    LC Guaranty - any
guaranty pursuant to which Agent or Lenders or any Affiliate of Agent or Lenders
shall guaranty the payment or performance by Borrower of its reimbursement
obligation under any letter of credit.

     

    LC Percent - the
Applicable Margin in respect to LIBOR Revolving Credit Portions.

     

    Legal Requirement -
any requirement imposed upon any Lender or any Participating Lender by any law
of the United States of America or the United Kingdom or by any regulation,
order, interpretation, ruling or official directive (whether or not having the
force of law) of the Board, the Bank of England or any other board, central bank
or governmental or administrative agency, institution or authority of the United
States of America, the United Kingdom or any political subdivision of either
thereof.

     

    Letter of Credit -
any letter of credit issued by Agent or Bank for the account of any
Borrower.

     

    LIBOR Interest Payment
Date - with respect to any LIBOR Portion, the first day of each calendar
month during the applicable LIBOR Period.

     

    LIBOR Option - the
option granted pursuant to Section 2.3 of
the Agreement to have the interest on all or any portion of the principal amount
of the Revolving Credit Loans based on a LIBOR Rate.

     

    LIBOR Period - any
period of one month, two months, three months or six months commencing on a
Business Day, selected as provided in Section 2.3(i);
provided, however that no LIBOR
Period shall extend beyond the last day of  the Original Term, unless
Borrower, Agent and Lenders have agreed to an extension of the Original Term
beyond the expiration of the LIBOR Period in question.  If any LIBOR
Period so selected shall end on a date that is not a Business Day, such LIBOR
Period shall instead end on the next preceding or succeeding Business Day as
determined by Agent in accordance with the then current banking practice in
London; provided, that Borrower shall not be required to pay double interest,
even though the preceding LIBOR Period ends and the new LIBOR Period begins on
the same day.  Each determination by Agent of the LIBOR Period shall,
in the absence of manifest error, be conclusive.

     

    LIBOR Portion - a
LIBOR Revolving Credit Portion.

     

    LIBOR Rate - with
respect to any LIBOR Portion for the related LIBOR Period, an interest rate per
annum (rounded upwards, if necessary, to the next higher 1/16 of 1% equal to the
product of (i) the Base LIBOR Rate (as hereinafter defined) multiplied by
(ii) Statutory Reserves.  For purposes of this definition, the
term “Base LIBOR Rate” shall mean the rate (rounded to the next higher 1/16 of
1%) at which deposits of U.S.  dollars approximately equal in
principal amount to the LIBOR Portion specified in the applicable LIBOR Request
are offered to Agent by prime banks in the London interbank foreign currency
deposits market at approximately 11:00 a.m., London time, 2 Business Days
prior to the commencement of such LIBOR Period, for delivery on the first day of
such LIBOR Period.  Each determination by Bank of any LIBOR Rate
shall, in the absence of manifest error, be conclusive.

    
       

      Appendix
A

      Page
9

        
          
             

          

          
             

            
              

            

          

          
             

          

        

    

    LIBOR Request - a
notice in writing (or by telephone confirmed by telex, telecopy or other
facsimile transmission on the same day as the telephone request) from Borrower,
on behalf of all Borrowers, to Agent requesting that interest on a portion of
the Revolving Credit Loan be based on the LIBOR Rate,
specifying:  (i) the first day of the LIBOR Period; (ii) the
length of the LIBOR Period consistent with the definition of that term; and
(iii) the dollar amount of the LIBOR Revolving Credit Portion consistent
with the definition of such terms.

     

    LIBOR Revolving Credit
Portion - that portion of the Revolving Credit Loans specified in a LIBOR
Request (including any portion of Revolving Credit Loans which is being borrowed
by Borrower concurrently with such LIBOR Request) which is not less than
$1,000,000 and is an integral multiple of $100,000, which does not exceed the
outstanding balance of Revolving Credit Loans not already subject to a LIBOR
Option and, which, as of the date of the LIBOR Request specifying such LIBOR
Revolving Credit Portion, has met the conditions for basing interest on the
LIBOR Rate in Section 2.3 of
the Agreement and the LIBOR Period of which was commenced and not
terminated.

     

    Lien - any interest
in Property securing an obligation owed to, or a claim by, a Person other than
the owner of the Property, whether such interest is based on common law, statute
or contract.  The term “Lien” shall also include reservations,
exceptions, encroachments, easements, rights-of-way, covenants, conditions,
restrictions, leases and other title exceptions and encumbrances affecting
Property.  For the purpose of the Agreement, Borrower shall be deemed
to be the owner of any Property which it has acquired or holds subject to a
conditional sale agreement or other arrangement pursuant to which title to the
Property has been retained by or vested in some other Person for security
purposes.

     

    Loan Account - the
loan account established on the books of Agent pursuant to Section 3.6 of
the Agreement.

     

    Loan Documents - the
Agreement, the Other Agreements and the Security Documents.

     

    Loans - all loans and
advances of any kind made by Lender pursuant to the Agreement.

     

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

     

    Money Borrowed -
means (i) Indebtedness arising from the lending of money by any Person to
Borrower; (ii) Indebtedness, whether or not in any such case arising from
the lending by any Person of money to Borrower, (A) which is represented by
notes payable or drafts accepted that evidence extensions of credit,
(B) which constitutes obligations evidenced by bonds, debentures, notes or
similar instruments, or (C) upon which interest charges are customarily
paid (other than accounts payable) or that was issued or assumed as full or
partial payment for Property; (iii) Indebtedness that constitutes a
Capitalized Lease Obligation; (iv) reimbursement obligations with respect
to letters of credit or guaranties of letters of credit and
(v) Indebtedness of Borrower under any guaranty of obligations that would
constitute Indebtedness for Money Borrowed under clauses (i) through (iii)
hereof, if owed directly by Borrower.

    
       

      Appendix
A

      Page
10 

        
          
             

          

          
             

            
              

            

          

          
             

          

        

    

    Mortgage - the
mortgage executed by Borrower on or about the closing date of the “1997 Loan
Agreement” (as defined in the 2000 Agreement) in favor of Agent for its ratable
benefit and the benefit of Lender, and by which such Borrower shall grant and
convey to Agent for its benefit and the ratable benefit of Lenders, as security
for the Obligations, a Lien upon the such Borrower’s interest in the real
property located in Houston, Texas and commonly known as 10201 North Loop East
(10201 NLE), Houston, Texas, which mortgage shall be released on the Closing
Date.

     

    Multiemployer Plan -
has the meaning set forth in Section 4001(a)(3) of ERISA.

     

    New Mortgages - as
defined in Section 5.3 of
the Agreement.

     

    NOLV Percentage – the
net orderly liquidation value of Inventory, expressed as a percentage, expected
to be realized at an orderly, negotiated sale held within a reasonable period of
time, net of all liquidation expenses, as determined from the most recent
appraisal of Borrower’s Inventory performed by an appraiser and on terms
satisfactory to Agent.

     

    Notes - collectively,
the Revolving Credit Notes.

     

    Notice of Revolving Credit
Loan - as defined in Section 3.1.1 of
the Agreement.

     

    Obligations - all
Loans and all other advances, debts, liabilities, obligations, covenants and
duties, together with all interest, fees and other charges thereon, owing,
arising, due or payable from Borrowers or any one of them to Agent or any Lender
of any kind or nature, present or future, whether or not evidenced by any note,
guaranty or other instrument, whether arising under the Agreement, or any of the
other Loan Documents, any interest rate protection agreement, swaps or caps or
otherwise whether direct or indirect (including those acquired by assignment),
absolute or contingent, primary or secondary, due or to become due, now existing
or hereafter arising and however acquired.

     

    Original Term - as
defined in Section 4.1 of
the Agreement.

     

    Other Agreements -
any and all agreements, instruments and documents (other than the Agreement and
the Security Documents), heretofore, now or hereafter executed by any Borrower,
any Subsidiary of any Borrower or any other third party and delivered to Agent
and/or Lenders in respect of the transactions contemplated by the
Agreement.

     

    Overadvance - as
defined in Section 1.1.1(C)
of the Agreement.

     

    Participating Lender
- each Person who shall be granted the right by any Lender to participate in any
of the Loans described in the Agreement and who shall have entered into a
participation agreement in form and substance satisfactory to such
Lender.

     

    Appendix
A

    Page
11 

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    Permitted
Acquisition(s) - means any acquisition(s) by Borrower of all or
substantially all of the assets or outstanding capital stock or other ownership
interests of a Person, or an operating division of a Person or a merger of a
Person with Borrower, which in either case, constitutes a business unit so long
as each of the following conditions precedent (collectively, the “Acquisition
Conditions”) have been fulfilled to the satisfaction of Agent:  (i) no
Default or Event of Default shall have occurred and be continuing at the time of
such acquisition or would occur as a result thereof; (ii) the business unit
being acquired (the “Target”) is primarily located in the United States of
America and is in the same or related line of business as Borrower;
(iii) immediately after giving effect to any such Acquisition, Borrower
shall be in compliance with subsection 8.1.6; (iv) the Fixed Charge
Coverage Ratio shall be greater than or equal to 1.2 to 1 (x) for the
twelve-month period immediately preceding the making of such acquisition, and
(y)  on a pro forma basis for the twelve-month period following the making
of such acquisition, after giving effect to the making of such acquisition, such
pro forma calculation to be demonstrated to Agent and to be reasonably
acceptable to Agent based on projections prepared using reasonable assumptions
by Borrower; (v) all conditions precedent to the consummation of the
transactions under such acquisition shall have been satisfied in all material
respects; and (vi) Agent shall have received a copy of the purchase
agreement with respect to such Permitted Acquisition, certified as true and
correct by Borrower and such other agreements, documents, and instruments as
Agent may reasonably request.

