THIRTEENTH AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
Execution
Copy
THIRTEENTH
AMENDMENT TO AMENDED AND RESTATED
THIRTEENTH
AMENDMENT, dated as of September 28, 2007 to the Amended and Restated Loan
and
Security Agreement, dated as of May 22, 2000, among HWC Wire & Cable Company
(formerly known as Houston Wire & Cable Company) (“Borrower”), the lenders
named therein (“Lenders”) and Bank of America, N.A. (“Bank of America”) as
successor-in-interest to Fleet Capital Corporation, as agent for said Lenders
(Bank of America, in such capacity, “Agent”). Said Amended and
Restated Loan and Security Agreement, as amended by a certain First Amendment
to
Amended and Restated Loan and Security Agreement by and among Borrower, Lenders
and Agent dated as of July 13, 2000, by a certain Second Amendment to Amended
and Restated Loan and Security Agreement by and among Borrower, Lenders and
Agent dated May 30, 2001, by a certain Third Amendment to Amended and
Restated Loan and Security Agreement by and among Borrower, Lenders and Agent
dated October 22, 2001, by a certain Fourth Amendment to Amended and
Restated Loan and Security Agreement by and among Borrower, Lenders and Agent
dated December 31, 2002, by a certain Fifth Amendment to Amended and Restated
Loan and Security Agreement by and among Borrower, Lenders and Agent dated
November 19, 2003, by a certain Sixth Amended to Amended and Restated Loan
and
Security Agreement dated as of May 26, 2005 by and among Borrower, Lenders
and
Agent, by a certain Seventh Amendment to Amended and Restated Loan and Security
Agreement dated December 14, 2005 by and among Borrower, Agent and Lenders,
by a
certain Eighth Amendment to Amended and Restated Loan and Security Agreement
dated December 30, 2005 by and among Borrower, Agent and Lenders, by a certain
Ninth Amendment to Amended and Restated Loan and Security Agreement dated May
23, 2006 by and among Borrower, Agent and Lenders, by a certain Tenth Amendment
to Amended and Restated Loan and Security Agreement dated as of November 3,
2006
by and among Borrower, Agent and Lenders, by a certain Eleventh Amendment to
Amendment of Restated Loan and Security Agreement dated as of July 31, 2007
by
and among Borrower, Agent and Lenders and by a certain Twelfth Amendment to
Amended and Restated Loan and Security Agreement dated August 3, 2007 by and
among Borrower, Lenders and Agent and as it may be further amended, is
hereinafter referred to as the “Loan Agreement.” The terms used
herein and not otherwise defined shall have the meanings attributed to them
in
the Loan Agreement. References to Agent and/or any Lender shall
include Agent’s or such Lender’s predecessor(s)-in-interest.
WHEREAS,
Lenders, Agent and Borrower desire to make certain amendments and modifications
to the Loan Agreement.
NOW
THEREFORE, in consideration of the premises and the mutual covenants hereinafter
contained and contained in the Loan Agreement, the parties hereto hereby agree
as follows:
1. Additional
and Amended Definitions. The following definitions of “Thirteenth
Amendment” and “Thirteenth Amendment Effective Date” are hereby inserted into
Exhibit A to the Loan Agreement. The definitions of
“Applicable Margin,” “Maximum Revolving Loan” and “Total Credit Facility” are
hereby deleted from Exhibit A to the Loan Agreement and the following are
restated in their stead:
1
* * *
“Applicable
Margin– from the Thirteenth Amendment Effective Date to, but not including,
the first Adjustment Date (as hereinafter defined) the percentages set forth
below with respect to the Base Rate Revolving Credit Portion, the LIBOR
Revolving Credit Portion and the Unused Line Fee:
Base
Rate Revolving Credit Portion
|
0%
|
LIBOR
Revolving Credit Portion
|
1.00%
|
Unused
Line Fee
|
0.20%
|
The
percentages set forth above will be adjusted on the first day of the month
following delivery by Borrower to Agent of the financial statements required
to
be delivered pursuant to subsection 8.1.3(ii) of the Agreement for
each December 31, March 31, June 30 and September 30 during the Term,
commencing with the month ending September 30, 2007 (each such date an
“Adjustment Date”), effective prospectively, by reference to the applicable
“Financial Measurement” (as defined below) for the four quarters most recently
ending in accordance with the following:
Financial
Measurement
|
Base
Rate
Revolving
Credit
Portion
|
LIBOR
Revolving
Credit
Portion
|
Unused
Line Fee
|
|||
>
1.25 to 1
|
0%
|
1.50%
|
0.25%
|
|||
<
1.25 to 1, but> 0.75 to 1
|
0%
|
1.25%
|
0.225%
|
|||
<
0.75 to 1
|
0%
|
1.00%
|
0.20%
|
provided
that, (i) if Borrower’s audited financial statements for any fiscal year
