AMENDMENT TO CREDIT FACILITIES
------------------------------
This Amendment to Credit Facilities ("Amendment") is effective as
of
April 11, 2003 (the "Amendment Effective
Date") by Patrick Industries, Inc.
("Company") and Bank One, NA, a national
banking association ("Bank").
RECITALS
--------
A. Company and Bank are parties to a Credit Agreement, dated
February
2, 1997, as amended by a First Amendment to
Credit Agreement dated January
28,2000 and by a Modification Agreement
dated August 1,2001 and by an Amendment
to Credit Agreement dated January 28,2003
(as amended, the "Credit Agreement").
B. Bank has provided a Line of Credit to Company under which Bank
has
extended certain letters of credit for the
account of the Company in an
aggregate principal amount not to exceed
$3,250,000 (the "Letter of Credit
Line").
C. The Company is obligated to Bank under the following
reimbursement
agreements:
(i) the Reimbursement and Pledge Agreement between
the Company and the Bank dated as of August 13, 1998, relating
to the Five Million Dollars ($5,000,000) principal amount The
Stanly County Industrial Facilities and Pollution Control
Financing Authority Variable Rate Demand Economic Development
Revenue Bonds (Patrick Industries, Inc. Project), Series 1998
(the "1998 Reimbursement Agreement"),
(ii) the Reimbursement Agreement made by the Company
in favor of the Bank dated as of December 1, 1994, relating to
the Six Million Dollars ($6,000,000) principal amount State of
Oregon Economic Development Revenue Bonds, Series CLI (Patrick
Industries, Inc. Project), dated December 22, 1994 (the "1994
Reimbursement Agreement"),
(iii) the Reimbursement Agreement made by the Company
in favor of the Bank dated as of November 1, 1991, relating to
the Three Million Nine Hundred Thousand Dollars ($3,900,000)
principal amount The Indiana Development Finance Authority
Limited Obligation Refunding Revenue Bonds (Patrick
Industries, Inc. Project), Series 1991, dated Decembers, 1991
(the "1991 Reimbursement Agreement") (collectively, the 1998
Reimbursement Agreement, the 1994 Reimbursement Agreement and
the 1991 Reimbursement Agreement are referred to herein as the
"Reimbursement Agreements").
<PAGE>
D. The Company has requested Bank to amend the Credit Agreement and
the
Letter of Credit Line and the Reimbursement
Agreements, effective as of the
Amendment Effective Date, as herein
provided. Bank has agreed to amend the
Credit Agreement and Letter of Credit Line
and Reimbursement Agreements as set
forth in this Amendment, all subject to the
terms and conditions of this
Amendment, including the conditions
precedent set forth in Section 6.
AGREEMENT
---------
NOW, THEREFORE, in consideration of the Recitals and the mutual
covenants and agreements herein, and for
other good and valuable considerations,
the receipt and sufficiency of which are
acknowledged by the parties to this
Amendment, it is agreed as follows:
1. Definitions. Terms which are defined in the Credit Agreement
shall
have the same meanings in this Amendment as
are ascribed to them in the Credit
Agreement, as amended hereby, excepting
only those terms which are expressly
defined in this Amendment, which shall have
the meanings ascribed to them in
this Amendment.
2. Amendments to Credit Agreement. The Credit Agreement is amended
as
follows:
a. The definition of "Revolving Credit Termination Date" set
forth in Section 1 of the Existing Agreement is amended and
restated in
its entirety as of the Amendment Effective Date to read as
follows:
"Revolving Credit Termination Date" shall mean the earlier to
occur of (a) May 31,2006 and (b) the date on which the
Commitment shall be terminated pursuant to Section 2.2 or
Section 6.2.
b. A new definition of Debt Service Coverage Ratio is added to
Section 1 of the Credit Agreement to provide as follows:
"Debt Service Coverage Ratio" means the ratio of the sum of
Company's EBITDA plus goodwill impairment less dividends,
taxes and common stock repurchases, to the sum of the current
portion of Company's long term debt payments and interest
expense.