     

    Permitted Liens - any
Lien of a kind specified in Section 8.2.5 of
the Agreement.

     

    Permitted Purchase Money
Indebtedness - Purchase Money Indebtedness of Borrower incurred after the
date hereof which is secured by a Purchase Money Lien and which, when aggregated
with the principal amount of all other such Purchase Money Indebtedness and
Capitalized Lease Obligations of Borrower at the time outstanding, does not
exceed $1,500,000.  For the purposes of this definition, the principal
amount of any Purchase Money Indebtedness consisting of capitalized leases shall
be computed as a Capitalized Lease Obligation.

     

    Person - an
individual, partnership, corporation, limited liability company, joint stock
company, land trust, business trust, or unincorporated organization, or a
government or agency or political subdivision thereof.

     

    Plan - an employee
benefit plan now or hereafter maintained for employees of Borrower that is
covered by Title IV of ERISA.

     

    Pledge Agreement -
the Pledge Agreement executed by Guarantor on or about May 22, 2000 in favor of
Agent (or its predecessor-in-interest) whereby Guarantor granted to Agent for
its benefit and the ratable benefit of Lenders, a first priority security
interest in all of the issued and outstanding shares of capital stock of
Borrower and all other assets of Guarantor to secure Guarantor’s obligations and
liabilities under the Guaranty.

     

    Projections -
Borrower’s forecasted (a) balance sheets, (b) profit and loss
statements, (c) cash flow statements, and (d) capitalization
statements, all prepared on a consistent basis with Borrower’s historical
financial statements, together with appropriate supporting details and a
statement of underlying assumptions.

     

    Property - any
interest in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible.

     

    Purchase Money
Indebtedness - means and includes (i) Indebtedness (other than the
Obligations) for the payment of all or any part of the purchase price of any
fixed assets, (ii) any Indebtedness (other than the Obligations) incurred
at the time of or within 10 days prior to or after the acquisition of any fixed
assets for the purpose of financing all or any part of the purchase price
thereof, and (iii) any renewals, extensions or refinancings thereof, but
not any increases in the principal amounts thereof outstanding at the
time.

     

    Appendix
A

    Page
12

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Purchase Money Lien -
a Lien upon fixed assets which secures Purchase Money Indebtedness, but only if
such Lien shall at all times be confined solely to the fixed assets the purchase
price of which was financed through the incurrence of the Purchase Money
Indebtedness secured by such Lien.

     

    Rentals - as defined
in Section 8.2.13
of the Agreement.

     

    Reportable Event -
any of the events set forth in Section 4043(b) of ERISA.

     

    Required Lenders - as
of any date, the Lenders with at least sixty-six and two-thirds percent
(66-2/3%) of the aggregate principal amount of the Revolving Loan Commitments,
if the Revolving Loan Commitments have terminated, Loans in excess of sixty-six
and two-thirds percent (66-2/3%) of all outstanding Loans; provided that if any
time there are two or fewer Lenders, Required Lenders shall mean all
Lenders.

     

    Restricted Investment
- any investment made in cash or by delivery of Property to any Person, whether
by acquisition of stock, Indebtedness or other obligation or Security, or by
loan, advance or capital contribution, or otherwise, or in any Property except
the following:

     

    (i)           investments
in one or more Subsidiaries of Borrower to the extent existing on the Closing
Date;

     

    (ii)           Property
to be used in the ordinary course of business;

     

    (iii)           Current
assets arising from the sale of goods and services in the ordinary course of
business of Borrower and its Subsidiaries;

     

    (iv)           investments
in direct obligations of the United States of America, or any agency thereof or
obligations guaranteed by the United States of America, provided that such
obligations mature within one year from the date of acquisition
thereof;

     

    (v)           investments
in certificates of deposit maturing within one year from the date of acquisition
issued by a bank or trust company organized under the laws of the United States
or any state thereof having capital surplus and undivided profits aggregating at
least $100,000,000;

     

    (vi)           investments
in commercial paper given the highest rating by a national credit rating agency
and maturing not more than 270 days from the date of creation thereof;
and

     

    (vii)           investments
in Permitted Acquisitions.

     

    Revolving Credit
Loans - a Loan made by Lenders as provided in Section 1.1.1 of
the Agreement.

     

    Appendix
A

    Page
13

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Revolving Credit Loan
Commitments - as defined in Section 1.1.1 of
the Agreement.

     

    Revolving Credit Note
- the Revolving Credit Note(s) to be executed by Borrowers in favor of Lenders
to evidence the Revolving Credit Loans, which shall be in the form of Exhibit 1.1.1
attached hereto.

     

    Revolving Credit
Percentage - as defined in Section 1.1.1 of
the Agreement.

     

    Schedule of Accounts
- as defined in Section 6.2.1 of
the Agreement.

     

    Security - shall have
the same meaning as in Section 2(1) of the Securities Act of 1933, as
amended.

     

    Security Documents -
the Mortgages, any New Mortgage, the Guaranty, the Pledge Agreement and all
other instruments and agreements now or at any time hereafter securing the whole
or any part of the Obligations.

     

    Solvent - as to any
Person, such Person (i) owns Property whose fair saleable value on a going
concern basis is greater than the amount required to pay all of such Person’s
Indebtedness (including contingent debts), (ii) is able to pay all of its
Indebtedness as such Indebtedness matures and (iii) has capital sufficient
to carry on its business and transactions and all business and transactions in
which it is about to engage.

     

    Standby Letter of
Credit - any Letter of Credit issued by Agent or Bank for the account of
Borrower which is not a Trade Letter of Credit.

     

    Statutory Reserves -
a fraction (expressed as a decimal), the numerator of which is the number one
and the denominator of which is the number one minus the aggregate
of the maximum reserve percentages (including, without limitation, any marginal,
special, emergency or supplemental reserves), expressed as a decimal,
established by the Board for Eurocurrency Liabilities (as defined in Regulation
D of the Board or any successor thereto) as applicable to each outstanding LIBOR
Portion and the LIBOR Period applicable thereto.  Such reserve
percentages shall include, without limitation, those imposed under such
Regulation D.  LIBOR Portions shall be deemed to constitute
Eurocurrency Liabilities and as such shall be deemed to be subject to such
reserve requirements without benefit of or credit for proration, exceptions or
offsets which may be available from time to time to Bank or any Lender under
such Regulation D.  Statutory Reserves shall be adjusted automatically
on and as of the effective date of any change in any reserve
percentage.

     

    Stock - all shares,
options, warrants, interest, participations or other equivalents (regardless of
how designated) of or in a corporation or equivalent entity, whether voting or
nonvoting, including, without limitation, common stock, preferred stock, or any
other “equity security” (as  such term in defined in Rule 3a11-1 of
the General Rules and Regulations promulgated by the Securities and Exchange
Commission under the Securities Act of 1934, as amended).

     

    Subordinated Debt -
Indebtedness of Borrower that is subordinated to the Obligations in a manner
satisfactory to Agent.

     

    
      Appendix
A

      Page
14

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      

    

    Subsidiary - any
corporation of which a Person owns, directly or indirectly through one or more
intermediaries, more than 50% of the Voting Stock at the time of
determination.

     

    Tax - in relation to
any LIBOR Portion and the applicable LIBOR Rate, any tax, levy, impost, duty,
deduction, withholding or charges of whatever nature required by any Legal
Requirement (i) to be paid by Agent or any Lender and/or (ii) to be
withheld or deducted from any payment otherwise required hereby to be made by
Borrowers to Agent or any Lender; provided, that the term “Tax” shall not
include any taxes imposed upon the net income of Agent or any
Lender.

     

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

     

    Trade Letter of
Credit - a Letter of Credit issued by Bank or Agent for the account of a
Borrower in connection with the purchase of Inventory by such
Borrower.

     

    Value – (a) for
Inventory, its value determined on the basis of the lower of cost or market,
calculated on an average cost basis; and (b) for an Account, its face
amount, net of any returns, rebates, discounts (calculated on the shortest
terms), credits, allowances or Taxes (including sales, excise or other taxes)
that have been or could be claimed by the Account Debtor or any other
Person.

     

    Voting Stock -
Securities of any class or classes of a corporation the holders of which are
ordinarily, in the absence of contingencies, entitled to elect a majority of the
corporate directors (or Persons performing similar functions).

     

    Other
Terms.  All other terms contained in the Agreement shall have,
when the context so indicates, the meanings provided for by the Code to the
extent the same are used or defined therein.

     

    Certain Matters of
Construction.  The terms “herein”, “hereof” and “hereunder” and
other words of similar import refer to the Agreement as a whole and not to any
particular section, paragraph or subdivision.  Any pronoun used shall
be deemed to cover all genders.  The section titles, table of contents
and list of exhibits appear as a matter of convenience only and shall not affect
the interpretation of the Agreement.  All references to statutes and
related regulations shall include any amendments of same and any successor
statutes and regulations.  All references to any of the Loan Documents
shall include any and all modifications thereto and any and all extensions or
renewals thereof.

