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Exhibit 10.7    
    

THIRD AMENDMENT TO AMENDED AND RESTATED

LOAN AND SECURITY AGREEMENT  

        THIRD AMENDMENT, dated as of October 22, 2001 to the Amended and Restated Loan and Security Agreement, dated as of May 22, 2000, among Houston
Wire & Cable Company ("Borrower"), the lenders named therein ("Lenders") and Fleet Capital Corporation ("FCC" as agent for said Lenders (FCC, in such capacity, "Agent"). Said Amended and
Restated Loan and Security Agreement, as amended by a certain First Amendment to Amended and Restated Loan and Security Agreement by and among Borrower, Lenders and Agent dated as of June 13,
2000, and by a certain Second Amendment to Amended and Restated Loan and Security Agreement by and among Borrower, Lenders and Agent dated May 30, 2001 and as it may be further amended, is
hereinafter referred to as the "Loan Agreement." The terms used herein and not otherwise defined shall have the meanings attributed to them in the Loan Agreement. 

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

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

        1.    Additional Definition and Amended Definition.    The definition of "PMC Lawsuit" set forth below is hereby
inserted into Appendix A to the Loan Agreement. The definitions of "LIBOR Term B Portion" contained in Appendix A to the Loan Agreement
and "EBITDA" contained in Exhibit Q to the Loan Agreement are hereby deleted and the following are inserted in their stead: 

        "LIBOR Term B Portion"—that portion of Term Loans B specified in a LIBOR Request which is not less than $100,000 and is an
integral multiple of $100,000, which does not exceed the outstanding balance of the Term Loans B not already subject to a LIBOR Option and, which, as of the date of the LIBOR Request specifying such
LIBOR Term B 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. 

        "PMC Lawsuit"—that certain cause of action known as PMC Corporation v. Houston Wire & Cable
Company, in the Superior Court of the State of New Hampshire, Case No. 98-C-0215 and all appellate actions resulting from such case. 

        "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;
(c) interest expense for such period, all as determined in accordance with GAAP; (d) one-time consolidation expenses or charges in an amount not to exceed the reserve (in the
approximate amount of $1,500,000) for such expenses or charges accrued for on or about the Closing Date in connection with the Acquisition; and (e) for periods ending on or prior to
September 30, 2001, any expenses or charges (in an amount not to exceed $1,450,000) to income that, in Agent's reasonable determination, were incurred in connection with the PMC Lawsuit. 

*    *    *

        2.    Reserves.    Borrower acknowledges and agrees that Agent shall, on the date hereof, establish a reserve pursuant
to Section 1.1.1 of the Loan Agreement in the initial amount of $83,333.33, which reserve shall increase by $83,333.33 per month on the 15th day of each month, commencing
November 15, 2001, until the amount of such reserve equals $500,000. Said reserve in the amount of $500,000 represents Agent's current estimate of Borrower's exposure under the PMC Lawsuit
after giving effect to any indemnification claims of Borrower against Alltel Corporation or its affiliates. Agent retains the right to modify the amount of any such reserve if Agent, in the reasonable
exercise of its discretion, estimates that net Borrower's exposure (after giving effect to realizable indemnity 

 

claims)
under the PMC Lawsuit may be larger than $500,000. Agent agrees that this reserve shall be terminated upon settlement in full of all claims, contingent or otherwise, asserted against Borrower
in respect of the PMC Lawsuit. 

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

        4.    Governing Law.    This Third 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. 

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

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

	HOUSTON WIRE & CABLE COMPANY,

as Borrower	 	BANK OF AMERICA, N.A.,

as a Lender
	

By:	

/s/  CHARLES A. SORRENTINO      
	
 	

By:	

/s/  MONIRAH SALAMA      

	Name:	Charles A. Sorrentino	 	Name:	Monirah Salama
	Title:	President and Chief Financial Officer	 	Title:	Assistant Vice President
	

HWC HOLDING CORPORATION,

as Guarantor	
 	

THE CIT GROUP/BUSINESS CREDIT, INC.,

as a Lender
	

By:	

/s/  NICOL G. GRAHAM      
	
 	

By:	