"Capital Expenditures" means purchases of property and
equipment as referred to in the Company's year end statement
of cash flows required to be included with Company's financial
statements under Section 5.1(d) of the Loan Agreement.
c. The definition of "Revolving Credit Loan Eurodollar Margin"
in Section 1.1 of the Credit Agreement shall be amended and
restated as
follows:
<PAGE>
"Revolving Credit Loan Eurodollar Margin" shall mean, with
respect to any Revolving Credit Loan that is also a
Eurodollars Rate Loan, the following amounts based on the
ratio of consolidated Funded Debt to consolidated EBITDA of
the Company and its Subsidiaries as of the end of the most
recent fiscal quarter of the Company for which financial
statements of the Company have been delivered pursuant to
Section 5.l(d)(ii):
Ratio of Funded Debt to Consolidated
Revolving Credit
Loan
------------------------------------
-------------------------
EBITDA
Eurodollar Margin
------
-----------------
greater than 3.00 to 1.00
1.75% per annum
greater than 2.50 to 1.00 but not greater 1.625% per annum
than 3.00 to 1.00
greater than 2.00 to 1.00 but not greater 1.50% per annum
than 2.50 to 1.00
less than or equal to 2.00 to 1.00
1.375% per annum
d. Section 2.3 of the Credit Agreement is amended to provide
in its entirety as follows:
2.3 Fees, (a) The Company agrees to pay to the Bank a
commitment fee on the daily average unused amount of the
Revolving
Credit Commitment equal to one-quarter of one percent (.25%) per
annum.
Accrued commitment fees shall be payable quarterly in arrears on
the
last Business Day of each March, June, September and December, and
on
the Revolving Credit Termination Date.
e. Section 5.2(c)of the Credit Agreement shall be amended and
restated as follows:
(c) Tangible Net Worth. Permit or suffer the consolidated
Tangible Net Worth of the Company and its Subsidiaries to be less
than
$52,000,000 at any time, which amount shall be increased by an
amount
equal to 50% of the Cumulative Net Income of the Company and
its
Subsidiaries for each fiscal year, beginning with the fiscal
year
ending on December 31, 2003 and annually thereafter.
f. Section 5.2(d) of the Credit Agreement shall be amended and
restated as follows:
(d) Total Liabilities to Tangible Net Worth. Permit or suffer
the ratio of consolidated Total Liabilities of the Company and
its
Subsidiaries to consolidated Tangible Net Worth of the Company and
its
Subsidiaries to
be greater than 1.00 to 1.00 at any time.
g. Section 5.2(b) of the Credit Agreement, captioned "Working
Capital" is deleted, and that provision is replaced with "RESERVED"
to
avoid renumbering other provisions.
<PAGE>
h. A new Section 5.2(j) is added to the Credit Agreement to
provide as follows:
(j) Capital Expenditures. The Company shall not permit or
suffer its Capital Expenditures during any calendar year to
exceed
$6,000,000 in the aggregate.
i. A new Section 5.2(k) is added to the Credit Agreement to
provide as follows:
(k) Debt Service Coverage. The Company shall not permit or
suffer its Debt
Service Coverage Ratio to be less than 1.10 to 1.00.
3. Amendment to Letter of Credit Line. The Letter of Credit Line
is
amended as follows:
a. To increase that Letter of Credit Line to $3,500,000 for
the issuance of standby letters of credit with expiries not to
exceed
one year and commercial letters of credit with expiries not to
exceed
six months.
b. To extend the term of that Letter of Credit Line until the
earlier to occur
of (a) May 31, 2004 and (b) the date on which the Bank
takes the action referred to in Section 6.2(ii) of the Credit
Agreement.
c. Any reference in the Letter of Credit Line to Commission
Rate or fee for issuing a letter of credit shall be amended to
refer to
a Commission Rate or fee for issuing a letter of credit of one
and
one-quarter percent (1.25%) per annum.
4. Amendment to Reimbursement Agreements. The Commission Rate
in
Section 2.02(b) of the 1991 Reimbursement
Agreement, Section 2.02(b) of the 1994
Reimbursement Agreement and Section 2.5.2
of the 1998 Reimbursement Agreement is
amended to refer to a Commission Rate of
one and one-quarter percent (1.25%) per
annum.
5. Security Interest. All obligations of Company to Bank under
the
Credit Agreement, Letter of Credit Line and
the Reimbursement Agreements shall
be secured by a security interest in all of
Company's accounts receivable and
inventory, now owned or hereafter acquired,
pursuant to the Security Agreement
in the form attached as Exhibit A (the
"Security Agreement").
