<SEC-DOCUMENT>0001299933-12-000022.txt : 20120104
<SEC-HEADER>0001299933-12-000022.hdr.sgml : 20120104
<ACCEPTANCE-DATETIME>20120104170505
ACCESSION NUMBER:		0001299933-12-000022
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20111229
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20120104
DATE AS OF CHANGE:		20120104

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			LAWSON PRODUCTS INC/NEW/DE/
		CENTRAL INDEX KEY:			0000703604
		STANDARD INDUSTRIAL CLASSIFICATION:	WHOLESALE-MACHINERY, EQUIPMENT & SUPPLIES [5080]
		IRS NUMBER:				362229304
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-10546
		FILM NUMBER:		12507172

	BUSINESS ADDRESS:	
		STREET 1:		1666 E TOUHY AVE
		CITY:			DES PLAINES
		STATE:			IL
		ZIP:			60018-3640
		BUSINESS PHONE:		7088279666

	MAIL ADDRESS:	
		STREET 1:		1666 EAST TOUHY AVENUE
		CITY:			DES PLAINES
		STATE:			IL
		ZIP:			60018-3640
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>htm_43900.htm
<DESCRIPTION>LIVE FILING
<TEXT>
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<TITLE> LAWSON PRODUCTS, INC. (Form: 8-K) </TITLE>
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		UNITED STATES<BR>
	SECURITIES AND EXCHANGE COMMISSION
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	WASHINGTON, D.C. 20549
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	FORM 8-K
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	CURRENT REPORT
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	Pursuant to Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934
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	Date of Report (Date of Earliest Event Reported):
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	&nbsp;
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	December 29, 2011
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<FONT SIZE="6">
	LAWSON PRODUCTS, INC.
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<BR>__________________________________________<BR>
	(Exact name of registrant as specified in its charter)
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	&nbsp;
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	Delaware
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	0-10546
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	36-2229304
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_____________________<BR>
	(State or other jurisdiction
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_____________<BR>
	(Commission
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______________<BR>
	(I.R.S. Employer
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	of incorporation)
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	File Number)
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	Identification No.)
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	&nbsp;&nbsp;
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	1666 E. Touhy Avenue, Des Plaines, Illinois
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	&nbsp;
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	60018
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_________________________________<BR>
	(Address of principal executive offices)
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	&nbsp;
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___________<BR>
	(Zip Code)
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	Registrant&#146;s telephone number, including area code:
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	&nbsp;
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	(847) 827-9666
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	Not Applicable
<BR>______________________________________________<BR>
	Former name or former address, if changed since last report
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	&nbsp;
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<!-- CoverPageRegistrant END --><P><FONT SIZE="2">
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:</FONT>
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<P><FONT SIZE="2">
[&nbsp;&nbsp;]&nbsp;&nbsp;Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)<br>
[&nbsp;&nbsp;]&nbsp;&nbsp;Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)<br>
[&nbsp;&nbsp;]&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))<br>
[&nbsp;&nbsp;]&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))<br>
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<FONT SIZE="2">Top of the Form</FONT>
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<B>
	Item 1.01 Entry into a Material Definitive Agreement.
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On December 29, 2011, Lawson Products, Inc. (the "Company") entered into the Sixth Amendment to Credit Agreement (the "Amendment") between the Company and The PrivateBank and Trust Company. As a result of the many initiatives that the Company has undergone and will continue to undergo during 2012 including, but not limited to, the recent Enterprise Resource Planning implementation, sales channel transformation and network optimization (including the consolidation of three Illinois facilities into one consolidated packaging/distribution center and the relocation of the Company&#x2019;s headquarters location), and the recent financial results, the Company  modified  various financial covenants to provide additional flexibility for the fourth quarter of 2011 and quarterly and annual results for 2012.<br><br>The Amendment modifies the financial covenants to replace the existing Debt Service Coverage Ratio requirement with a minimum Consolidated EBITDA (as defined) on a quarterly basis through the third quarter ended September 30, 2012.  The Debt Service Coverage Ratio will be reinstituted for the trailing four quarters ended December 31, 2012 at a reduced minimum of 1.10 to 1.00 which then returns to the existing level minimum before the Amendment of 1.20 to 1.00 for the trailing four quarters ended March 31, 2013 and each quarter thereafter.  Additionally, the Consolidated EBITDA (as defined) has been expanded to allow for certain non-recurring add-backs to better reflect ongoing operations.<br><br><br>The description of the terms of the Amendment above is qualified in its entirety by reference to the full text of the Amendment which is incorporated by reference to this Current Report on Form 8-K as Exhibit 10.1.<br>
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	Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
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The information set forth above in Item 1.01 of this Current Report on Form 8-K with respect to the Amendment is incorporated by reference into this Item 2.03.<br><br>
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	Item 9.01 Financial Statements and Exhibits.
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d) Exhibits<br><br>10.1 Sixth Amendment to Credit Agreement dated December 29, 2011, by and among Lawson Products, Inc. and certain of its subsidiaries and The PrivateBank and Trust Company.<br>
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	SIGNATURES
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	Pursuant to the requirements of the Securities Exchange Act of 1934, the
	registrant has duly caused this report to be signed on its behalf by the
	undersigned hereunto duly authorized.
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	LAWSON PRODUCTS, INC.
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	&nbsp;&nbsp;
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<I>
	January 4, 2012
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	&nbsp;
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<I>
	By:
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	&nbsp;
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<I>
	Ronald J. Knutson
</I>
<BR>
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	&nbsp;
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<I>
	Name: Ronald J. Knutson
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<I>
	Title: Senior Vice President, Chief Financial Officer
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	Exhibit&nbsp;Index
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	Exhibit No.
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	Description
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	10.1
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	&nbsp;
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Sixth Amendment to Credit Agreement dated December 29, 2011, by and among Lawson Products, Inc. and certain of its subsidiaries and The PrivateBank and Trust Company.
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<DOCUMENT>
<TYPE>EX-10.1
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<DESCRIPTION>EX-10.1
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<P align="center" style="font-size: 10pt"><FONT style="font-size: 12pt">SIXTH AMENDMENT TO CREDIT AGREEMENT</FONT>



