Document:

THIRD AMENDMENT AND WAIVER  

THIS THIRD AMENDMENT AND WAIVER dated as of April 14, 2009 (this “Amendment”) amends the Credit Agreement dated as of May 18, 2007 (as amended, the “Credit Agreement”) among PATRICK INDUSTRIES, INC., an Indiana corporation (the “Borrower”), the LENDERS party thereto and JPMORGAN CHASE BANK, N.A., as Administrative Agent (in such capacity, the “Administrative Agent”). Capitalized terms used but not defined herein have the respective meanings given to them in the Credit Agreement.

WHEREAS, the Borrower has requested certain amendments to, and waivers under, the Credit Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

SECTION 1.   AMENDMENTS. Subject to the conditions precedent set forth in Section 4, the Credit Agreement is amended as follows:

 

	
             
 	
            1.1
 	
            Amendments to Definitions in Section 1.1.
 

1.1.1    The definitions of Consolidated EBITDA and Restructuring Charges are amended in their entirety to read as follows respectively:

“Consolidated EBITDA” means, for any period, the sum (without duplication) of (a) Consolidated Net Income for such period plus (b) to the extent deducted in determining such Consolidated Net Income, Interest Expense, income tax expense, depreciation, amortization and Restructuring Charges plus (c) losses in connection with discontinued operations during such period to the extent approved in writing by the Administrative Agent (which approval shall not be unreasonably withheld) minus (d) gains in connection with discontinued operations during such period.

“Restructuring Charges” means non-recurring restructuring charges taken after December 31, 2008 that are approved in writing by the Administrative Agent (which approval shall not be unreasonably withheld).

1.2       Amendment to Section 2.11. Section 2.11(c) is amended in its entirety to read as follows:

(c)       Not later than five Business Days following the receipt of any Net Cash Proceeds of any Asset Disposition by the Borrower or any Subsidiary, the Borrower shall prepay the Term Loans (and, after the Term Loans have been paid in full, prepay Revolving Loans) in an amount (rounded down, if necessary, to an integral multiple of $100,000) equal to the excess of (x) all Net Cash Proceeds of Asset Dispositions (excluding, so long as no Default exists at the time of such sale, any Net Cash Proceeds attributable to inventory and receivables) received on 

 

or after the date of this Agreement over (y) the amount of Net Cash Proceeds of Asset Dispositions previously applied to prepay Loans pursuant to this clause (c). 

1.3       Amendment to Section 5.1(g) and (h). Each of Sections 5.1(g) and (h) is amended by deleting each references to “month” therein and replacing it with “fiscal month.”

1.4       Amendment to Section 5.10. Section 5.10 is amended by adding the following clause (d) at the end thereof:

(d)       Not later that 60 days after the effectiveness of the Third Amendment to this Agreement, deliver to the Administrative Agent an appraisal, in form satisfactory to the Administrative Agent, of each parcel of real estate owned by the Company or any Subsidiary, in each case prepared by an appraiser reasonable satisfactory to the Administrative Agent.

1.5       Amendment to Section 6.8(a). Section 6.8(a) is amended by deleting each references to “month” therein and replacing it with “fiscal month.”

1.6       Amendment to Schedules. Schedule 1.1(b), Schedule 2.1 and Schedule 6.8 to the Credit Agreement are deleted and replaced with Schedule 1.1(b), Schedule 2.1 and Schedule 6.8 hereto, respectively.

SECTION 2.   WAIVER. Subject to the conditions precedent set forth in Section 4, the Required Lenders waive any Event of Default resulting from (i) the Borrower’s actual or potential non-compliance with Section 6.8 of the Credit Agreement for the fiscal months of the Borrower ended March 1, 2009 and March 29, 2009 and (ii) the delivery of certificates required under Section 5.1(g) of the Credit Agreement for the fiscal months ended January 25, 2009 and March 1, 2009 by the date due.

SECTION 3.   REPRESENTATIONS AND WARRANTIES. The Borrower represents and warrants to the Administrative Agent and the Lenders that after giving effect to this Amendment: (a) the representations and warranties of the Borrower set forth in the Credit Agreement are true and correct in all material respects (except to the extent stated to relate to an earlier date, in which case such representations and warranties were true and correct in all material respects as of such earlier date); and (b) no Default will exist.