     

    Any
accounting term used in this Agreement shall have, unless otherwise specifically
provided herein, the meaning customarily given such term in accordance with
GAAP, and all financial computations hereunder shall be computed, unless
otherwise specifically provided herein, in accordance with GAAP consistently
applied.  That certain terms or computations are explicitly modified
by the phrase “in accordance with GAAP” shall in no way be construed to limit
the foregoing.

     

    
      Appendix
A

      Page
15

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    LIST OF EXHIBITS AND
SCHEDULES

     

    
      
        
          	
                  Exhibit 1.1.1

                	 
      	
                  Form
      of Revolving Credit Note

                
	
                  Exhibit
      2.4

                	 
      	
                  Letter
      of Credit Charges

                
	
                  Exhibit 6.1.1

                	 
      	
                  Borrower’s
      and each Subsidiary’s Business Locations

                
	
                  Exhibit 6.2.1

                	 
      	
                  Form
      of Borrowing Base Certificate

                
	
                  Exhibit 7.1.1

                	 
      	
                  Jurisdictions
      in which Borrower and each Subsidiary is Authorized to do
      Business

                
	
                  Exhibit 7.1.4

                	 
      	
                  Capital
      Structure of Borrower

                
	
                  Exhibit 7.1.5

                	 
      	
                  Legal
      Names

                
	
                  Exhibit
      7.1.13

                	 
      	
                  Surety
      Obligations

                
	
                  Exhibit 7.1.14

                	 
      	
                  Tax
      Identification Numbers of Subsidiaries of Borrower

                
	
                  Exhibit7.1.16

                	 
      	
                  Patents,
      Trademarks, Copyrights and Licenses

                
	
                  Exhibit 7.1.19

                	 
      	
                  Contracts
      Restricting Borrower’s Right to Incur Debts

                
	
                  Exhibit 7.1.20

                	 
      	
                  Litigation

                
	
                  Exhibit 7.1.22(a)

                	 
      	
                  Capitalized
      Leases

                
	
                  Exhibit 7.1.22(b)

                	 
      	
                  Operating
      Leases

                
	
                  Exhibit 7.1.23

                	 
      	
                  Pension
      Plans

                
	
                  Exhibit 7.1.25

                	 
      	
                  Labor
      Contracts

                
	
                  Exhibit 8.1.3

                	 
      	
                  Compliance
      Certificate

                
	
                  Exhibit
      8.2.4

                	 
      	
                  Affiliate
      Transactions

                
	
                  Exhibit 8.2.5

                	 
      	
                  Permitted
      Liens

                
	
                  Exhibit
      8.3

                	 
      	
                  Financial
      Covenants

                
	
                  Exhibit 9.1

                	 
      	
                  Schedule
      of Documents

                
	
                  Exhibit 12.3(b)

                	
                    

                	
                  Form
      of Assignment and Acceptance
Agreement

                

        

      

    

     

    
      List of
Exhibits and Schedules

      Page 1

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT 1.1.1

     

    REVOLVING
CREDIT NOTE

     

    
      
        	
                $_____________

              	
                Amended
      and Restated

                as
      of ________, 2009

                Chicago,
      Illinois

              

      

    

    

    FOR VALUE RECEIVED, the
undersigned, (hereinafter “Borrower”), hereby promises to pay to the order of
____________________________, a ________________ 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 ________________ ($_________), 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 Second Amended and Restated Loan and Security Agreement dated as of
August __, 2009 by and among Borrower, the lender signatories thereto
(including Lender) and 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.

     

    
      Exhibit
1.1.1

      Page
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:

                      	 
      

              

            

          

        

      

    

     

    
      Exhibit
1.1.1

      Page
2

       

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT 2.4

     

    LETTER
OF CREDIT CHARGES

     

    FEE
SCHEDULE - TRADE LETTERS OF CREDIT

     

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                Issuance

                              	 
      	
                                1⁄4%
      flat (minimum $250.00)

                              
	 	 	 
	
                                Amendment

                              	 
      	
                                $85.00
      - a maximum of six amendments per LC will be allowed.  An
      amendment to increase and/or extend the LC will be treated as an
      issuance.

                              
	 	 	 
	
                                LC
      Fee

                              	 
      	
                                LC
      Percent - as defined in the Loan Agreement (for ratable benefit of
      Lenders)

                              
	 	 	 
	
                                Negotiation
      / Payment

                              	 
      	
                                1⁄4%
      flat (minimum $150.00)

                              
	 	 	 
	
                                Acceptance
      / Deferred Payment

                              	 
      	
                                2.75%
      p.a.  (minimum $150.00)

                              
	 	 	 
	
                                Cancellation
      of Unused Credits

                              	 
      	
                                $100.00

                              
	 	 	 
	
                                Transfer
      / Assignment of LC

                              	 
      	
                                1⁄4%
      flat (minimum $250.00)

                              
	 	 	 
	
                                Shipping
      Guaranty / Airway Release

                              	 
      	
                                $100.00

                              
	 	 	 
	
                                Wire
      Transfer

                              	
                                  

                              	
                                $35.00
      per
transfer

                              

                      

                    

                  

                

              

            

          

        

      

    

    

    plus any and all
out-of-pocket expenses such as courier, postage and telexes, etc.

     

    FEE
SCHEDULE - STANDBY LETTERS OF CREDIT

     

    
      
        
          
            
              
                
                  	
                          Issuance

                        	 
      	
                          1⁄4%
      flat (minimum $150.00)

                        
	 	 	 
	
                          Amendment

                        	 
      	
                          $150.00
      inclusive of automatic renewal of LC

                        
	 	 	 
	
                          LC
      Fee

                        	 
      	
                          LC
      Percent - as defined in the Loan Agreement (for ratable benefit of
      Lenders)

                        
	 	 	 
	
                          Negotiation
      / Payment

                        	 
      	
                          1⁄4%
      flat (minimum $150.00)

                        
	 	 	 
	
                          Transfer
      of LC

                        	 
      	
                          1⁄4%
      flat (minimum $2000.00)

                        
	 	 	 
	
                          Wire
      Transfer

                        	
                            

                        	
                          $35.00
      per
transfer

                        

                

              

            

          

        

      

    

    

    plus any and all
out-of-pocket expenses such as courier, postage and telexes, etc.

     

    
      
        Exhibit
2.4

        Page
1 

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT 6.1.1

     

    BUSINESS
LOCATIONS

     

    1.           Borrower
currently has the following business locations, and no others:

     

    Chief
Executive Office: 10201 North
Loop East, Houston, TX  77029

     

    Other
Locations:

     

    
      
        
          
            
              	
                      14402
      Carmenita Rd.

                      Norwalk,
      California 90650

                    	 
      	
                      6565
      Exchequer Dr., Suite 130

                      Baton
      Rouge, LA 70809

                    
	 	 	 
	
                      3401
      Cragmont Dr.

                      Tampa,
      FL 33619

                    	 
      	
                      4925
      Sirona Dr., Suite 100

                      Charlotte,
      NC 28273

                    
	 	 	 
	
                      2453
      Prospect Dr., Suite A

                      Aurora,
      IL 60502

                    	 
      	
                      100
      Cheshire Court, Suite 100

                      Coatesville,
      PA 19320

                    
	 	 	 
	
                      6608
      South 211th
      Street, Suite 108

                      Kent,
      WA 98032

                    	
                        

                    	
                      255
      Satellite Blvd N.E., Suite 150

                      Suwanee,
      GA 30024

                    

            

          

        

      

    

     

    2.           Borrower
maintains its books and records relating to Accounts and General Intangibles at:
10201 North Loop East, Houston,
TX  77029

     

    3.           Borrower
has had no office, place of business or agent for process located in any county
other than as set forth above, except: N/A

     

    4.           Each
Subsidiary currently has the following business locations, and no
others:

     

    Chief
Executive
Office:           N/A

     

    Other
Locations:

     

    5.           Each
Subsidiary maintains its books and records relating to Accounts and General
Intangibles at:        N/A

     

    6.           Each
Subsidiary has had no office, place of business or agent for process located in
any county other than as set forth above, except:  N/A

     

    7.           The
following bailees, warehouseman, similar parties and consignees hold inventory
of Borrower or one of its Subsidiaries:

     

    
      Exhibit
6.1.1

      Page 1

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      
        
          
            
              
                
                  
                    
                      	
                              Name and

                              Address of Party

                            	 	
                              Nature of

                              Relationship

                            	 	
                              Amount of

                              Inventory

                            	 	
                              Owner of

                              Inventory

                            
	
                              Horizon
      Solutions LLC

                            	 	
                              Independent
      Sales Representative

                            	 	
                              $98,000

                            	 	
                              Borrower

                            
	 	 	 	 	 	 	 
	
                              *
      Mountain States Logistics, LLC

                              14501
      East 35th
      Place, Aurora, CO  80011

                            	 	
                              3rd
      Party Logistics

                            	 	
                              $712,000

                            	 	
                              Borrower

                            
	 	 	 	 	 	 	 
	
                              * Cal
      Cargo, Inc.

                              2376
      Davis Ave

                              Haywood,
      CA  94545

                            	 	
                              3rd
      Party Logistics

                            	 	
                              $574,000

                            	 	
                              Borrower

                            

                    

                  

                

              

            

          

        

      

    

    

    * Landlord’s
lien waivers to be obtained.