delivered pursuant to subsection 8.1.3(i) of the Agreement reflect a
Financial Measurement that yields a higher Applicable Margin than that yielded
by the financial statements previously delivered pursuant to
subsection 8.1.3(ii) of the Agreement for such fiscal year, the Applicable
Margin shall be readjusted retroactively for the period that was incorrectly
calculated and (ii) if Borrower fails to deliver the financial statements
required to be delivered pursuant to subsection 8.1.3(i) or
subsection 8.1.3(ii) of the Agreement on or before the due date thereof,
the interest rate shall automatically adjust to the highest interest rate set
forth above, effective prospectively from such due date until that date on
which
such financial statements are so delivered to Agent. For purposes
hereof, “Financial Measurement” shall mean the Debt to EBITDA
Ratio.
* * *
Maximum
Revolving Loan– Seventy-Five Million Dollars ($75,000,000).
* * *
2
Total
Credit Facility– Seventy-Five Million Dollars ($75,000,000).
* * *
Thirteenth
Amendment– that certain Thirteenth Amendment to Amended and Restated Loan
and Security Agreement dated as of September 28, 2007 by and among Borrower,
Agent and Lenders.
* * *
Thirteenth
Amendment Effective Date– the date on which the conditions precedent to the
effectiveness of the Thirteenth Amendment are satisfied.”
2. Total
Credit Facility. The first paragraph of Section 1 of the Loan
Agreement is hereby deleted and the following is inserted in its
stead:
“1. CREDIT
FACILITY.
Subject
to the terms and conditions of, and in reliance upon the representations and
warranties made in, this Agreement and the other Loan Documents, Lenders agree
to make a credit facility of up to Seventy-Five Million Dollars ($75,000,000)
available upon Borrower’s request therefor, as follows:”
* * *
3. Revolving
Loans. Section 1.1.1(A) of the Loan Agreement is hereby deleted
and the following is inserted in its stead:
“1.1 Revolving
Credit Loans.
1.1.1 Loans
and
Reserves. (A) Loans and Reserves. The aggregate amount of
the Revolving Credit Loans to be made by each Lender (such Lender’s “Revolving
Credit Loan Commitment”), pursuant to the terms hereof, shall be the amount set
below such Lender’s name on the signature pages hereof. The aggregate
principal amount of the Revolving Credit Loan Commitments is Seventy-Five
Million Dollars ($75,000,000). The percentage equal to the quotient
of (x) each Lender’s Revolving Credit Loan Commitment, divided by (y) the
aggregate of all Revolving Credit Loan Commitments, is that Lender’s “Revolving
Credit Percentage”. Subject to all of the terms and conditions of
this Agreement, each Lender agrees, for so long as no Default or Event of
Default exists, to make Revolving Credit Loans to Borrower from time to time,
as
requested by Borrower in accordance with the terms of Section 3.1 hereof, up
to
a maximum principal amount at any time outstanding equal to the product of
(A)
the Borrowing Base at such time multiplied by (B) such Lender’s Revolving Credit
Percentage. It is expressly understood and agreed that Agent and
Lenders may use the Borrowing Base as a maximum ceiling on Revolving Credit
Loans outstanding to Borrower at any time. If the unpaid balance of
the Revolving Credit Loans should exceed the ceiling so determined or any other
limitation set forth in this Agreement, such Revolving Credit Loans shall
nevertheless constitute Obligations that are secured by the Collateral and
entitled to all the benefits thereof. In no event shall Lenders be
required to make a Revolving Credit Loan at any time that there exists a Default
or an Event of Default. Agent shall have the right to establish
reserves in such amounts, and with respect to such matters, as Agent shall
deem
necessary or appropriate in the reasonable exercise of Agent’s credit judgment,
against the amount of Revolving Credit Loans which Borrower may otherwise
request under this Section 1.1.1., including, without limitation, with respect
to (i) price adjustments, damages, unearned discounts, returned products or
other matters for which credit memoranda are issued in the ordinary course
of
Borrower’s business; (ii) shrinkage, spoilage and obsolescence of Inventory;
(iii) slow moving Inventory; (iv) other sums chargeable against Borrower’s Loan
Account as Revolving Credit Loans under any section of this Agreement; (v)
amounts owing by Borrower to any Person to the extent secured by a Lien on,
or
trust over, any Property of Borrower; and (vi) such other matters, events,
conditions or contingencies from time to time hereunder as to which Agent,
in
its reasonable credit judgment, determines reserves should be established from
time to time hereunder.”