6. Representations and Warranties. The Company represents and
warrants
to Bank that:
<PAGE>
a. (i) The execution, delivery and performance of this
Amendment and all agreements and documents delivered pursuant
hereto by
the Company has been duly authorized by all necessary action
(whether
corporate, partnership or otherwise) and does not and will not
violate
any provision of any law, rule, regulation, order, judgment,
injunction, or award presently in effect applying to the Company,
or of
the Company's articles of incorporation, by-laws, articles of
organization or operating agreement (as applicable) or result in
a
breach of or constitute a default under any material agreement,
lease
or instrument to which the Company is a party or by which the
Company's
properties may be bound or affected; (ii) no authorization,
consent,
approval, license, exemption or filing of a registration with any
court
or governmental department, agency or instrumentality is or will
be
necessary to the valid execution, delivery or performance by any
of
them of this Amendment and all
<PAGE>
agreements and documents delivered pursuant hereto; and (iii)
this
Amendment and all agreements and documents delivered pursuant
hereto by
the Company are its legal, valid and binding obligations and
enforceable against the Company in accordance with the terms
thereof.
b. After giving effect to the amendments contained in this
Amendment, the representations and warranties contained in Section
4 of
the Credit Agreement are true and correct on and as of the
Amendment
Effective Date with the same force and effect as if made on and as
of
the Amendment Effective Date, except that the representation in
Section
4.6 of the Credit Agreement shall be deemed to refer to the
financial
statements of Company most recently delivered to Bank prior to
the
Amendment Effective Date.
c. No Event of Default or Unmatured Event of Default has
occurred and is continuing or will exist under the Credit Agreement
as
of the Amendment Effective Date.
7. GENERAL RELEASE. THE COMPANY FOR ITSELF AND ITS LEGAL
REPRESENTATIVES, SUCCESSORS AND ASSIGNS
(COLLECTIVELY, THE "RELEASING PARTIES"),
HEREBY RELEASES AND DISCHARGES BANK, ITS
OFFICERS, DIRECTORS, AGENTS, EMPLOYEES,
ATTORNEYS, LEGAL REPRESENTATIVES,
SUCCESSORS AND ASSIGNS (COLLECTIVELY, THE
"RELEASED PARTIES") FROM ANY AND ALL
CLAIMS, DEMANDS, ACTIONS, DAMAGES AND
CAUSES OF ACTION WHICH ANY OF THE RELEASING
PARTIES HAS ASSERTED OR CLAIMED OR
MIGHT NOW OR HEREAFTER ASSERT OR CLAIM
AGAINST ALL OF ANY OF THE RELEASED
PARTIES, WHETHER KNOWN OR UNKNOWN, ARISING
OUT OF, RELATED TO OR IN ANY WAY
CONNECTED WITH OR BASED UPON ANY PRIOR
RELATED EVENT (AS SUCH TERM IS
HEREINAFTER DEFINED). THE TERM "PRIOR
RELATED EVENT" SHALL MEAN ANY ACT,
OMISSION, CIRCUMSTANCE, AGREEMENT, LOAN
EXTENSION OF CREDIT, TRANSACTION,
TRANSFER, PAYMENT, EVENT, ACTION OR
OCCURRENCE BETWEEN OR INVOLVING THE COMPANY
AND ALL OR ANY OF THE PRIOR TO THE
EXECUTION OF THIS AGREEMENT, INCLUDING
WITHOUT LIMITING IN ANY RESPECT THE
GENERALITY OF THE FOREGOING: (i) ANY ACTION
TAKEN ON OR PRIOR TO THE EXECUTION OF THIS
RIGHT OR PURPORTED RIGHT OF BANK AS A
CREDITOR; (u) ANY FAILURE OR REFUSAL TO
MAKE ANY LOAN OR ADVANCE; AND (in) ANY
PAYMENT OR OTHER TRANSFER MADE TO BANK BY
OR FOR THE ACCOUNT OF THE COMPANY AT
ANY TIME PRIOR TO THE EXECUTION OF THIS
AGREEMENT. THE COMPANY AGREES AND
ACKNOWLEDGES THAT THIS SECTION IS NOT TO BE
CONSTRUED AS OR DEEMED AN
ACKNOWLEDGMENT OR ADMISSION ON THE PART OF
ANY OF THE RELEASED PARTIES OF
LIABILITY FOR ANY MATTER OR AS PRECEDENT
UPON WHICH ANY LIABILITY MAY BE
ASSERTED.
8. Conditions. The obligation of Bank to execute and to perform
this
Amendment shall be subject to full
satisfaction of the following conditions
precedent:
a. This Amendment shall have been duly executed and delivered
by the Company.
b. The Security Agreement shall have been duly
executed and delivered by the Company.