     

    Exhibit
6.1.1

    Page 2

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    EXHIBIT 6.2.1

     

    FORM
OF BORROWING BASE CERTIFICATE

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  
                                                                                    
                                                                                      
                                                                                        
                                                                                          
                                                                                            
                                                                                              
                                                                                                
                                                                                                  
                                                                                                    
                                                                                                      
                                                                                                        
                                                                                                          	
                                                                                                                  Bank
      of America

                                                                                                                	 
      	 
      	 
      	
                                                                                                                  Borrowing
      Certificate

                                                                                                                
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	
                                                                                                                  Customer
      Name:

                                                                                                                	
                                                                                                                  Houston Wire & Cable

                                                                                                                  Company

                                                                                                                	 
      	 
      
	 
      	 
      	 
      	 
      	
                                                                                                                  Assignment
      #:

                                                                                                                	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	
                                                                                                                  Report
      Date:

                                                                                                                	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                  ACCOUNTS
      RECEIVABLE

                                                                                                                	 
      	
                                                                                                                  HWC01

                                                                                                                	 
      	
                                                                                                                  INVENTORY

                                                                                                                	 
      	 
      	
                                                                                                                  HWC05

                                                                                                                
	
                                                                                                                  Date
      Covered:

                                                                                                                	 
      	 
      	 
      	
                                                                                                                  Date
      Covered:

                                                                                                                	 
      	 
      	 
      
	
                                                                                                                  Collateral

                                                                                                                	 
      	 
      	 
      	
                                                                                                                  Collateral

                                                                                                                	 
      	 
      	 
      
	
                                                                                                                  1.   Beginning
      Balance

                                                                                                                	 
      	 
      	 
      	
                                                                                                                  1.   Beginning
      Balance

                                                                                                                	 
      	 
      	 
      
	
                                                                                                                  2.   Sales
      (+)

                                                                                                                	 
      	 
      	 
      	
                                                                                                                  2.     Adjustments
      (+)

                                                                                                                	 
      	 
      	 
      
	
                                                                                                                  3.   Credit
      Memos (-)

                                                                                                                	 
      	 
      	 
      	
                                                                                                                  3.     Adjustments
      (-)

                                                                                                                	 
      	 
      	 
      
	
                                                                                                                  4.   Adjustments
      (+)

                                                                                                                	 
      	 
      	 
      	
                                                                                                                  4.
      Current Balance

                                                                                                                	 
      	 
      	 
      
	
                                                                                                                  5.   Adjustments
      (-)

                                                                                                                	 
      	 
      	 
      	
                                                                                                                  5.
      Ineligibles

                                                                                                                	 
      	 
      	 
      
	
                                                                                                                  6.  
      Net Collections - Includes Non A/R Cash (-)

                                                                                                                	 
      	 
      	 
      	
                                                                                                                  6.
      Eligible Collateral  (4-5)

                                                                                                                	 
      	 
      	
                                                                                                                  0.00

                                                                                                                
	
                                                                                                                  7.   Discounts
      (-)

                                                                                                                	 
      	 
      	 
      	
                                                                                                                  7.
      Eligible Inventory

                                                                                                                	
                                                                                                                  @
      65%

                                                                                                                	 
      	
                                                                                                                  0.00

                                                                                                                
	
                                                                                                                  8.   Non
      A/R Cash (+)

                                                                                                                	 
      	 
      	 
      	
                                                                                                                  8.
      Less Reserve

                                                                                                                	 
      	 
      	
                                                                                                                  0.00

                                                                                                                
	
                                                                                                                  9.   Unapplied
      Cash (-)

                                                                                                                	 
      	 
      	 
      	
                                                                                                                  9.
      Qualified Inventory

                                                                                                                	 
      	 
      	
                                                                                                                  0.00

                                                                                                                
	
                                                                                                                  10.
      Current Balance

                                                                                                                	 
      	
                                                                                                                  0.00

                                                                                                                	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                  11.
      Ineligible

                                                                                                                	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                  12.
      Eligible Collateral (10-11)

                                                                                                                	 
      	
                                                                                                                  0.00

                                                                                                                	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                  13.
      Eligible
      A/R                  @
      85%

                                                                                                                	 
      	
                                                                                                                  0.00

                                                                                                                	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                  14.
      Less Reserve

                                                                                                                	 
      	
                                                                                                                  0.00

                                                                                                                	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                  15.
      Qualified Collateral

                                                                                                                	 
      	
                                                                                                                  0.00

                                                                                                                	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                  Loan

                                                                                                                	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                  17.
      Beginning
      Balance                      @

                                                                                                                	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                  18.
      Cash (Checks/ACH) (-)

                                                                                                                	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                  19.
      Cash (Wire) (-)

                                                                                                                	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                  20.
      Adjustments (-/+) (circle one)

                                                                                                                	 
      	 
      	 
      	 
      	 
      	 
      	 
      

                                                                                                        

                                                                                                      

                                                                                                    

                                                                                                  

                                                                                                

                                                                                              

                                                                                            

                                                                                          

                                                                                        

                                                                                      

                                                                                    

                                                                                  

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  	
                                                                          21.
      Advance (+)

                                                                        	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                                                          22.
      Current Revolving LoanBalance @

                                                                        	 
      	
                                                                          0.00

                                                                        	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                                                                           
      

                                                                        	 
      	 
      	 
      	 
      	 
      
	
                                                                          Total
      Availability (#15 + #9)

                                                                        	 
      	
                                                                          0.00

                                                                        	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                                                          Total
      Credit Line $75.0MM

                                                                        	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                                                          Qualified
      Availability

                                                                        	 
      	
                                                                          0.00

                                                                        	 
      	 
      	 
      	 
      	 
      
	
                                                                          Less
      Total Revolving Loan Balance

                                                                        	 
      	
                                                                          0.00

                                                                        	 
      	 
      	 
      	 
      	 
      
	
                                                                          Less
      Letters of Credit

                                                                        	 
      	
                                                                          0.00

                                                                        	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                                                          Remaining
      Availability

                                                                        	 
      	
                                                                          0.00

                                                                        	 
      	 
      	 
      	 
      	 
      

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          	
                                                  The
      foregoing information is delivered to Bank of America
(BOA)

                                                	 	
                                                   

                                                
	
                                                  in
      accordance with a Loan and Security agreement between

                                                	 	 
      
	
                                                   

                                                	 	
                                                  Title:  VP
      & Controller

                                                
	
                                                  BOA
      and HWC 

                                                	 	Date:
	
                                                  Dated:

                                                	 	 
      
	
                                                  I
      hereby certify that the information contained herein is
    true

                                                	 	
                                                  Approved
      by:

                                                
	
                                                  and
      correct as of the dates shown herein.  Nothing
      contained

                                                	 	 
      
	
                                                  herein
      shall constitute a waiver, modification, or limitation of

                                                	 	
                                                  Title:
      VP & CFO

                                                  Date:

                                                
	
                                                  any
      of the terms or conditions set forth in the referenced Loan and
      Security Agreement.

                                                	 	 
      

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      Exhibit
6.2.1

      Page 1

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT 7.1.1

    JURISDICTIONS
IN WHICH BORROWER

    AND
ITS SUBSIDIARIES ARE AUTHORIZED TO DO BUSINESS

     

    
      
        	
                Name of Entity

              	 
      	
                Jurisdiction

              
	
                Borrower

              	 
      	
                California

              
	 
      	 
      	
                Colorado

              
	 
      	 
      	
                Florida

              
	 
      	 
      	
                Georgia

              
	 
      	 
      	
                Illinois

              
	 
      	 
      	
                Louisiana

              
	 
      	 
      	
                Maine

              
	 
      	 
      	
                Missouri

              
	 
      	 
      	
                New
      Jersey

              
	 
      	 
      	
                North
      Carolina

              
	 
      	 
      	
                Pennsylvania

              
	 
      	 
      	
                Texas

              
	 
      	 
      	
                Washington

              
	 
      	
                  

              	
                Delaware

              

      

    

    Exhibit
7.1.1

    Page 1

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    EXHIBIT 7.1.4

     

    CAPITAL
STRUCTURE

     

    
      	
              1.

            	
              The
      classes and number of authorized shares of Borrower and each Subsidiary
      and the record owner of such shares are as
  follows:

            

    

     

    Borrower:

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	
                                      Class of Stock

                                    	 	
                                      Number of Shares

                                      Issued and Outstanding

                                    	 	
                                      Record Owners

                                    	 	
                                      Number of Shares

                                      Authorized but Unissued

                                    
	
                                      Common

                                    	 	
                                      100

                                    	 	
                                      Houston
      Wire & Cable Company

                                    	 	
                                      900

                                    
	 	 	 	 	 	 	 

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    Subsidiaries:

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    Class of Stock

                                  	 	
                                    Number of Shares

                                    Issued and Outstanding

                                  	 	
                                    Record Owners

                                  	 	
                                    Number of Shares

                                    Authorized but Unissued

                                  
	
                                    None

                                  	 	 
      	 	 
      	 	 
      
	 	 	 	 	 	 	 

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    
      	
              2.

            	
              The
      number, nature and holder of all other outstanding Securities of Borrower
      and each Subsidiary are as follows:
None

            

    

     

    
      	
              3.

            	
              The
      correct name and jurisdiction of incorporation of each Subsidiary of
      Borrower and the percentage of its issued and outstanding shares owned by
      Borrower are as follows:

            

    

     

    
      
        
          
            
              
                
                  
                    
                      	
                              Name

                            	 	
                              Jurisdiction of

                              Incorporation

                            	 	
                              Percentage of Shares

                              Owned by Borrower

                            
	
                              None

                            	 	 
      	 	 
      
	 	 	 	 	 

                    

                  

                

              

            

          

        

      

    

    

    
      
        	
              	
                4.