3
4. Distribution. Subsection
8.2.7 of the Loan Agreement is hereby deleted and the following is inserted
in
its stead:
“8.2.7 Distributions. Declare
or make, or permit any Subsidiary of Borrower to declare or make, any
Distributions, except that:
(a) Subsidiaries
of Borrower may make Distributions to Borrower with respect to their common
Stock;
(b) Borrower
may pay dividends to Guarantor in an amount sufficient to maintain the corporate
existence of Guarantor, to pay income taxes and to pay the reasonable
out-of-pocket expenses of Guarantor and audit fees and expenses, not to exceed
$100,000 per annum in the aggregate;
(c) Borrower
may pay dividends to Guarantor for further distribution to its stockholders
in
an amount not to exceed the lesser of (x) income taxes on phantom income
incurred on the issuance of payment-in-kind notes with respect to the Guarantor
Subordinated Debt or (y) $125,000 per year;
(d) Borrower
may pay dividends to Guarantor of up to $100,000 in each Fiscal Year to
repurchase the capital stock of employees who die or terminate their employment
with Borrower; and
(e) Borrower
may make Distributions to Guarantor to permit Guarantor to pay dividends on
Guarantor’s common Stock so long as after giving effect to any such
Distribution, (i) no Event of Default shall have occurred and is continuing,
(ii) the aggregate amount of all such Distributions made within the most
recently ended twelve month period plus the amount of the proposed Distribution
does not exceed, within any twelve month period, $10,000,000, and (iii)
Availability was or will not be less than $15,000,000 at any time within the
90
days immediately prior to the date of such Distribution or after giving effect
to such Distribution and any pending Distribution for declared but unpaid
dividends or common Stock repurchases.
4
(f) On
or prior to August 30, 2009, Borrower may make Distributions to Guarantor to
permit Guarantor to make repurchases of, Guarantor’s common Stock so long as
after giving Guarantors effect to any such Distribution, (i) no Event
of Default shall have occurred and is continuing, (ii) the aggregate amount
of
all such Distributions does not exceed $50,000,000, and (iii) Availability
was
or will not be less than $15,000,000 at any time within the 90 days immediately
prior to the date of such Distribution or after giving effect to such
Distribution and any pending Distributions for declared but unpaid dividends
or
common Stock repurchases.
5. Fee. In
order to induce Bank of America, as a Lender, to increase its Revolving Loan
Commitment by $20,000,000, Borrower agrees to pay to Agent, for the benefit
of
Bank of America, a fee in the amount of $20,000. Said fee shall be
due and payable and fully earned and non-refundable on the date
hereof.
6. Conditions
Precedent. This Thirteenth Amendment shall become effective upon
satisfaction of each of the following conditions precedent:
(a) Agent
shall have received each of the following documents, each in form and substance
acceptable to Agent:
(i) Copy
of this Thirteenth Amendment, duly executed by Borrower, Guarantor, Agent and
each Lender;
(ii) Amended
and Restated Revolving Credit Notes in the forms attached hereto and
incorporated herein as Exhibits A-1 and A-2 attached to this Thirteenth
Amendment executed by Borrower; and
(iii) Copies
of resolutions of the Board of Directors of Borrower authorizing this Thirteenth
Amendment certified as true and correct by the Secretary of
Borrower.