SECTION 4.   CONDITIONS PRECEDENT. This Amendment shall become effective on the date on which the Administrative Agent shall have received the following:

(a)       Counterparts of this Amendment signed by the Borrower and the Required Lenders.

(b)       A Confirmation substantially in the form of Exhibit A signed by each Loan Party.

 (c)       Payment of all invoiced fees and expenses of the Administrative Agent (including reasonable attorneys’ fees and expenses) in connection herewith.

 

	
             
 	
            - 2 -
 

 

(d)       An amendment fee for each Lender that delivers a signed counterpart to this Amendment to the Administrative Agent, prior to 12:00 p.m. (Chicago time) on April 13, 2009, in an amount equal to the product of 0.25% multiplied by the sum of (i) such Lender’s Revolving Commitment (as reduced by this Amendment) and (ii) the outstanding principal amount of such Lender’s Term Loans.

	
             
 	
            SECTION 5.
 	
            MISCELLANEOUS.
 

5.1       Continuing Effectiveness, etc. After giving effect to this Amendment, the Credit Agreement shall remain in full force and effect and is hereby ratified, approved and confirmed in each and every respect. After the effectiveness hereof, all references to the Credit Agreement in any Loan Document shall be deemed to refer to the Credit Agreement as amended hereby. The waivers contained in Section 2 are limited to the matters specifically set forth therein and shall not be deemed to constitute a waiver or amendment with respect to any other matter whatsoever.

5.2       Incorporation of Credit Agreement Provisions. The provisions of Sections 1.3 (Terms Generally), 9.7 (Severability), 9.10 (Waiver of Jury Trial) and 9.11 (Headings) of the Credit Agreement are incorporated by reference as if fully set forth herein, mutatis mutandis.

5.3       Signing in Counterparts. This Amendment may be signed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement. A signature hereto delivered by facsimile or in .pdf format shall be effective as delivery of an original counterpart.

5.4       Governing Law. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS.

5.5       Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

5.6       Reduction of Commitments. Concurrently with the effectiveness of this Amendment, the Revolving Commitments shall be reduced by $5,000,000 (such reduction to be applied ratably to the respective Revolving Commitments of the Lenders in accordance with their Revolving Percentages).

[Remainder Of Page Intentionally Left Blank]

 

	
             
 	
            - 3 -
 

 

            IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be signed by their respective officers thereunto duly authorized as of the day and year first above written.

	
             
 	
            PATRICK INDUSTRIES, INC.
 
	
             
 	
            By  /s/ Andy L. Nemeth
 
	
             
 	
            Name: Andy L. Nemeth
 
	
             
 	
            Title: Executive Vice President - Finance
 
	
             
 	
            
JPMORGAN CHASE BANK, N.A., individually and as Administrative Agent
 
	
             
 	
            By  /s/ Michael E. Lewis
 
	
             
 	
            Name:  Michael E. Lewis
 
	
             
 	
            Title:  Senior Vice President
 
	
             
 	
            
FIFTH THIRD BANK
 
	
             
 	
            By  /s/ David R. Garcia
 
	
             
 	
            Name:  David R. Garcia
 
	
             
 	
            Title:  Vice President
 
	
             
 	
             
 
	
             
 	
            BANK OF AMERICA, N.A., as successor to LaSalle Bank National Association
 
	
             
 	
            By  /s/ Scott W. Vokey
 
	
             
 	
            Name:  Scott W. Vokey
 
	
             
 	
            Title:  Senior Vice President
 
	
             
 	
             
 
	
             
 	
            KEY BANK, NATIONAL ASSOCIATION
 
	
             
 	
            By  /s/ Ryan J. Watkins
 
	
             
 	
            Name:  Ryan J. Watkins
 
	
             
 	
            Title:  Vice President

 
	
             
 	
            

 

 

 

 

	
             
 	
            RBS CITIZENS, NATIONAL ASSOCIATION, as successor by merger with Charter One Bank 
 
	
             
 	
            By  /s/ Thomas F. Thompson
 
	
             
 	
            Name:  Thomas F. Thompson
 
	
             
 	
            Title:  Vice President
 
	
             
 	
             
 
	
             
 	