<PAGE>
c. Bank shall have received such additional agreements,
documents and certifications, fully executed by the Company as may
be
reasonably requested by Bank, or its counsel.
9. Binding on Successors and Assigns. All of the terms and
provisions
of this Amendment shall be binding upon and
inure to the benefit of the parties
hereto, their respective successors,
assigns and legal representatives.
10. Governing Law/Entire Agreement/Survival. This Amendment is
a
contract made under, and shall be governed
by and construed in accordance with,
the laws of the State of Indiana applicable
to contracts made and to be
performed entirely with such state and
without giving effect to the choice of
law principles of such state. This
Amendment constitutes and expresses the
entire understanding between the parties
hereto with respect to the subject
matter hereof, and supersedes all prior
agreements and understandings,
commitments, inducements or conditions,
whether express or implied, oral or
written. All covenants, agreements,
undertakings, representations and warranties
made in this Amendment shall survive the
execution and delivery of this
Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be
duly executed and delivered as of the
Amendment Effective Date.
BANK ONE, NA By: >
-
/S/ Chad Douglass, V.P.
(Printed Name and Title)
PATRICK INDUSTRIES, INC. By:
/S/ Andy L. Nemeth, Secretary-Treasurer
(Printed Name and Title)
ELDS01 JST
148480v4
<PAGE>
LOAN PARTICIPATION AGREEMENT
----------------------------
This Agreement is entered into on April 11, 2003, between Bank One,
NA,
with principal offices at 121 West Franklin
Street, Elkhart, Indiana 46516
("Lead Bank") and National City Bank of
Indiana, with offices at 101 North Main
Street, Elkhart, Indiana 46516
("Participant").
RECITALS
--------
Lead Bank has extended and has agreed to extend credit to
Patrick
Industries, Inc., an Indiana corporation
("Borrower"), whose address is 1800
South 14th Street, Elkhart, Indiana 46516,
in accordance with the commercial
loan agreement and industrial revenue bond
letter of credit reimbursement
agreements described in Section l(c) below.
Participant desires to obtain a
participation interest in the loans made or
to be made by Lead Bank to Borrower,
and Lead Bank is willing to sell
Participant a participation interest in the
loans to Borrower on the terms and
conditions contained in this Agreement.
Lead Bank and Participant agree as
follows:
AGREEMENT
---------
Section 1. Definitions.
(a) "Collateral" includes all liens, security interests,
mortgages,
guaranties and other instruments, property
or rights received or acquired by
Lead Bank in connection with or securing
the Loans.
(b) "Collections" includes all amounts received by Lead Bank as
principal of or interest on the Loan, or
received after default on the Loan
whether as proceeds of the Collateral or
otherwise.
(c) "Loan" or "Loans" refers to the following loans, advances or
other
extensions of credit made or to be made by
Lead Bank to Borrower:
(i) $10,000,000 Revolving Credit Facility pursuant to a Credit
Agreement between Lead Bank and Borrower dated February 2, 1997,
as
amended by a First Amendment to Credit Agreement dated January
28,
2000, by a Modification Agreement dated August 1, 2001, by an
Amendment
to Credit Agreement dated January 28, 2003 and by an Amendment
to
Credit Agreement dated /April 11 , 2003 (as amended or as may
hereafter
be amended, the "Credit Agreement"), and evidenced by a promissory
note
dated April 11____, 2003 made by Borrower to Lead Bank in the
original
principal amount of up to $10,000,000, and all extensions,
modifications, renewals, substitutions and replacements of that
note
(the "Revolving Note").
(ii) $3,500,000 line of credit pursuant to Borrower's
application agreements for letters of credit containing
Borrower's
reimbursement agreement
<PAGE>
for draws against such letters of credit, and under which Lead Bank
has
issued and may issue letters of credit for the account of Borrower
in
an aggregate face amount not to exceed $3,500,000 (the "Letter
of
Credit Loan").
(iii) The Reimbursement and Pledge Agreement between the
Borrower and the Lead Bank dated as of August 13, 1998, relating to
the
Five Million Dollars ($5,000,000) principal amount The Stanly
County
Industrial Facilities and Pollution Control Financing Authority
Variable Rate Demand Economic Development Revenue Bonds
(Patrick
Industries, Inc. Project), Series 1998 (the "1998 Reimbursement
Agreement").
(iv) The Reimbursement Agreement made by the Borrower in favor
of the Lead Bank dated as of December 1, 1994, relating to the
Six
Million Dollars ($6,000,000) principal amount State of Oregon
Economic
Development Revenue Bonds, Series CLI (Patrick Industries, Inc.