              	
                The
      name of each of Borrower’s corporate or joint venture Affiliates and the
      nature of the affiliation are as follows:  None

              

      

    

     

    
      Exhibit
7.1.4

      Page 1

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT 7.1.5

     

    CORPORATE
NAMES

     

    
      	
              1.

            	
              Borrower’s
      correct corporate name, as registered with the Secretary of State of the
      State of    Delaware,
      is: HWC Wire & Cable Company dba Houston Wire & Cable
      Company

            

    

     

    
      	
              2.

            	
              In
      the conduct of its business, Borrower has used the following
      names:

            

    

     

    
      	
               
      

            	
              Houston
      Wire & Cable Company

            

    

    
      	
               
      

            	
              HWC
      Distribution Corp.

            

    

    
      	
               
      

            	
              Worldwide
      Electrical Sales Inc.

            

    

    
      	
               
      

            	
              Specialty
      Purchases Inc.

            

    

    
      	
               
      

            	
              HWC
      Holding Corporation

            

    

    
      
        	
                 
      

              	
                HWC
      International, Inc.

              
	 	
                Cable
      Management Services

              
	 	
                Advantage
      Wire & Cable

              

      

    

    

    
      	
              3.

            	
              Each
      Subsidiary’s correct corporate name, as registered with the Secretary of
      State of the State of its incorporation,
  is:  N/A

            

    

     

    
      	
              4.

            	
              In
      the conduct of its business, each Subsidiary has used the following
      names:

            

    

    
      None

    

     

    
      Exhibit
7.1.5

      Page 1

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
7.1.13

     

    SURETY
OBLIGATIONS

     

    
      None

    

    Exhibit
7.1.13

    Page 1

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    EXHIBIT 7.1.14

     

    TAX
IDENTIFICATION NUMBERS OF SUBSIDIARIES

     

    
      
        
          
            
              
                	
                        Subsidiary

                      	 	
                        Number

                      
	
                        None

                      	 	 
      
	 
      	 	 
      
	 
      	 	 
      
	 
      	 	 
      

              

            

          

        

      

    

     

    Exhibit 7.1.14

    Page 1

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    EXHIBIT 7.1.16

     

    PATENTS,
TRADEMARKS, COPYRIGHTS AND LICENSES

     

    1.           Borrower’s
including Guarantor’s and its Subsidiaries’ patents:

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	
                                      Patent

                                    	 	
                                      Owner

                                    	 	
                                      Status in

                                      Patent Office

                                    	 	
                                      Federal

                                      Registration

                                      Number

                                    	 	
                                      Registration

                                      Date

                                    
	
                                      Apparatus
      & Method for Sealing A Conduit

                                    	 	
                                      Borrower

                                    	 	
                                      Registered

                                    	 	
                                      US6,852922B2

                                    	 	
                                      February
      8,
2005

                                    

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    2.           Borrower’s
(including Guarantor’s) and its Subsidiaries’ trademarks:

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                	
                                                        Trademark

                                                      	 	
                                                        Owner

                                                      	 	
                                                        Status
      in

                                                        Trademark

                                                        Office

                                                      	 	
                                                        Federal

                                                        Registration

                                                        Number

                                                      	 	
                                                        Registration

                                                        Date

                                                      
	
                                                        HWC
      Houston Wire & Cable Company and  Design

                                                      	 	
                                                        Borrower

                                                      	 	
                                                        Registered

                                                      	 	
                                                        2,924,985

                                                      	 	
                                                        November
      23, 2004

                                                         

                                                      
	 
      	 	 
      	 	 
      	 	 
      	 	 
      
	
                                                        HWC
      Houston Wire & Cable Company and Design and Houston Wire & Cable
      Company

                                                      	 	
                                                        Borrower

                                                      	 	
                                                        Registered

                                                             “
      “

                                                             “
      “

                                                             “
      “

                                                      	 	
                                                        2,906,370

                                                        2,906,371

                                                        2,906,372

                                                        2,906,373

                                                      	 	
                                                        November
      30, 2004

                                                        November
      30, 2004

                                                        November
      30, 2004

                                                        November
      30, 2004

                                                      
	 
      	 	 
      	 	 
      	 	 
      	 	 
      
	
                                                        Houston
      Wire & Cable Company and HWC Houston Wire & Cable Company and
      Design

                                                      	 	
                                                        Borrower

                                                      	 	
                                                        Registered

                                                             “
      “

                                                             “
      “

                                                         

                                                      	 	
                                                        2,904,865

                                                        2,904,866

                                                        2,904,867

                                                      	 	
                                                        November
      23, 2004

                                                        November
      23, 2004

                                                        November
      23, 2004

                                                      
	 
      	 	 
      	 	 
      	 	 
      	 	 
      
	
                                                        HOUWIRE

                                                      	 	
                                                        Borrower

                                                      	 	
                                                        Registered

                                                      	 	
                                                        2,321,131

                                                      	 	
                                                        February
      22, 2000

                                                      
	 
      	 	 
      	 	 
      	 	 
      	 	 
      
	
                                                        HWC
      DATACOM

                                                      	 	
                                                        Borrower

                                                      	 	
                                                        Registered

                                                             “
      “

                                                             “
      “

                                                      	 	
                                                        2,965,387

                                                        2,805,736

                                                        2,809,318

                                                      	 	
                                                        July
      5, 2005

                                                        January
      13, 2004

                                                        January
      27, 2004

                                                      
	 
      	 	 
      	 	 
      	 	 
      	 	 
      
	
                                                        LIFEGUARD

                                                      	 	
                                                        Borrower

                                                      	 	
                                                        Trademark
      /

                                                         Reg
      Pending

                                                      	 	
                                                        78/191,043

                                                      	 	
                                                        December
      4, 2002

                                                      
	 
      	 	 
      	 	 
      	 	 
      	 	 
      
	
                                                        LIFEGUARD

                                                        (MEXICO)

                                                      	 	
                                                        Borrower

                                                      	 	
                                                        Registered

                                                      	 	
                                                        1096366

                                                      	 	
                                                        September
      1, 2008

                                                      
	 
      	 	 
      	 	 
      	 	 
      	 	 
      
	
                                                        DATAGUARD

                                                      	 	
                                                        Borrower

                                                      	 	
                                                        Registered

                                                      	 	
                                                        3,072,172

                                                      	 	
                                                        March
      21, 2006

                                                      
	 
      	 	 
      	 	 
      	 	 
      	 	 
      
	
                                                        DATAGUARD
      (CANADA)

                                                      	 	
                                                        Borrower

                                                      	 	
                                                        Registered

                                                         

                                                      	 	
                                                        TMA700489

                                                      	 	
                                                        November
      7,
2007

                                                      

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    Exhibit 7.1.16

    Page 1

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    3.           Borrower’s
and its Subsidiaries’ copyrights:

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	
                                        Copyrights

                                      	 	
                                        Owner

                                      	 	
                                        Status
      in

                                        Copyright

                                        Office

                                      	 	
                                        Federal

                                        Registration

                                        Number

                                      	 	
                                        Registration

                                        Date

                                      
	
                                        None

                                      	 	 
      	 	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      	 	 
      	 	 
      

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    4.           Borrower’s
and its Subsidiaries’ licenses (other than routine business licenses,
authorizing them to transact business in local jurisdictions):

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  Name of License

                                	 	
                                  Nature of License

                                	 	
                                  Licensor

                                	 	
                                  Term of License

                                
	
                                  None

                                	 	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      	 	 
      

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    Exhibit 7.1.16

    Page 2

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    EXHIBIT 7.1.19

     

    CONTRACTS
RESTRICTING BORROWER’S RIGHT TO INCUR DEBTS

     

    Contracts
that restrict the right of Borrower to incur Indebtedness:

    

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                Title of Contract

                              	 	
                                Identity of Parties

                              	 	
                                Nature of Restriction

                              	 	
                                Term of Contract

                              
	
                                None

                              	 	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      	 	 
      

                      

                    

                  

                

              

            

          

        

      

    

     

    Exhibit 7.1.19

    Page 1

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    EXHIBIT 7.1.20

     

    LITIGATION

     

    1.           Actions,
suits, proceedings and investigations pending against Borrower or any
Subsidiary:

     

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                Title of Action

                              	 	
                                Nature of Action

                              	 	
                                Complaining Parties

                              	 	
                                Jurisdiction or Tribunal

                              
	 
      	 	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      	 	 
      

                      

                    

                  

                

              

            

          

        

      

    

     

    As disclosed in Note 9 to the
Consolidated Financial Statements for the year ended December 31, 2008, the
Company has been named in a number of lawsuits involving asbestos.