            ASSOCIATED BANK
 
	
             
 	
            By  /s/ Michael A. McPeek
 
	
             
 	
            Name:  Michael A. McPeek
 
	
             
 	
            Title:  Senior Vice President
 
	
             
 	
             
 
	
             
 	
            NATIONAL CITY BANK
 
	
             
 	
            By_______________________________________
 
	
             
 	
            Name:
 
	
             
 	
            Title:
 
	
             
 	
             
 
	
             
 	
            1ST SOURCE BANK
 
	
             
 	
            By  /s/ Jeff Baker
 
	
             
 	
            Name:  Jeff Baker
 
	
             
 	
            Title:  Senior Vice President
 

 

 

SCHEDULE 1.1(b)

 

BORROWING BASE AMOUNTS

 

	
            Period
 	
            Amount
 
	
             

January 1, 2009 - April 30, 2009
 	
             

$25,000,000
 
	
             

May 1, 2009 - May 31, 2009
 	
             

$27,000,000 
 
	
             

June 1, 2009 - June 30, 2009
 	
             

$26,000,000
 
	
             

July 1, 2009 – July 31, 2009
 	
             

$27,000,000
 
	
             

August 1, 2009 – August 31, 2009
 	
             

$29,000,000
 
	
             

September 1, 2009 - September 30, 2009
 	
             

$27,000,000
 
	
             

October 1, 2009 - October 31, 2009
 	
             

$26,000,000 
 
	
             

November1, 2009 – December 31, 2009
 	
             

$25,000,000
 
	
             

January 1, 2010 - January 31, 2010
 	
             

$19,000,000 
 
	
             

February 1, 2010 - March 31,2010
 	
             

$23,000,000 
 
	
             

April 1, 2010 - June 30, 2010
 	
             

$25,000,000 
 
	
             

July 1, 2010 - August 31, 2010
 	
             

$28,000,000 
 
	
             

September 1, 2010 - October 31, 2010
 	
             

$23,000,000 
 
	
             

November 1, 2010 - November 30, 2010
 	
             

$21,000,000 
 
	
             

December 1, 2010 - December 31, 2010
 	
             

$19,000,000
 

 

 

SCHEDULE 2.1

COMMITMENTS

 

	
            Bank
 	
            Revolver

Commitment
 	
            Term Loan

Commitment
 	
            Total

Commitment
 
	
             
 	
             
 	
             
 	
             
 
	
            JPMorgan Chase Bank, N.A
 	
            $5,454,545.44
 	
            $6,515,535.42
 	
            $11,970,080.86
 
	
            Fifth Third Bank
 	
            $4,909,090.91
 	
            $5,863,981.81
 	
            $10,773,072.72
 
	
            Bank of America, N.A
 	
            $4,431,818.19
 	
            $5,293,872.46
 	
            $  9,725,690.65
 
	
            Key Bank, National Association
 	
            $4,431,818.19
 	
            $5,293,872.46
 	
            $  9,725,690.65
 
	
            RBS Citizens, National Association
 	
            $4,431,818.19
 	
            $5,293,872.46
 	
            $  9,725,690.65
 
	
            Associated Bank
 	
            $3,613,636.36
 	
            $4,316,542.16
 	
            $  7,930,178.52
 
	
            National City Bank
 	
            $1,363,636.36
 	
            $1,628,883.83
 	
            $  2,992,520.19
 
	
            1st Source Bank
 	
            $1,363,636.36
 	
            $1,628,883.83
 	
            $  2,992,520.19
 
	
            Total 
 	
            $30,000,000.00
 	
            $35,835,444.43
 	
            $65.835,444.43
 

 

 

SCHEDULE 6.8

 

CONSOLIDATED EBITDA

	
            Fiscal Month
 (ended on or closest to)
 	
            Fiscal month then ending
 	
            Fiscal two months then ending
 
	
             

March 29,2009
 	
             

N/A
 	
             

N/A
 
	
             

April 26, 2009
 	
             

N/A
 	
             

N/A
 
	
             

May 31, 2009
 	
             

N/A
 	
             

N/A
 
	
             

June 28, 2009
 	
             

$279,300
 	
             

N/A
 
	
             

July 26, 2009
 	
             

$189,700
 	
             