Project), dated December 22, 1994 (the "1994 Reimbursement
Agreement").
(v) The Reimbursement Agreement made by the Borrower in favor
of the Lead Bank dated as of November 1, 1991, relating to the
Three
Million Nine Hundred Thousand Dollars ($3,900,000) principal amount
The
Indiana Development Finance Authority Limited Obligation
Refunding
Revenue Bonds (Patrick Industries, Inc. Project), Series 1991,
dated
December 5, 1991 (the "1991 Reimbursement Agreement").
(d) The 1998 Reimbursement Agreement, the 1994 Reimbursement
Agreement
and the 1991 Reimbursement Agreement are
sometimes referred to herein as the
"Reimbursement Agreements". The Revolving
Credit Note, the Credit Agreement, the
Line of Credit, the Reimbursement
Agreements, and all other agreements,
documents and instruments evidencing,
securing or otherwise relating to the
Credit Agreement, the Line of Credit or the
Reimbursement Agreements are
sometimes referred to individually and
collectively as the "Loan Documents".
(e) "Resettlement Date" is the date on which Collections are
applied to
Borrower's account and on which Collections
are to be remitted to Participant.
Section 2. Sale of Participation. Lead Bank hereby sells to
Participant
and Participant hereby purchases a
participation of fifty percent (50%) of (i)
the principal amount of the Loans
referenced in Section l(c)(i) (ii) (iii) (iv)
and (v) outstanding on the date of this
Agreement, (ii) the principal amount of
any future advances under the Loans, (iii)
the interest attributable to such
principal amounts from the date of this
Agreement, (iv) fees payable under the
Reimbursement Agreements, and (v) the
Collateral securing the Loans, for an
amount equal to fifty percent (50%) of the
sum of items (i) and (ii) above, with
ZERO Dollars ($ - 0 - ) payable by
Participant on the date of this Agreement.
With respect to any future advances under
the Loans, including any drawings made
under letters of credit relating to the
Letter of Credit Loan and the
Reimbursement Agreements, Participant will
provide the amount of its pro-rata
portion of advances to Lead Bank in
immediately available funds by 2:00 p.m.
Elkhart, Indiana time, on the day Lead Bank
requests funds if Lead Bank makes
such request by 10:00 a.m. Elkhart time, or
if Lead Bank does not notify
Participant by such time, then by 10:00
a.m. Elkhart time on the next banking
day.
<PAGE>
The participation sold under this agreement shall constitute a
sale,
without recourse to the Lead Bank, of an
undivided interest in the Lead Bank's
interest in the Loans, the Lead Bank's
commitment (if any) to make the Loans,
the Loan Documents, all amounts payable by
the Borrower under the Loan Documents
including principal, interest, and fees,
and any collateral securing the Loans.
Participant represents and warrants to Lead Bank that Participant
has,
independently and without reliance on Lead
Bank, made its own credit analysis
and performed such due diligence as
Participant deems appropriate and will
continue to be responsible for making its
own independent evaluation of the
credit, financial condition, and all other
matters concerning the Borrower.
Section 3. Application of Collections. Lead Bank shall receive
all
Collections and apply them on each
Resettlement Date pro-rata, together with
pro-rata interest, in accordance with the
respective percentage participation of
Lead Bank and Participant in the Loan. If
after Lead Bank has paid Participant
its pro-rata portion of any Collections
such payment must be paid back by Lead
Bank for any reason, Participant will pay
on demand to Lead Bank the
Participant's pro-rata portion of the
amount that must be paid back by Lead
Bank, together with Participant's pro-rata
portion of any interest or penalties
payable thereon. The Participant
acknowledges and agrees that the Lead Bank
shall have no obligation to attempt to
collect any Loan in preference and
priority over the collection and/or
enforcement of any other debt of the
Borrower to the Lead Bank. The Lead Bank,
however, agrees that the proceeds of
all collateral directly securing repayment
of the Loans shall be applied first
to the payment of the Loans.
Section 4. Documentation. Lead Bank has delivered to Participant a
copy
of the Loan Documents and Lead Bank will
deliver to Participant copies of all
future extensions and modifications thereof
and replacements therefor. All
additional documents on file with Lead Bank
concerning the Loan Documents, the
Loan or this Participation Agreement shall
be available at Lead Bank's office
for Participant's inspection at reasonable
times on reasonable notice to Lead
Bank. The Lead Bank shall promptly furnish
to the Participant copies of all
financial statements received from the
Borrower pursuant to the Loan Documents.