/s/  GRANT WEISS      

	Name:	Nicol G. Graham	 	Name:	Grant Weiss
	Title:	Secretary	 	Title:	Vice President
	

FLEET CAPITAL CORPORATION,

as Agent and a Lender	
 	

 	

 
	

By:	

/s/  ARTHUR A. PESAVENTO      
	
 	

 	

 
	Name:	Arthur A. Pesavento	 	 	 
	Title:	Vice President	 	 	 

2

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Exhibit 10.8    
    

FOURTH AMENDMENT TO AMENDED AND RESTATED

LOAN AND SECURITY AGREEMENT  

        FOURTH AMENDMENT, dated as of December 31, 2002 to the Amended and Restated Loan and Security Agreement, dated as of May 22, 2000, among Houston
Wire & Cable Company ("Borrower"), the lenders named therein ("Lenders") and Fleet Capital Corporation ("FCC" as agent for said Lenders (FCC, in such capacity, "Agent"). Said Amended and
Restated Loan and Security Agreement, as amended by a certain First Amendment to Amended and Restated Loan and Security Agreement by and among Borrower, Lenders and Agent dated as of June 13,
2000, by a certain Second Amendment to Amended and Restated Loan and Security Agreement by and among Borrower, Lenders and Agent dated May 30, 2001 and by a certain Third Amendment to Amended
and Restated Loan and Security Agreement by and among Borrowers, Lenders and Agent dated October 22, 2001 and as it may be further amended, is hereinafter referred to as the "Loan Agreement."
The terms used herein and not otherwise defined shall have the meanings attributed to them in the Loan Agreement. 

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

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

        1.    6.2.1    Records, Schedules and Assignments of Accounts.    Section 6.2.1 of the Loan Agreement
is hereby deleted and the following is inserted in its stead. 

        6.2.1    Records, Schedules and Assignments of Accounts.    Borrower shall execute and deliver to Agent a Borrowing
Base Certificate in the form attached hereto as Exhibit C on a weekly basis or, if as determined by Agent on a more frequent basis. Borrower
shall keep accurate and complete records of its Accounts and all payments and collections thereon and shall submit to Agent on such periodic basis as Agent shall request a sales and collections report
for the preceding period, in form satisfactory to Agent. On or before the 25th day of each month from and after the Closing Date, Borrower shall deliver to Agent, in form acceptable to Agent, a
detailed aged trial balance of all Accounts existing as
of the last day of the preceding month, specifying the names, addresses, face value, dates of invoices and due dates for each Account Debtor obligated on an Account so listed ("Schedule of Accounts"),
and, upon Agent's request therefor, copies of proof of delivery and the original copy of all documents, including, without limitation, repayment histories and present status reports relating to the
Accounts so scheduled and such other matters and information relating to the status of then existing Accounts as Agent shall reasonably request. The foregoing notwithstanding, Borrower shall make the
deliveries required by the preceding sentence on or before the 15th day of each month, if for the immediately preceding month average Availability was less than $4,000,000 or if so requested by Agent
upon reasonable notice to Borrower. In addition, if Accounts in an aggregate face amount in excess of $100,000 become ineligible because they fall within one of the specified categories of
ineligibility set forth in the definition of Eligible Accounts or otherwise established by Agent, Borrower shall notify Agent of such occurrence on the first Business Day following such occurrence and
the Borrowing Base shall be adjusted to reflect such occurrence. If requested by Agent, Borrower shall execute and deliver to Agent formal written assignments of all of its Accounts periodically,
which shall include all Accounts that have been created since the date of the last assignment, together with copies of invoices or invoices registers related thereto." 

        2.    Financial Covenants.    Exhibit 8.3 to the Loan Agreement
is hereby deleted and Exhibit 8.3 attached hereto and incorporated herein is inserted in its stead: 

        3.    Waiver.    Agent and Lenders hereby agree to waive any Events of Default resulting from Borrower failing to
comply with the provisions of Section 8.3 and Exhibit Q (Minimum EBITDA) (prior to their
amendment by the terms hereof) for the fiscal period ended September 30, 2002. Such waiver 

 

shall
not apply to any provision of the Loan Agreement other than Section 8.3 and  Exhibit Q (Minimum EBITDA) or any fiscal period other than the period
ended September 30, 2002. 