<P align="left" style="font-size: 12pt; text-indent: 4%">SIXTH AMENDMENT TO CREDIT AGREEMENT (this &#147;<U>Amendment</U>&#148;), dated as of December&nbsp;29, 2011,
is executed by and among LAWSON PRODUCTS, INC., a Delaware corporation (&#147;<U>Lawson</U>&#148;), which
has its chief executive office located at 1666 E. Touhy Avenue, Des Plaines, Illinois 60018,
various subsidiaries of Lawson listed on the signature pages hereto (Lawson and the subsidiaries
are referred to collectively herein as the &#147;<U>Borrower</U>&#148; or the &#147;<U>Borrowers</U>&#148;), THE
PRIVATEBANK AND TRUST COMPANY both as a lender and as agent (in such capacity, the
&#147;<U>Agent</U>&#148;), for itself and all other lenders from time to time a party hereto
(&#147;<U>Lenders</U>&#148;), located at 120 South LaSalle Street, Chicago, Illinois 60603-3400, and the
Lenders.


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, the Agent, Lawson and certain subsidiaries of Lawson (together with Lawson,
collectively, the &#147;<U>Original Borrowers</U>&#148;), entered into a Credit Agreement, dated as of
August&nbsp;21, 2009, among the Original Borrowers, the Agent and the Lenders, and on December&nbsp;2, 2009,
Lawson Products, Inc., an Illinois corporation and newly-formed wholly-owned subsidiary of Lawson
(&#147;<U>Lawson IL</U>&#148;), became a party to such agreement as a Borrower (herein, as the same may be
amended, modified or supplemented from time to time, the &#147;<U>Credit Agreement</U>&#148;); and