The Lead Bank shall promptly notify the
Participant of the occurrence of any
event of default under any of the Loan
Documents of which the Lead Bank has
actual knowledge and of any information as
to any actual or potential event of
default received by the Lead Bank from any
source which the Lead Bank believes
to be accurate and reliable. The Lead Bank
shall, however, have no
responsibility to the Participant for any
errors or omissions in any such
reports, financial statements or other
information. The Participant may at any
time request other information and/or
documents in the Lead Bank's possession
relating to the Loans. That information
and/or documents shall not be
unreasonably withheld.
Section 5. Lead's Administration.
(a) The Note, all Collateral and the Loan
shall be held by Lead Bank and dealt
with in Lead Bank's name on Participant's
behalf. Lead Bank will service, manage
andcollect the Loan and the Collateral in
the ordinary course of business and in
accordance with Lead Bank's usual
practices. It is agreed that Lead Bank may use
<PAGE>
its sole discretion with respect to
exercising or refraining from exercising
Lead Bank's rights, or waiving Lead Bank's
rights, with respect to the Loan.
Subject only to considerations of prudent
banking practices, Lead Bank shall
have the sole discretion concerning the
initiation, prosecution, settlement or
termination of collection proceedings if
the Loan becomes in default. Lead Bank
will examine the Collateral and Borrower's
books and records relating to the
Loan as Lead Bank deems necessary.
(b) Lead Bank may, in its sole discretion,
without notice to or consent by
Participant, and subject only to
considerations of prudent banking practices,
extend, modify or replace the Note or
release or otherwise deal in any of the
Collateral or release any guarantor of the
obligations of Borrower.
(c) The Lead Bank shall exercise the same
care in administering the Loans as it
would if the Loans were made entirely for
the Lead Bank's own account, but Lead
Bank shall not be liable to Participant for
any action taken or omitted or for
any error in judgment, except for Lead
Bank's own bad faith.
(d) Notwithstanding Section 5(a) (b) and
(c) above, the Lead Bank shall not
without the consent of the Participant (a)
agree to any material amendment or
modification of any of the Loan Documents,
including any waiver of any financial
covenants and any amendment which would
extend the maturity of any Loan,
increase the amount of any Loan, or reduce
the interest on any Loan; (b) release
any security for any Loan other than in
accordance with the express provisions
of the Loan Documents; (c) commence any
legal proceeding to collect any Loan; or
(d) take any action to seize, foreclose,
sell or transfer any collateral. If the
Participant's consent shall be requested
but denied, the Lead Bank may (but
shall have no obligation to) repurchase the
participation evidenced by this
agreement for a price equal to the
outstanding balance of the Participant's
interest in the Loans plus accrued and
unpaid interest and fees payable under
the Reimbursement Agreements to the date of
such repurchase.
Section 6. Expenses. All expenses of receiving Collections,
including,
but not limited to, attorney's fees, court
costs and disbursements, shall be
shared pro-rata by Participant and Lead
Bank in accordance with their respective
percentage interests. Participant's portion
of such expenses shall be payable to
Lead Bank on demand. Lead Bank may receive
Participant's portion of such
expenses by deducting them from any amounts
required to be remitted by Lead Bank
to Participant hereunder.
Section 7. Offset. Lead Bank may offset against amounts owed to
Participant under this Agreement any
amounts Participant may owe Lead Bank under
any agreements or circumstances.
Section 8. Disclaimer. The Lead Bank makes no representation or
warranty, whether express or implied, to
the Participant with respect to (a) the
collectibility of the Loans, (b) the
financial condition or solvency of the
Borrower or any other party obligated on
the Loans, (c) the accuracy of any
information, statements, or certificates
provided to the Participant under this
agreement; or (d) the existence,
sufficiency or value of any collateral securing
the Loans.
<PAGE>
Section 9. Reimbursement and Indemnification. The Participant
shall
reimburse the Lead Bank on demand in
proportion to the Participant's pro rata
interest in the Loan, for all out-of-pocket
expenses, including reasonable
attorney's fees, incurred by the Lead Bank
in connection with the making or
collection or the Loans, to the extend not
recovered from the Borrower. The
Participant shall indemnify the Lead Bank
for the Participant's pro rata share
(determined in accordance with its pro rata
interest in the Loan) of any costs,
expenses (including reasonable attorney's
fees and disbursements), claims,
damages, actions, losses or liabilities,
incurred by the Lead Bank in connection
with the Loans unless they result from the
Lead Bank's own gross negligence or
willful misconduct or are paid in
satisfaction of a judgment, settlement
agreement, or arbitration award arising out
of the Borrower's allegations of
fraud, deceit, misrepresentation, or lack
of good faith (other than allegations
that arise out of conduct of the
Participant or conduct of the Lead Bank
specifically directed, authorized, or
concurred in by the Participant).