$797,300
 
	
             

August 30, 2009
 	
             

$785,100
 	
             

$1,657,100
 
	
             

September 27, 2009
 	
             

$648,800
 	
             

$2,437,600
 
	
             

October 25, 2009
 	
             

$466,500
 	
             

$1,896,000
 
	
             

November 29, 2009
 	
             

$404,300
 	
             

$1,480,300
 
	
             

December 31, 2009
 	
             

($206,200)
 	
             

$570,400
 
	
             

January 31, 2010
 	
             

($1,215,750)
 	
             

($1,090,200)
 
	
             

February 28, 2010
 	
             

$527,850
 	
             

$208,420
 
	
             

March 31,2010
 	
             

$396,250
 	
             

$1,570,970
 
	
             

April 30, 2010
 	
             

$549,000
 	
             

$1,606,925
 
	
             

May 31, 2010
 	
             

$797,250
 	
             

$2,288,625
 
	
             

June 30, 2010
 	
             

$358,200
 	
             

$1,964,270
 
	
             

July 31, 2010
 	
             

$152,000
 	
             

$867,340
 
	
             

August 31, 2010
 	
             

$1,092,400
 	
             

$2,115,480
 
	
             

September 30, 2010
 	
             

$597,900
 	
             

$2,873,510
 
	
             

October 31, 2010
 	
             

$635,500
 	
             

$2,096,780
 
	
             

November 30, 2010
 	
             

$284,350
 	
             

$1,563,745
 
	
             

December 31, 2010
 	
             

($288,600)
 	
             

$319,855
 

 

 

EXHIBIT A

 

FORM OF CONFIRMATION

 

April 14, 2009

 

	
            To:
 	
            JPMorgan Chase Bank, N.A., individually and as Administrative
 

	
             
 	
            Agent, and the other financial institutions that are
 

	
             
 	
            parties to the Credit Agreement referred to below
 

 

Please refer to the Third Amendment and Waiver dated as of the date hereof (the “Amendment”) to the Credit Agreement dated as of May 18, 2007 (the “Credit Agreement”) among Patrick Industries, Inc., an Indiana corporation, the Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. Capitalized terms used but not otherwise defined herein have the respective meanings given to them in the Credit Agreement.

Each of the undersigned hereby confirms to the Administrative Agent and the Lenders that such undersigned has received a copy of the Amendment and that, after giving effect to the Amendment and the transactions contemplated thereby, each Loan Document to which such undersigned is a party continues in full force and effect and is the legal, valid and binding obligation of such undersigned, enforceable against such undersigned in accordance with its terms. 

	
             
 	
            PATRICK INDUSTRIES, INC.
 

 

	
             
 	
            By:  
 	
            /s/ Andy L. Nemeth
 

	
             
 	
            Andy L. Nemeth
 

	
             
 	
            Executive Vice President - Finance
 

 

	
             
 	
            ADORN HOLDINGS, INC.
 

 

	
             
 	
            By:  
 	
            /s/ Andy L. Nemeth
 

	
             
 	
            Andy L. Nemeth
 

	
             
 	
            Treasurer and Secretary
 

 

 

ADORN, LLC

 

	
             
 	
            By:  
 	
            /s/ Andy L. Nemeth
 

	
             
 	
            Andy L. Nemeth
 

	
             
 	
            Treasurer and SecretaryApril 14, 2009

Patrick Industries, Inc.

107 West Franklin Street

Elkhart, Indiana 46516

Attn: Andy Nemeth

 

	
             
 	
            Re:
 	
            Waiver under Second Amended and Restated Registration Rights Agreement
 

Ladies/Gentlemen:

Please refer to the Second Amended and Restated Registration Rights Agreement dated as of December 11, 2008 (the “Registration Rights Agreement”) among Patrick Industries, Inc. (the “Company”) and the stockholders of the Company identified on the signature page thereto. Capitalized terms used but not defined herein shall have the respective meanings set forth in the Registration Rights Agreement.

At the request of the Company, the Majority Holders of the Registrable Securities and the Majority Holders of the Warrant Shares waive the requirement under Section 1.2(a)(ii) of the Registration Rights Agreement which requires the Company to file a Registration Statement on Form S-3 under the Securities Act registering the resale under Rule 415 under the Securities Act of all of the Registrable Securities that may be issued upon the exercise of the Warrants by April 10, 2009, so long as the Company complies with such requirement not later than May 31, 2009.