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, the Borrowers consummated an internal reorganization pursuant to which several of the
Borrowers were merged into Lawson IL and assets of certain of the Borrowers were transferred among
the Borrowers; and


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, the Borrowers, the Lenders and the Agent entered into a Consent, Waiver and First
Amendment to Credit Agreement dated as of December&nbsp;31, 2009; and


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, the Borrowers, the Lenders and the Agent entered into a Second Amendment to Credit
Agreement dated as of January&nbsp;29, 2010; and


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, the Borrowers, the Lenders and the Agent entered into a Consent Waiver and Third
Amendment to Credit Agreement dated as of September&nbsp;1, 2010 with respect to the sale of certain
assets and liabilities of Assembly Component Systems, Inc., an Illinois corporation, during the
third quarter of Lawson&#146;s fiscal 2010; and


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, the Borrowers, the Lenders and the Agent entered into a Consent, Waiver and Fourth
Amendment to Credit Agreement dated as of December&nbsp;10, 2010 with respect to the sale of all or
substantially all of the assets of Rutland Tool and Supply Co., a Nevada corporation; and


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, the Borrowers, the Lenders and the Agent entered into a Fifth Amendment to Credit
Agreement dated as of September&nbsp;30, 2011; and


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, the Borrowers, the Lenders and the Agent wish to enter into this Amendment to amend
the Credit Agreement to give effect to the provisions set forth herein.


<P align="left" style="font-size: 12pt; text-indent: 4%">NOW THEREFORE, in consideration of the premises and the mutual covenants hereinafter contained
in this Amendment, the parties hereto hereby agree as follows:


<P align="left" style="font-size: 12pt; text-indent: 4%">1.&nbsp;<U>Incorporation of the Agreement</U>. All capitalized terms which are not defined
hereunder shall have the same meanings as set forth in the Credit Agreement, and the Credit
Agreement, to the extent not inconsistent with this Amendment, is incorporated herein by this
reference as though the same were set forth in its entirety. To the extent any terms and
provisions of the Credit Agreement are inconsistent with the amendments set forth in
<U>Paragraph&nbsp;2</U> below, such terms and provisions shall be deemed superseded hereby. Except as
specifically set forth herein, the Credit Agreement and the other Loan Documents shall remain in
full force and effect and the provisions thereof shall be binding on the parties hereto.


<P align="left" style="font-size: 12pt; text-indent: 4%">2.&nbsp;<U>Amendments to the Credit Agreement</U>. The parties hereto hereby amend the Credit
Agreement, effective as of the date hereof as follows:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The definition of &#147;<U>Consolidated EBITDA</U>&#148; stated in
Section&nbsp;1.1 of the Credit Agreement is amended in its entirety to state the
following:</TD>
</TR>

</TABLE>



<P align="left" style="margin-left:12%; font-size: 12pt">&#147;<U>Consolidated EBITDA</U>&#148; shall mean, for any period, (a)&nbsp;the sum for
such period of Consolidated Net Income, plus (b)&nbsp;depreciation and
amortization expense deducted in the determination of such Consolidated Net
Income, plus (c)&nbsp;Consolidated Interest Expense deducted in the determination
of such Consolidated Net Income, plus (d)&nbsp;federal and state income taxes as
determined in accordance with GAAP and deducted in the determination of the
amount of such Consolidated Net Income, plus (e)&nbsp;non-recurring expenses
related to the relocation of the corporate headquarters and the
distribution/packing centers and employee severance charges not to exceed
$8,000,000 in the aggregate for 2012, plus (f)&nbsp;non-cash expenses under SFAS
123R, and less (or plus) (g)&nbsp;any items of gain (or loss) which are
extraordinary or non-recurring items as defined in GAAP to the extent
reflected in the determination of such Consolidated Net Income.