Section 10. Notices. Except as provided in Section 2 above, all
notices
required or permitted to be given under
this Agreement shall be in writing
(including telecommunications) and shall be
deemed effective if delivered to the
recipient's address or facsimile number set
forth beside its name below by any
of the following means: (a) hand delivery,
(b) registered or certified mail,
postage prepaid, with return receipt
requested, (c) express mail, postage
prepaid, (d) Federal Express or like
overnight courier service or (e) facsimile
or other wire transmission with request for
assurance of receipt in a manner
typical with respect to communication of
that type. Notice made in accordance
with the section shall be deemed delivered
upon receipt.
If to Lead Bank, to: Bank
One, NA
121 West Franklin Street
Elkhart, Indiana 46516
Attention: Mr. Kurt E. Meibeyer
Facsimile: (574) 524-3033
If to Participant, to: National City
Bank of Indiana
101 North Main Street
Elkhart, Indiana 46516
Attention: Robert E. Norell, Jr.
Facsimile: (574)389-9543
Section 11. Entire Agreement. This Agreement embodies the
entire
agreement and understanding between the
Lead Bank and the Participant and
supersedes all prior agreements and
understandings relating to its subject
matter. This Agreement may not be amended
or in any manner modified unless such
amendment or modification is in writing and
signed by both parties.
Section 12. Other Provisions.
(a) Participant shall not sell, pledge, assign, sub-participate,
or
otherwise transfer its rights under this
Agreement, the Collateral, or any
portion of the Loan without procuring in
advance the written consent of Lead
Bank. Lead Bank may sell, pledge, assign,
sub-participate, or otherwise transfer
<PAGE>
its rights under this Agreement, the
Collateral, or any portion of the Loan
without the consent of Participant.
(b) Lead Bank reserves the right to purchase at Lead Bank's option
with
Borrower's written consent upon thirty (30)
days' notice the participation
interest of Participant for an amount equal
to Participant's portion of the
outstanding principal balance of the Loan
as of the date of purchase under the
option, plus accrued interest thereon
through the date of purchase.
(c) Participant acknowledges that Lead Bank may have other
banking
relationships with Borrower, any guarantor
of Borrower's obligations under the
Loan, or their affiliates. Participant
shall have no interest in any property
taken as collateral for any other loans or
extensions of credit made by Lead
Bank to Borrower or any guarantor, or in
any property in Lead Bank's possession
or control, or in any deposit held or other
indebtedness owing by Lead Bank,
which may be or become collateral for or
otherwise available for payment of the
Loan by reason of the general description
of secured obligations contained in
any security agreement or other agreement
or instrument held by Lead Bank or by
reason of the right of set-off,
counterclaim or otherwise, except that if any of
those items or the proceeds thereof are
applied in reduction of amounts
outstanding under the Loan, then
Participant shall be entitled to its pro-rata
share in such application.
(d) Nothing in this Agreement shall confer upon either party
any
interest in, or subject either party to any
liability for, the assets or
liabilities of the other, except only as to
the Loan or Collateral in accordance
with this Participation Agreement.
(e) This Agreement shall be governed by the laws of the State
of
Indiana, may not be amended or modified
orally, and shall bind the respective
legal representatives, successors and
assigns of the parties.
(f) All notices shall be in writing and mailed to the
respective
parties at the addresses set forth
below.
"LEAD BANK"
Bank One, NA
By: /S/ Chad Douglass, V.P.
(Printed Name and Title)
"PARTICIPANT"
National City Bank of Indiana
By: /S/ Robert E. Norell, Jr., V.P.
(Printed Name and Title)
ELDS01 JST 148476v4
<PAGE>
RESOLUTION OF BOARD OF DIRECTORS OF
PATRICK INDUSTRIES, INC.
AN INDIANA CORPORATION ("CORPORATION")
The Corporation desires to engage in
financial transactions from time to time
with Bank One, Indiana, N.A., a national
banking association, formerly known as
NBD Bank, N.D. (the "Bank"), to further the
Corporation's purposes; and
The Corporation desires to authorize
certain of its officers to engage in these
transactions for the Corporation; and
The Corporation desires to ratify all past
transactions and eliminate the
necessity of presenting separate individual
resolutions to the Bank in the
future.