     

    2.           The
only threatened actions, suits, proceedings or investigations of which Borrower
or any Subsidiary is aware are as follows:    None
known

     

    Exhibit 7.1.20

    Page 1

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    EXHIBIT 7.1.22(a)

     

    CAPITALIZED
LEASES

     

    Borrower
and its Subsidiaries have the following capitalized leases:

     

    
      
        
          
            
              
                
                  
                    
                      	
                              Lessee

                            	 	
                              Lessor

                            	 	
                              Term of Lease

                            	 	
                              Property Covered

                            
	
                              Borrower

                            	 	
                              Xerox

                            	 	
                              60
      months

                              (commencing
      10/06)

                            	 	
                              WCP245H
      WCP245 Prntr/Scn/Hcf

                            
	 
      	 	 
      	 	 
      	 	 
      
	
                              Borrower

                            	 	
                              Xerox

                            	 	
                              60
      months

                              (commencing
      10/06)

                            	 	
                              EPSCNTRLC
      Docusp X86 Cntrl

                            
	 
      	 	 
      	 	 
      	 	 
      
	
                              Borrower

                            	 	
                              Xerox

                            	 	
                              60
      months

                              (commencing
      10/06)

                            	 	
                              4110EPSC
      (4110EPS System)

                            
	 
      	 	 
      	 	 
      	 	 
      
	
                              Borrower

                            	 	
                              Xerox

                            	 	
                              60
      months

                              (commencing
      10/07)

                            	 	
                              D242OC
      (Office D242 'C') Docucolor w/ finisher

                            
	 
      	 	 
      	 	 
      	 	 
      
	
                              Borrower

                            	 	
                              Xerox

                            	 	
                              60
      months

                              (commencing
      10/07)

                            	 	
                              D252EFIO
      (Ofc 242/252 Bustled)

                            
	 
      	 	 
      	 	 
      	 	 
      
	
                              Borrower

                            	 	
                              Xerox

                            	 	
                              60
      months

                              (commencing
      10/07)

                            	 	
                              W7655P
      (WC 7655 Copier-Printer) w/ finisher

                            
	 
      	 	 
      	 	 
      	 	 
      
	
                              Borrower

                            	 	
                              Xerox

                            	 	
                              60
      months

                              (commencing
      10/07)

                            	 	
                              WCP238H
      (WCP238 Ptr/Scn/Hcf) w/ finisher

                            
	 
      	 	 
      	 	 
      	 	 
      
	
                              Borrower

                            	 	
                              Xerox

                            	 	
                              60
      months

                              (commencing
      10/07)

                            	 	
                              WCP255HC
      (WCP255 Ptr/Scn/Hcf) w/
finisher

                            

                    

                  

                

              

            

          

        

      

    

     

    Exhibit 7.1.22(a)

    Page 1

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    EXHIBIT 7.1.22(b)

     

    OPERATING
LEASES

     

    Borrower
and its Subsidiaries have the following operating leases:

     

    
      
        
          
            
              
                
                  
                    
                      	
                              Lessee

                            	 	
                              Lessor

                            	 	
                              Term of Lease

                            	 	
                              Property Covered

                            
	
                              Borrower

                            	 	
                              Bukewihge
      Properties LL

                            	 	
                              11/15/04
      - 11/14/14

                            	 	
                              14402
      Carmenita Rd.

                              Norwalk,
      California 90650

                            
	 
      	 	 
      	 	 
      	 	 
      
	
                              Borrower

                            	 	
                              LVP
      6565 Exchequer LLC

                            	 	
                              10/01/00
      - 09/30/14

                            	 	
                              6565
      Exchequer Dr.,

                              Suite
      130

                              Baton
      Rouge, LA 70809

                            
	 
      	 	 
      	 	 
      	 	 
      
	
                              Borrower

                            	 	
                              ProLogis
      Trust

                            	 	
                              03/01/06
      - 03/31/13

                            	 	
                              3401
      Cragmont Drive

                              Tampa
      FL 33619

                            
	 
      	 	 
      	 	 
      	 	 
      
	
                              Borrower

                            	 	
                              Shopton
      Ridge 30B LLC

                            	 	
                              03/21/05
      - 06/30/15

                            	 	
                              4925
      Sirona Dr.,

                              Suite
      100

                              Charlotte,
      NC 28273

                            
	 
      	 	 
      	 	 
      	 	 
      
	
                              Borrower

                            	 	
                              Liberty
      Illinois Limited Partnership

                            	 	
                              07/24/03
      - 08/08/13

                            	 	
                              2453
      Prospect Drive,

                              Suite
      A

                              Aurora,
      IL 60502

                            
	 
      	 	 
      	 	 
      	 	 
      
	
                              Borrower

                            	 	
                              High
      Associates, Ltd.

                            	 	
                              01/01/02
      - 12/31/11

                            	 	
                              100
      Cheshire Court,

                              Suite
      100

                              Coatesville,
      PA 19320

                            
	 
      	 	 
      	 	 
      	 	 
      
	
                              Borrower

                            	 	
                              Gateway
      Kent, LP.

                            	 	
                              05/07/07
      - 07/31/12

                            	 	
                              6608
      South 211th Street,

                              Suite
      108

                              Kent,
      WA 98032

                            
	 
      	 	 
      	 	 
      	 	 
      
	
                              Borrower

                            	 	
                              CHI
      Atlanta I-85 LLC

                            	 	
                              10/01/04
      - 02/28/15

                            	 	
                              255
      Satellite Blvd N.E.,

                              Suite.
      150

                              Suwanee,
      GA 30024

                            
	 
      	 	 
      	 	 
      	 	 
      
	
                              Borrower

                            	 	
                              Leasing
      Associates

                            	 	
                              Open
      ended lease; each vehicle has a different term

                            	 	
                              Auto

                            
	 
      	 	 
      	 	 
      	 	 
      
	
                              Borrower

                            	 	
                              Various

                            	 	
                              Equipment
      has different terms

                            	 	
                              Leases
      for copiers and postage
machines

                            

                    

                  

                

              

            

          

        

      

    

     

    Exhibit 7.1.22(b)

    Page 1

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    EXHIBIT 7.1.23

     

    PENSION
PLANS

     

    Borrower
and its Subsidiaries have the following Plans:

     

    
      
        
          	
                  Party

                	 	
                  Type of Plan

                
	
                  Borrower

                	 	
                  None

                
	 
      	 	 
      
	
                  [Subsidiaries]

                	 	
                  None

                
	 
      	 	 
      

        

      

    

    
       

      Exhibit 7.1.23

      Page 1

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT 7.1.25

     

    COLLECTIVE
BARGAINING AGREEMENTS; LABOR CONTROVERSIES

     

    1.           Borrower
and its Subsidiaries are parties to the following collective bargaining
agreements:

     

    
      
        
          
            
              	
                      Type of Agreement

                    	 	
                      Parties

                    	 	
                      Term of Agreement

                    
	
                      None

                    	 	 
      	 	 
      
	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      

            

          

        

      

    

    

    2.           Material
grievances, disputes or controversies with employees are as
follows:

     

    
      
        
          	
                  Parties Involved

                	 	
                  Nature of Grievance, Dispute or
      Controversy

                
	
                  None

                	 	 
      
	 
      	 	 
      
	 
      	 	 
      
	 
      	 	 
      

        

      

    

    

    3.           Threatened
strikes, work stoppages and asserted pending demands for collective bargaining
are as follows:

     

    
      
        
          	
                  Parties Involved

                	 	
                  Nature of Matter

                
	
                  None

                	 	 
      
	 
      	 	 
      
	 
      	 	 
      
	 
      	 	 
      

        

      

    

    
       

      Exhibit 7.1.25

      Page 1

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT 8.1.3

     

    COMPLIANCE
CERTIFICATE

     

    

     

                        _______,
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 Second Amended and Restated Loan and Security Agreement dated
August __, 2009, among Borrower, the lender signatories thereto (“Lenders”) and
Bank of America, N.A. (“Bank of America”), a national banking association, 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)           Availability
for each day of the 90 day period ending __________ was [never] less than
$15,000,000;

     

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

     

    (c)           the
Debt to EBITDA Ratio as of _______________ for the four fiscal quarters then
ended was ___________ to 1;

     

    (d)           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]

     

    
      
        	
                Very
      truly yours,

              
	 
      
	 
      
	
                 Nicol
      G. Graham

              
	
                Chief
      Financial Officer

              

      

    

     

    Exhibit 8.1.3

    Page 1

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    EXHIBIT
8.2.4

    

    AFFILIATE
TRANSACTIONS

    

    None

     

    
      Exhibit 8.2.4

      Page 1

        
          
             

          

          
             

            
              

            

          

          
             

          

        

    

    EXHIBIT 8.2.5

     

    PERMITTED
LIENS

     

    
      
        
          	
                  Secured Party

                	 	
                  Nature of Lien

                
	
                  Prairie
      State Generating Company LLC or Bechtel Power Corporation (see
      attached letter)

                	 	 
      
	 
      	 	 
      
	 
      	 	 
      
	 
      	 	 
      

        

      

    

     

    
      Exhibit 8.2.5

      Page 1

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

        
           

          BANK OF
AMERICA, N.A.

          135 South
LaSalle Street, 4th Floor

          11,4-135-04-65

          Chicago,
Illinois 60603

           

          December
8, 2008

           

          HWC Wire
& Cable Company 10201 N. Loop East

          Houston,
Texas 77029

           

          Re:            $75
Million Credit Facility to HWC Wire & Cable Company

           

          Gentlemen:

          Reference
is made to that certain Amended and Restated Loan and Security Agreement among
HWC Wire & Cable Company, a Delaware corporation ("Borrower"), and Bank of
America, N.A. as sole lender and agent (Bank of America, N.A., in such capacity
("Agent"), dated May 22, 2000 (as amended from time to time, as the "Loan
Agreement"). Capitalized terms used herein, unless otherwise defined, shall have
the meanings ascribed to them in the Loan Agreement.