<P>
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<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Section&nbsp;8.3(a) of the Credit Agreement is amended in its
entirety to state the following:</TD>
</TR>

</TABLE>



<P align="left" style="margin-left:12%; font-size: 12pt">Commencing with the measurement as of December&nbsp;31, 2011 Lawson and its
Subsidiaries&#146; Consolidated EBITDA shall not be below the following amounts
measured at the end of the period for each measurement period set forth
below:

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="36%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="31%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">Measured at End of Period
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="3" align="center" valign="top">Minimum Consolidated<BR>
EBITDA
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Measurement Period<BR>
<BR></DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">Fourth Quarter 2011
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">($5,000,000</TD>
    <TD nowrap valign="top">)</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Quarter ending on the<BR>
measurement date</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">First Quarter 2012
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">($2,500,000</TD>
    <TD nowrap valign="top">)</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Quarter ending on the<BR>
measurement date</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">Second Quarter 2012
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">$</TD>
    <TD align="right" valign="top">2,000,000</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Quarter ending on the<BR>
measurement date</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">Third Quarter 2012
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">$</TD>
    <TD align="right" valign="top">3,000,000</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Quarter ending on the<BR>
measurement date</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Section&nbsp;8.3(d) of the Credit Agreement is amended in its
entirety to state the following:</TD>
</TR>

</TABLE>



<P align="left" style="margin-left:12%; font-size: 12pt">Commencing at the end of Borrowers&#146; fiscal year 2012, the Borrowers&#146;
trailing four-quarter consolidated Debt Service Coverage Ratio measured
quarterly shall not be less than or equal to 1.10:1.00, and commencing as of
March&nbsp;31, 2013 and at the end of each fiscal quarter thereafter, the
Borrowers&#146; trailing four quarter consolidated Debt Service Coverage Ratio
shall not be less than or equal to 1.20:1.00.


<P align="left" style="font-size: 12pt; text-indent: 4%">3.&nbsp;<U>Representations and Warranties</U>.


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The representations and warranties set forth in
<U>Section&nbsp;7</U> of the Credit Agreement shall be deemed remade and affirmed
by the Borrowers in all material respects, as of the date hereof; provided that
representations and warranties referencing a particular date other than a
general date of execution shall be true and correct as of such date; provided,
further, that any and all references to the Credit Agreement in such
representations and warranties shall be deemed to include this Amendment.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Borrowers represent and warrant that no Event of Default
has occurred and is continuing.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 12pt; text-indent: 4%">4.&nbsp;<U>Fees and Expenses</U>. Upon execution of this Amendment, the Borrowers shall pay the
Agent a nonrefundable amendment fee of $10,000 which shall be fully earned by Agent as of the date
of this Amendment. In addition, the Borrowers shall pay or reimburse the Agent for all reasonable
costs and expenses, including, without limitation, legal expenses and reasonable attorneys&#146; fees
(for outside counsel) incurred by the Agent, or for which the Agent becomes obligated, in
connection with the negotiation, preparation, and closing of this Amendment.


<P align="left" style="font-size: 12pt; text-indent: 4%">5.&nbsp;<U>Delivery of Documents/Information</U>. This Amendment shall be effective on the date
hereof upon receipt by Agent of the last of the following: (i)&nbsp;a fully executed copy of this
Amendment, and (ii)&nbsp;Borrowers&#146; payment to Agent of the amendment fee and all invoiced fees and
expenses.


<P align="left" style="font-size: 12pt; text-indent: 4%">6.&nbsp;<U>Continuing Effect</U>. Except as otherwise specifically set out herein, the provisions
of the Credit Agreement and each of the Loan Documents shall remain in full force and effect. The
Borrowers have heretofore executed and delivered to the Agent certain Loan Documents and the
Borrowers hereby acknowledge and agree that, notwithstanding the execution and delivery of this
Amendment, the Loan Documents remain in full force and effect after giving effect to the amendments
set forth in this Amendment and the rights and remedies of the Agent and the Lenders thereunder,
the obligations of each Borrower thereunder and the liens and security interests created and
provided for thereunder remain in full force and effect and shall not be affected, impaired or
discharged hereby. Nothing herein contained shall affect or impair the priority of the liens and
security interests created and provided for in the Loan Documents as to the indebtedness which
would be secured thereby prior to giving effect to this Amendment and which remains secured thereby
after giving effect to this Amendment. Any and all references to the Credit Agreement in each of
the Loan Documents shall be deemed to refer to and include this Amendment.