The
date
on which all of the conditions precedent listed above are satisfied or waived
is
hereinafter referred to as the “Thirteenth Amendment Effective
Date.” After the Thirteenth Amendment Effective Date, Lenders shall
deliver to Borrower the Revolving Credit Notes and Term Notes previously
executed and delivered by Borrower to Lenders, which Notes shall be marked
“Amended and Superceded.”
7. Signature
Block. The signature block to the Loan Agreement is hereby
amended to read as the signature block to this Thirteenth
Amendment.
5
8. Continuing
Effect. Except as otherwise specifically set out herein, the
provisions of the Loan Agreement shall remain in full force and
effect.
9. Governing
Law. This Thirteenth Amendment and the obligations arising
hereunder shall be governed by, and construed and enforced in accordance with,
the laws of the State of Illinois applicable to contracts made and performed
in
such state, without regard to the principles thereof regarding conflict of
laws.
10. Counterparts. This
Thirteenth Amendment may be executed in any number of separate counterparts,
each of which shall, collectively and separately, constitute one
agreement.
11. No
Novation. The amended and restated Revolving Credit Notes to be
delivered pursuant to this Thirteenth Amendment replace and supercede those
certain promissory notes in the principal amount of $35,000,000 and $20,000,000,
respectively, each dated August 3, 2007 (the “Original Notes”) and the execution
and delivery of such amended and restated Revolving Credit Notes shall not
constitute (a) an extinguishment of the indebtedness of Borrower to the
applicable Lender evidenced by the Original Notes or (b) a novation of any
such
indebtedness or any of the Original Notes.
(Signature
Page Follows)
6
(Signature
Page to Thirteenth Amendment to Amended and Restated
Loan
and Security Agreement)
IN
WITNESS WHEREOF, this Thirteenth Amendment has been duly executed as of the
first day written above.
HWC
WIRE & CABLE COMPANY, as
Borrower
|
HOUSTON
WIRE & CABLE COMPANY,
as
Guarantor
|
|||
By:
|
/s/ Xxxxx X. Xxxxxx |
By:
|
/s/ Xxxxxxx X. Xxxxxxxxxx | |
Name:
|
Xxxxx. X. Xxxxxx |
Name:
|
Xxxxxxx X. Xxxxxxxxxx | |
Title:
|
Vice President & Chief Financial Officer |
Title:
|
President and Chief Executive Officer | |
|
||||
THE
CIT GROUP/BUSINESS CREDIT, INC., as a Lender
|
BANK
OF AMERICA, N.A., as Agent and a Lender
|
|||
By:
|
/s/ Xxxx X. Xxxxxxxx |
By:
|
/s/ Xxxxxx X. Xxxxx | |
Name:
|
Xxxx X. Xxxxxxxx |
Name:
|
Xxxxxx X. Xxxxx | |
Title:
|
Vice President |
Title:
|
Senior Vice President | |
|
||||
Revolving
Loan Commitment: $20,000,000
|
Revolving
Loan
Commitment: $55,000,000
|
EXHIBIT
A-1
AMENDED
AND RESTATED REVOLVING CREDIT NOTE
$55,000,000
|
Amended
and Restated
As
of September __, 2007
Chicago,
Illinois
|
FOR
VALUE
RECEIVED, the undersigned, (hereinafter “Borrower”), hereby PROMISES TO PAY to
the order of Bank of America, N.A., a national banking association (“Lender”),
or its registered assigns, at the principal office of Bank of America, N.A.,
as
agent for such Lender, or at such other place in the United States of America
as
the holder of this Note may designate from time to time in writing, in lawful
money of the United States of America and in immediately available funds, the
principal amount of Fifty-Five Million Dollars ($55,000,000), or such lesser
principal amount as may be outstanding pursuant to the Loan Agreement (as
hereinafter defined) with respect to the Revolving Credit Loan, together with
interest on the unpaid principal amount of this Note outstanding from time
to
time.