           

          Subject
to the following, Agent and Lender hereby consent to Borrower granting a
purchase money security interest in favor of Prairie State Generating Company
LLC ("Prairie State") or
Bechtal Power Corporation ("Bechtal Power") on Inventory purchased in connection
with Borrower's "Cable Management for Prairie State" program to the extent
Prairie State or Bechtal Power finances the purchase of such Inventory. Such
consent is subject to the following conditions:

           

          1.           The
maximum amount of Indebtedness secured by such purchase money security interest
shall not exceed $6,000,000;

           

          2.           All
such Inventory subject to such purchase money security interest for Prairie
State or Bechtal Power (the "CM Inventory") shall be clearly identified with
separate parts or job numbers through bar coding, band marking or similar device
located on each reel of CM Inventory;

           

          3. No
Inventory which is included within CM Inventory shall he Eligible Inventory.
Borrower shall include on each Borrowing Base Certificate a separate line item
evidencing that the CM Inventory has been excluded from Eligible
Inventory;

           

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

           

          HWC Wire
& Cable Company

          December
8, 2008

          Page
2

           

           

          4.           The
purchase money security interest granted to Prairie State or Bechtal Power shall
only extend to the CM Inventory and Borrower shall provide Agent with true,
correct and complete copies of the agreements between Borrower and Prairie State
and/or Bechtal Power creating and evidencing such purchase money security
interest including without limitation any and all UCC filings; and

           

          5.            Borrower
and Guarantor shall have executed and returned a signed copy of this consent
letter to Agent.

           

          
            
              	 	BANK OF AMERICA, N.A.,
      as Agent and sole Lender	 
	 	 	 	 
	 	
                      By:
      

                    	/s/ Steven
      J. Chalmers  	 
	 	Name: 
      	 	 
	 	Title:
      	VP	 
	 	 	 	 

            

          

                                                   

           

          

           

          Accepted
and Agreed to this 

          8th day of
December, 2008

           

          
             

          

          HWC WIRE
& CABLE COMPANY

        

         

        

         

      

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      

    

    EXHIBIT
8.3

     

    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 (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) Distributions paid
in cash within such period.

     

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

     

    
      Exhibit 8.3

      Page 1

        
          
             

          

          
             

            
              

            

          

          
             

          

        

    

    COVENANT

     

    Fixed Charge Coverage
Ratio- If Availability at any time within the most recently ended 90 day
period is less than Fifteen Million Dollars ($15,000,000), 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.

     

    
      Exhibit 8.3

      Page 2

        
          
             

          

          
             

            
              

            

          

          
             

          

        

    

    EXHIBIT 9.1

     

    SCHEDULE
OF DOCUMENTS

     

    (A)           A
Certificate of the Secretary of Borrower, together with true and correct copies
of the Certificate of Incorporation and Bylaws of Borrower, and all amendments
thereto, true and correct copies of the resolutions of the Board of Directors of
Borrower authorizing or ratifying the execution, delivery and performance of
this Agreement and the Other Agreements executed in connection therewith and the
names of the officer or officers of Borrower authorized to sign this Agreement
and the Other Agreements executed in connection therewith together with a sample
of the true signature of each such officer;

     

    (B)           The
Guaranty; and

     

    (C)           Such
other documents, instruments and agreements as Agent shall reasonably request in
connection with the foregoing matters.

     

    
      Exhibit 9.1

      Page 1

        
          
             

          

          
             

            
              

            

          

          
             

          

        

    

    EXHIBIT 12.3(b)

     

    FORM
OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

     

    THIS ASSIGNMENT AND ACCEPTANCE
AGREEMENT (this “Agreement”) made as of
______________, 200_, by and between ________________ (“Assignee”) and ______________
(“Assignor”), HWC Wire & Cable
Company, a Delaware corporation (“Borrower”), the lenders
signatory thereto (“Lenders”) and Bank of America, N.A. (“Bank of America”) as agent for
such Lenders (Bank of America, in such capacity “Agent”) entered into a certain
Second Amended and Restated Loan and Security Agreement dated as of
August __, 2009 (the “Loan
Agreement”) pursuant to which Lenders extended credit to
Borrower.  The parties are entering into this Agreement to provide for
the transfer by Assignor of a portion of its rights and obligations under the
Loan Agreement to Assignee.

     

    Capitalized
terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Loan Agreement.

     

    NOW THEREFORE, in consideration of
the mutual agreements contained herein and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Assignee and Assignor agree as follows:

     

    1.        
   Assignment.

     

    (a)           Assignor
hereby sells, assigns and transfers to Assignee, and Assignee hereby purchases
and assumes from the Assignor as of the Effective Date (as defined in Section 4
hereof) subject to the terms and conditions set forth in Section 11.3(b)
of the Loan Agreement (x) ___________ Dollars ($_________) Revolving Loan
Commitment, including without limitation, an equivalent undivided interest and
participation in and to all Letters of Credit and LC Guaranties, whether
outstanding on the Effective Date or issued thereafter, (collectively, the
“Assigned Commitment”), which shall be evidenced by a Revolving Credit Note, in
the form of Exhibit A hereto
(the “____________ Revolving Credit Note”), and (y) a proportional ________
percent (___%) portion of the Revolving Credit Loans as of the Effective Date
(the “Assigned Loans”) also evidenced by the ____________ Revolving Credit
Note.  As of the date hereof, the face amount of all outstanding
Letters of Credit and LC Guaranties is ______________________
($_________).

     

    (b)           The
Assignee hereby irrevocably purchases, takes and assumes, effective on the
Effective Date, all duties, liabilities, obligations, rights and interests
assigned and delegated to it by the Assignor (including, without limitation, the
obligation to make Revolving Credit Loans or to incur obligations in respect to
Letters of Credit and LC Guaranties up to the amount of the Assignee’s Assigned
Commitment) and agrees to perform and assume all such duties, liabilities and
obligations, and shall have all such rights and interests on and after the
Effective Date as if it had been an original party to the Loan Agreement and
each of the other Loan Documents having a Revolving Credit Loan Commitment equal
to ____________ (____%) of the total Revolving Credit Loan Commitments under the
Loan Agreement as is more specifically set forth in Section 1(a)
hereof.

     

    Exhibit 12.3(b)

    Page 1

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c)           Assignor
makes no representation or warranty and assumes no responsibility with respect
to  (x) any statements, warranties or representations made in or
in connection with the Loan Agreement or the other Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Loan Agreement and the other Loan Documents, other than that it is the
legal and beneficial owner of the interests being assigned by it hereunder, that
such interests are free and clear of any adverse claim, that it is legally
authorized to enter into this Agreement and that this Agreement constitutes its
legal, valid and binding obligations and (y) the financial condition of
Borrower or the performance or observance by Borrower of any of their respective
obligations under the Loan Agreement or any of the other Loan
Documents.

     

    (d)           The
Assignee (i) represents and warrants that it is legally authorized to enter
into this Agreement, that the same constitutes its legal, valid and binding
obligations and that all necessary consents, licenses, approvals, authorizations
of, and all registrations or declarations with, any governmental or regulatory
authority or body (collectively, the “Consents” and individually, a “Consent”)
presently required in connection with its execution, delivery and performance of
this Agreement or for the enforcement of this Agreement against it have been
obtained or made and are in full force and effect, and agrees that it shall
(x) use its best efforts to obtain any additional Consents that become
necessary for such execution, delivery, performance or enforcement,
(y) comply in all material aspects with the terms of each such Consent and
(z) notify the Agent promptly upon any such Consent being withdrawn,
suspended or otherwise limited in effect or ceasing to be in full force and
effect or of any such additional Consent becoming necessary; (ii) confirms
that it has received a copy of the Loan Agreement and each of the other Loan
Documents, together with copies of financial statements which Assignor has
identified as the most recent financial statements delivered in accordance with
the terms of the Loan Agreement and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this Agreement; (iii) agrees that it will, independently and without
reliance upon Agent, Assignor or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Loan Agreement and
each of the other Loan Documents; (iv) appoints and authorizes Agent to
take such action as Agent on its behalf and to exercise such powers under the
Loan Agreement and each of the other Loan Documents as are delegated to Agent by
the terms thereof; (v) confirms that it is purchasing and assuming the
interests in the Assigned Commitment, the Assigned Loans, the Loan Agreement and
each of the other Loan Documents hereunder in the course of making loans in the
ordinary course of its commercial lending business and not with any present
intention of distributing or selling such interests (except as permitted under
the Loan Agreement); and (vi) agrees that it will perform in accordance
with their terms all the Obligations which by the terms of the Loan Agreement
and each of the other Loan Documents are required to be performed by it as a
Lender under the Loan Agreement and each of the other Loan
Documents.

     

    (e)           Assignee
agrees to indemnify Assignor from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against Assignor in any way relating to or arising
out of Assignee’s failure to perform Assignee’s obligations under the Assigned
Commitment on or after the Effective Date.

     

    
      Exhibit 12.3(b)

      Page 2

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.       
    Payment for Assigned
Revolving Credit Loans.

     

    (a)           On
or before 11:00 a.m. on the Effective Date, Assignee shall deliver to
Assignor in immediately available funds (the “Purchase Price”) equal to
__________ percent (____%) of the principal amount of all of the Revolving
Credit Loans outstanding on the Effective Date.