<P align="left" style="font-size: 12pt; text-indent: 4%">7.&nbsp;<U>Headings</U>. The headings of this Amendment are for the purposes of reference only
and shall not affect the construction of the Amendment.


<P align="left" style="font-size: 12pt; text-indent: 4%">8.&nbsp;<U>Counterparts</U>. This Amendment may be executed by one or more of the parties to this
Amendment on any number of separate counterparts and all of said counterparts taken together shall
be deemed to constitute one and the same instrument. Delivery of an executed counterpart of this
Amendment by facsimile or electronic mail shall be equally as effective as delivery of a manually
executed counterpart of this Amendment. Any party delivering an executed counterpart of this
Amendment by facsimile or electronic mail shall also deliver a manually executed counterpart of
this Amendment, but the failure to deliver a manually executed counterpart shall not affect the
validity, enforceability, or binding effect of this Amendment.


<P align="left" style="font-size: 12pt; text-indent: 4%">9.&nbsp;<U>Governing Law</U>. This Amendment shall be governed by and construed in accordance
with the internal laws (as opposed to the conflict of law provisions) of the State of Illinois.


<P align="center" style="font-size: 12pt"><B>&#091;SIGNATURE PAGES&nbsp;FOLLOW&#093;</B>




<P align="center" style="font-size: 10pt; display: none">1
<!-- PAGEBREAK -->




<P align="center" style="font-size: 12pt"><B><I>(Signature Page to Sixth Amendment to Credit Agreement)</I></B>



<P align="left" style="font-size: 12pt; text-indent: 4%">IN WITNESS WHEREOF, the Borrowers, the Agent and each Lender have executed this Amendment as
of the date first above written.

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="95%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top"><B>BORROWERS:</B>
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><BR></DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top"><B>LAWSON PRODUCTS, INC.</B>,<BR>
a Delaware corporation<BR>
By: \Ronald J. Knutson
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>LAWSON PRODUCTS, INC.</B>,<BR>
an Illinois corporation<BR>
By: \Ronald J. Knutson</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">Name: Ronald J. Knutson<BR>
Its: Senior Vice President and<BR>
Chief Financial Officer
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Name: Ronald J. Knutson<BR>
Its: Senior Vice President and<BR>
Chief Financial Officer</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top"><B>DRUMMOND AMERICAN LLC</B>,<BR>
an Illinois limited liability company<BR>
By: \Ronald J. Knutson
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>CRONATRON WELDING SYSTEMS LLC</B>,<BR>
a North Carolina limited liability company<BR>
By: \Ronald J. Knutson</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">Name: Ronald J. Knutson<BR>
Its: Senior Vice President and<BR>
Chief Financial Officer
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Name: Ronald J. Knutson<BR>
Its: Senior Vice President and<BR>
Chief Financial Officer</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>AUTOMATIC SCREW MACHINE PRODUCTS COMPANY,<BR>
INC.</B>,<BR>
an Alabama corporation<BR>
By: \Ronald J. Knutson</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Name: Ronald J. Knutson<BR>
Its: Senior Vice President and<BR>
Chief Financial Officer</DIV></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt; display: none">2
<!-- PAGEBREAK -->

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="100%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B><I>(Signature Page to Sixth Amendment to Credit Agreement)</I></B></DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>AGENT:</B></DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>THE PRIVATEBANK AND TRUST COMPANY</B><BR>
By: \Thomas G. Esky</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Name: Thomas G. Esky</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Its: Managing Director</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>LENDER:</B></DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>THE PRIVATEBANK AND TRUST COMPANY</B><BR>
By: \Thomas G. Esky</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Name: Thomas G. Esky</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Its: Managing Director</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt; display: none">3




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