This waiver letter is limited to the matters specifically set forth herein and does not constitute a waiver, consent or amendment with respect to any other matter whatsoever. Except as specifically set forth herein, the Registration Rights Agreement shall remain in full force and effect and is hereby ratified in all respects.

This waiver letter shall become effective when counterparts hereof executed by the Company, the Majority Holders of the Registrable Securities and the Majority Holders of the Warrant Shares. 

This waiver letter may be executed in counterparts and by the parties hereto on separate counterparts. A signature page hereto delivered by facsimile or .pdf shall be effective as delivery of an original counterpart.

This letter agreement shall be a contract made under and governed by the laws of the State of Indiana applicable to contracts made and to be performed entirely within such State.

 

-Signature pages follow-

 

	
             
 	
            PATRICK INDUSTRIES, INC.
 
	
             
 	
             
 
	
             
 	
             
 
	
             
 	
            By: /s/ Andy L. Nemeth
 
	
             
 	
            Andy L. Nemeth, Executive Vice President - Finance
 
	
             
 	
             
 
	
             
 	
             
 
	
             
 	
             
 

 

 

	
             
 	
            TONTINE CAPITAL PARTNERS, L.P.
 
	
             
 	
             
 
	
             
 	
            By:       Tontine Capital Management, L.L.C., its general partner
 
	
             
 	
             
 
	
             
 	
            By: /s/ Jeffrey L. Gendell
 
	
             
 	
            Jeffrey L. Gendell, as managing member
 
	
             
 	
             
 
	
             
 	
             
 
	
             
 	
             
 
	
             
 	
            TONTINE CAPITAL OVERSEAS MASTER FUND, L.P.
 
	
             
 	
             
 
	
             
 	
            By:       Tontine Capital Overseas GP, L.L.C., its general partner
 
	
             
 	
             
 
	
             
 	
            By: /s/ Jeffrey L. Gendell
 
	
             
 	
            Jeffrey L. Gendell, as managing member
 
	
             
 	
             
 

 

 

	
             
 	
            JPMORGAN CHASE BANK, N.A. 
 
	
             
 	
            By /s/ Michael Lewis
 
	
             
 	
            Name:  Michael Lewis
 
	
             
 	
             
 
	
             
 	
             
 
	
             
 	
            FIFTH THIRD BANK
 
	
             
 	
            By________________________________________
 
	
             
 	
            Name:  David R. Garcia
 
	
             
 	
             
 
	
             
 	
             
 
	
             
 	
            BANK OF AMERICA, N.A., as successor to LaSalle Bank National Association
 
	
             
 	
            By /s/ Scott W. Vokey
 
	
             
 	
            Name:  Scott W. Vokey
 
	
             
 	
             
 
	
             
 	
             
 
	
             
 	
            KEY BANK, NATIONAL ASSOCIATION
 
	
             
 	
            By /s/ Ryan J. Watkins
 
	
             
 	
            Name:  Ryan J. Watkins
 
	
             
 	
             
 
	
             
 	
             
 
	
             
 	
             
 
	
             
 	
            RBS CITIZENS, NATIONAL ASSOCIATION, as successor by merger with Charter One Bank 
 
	
             
 	
             
 
	
             
 	
             
 
	
             
 	
            By /s/ Thomas F. Thompson
 
	
             
 	
            Name:  Thomas F. Thompson
 
	
             
 	
             
 
	
             
 	
             
 

 

 

 

	
             
 	
             
 
	
             
 	
            ASSOCIATED BANK
 
	
             
 	
            By________________________________________
 
	
             
 	
            Name:  Michael A. McPeek
 
	
             
 	
             
 
	
             
 	
             
 
	
             
 	
            NATIONAL CITY BANK
 
	
             
 	
            By________________________________________
 
	
             
 	
            Name:
 
	
             
 	
             
 
	
             
 	
             
 
	
             
 	
             
 
	
             
 	
            1ST SOURCE BANK
 
	
             
 	
            By________________________________________
 
	
             
 	
            Name:  Jeff Baker

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