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Modification of Loan Documents

This is an actual contract between Lawson Products and Lasalle Bank.

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Sectors: Manufacturing, Insurance
Governing Law: Illinois, View Illinois State Laws
Effective Date: December 26, 2007
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SEVENTH MODIFICATION OF LOAN DOCUMENTS


DATED AS OF DECEMBER 26, 2007


by and among


Lawson Products, Inc., a Delaware Corporation


AND


LASALLE BANK NATIONAL ASSOCIATION


SEVENTH MODIFICATION OF LOAN DOCUMENTS


THIS SEVENTH MODIFICATION OF LOAN DOCUMENTS (this " Modification ") is made as of the 26th day of December 2007, by and among Lawson Products, Inc., a Delaware Corporation (" Lawson" ), with its principal place of business and chief executive office at 1666 E. Touhy Ave., Des Plaines, Illinois, 60018, various Subsidiaries of Lawson listed on Schedule 6.12 to the Credit Agreement (Lawson and the Subsidiaries may be referred to herein collectively as the " Borrower ") and LASALLE BANK NATIONAL ASSOCIATION , a national banking association, its successors and assigns (" Lender ").


R E C I T A L S :


A. Lender has heretofore made a loan (" Loan ") to Borrower in the principal amount of Fifty Million and no/100 Dollars ($50,000,000) pursuant to the terms and conditions of a Credit Agreement dated as of March 27, 2001 between Borrower and Lender, (the " Credit Agreement ", all terms not otherwise defined herein shall have the meanings set forth in the Credit Agreement, as amended), and as evidenced by a Promissory Note dated March 27, 2001, in the principal amount of the Loan made payable by Borrower to the order of Lender (" Note ").


B. The Credit Agreement was amended (i) as of August 12, 2002 to, among other things, add a letter of credit subfacility; (ii) as of July 11, 2003 to, among other things, increase the availability under the letter of credit subfacility; (iii) as of May 31, 2005 to, among other things, increase the Maximum Facility, (iv) as of November 30, 2006 to, among other things, modify the interest rate to be charged on the facility; (v) as of January 31, 2007 to, among other things, acknowledge Lawson' s liquidation and dissolution Assembly Component Systems, Limited, a United Kingdom corporation (" ACSL" ), a Subsidiary of Lawson, and therefore release ACSL from the facility; and (vi) as of June 21, 2007 to, among other things, increase the letter of credit subfacility and modify certain financial covenants.


C. Borrower has requested that the Credit Agreement be further modified in order to increase certain subfacilities, and the Lender has agreed modify those subfacilities upon the terms and conditions hereinafter set forth.


AGREEMENTS :


NOW, THEREFORE , in consideration of (i) the facts set forth hereinabove (which are hereby incorporated into and made a part of this Modification with the intent that Lender may rely upon the matters therein recited as representations and warranties of Borrower), (ii) the agreements by Lender to modify the Loan Documents, as provided herein, (iii) the covenants and agreements contained herein, and (iv) for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:


1. Modification to the Loan Agreement Definitions . Section 1.1 of the Credit Agreement is hereby amended by amending and restating the definitions of " Maximum Commercial Card Obligation" and " Maximum Letter of Credit Obligation" :


" Maximum Letter of Credit Obligation" shall mean Ten Million and no/100 Dollars ($10,000,000).


" Maximum Commercial Card Obligation" shall mean Bank Product Obligations incurred with respect to purchase cards pursuant to Master Commercial Card Agreement (as hereinafter defined), not to exceed at any, time Seven Hundred Thousand and no/100 Dollars ($700,000).


2. Modification certain financial covenants . Borrower has accrued during Fiscal Year 2007 severance to one or more of the Borrower' s former management executives in the approximate aggregate amount of $11,071,000 (the " Severance Obligations" ). For purposes of calculating Fixed Charge Coverage Covenant set forth in Section 8.13(C) of the Agreement, and Total Debt to consolidated EBITDA set forth in Section 8.13(G) of the Agreement, the Severance Obligations accrued in any Fiscal Quarter during Fiscal Year 2007 shall not be classified as a reduction to EBITDA for the applicable measurement period for such Fiscal Quarter. After all Fiscal Year 2007 Fiscal Quarters have, on a rolling Fiscal Quarter basis, ceased being a part of the financial covenants described above, this modification to EBITDA shall be of no force or effect.


3. Representations and Warranties of Borrower . Borrower hereby represents, covenants and warrants to Lender as follows:


(a) The representations and warranties in the Credit Agreement, and the other Loan Documents are t
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