     

    (b)           Notwithstanding
the terms of the Loan Agreement or the ___________ Revolving Credit Note with
respect to:  (a) the first interest payments due after the
Effective Date on the LIBOR Portion or the Base Rate Portion, (b) the first
unused line fee due after the Effective Date and (c) fees received by Agent
prior to the Effective Date in respect to Letters of Credit or LC Guaranties
outstanding on the Effective Date:

     

    (i)           Whenever
Agent receives a payment of such interest, Agent will promptly pay over to
Assignee interest on the LIBOR Portion(s) and the Base Rate Portion at the
interest rates provided for in the Loan Agreement calculated from the Effective
Date;

     

    (ii)           Whenever
Agent receives a payment of such unused line fee, it will promptly pay over to
Assignee its proportionate share of said fee calculated from the Effective Date
in accordance with the terms of the Loan Agreement; and

     

    (iii)           Whenever
Agent receives a payment of such fees in respect to Letters of Credit or LC
Guaranties outstanding on the Effective Date, it will promptly pay over to the
Assignee its proportionate share of said fees calculated from the Effective Date
in accordance with the terms of the Loan Agreement.

     

    Agent
shall pay over to Assignor (or to another applicable Lender) (x) the
difference between the total amount of the first interest payments due after the
Effective Date in respect to the LIBOR Portion or the Base Rate Portion and the
amounts paid to Assignee pursuant to 2(b)(i) above, (y) the difference
between the first payment of unused line fee due after the Effective Date and
the amounts paid to Assignee pursuant to Section 2(b)(ii)
above and (z) the difference between the first payment of fees in respect
to Letters of Credit or LC Guaranties outstanding on the Effective Date and the
amounts paid to Assignee pursuant to Section 2(b)(iii)
above.

     

    3.      
     Delivery of
Amendment.

     

    On the
Effective Date, Assignor and Assignee shall execute an amendment to the Loan
Agreement in the form of Schedule I
hereto (the “Amendment”).  Assignor will use its best efforts to cause
Borrower to promptly deliver to Assignee the Amendment and the ______________
Revolving Credit Note executed by Borrower.

     

    4.         
  Effective
Date.

     

    (a)           This
Agreement shall become effective on the first date (the “Effective Date”) when
each of the following conditions precedent is satisfied in full:

     

    
      
        Exhibit 12.3(b)

        Page 3

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (i)           Agent
shall have received counterparts of this Agreement which, when taken together,
bear the signature of all of the parties hereto;

     

    (ii)           Agent
shall have received for and on behalf of Assignor and Assignee, the Amendment
executed by all parties thereto, the __________ Revolving Credit Note and the
Revolving Credit Note to be delivered to Assignor pursuant to the Amendment;
and

     

    (iii)           Assignee
shall have delivered to the Assignor in immediately available funds the Purchase
Price, and Assignor shall have delivered to Assignee in immediately available
funds amounts due Assignee pursuant to Section 2 above;
and

     

    (iv)           Agent
shall have received the fee payable to it pursuant to Section 12.3(b)
of the Loan Agreement.

     

    (b)           All
notices shall be delivered to the Assignee, at the following
address:

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  	
                                          Attention:

                                        	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                                          Attention:

                                        	 
      	 
      
	 
      	
                                          Telephone No.:

                                        	 
      
	 
      	
                                          Telecopier No.:

                                        	 
      

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    5.        
   Governing
Law.

     

    This
Agreement 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.

     

    6.       
    Counterparts.

     

    This
Agreement may be executed in any number of counterparts, and by the different
parties hereto on separate counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together constitute one
and the same instrument.

     

    
      
        Exhibit 12.3(b)

        Page 4

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the
undersigned have caused this Agreement to be duly executed by their duly
authorized representatives, all as of the day and year first above
written.

     

    
      
        
          	
                  [ASSIGNEE NAME], as
      Assignee

                
	 
      	 
      
	
                  By:

                	 
      

        

      

    

    
      
        
          	
                  Name:

                	 
      

        

      

    

    
      
        	
                Title:

              	 
      

      

    

     

    
      
        
          
            
              	
                      [ASSIGNEE NAME], as
      Assignee

                    
	 
      	 
      
	
                      By:

                    	 
      

            

          

        

      

    

    
      
        
          	
                  Name:

                	 
      

        

      

    

    
      
        
          	
                  Title:

                	 
      

        

      

    

    

    Accepted
and Agreed to as of this ____ day of ______, 20__

     

    
      
        Exhibit 12.3(b)

        Page 5

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE I

     

    FORM
OF AMENDMENT TO SECOND AMENDED

     

    AND
RESTATED LOAN AND SECURITY AGREEMENT

     

    AMENDMENT, dated as of
__________________, to the Second Amended and Restated Loan and Security
Agreement, dated as of August ___, 2009, among HWC Wire & Cable
Company (“Borrower”), the lenders named therein (“Lenders”) and Bank of America,
N.A., as Agent (the “Loan Agreement”).  The terms used herein and not
otherwise defined shall have the meanings attributed to them in the Loan
Agreement.

     

    WHEREAS, pursuant to the Loan
Agreement, inter alia, Lenders:  (i) have committed to make
Revolving Credit Loans to Borrower in the principal amount of up to Seventy-Five
Million Dollars ($75,000,000); and (ii) have committed to incur certain
obligations on behalf of Borrower in respect to Letters of Credit and LC
Guaranties;

     

    WHEREAS,
________________________________ has sold, transferred and assigned the
following Revolving Credit Loans and the Revolving Credit Loan Commitment to the
following parties:

     

    (a)           [LENDER
NO. 1]

     

    (i)           Assigned
Revolving Credit Loans:  ____________________ Dollars ($__________);
and

     

    (ii)           Assigned
Revolving Credit Loan Commitment:  _________________ Dollars
($__________).

     

    (b)           [LENDER
NO. 2]

     

    (i)           Assigned
Revolving Credit Loans:  _________________ Dollars ($__________);
and

     

    (ii)           Assigned
Revolving Credit Loan Commitment:  _________________ Dollars
($__________).

     

    WHEREAS, as a result of such
sale, assignment and transfer each of LENDER NO. 1 and LENDER NO. 2 has become a
Lender with a Revolving Credit Loan Commitment under the Loan Agreement;
and

     

    WHEREAS, the parties hereto
desire to amend the Loan Agreement to add LENDER NO. 1 and LENDER NO. 2 as
Lenders.

     

    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:

     

    
      Schedule
I

      Page 1

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.           The
signature block to the Loan Agreement is hereby amended to read as the signature
block to this Amendment.

     

    2.           Borrower
hereby confirms that the representations and warranties of Borrower contained in
the Loan Documents are correct in all material respects on the date hereof,
except (i) to the extent that any such representation or warranty expressly
relates to an earlier date, and (ii) for changes therein permitted or
contemplated by the Loan Agreement.

     

    3.           Borrower
represents and warrants that no Default or Event of Default exists as of the
date hereof.

     

    4.           On
the date hereof, Borrower shall issue and deliver to Agent Revolving Credit
Notes to each of LENDER NO. 1, LENDER NO. 2 and [Assigning Lender] in the amount
of each Lender’s respective Revolving Credit Loan Commitment.  Upon
the delivery to Agent of such Notes, Agent shall deliver to Borrower for
cancellation the Notes previously delivered to [Assigning Lender].

     

    5.           Notices
to LENDER NO. 1 and LENDER NO. 2 shall be addressed as follows:

     

    
      	
               
      

            	
              (a)

            	
              LENDER
      NO. 1

            

    

     

    
      
        	
                 
      

              
	
                 
      

              
	
                 
      

              
	
                 
      

              

      

    

     

    
      	
               
      

            	
              (b)

            	
              LENDER
      NO. 2

            

    

     

    
      	
               
      

            
	
               
      

            
	
               
      

            
	
               
      

            

    

     

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

     

    7.           This
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.

     

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

     

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

     

    
      Schedule
I

      Page 2

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	
                HWC
      WIRE & CABLE COMPANY

              	 
      	
                LENDER
      NO. 1

              
	 
      	 
      	 
      	 
      	 
      
	
                By:

              	
                /s/ Nicol G. Graham

              	 
      	
                By:

              	
                /s/ Steven J.
  Chalmers

              

      

    

    
      
        
          
            	
                    Name:

                  	 
      	 
      	
                    Name:

                  	 
      

          

        

      

    

    
      
        
          
            
              
                
                  
                    	
                            Title: VP & CFO

                          	
                             

                          	  	
                            Title: Vice President

                          	
                          
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                            Revolving
      Credit Loan Commitment:

                            $75,000,000________________

                          

                  

                

              

            

          

        

      

    

     

    
      
        
          
            	
                    BANK OF AMERICA, N.A.,
      as Agent

                  	 
      	
                    LENDER
      NO. 2

                  
	 
      	 
      	 
      	 
      	 
      
	
                    By:

                  	
                    /s/ Steven J. Chalmers

                  	 
      	
                    By:

                  	 
      

          

        

      

    

    
      
        
          
            	
                    Name:

                  	 
      	 
      	
                    Name:

                  	 
      

          

        

      

    

    
      
        
          
            
              	
                      Title: Vice President 

                    	 	  	
                      Title:

                    	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                      Revolving
      Credit Loan Commitment:

                    
	 
      	 
      	 
      	
                      $_______________

                    

            

          

        

      

    

     

    
      
        Schedule
I

        Page 3

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