        4.    Amendment Fee.    In order to induce Agent and Lenders to enter into this Fourth Amendment, Borrower shall pay
to Agent for the ratable benefit of Lenders an amendment fee equal to $25,000. Said amendment fee shall be due and payable and shall be deemed fully earned and non-refundable on the date
hereof. 

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

        6.    Governing Law.    This Fourth 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. 

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

(Signature Page Follows)  

2

 
(Signature Page to Fourth Amendment to Amended and Restated

Loan and Security Agreement)  

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

	HOUSTON WIRE & CABLE COMPANY,

as Borrower	 	BANK OF AMERICA, N.A.,

as a Lender
	

By:	

/s/  NICOL G. GRAHAM      
	
 	

By:	

/s/  LEA KALEBICH      

	Name:	Nicol G. Graham	 	Name:	Lea Kalebich
	Title:	Secretary and Treasurer	 	Title:	Account Executive
	

HWC HOLDING CORPORATION,

as Guarantor	
 	

THE CIT GROUP/BUSINESS CREDIT, INC.,

as a Lender
	

By:	

/s/  CHARLES SORRENTINO      
	
 	

By:	

/s/  GRANT WEISS      

	Name:	Charles Sorrentino	 	Name:	Grant Weiss
	Title:	Chief Executive Officer	 	Title:	Vice President
	

FLEET CAPITAL CORPORATION,

as Agent and a Lender	
 	

 	

 
	

By:	

/s/  THOMAS F. KARLOV      
	
 	

 	

 
	Name:	Thomas F. Karlov	 	 	 
	Title:	Senior Vice President	 	 	 

3

   EXHIBIT Q

FINANCIAL COVENANTS  

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

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

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

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

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

Q-1

 

COVENANTS  

        Fixed Charge Coverage Ratio—Borrowers shall not permit the Fixed Charge Coverage Ratio for any period
set forth below to be less than the ratio set forth opposite such period below: 

	Period
 
	 	Ratio

	June 1, 2000 to September 30, 2000	 	.78 to 1.0
	June 1, 2000 to December 31, 2000	 	.77 to 1.0
	June 1, 2000 to March 31, 2001	 	.80 to 1.0
	Twelve months ending June 30, 2001	 	.75 to 1.0
	Twelve months ending September 30, 2001	 	.80 to 1
	Twelve months ending December 31, 2001	 	.80 to 1
	Twelve months ending March 31, 2002	 	.85 to 1
	Twelve months ending June 30, 2002	 	1.00 to 1
	Twelve months ending September 30, 2002	 	1.00 to 1
	Twelve months ending December 31, 2002	 	1.10 to 1
	Twelve months ending March 31, 2003	 	1.10 to 1
	Twelve months ending June 30, 2003	 	1.10 to 1
	Twelve months ending September 30, 2003	 	1.10 to 1
	Twelve months ending December 31, 2003	 	1.10 to 1
	Twelve months ending March 31, 2004	 	1.10 to 1

        Minimum EBITDA—Borrowers shall achieve EBITDA for each period set forth below of not less than the amount set forth opposite
such period below: 

	Period
 
	 	Minimum

EBITDA

	June 1, 2000 to September 30, 2000	 	$	1,600,000
	June 1, 2000 to December 31, 2000	 	$	3,200,000
	June 1, 2000 to March 31, 2001	 	$	5,400,000
	Twelve months ending June 30, 2001	 	$	7,400,000
	Twelve months ending September 30, 2001	 	$	8,500,000
	Twelve months ending December 31, 2001	 	$	9,000,000
	Twelve months ending March 31, 2002	 	$	9,500,000
	Twelve months ending June 30, 2002	 	$	10,000,000
	Twelve months ending September 30, 2002	 	 	N/A
	Twelve months ending December 31, 2002	 	$	6,500,000
	Twelve months ending March 31, 2003	 	$	5,500,000
	Twelve months ending June 30, 2003	 	$	5,750,000
	Twelve months ending September 30, 2003	 	$	6,250,000
	Twelve months ending December 31, 2003	 	$	6,500,000
	Twelve months ending March 31, 2004	 	$	7,000,000

Q-2

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Exhibit 10.8

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