This
Note
is one of the Revolving Credit Notes referred to in, and issued pursuant to,
that certain Amended and Restated Loan and Security Agreement dated as of
May 22, 2000 by and among Borrower, the lender signatories thereto
(including Lender) and Fleet Capital Corporation, the predecessor-in-interest
to
Bank of America, N.A. (“Bank of America”), as agent for such Lenders (Bank of
America in such capacity “Agent”) (hereinafter amended from time to time, the
“Loan Agreement”), and is entitled to the benefit and security of the Loan
Agreement. All of the terms, covenants and conditions of the Loan
Agreement and the Security Documents are hereby made a part of this Note and
are
deemed incorporated herein in full. All capitalized terms herein,
unless otherwise defined, unless otherwise specifically defined in this Note,
shall have the meanings ascribed to them in the Loan Agreement.
The
principal amount of the indebtedness evidenced hereby shall be payable in the
amounts and on the dates specified in the Loan Agreement and, if not sooner
paid
in full, on the Commitment Termination Date, unless the term hereof is extended
in accordance with the Loan Agreement. Interest thereon shall be paid
until such principal amount is paid in full at such interest rates and at such
times as are specified in the Loan Agreement.
Upon
and
after the occurrence, and during the continuation, of an Event of Default,
this
Note shall or may, as provided in the Loan Agreement, become or be declared
immediately due and payable.
The
right
to receive principal of, and stated interest on, this Note may only be
transferred in accordance with the provisions of the Loan
Agreement.
Demand,
presentment, protest and notice of nonpayment and protest are hereby waived
by
Borrower.
A-1-1
This
Note
shall be interpreted, governed by, and construed in accordance with, the
internal laws of the State of Illinois.
HWC
WIRE & CABLE COMPANY
|
||
|
||
By:
|
||
Name:
|
||
Title:
|
X-0-0
XXXXXXX
X-0
AMENDED
AND RESTATED REVOLVING CREDIT NOTE
$20,000,000
|
Amended
and Restated
As
of September __, 2007
Chicago,
Illinois
|
FOR
VALUE
RECEIVED, the undersigned, (hereinafter “Borrower”), hereby PROMISES TO PAY to
the order of The CIT Group/Business Credit, Inc., a New York corporation
(“Lender”), or its registered assigns, at the principal office of Bank of
America, N.A., as agent for such Lender, or at such other place in the United
States of America as the holder of this Note may designate from time to time
in
writing, in lawful money of the United States of America and in immediately
available funds, the principal amount of Twenty Million Dollars ($20,000,000),
or such lesser principal amount as may be outstanding pursuant to the Loan
Agreement (as hereinafter defined) with respect to the Revolving Credit Loan,
together with interest on the unpaid principal amount of this Note outstanding
from time to time.
This
Note
is one of the Revolving Credit Notes referred to in, and issued pursuant to,
that certain Amended and Restated Loan and Security Agreement dated as of
May 22, 2000 by and among Borrower, the lender signatories thereto
(including Lender) and Fleet Capital Corporation, the predecessor-in-interest
to
Bank of America, N.A. (“Bank of America”), as agent for such Lenders (Bank of
America in such capacity “Agent”) (hereinafter amended from time to time, the
“Loan Agreement”), and is entitled to the benefit and security of the Loan
Agreement. All of the terms, covenants and conditions of the Loan
Agreement and the Security Documents are hereby made a part of this Note and
are
deemed incorporated herein in full. All capitalized terms herein,
unless otherwise defined, unless otherwise specifically defined in this Note,
shall have the meanings ascribed to them in the Loan Agreement.
The
principal amount of the indebtedness evidenced hereby shall be payable in the
amounts and on the dates specified in the Loan Agreement and, if not sooner
paid
in full, on the Commitment Termination Date, unless the term hereof is extended
in accordance with the Loan Agreement. Interest thereon shall be paid
until such principal amount is paid in full at such interest rates and at such
times as are specified in the Loan Agreement.
Upon
and
after the occurrence, and during the continuation, of an Event of Default,
this
Note shall or may, as provided in the Loan Agreement, become or be declared
immediately due and payable.
The
right
to receive principal of, and stated interest on, this Note may only be
transferred in accordance with the provisions of the Loan
Agreement.
Demand,
presentment, protest and notice of nonpayment and protest are hereby waived
by
Borrower.
A-2-1
This
Note
shall be interpreted, governed by, and construed in accordance with, the
internal laws of the State of Illinois.
HWC
WIRE & CABLE COMPANY
|
||
|
||
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By:
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Name:
|
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Title:
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A-2-2