Exhibit 10.4
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE
IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AND
INTERCREDITOR AGREEMENT (AS THE SAME MAY BE AMENDED OR OTHERWISE MODIFIED FROM
TIME TO TIME PURSUANT TO THE TERMS THEREOF, THE "SUBORDINATION AGREEMENT") DATED
AS OF MARCH 31, 2011 AMONG PATRICK INDUSTRIES, INC., AN INDIANA CORPORATION (THE
"COMPANY"), TONTINE CAPITAL OVERSEAS MASTER FUND II, L.P., A CAYMAN ISLANDS
LIMITED PARTNERSHIP, NORTHCREEK MEZZANINE FUND I, L.P., A DELAWARE LIMITED
PARTNERSHIP, ON ITS BEHALF AND IN ITS CAPACITY AS COLLATERAL AGENT, AND WELLS
FARGO CAPITAL FINANCE, LLC ("WFCF"), TO THE INDEBTEDNESS (INCLUDING INTEREST)
OWED BY THE CREDIT PARTIES (AS DEFINED IN THE SUBORDINATION AGREEMENT) PURSUANT
TO THAT CERTAIN CREDIT AGREEMENT DATED AS OF MARCH 31, 2011 AMONG THE COMPANY,
WFCF AND THE LENDERS FROM TIME TO TIME PARTY THERETO (THE "SENIOR CREDIT
AGREEMENT"), AND THE OTHER SENIOR DEBT DOCUMENTS (AS DEFINED IN THE
SUBORDINATION AGREEMENT), AS SUCH SENIOR CREDIT AGREEMENT, AND SUCH OTHER SENIOR
DEBT DOCUMENTS HAVE BEEN AND HEREAFTER MAY BE AMENDED, RESTATED, SUPPLEMENTED OR
OTHERWISE MODIFIED FROM TIME TO TIME AND TO INDEBTEDNESS REFINANCING THE
INDEBTEDNESS UNDER SUCH AGREEMENTS AS PERMITTED BY THE SUBORDINATION AGREEMENT;
AND EACH HOLDER OF THE NOTES ISSUED HEREUNDER, BY ITS ACCEPTANCE HEREOF,
IRREVOCABLY AGREES TO BE BOUND BY THE PROVISIONS OF THE SUBORDINATION AGREEMENT.
SECURITY AGREEMENT
This SECURITY AGREEMENT (this "Agreement"), dated as of March 31, 2011, among
the Persons listed on the signature pages hereof as "Grantors" and those
additional entities that hereafter become parties hereto by executing the form
of Joinder attached hereto as Annex 1 (each, a "Grantor" and collectively, the
"Grantors"), and NORTHCREEK MEZZANINE FUND I, L.P., a Delaware limited
partnership ("Northcreek"), in its capacity as collateral agent for the
Subordinated Lender Group (in such capacity, together with its successors and
assigns in such capacity, "Collateral Agent").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Secured Senior Subordinated Note and Warrant
Purchase Agreement of even date herewith (as amended, restated, supplemented, or
otherwise modified from time to time, the "Note Purchase Agreement") by and
among PATRICK INDUSTRIES, INC., an Indiana corporation (the "Borrower"), the
lenders party thereto as "Buyers" (such Buyers, together with their respective
successors and assigns in such capacity, each, individually, a "Lender" and,
collectively, the "Lenders"), and Collateral Agent, the Subordinated Lender
Group has agreed to make certain financial accommodations available to the
Borrower from time to time pursuant to the terms and conditions thereof; and
WHEREAS, Collateral Agent has agreed to act as collateral agent for the benefit
of the Subordinated Lender Group in connection with the transactions
contemplated by the Note Purchase Agreement and this Agreement; and
WHEREAS, in order to induce the Subordinated Lender Group to enter into the Note
Purchase Agreement and the other Transaction Documents and to induce the
Subordinated Lender Group to make financial accommodations to the Borrower as
provided for in the Note Purchase Agreement