RESOLVED: The President, Vice-President,
Treasurer, Secretary, Vice-President -
Finance or any of them, are authorized from
time to time for the Corporation to:
1. NEGOTIATE AND PROCURE
LOANS, lines of credit, letters of credit,
discounts, foreign exchange contracts, and
any other credit from the Bank in any
form and in any amount and on any terms as
they shall determine.
2. GUARANTY to the Bank the
obligation of any third party in any amount and
on any terms as they shall determine.
3. SUBORDINATE to the Bank
any interest of the Corporation in any note,
lease, mortgage, debt, or any other asset
belonging to this Corporation on any
terms as they shall determine.
4. GIVE AS SECURITY for any
such credits or guarantees, security interests in
or pledges, assignments, hypothecations,
mortgages, or transfers of any
property, tangible or intangible, real or
personal, of this Corporation, all as
they shall determine.
5. LEASE personal property
as lessee and elect as to tax credit and
depreciation deductions.
6. SELL, assign, pledge or
transfer all stocks or securities now or later in
the Corporation's name.
7. ENTER INTO ANY DERIVATIVE
TRANSACTION, including, without limitation, any
rate swap transactions, basis swap, forward
rate transaction, commodity swap,
commodity option, equity or equity index
transaction, cap transaction, floor
transaction, collar transaction, currency
swap transaction, cross-currency rate
swap transaction, current option and any
similar transaction or option and any
combination of the foregoing (collectively,
"Derivative Transactions"); and any
cancellation, buy-back, reversal,
termination or assignment of any Derivative
Transaction.
8. SIGN in the name of this
Corporation agreements, notes, drafts,
acceptances, guaranties, subordination
agreements, assignments, applications for
letters of credit, appointments, security
agreements, financing statements,
mortgages, pledges, hypothecations,
transfers, leases and any other instrument
or document deemed necessary by the Bank to
carry out the authority contained in
this resolution.
FURTHER: The Bank is authorized and
directed to pay the proceeds of any action
taken pursuant to these resolutions in the
manner directed by any of the persons
authorized to act, whether payable to the
order of any of them in an individual
capacity or not, and whether the proceeds
are deposited to the individual credit
of any of them or the individual credit of
any other person.
These resolutions shall continue in force
until notice to the contrary in
writing is delivered to the Bank.
<PAGE>
FURTHER: Any one of the persons authorized
above or any other person designated
by a person authorized above may request
loans or other credit under credit
facilities approved by the Bank, and
authorize payment by the Corporation of any
of its obligations under such credit
facilities. Those instructions may be made
by telephone, facsimile, or any other means
of communication. The Bank is
released from any liability for following
instructions that the recipient
believes in good faith to have been given
by a person authorized to act under
these resolutions.
FURTHER: The authority given is
retroactive, and any acts referred to which were
performed prior to the adoption of these
resolutions are ratified and affirmed.
I CERTIFY that I am the duly elected and
qualified Secretary of the Corporation
and the keeper of the records and the
corporate seal of the Corporation and that
the above is a true and correct copy of
resolutions duly adopted at a meting of
the Board of Directors of the Corporation
held in accordance with its by-laws on
May 15, 2001, and that they are in full
force and effect.
I FURTHER CERTIFY that the individuals
whose signatures appear below have been
duly elected and are presently the
incumbents of the offices set below their
respective signatures, and that the
signatures are the genuine original
signatures of each respectively.
Actual Signatures
Actual Signatures
/S/ David D. Lung
_____________________________________
David D. Lung, President
_______________________,Vice President
(Print Name)
/S/ Andy Lee Nemeth, Jr.
_____________________________________
Andy Lee Nemeth, Jr., Treasurer
________________________, Secretary
(Print Name)
------------------------------
-------------------------------------
______________, Vice-President-Finance
_____________________________________
(Print Name)
(Print Name)
(Print Title)
EXECUTED on April 11, 2003.
/S/ Andy Lee Nemeth, Jr.
Andy Lee Nemeth, Jr., Secretary
<PAGE>
[LOGO]
BANK ONE
LINE OF CREDIT Note
DUE: MAY 31, 2006
$10,000,000.00
DATE: APRIL 11, 2003
PROMISE TO PAY. On or before May 31, 2006,
for value received, Patrick
Industries, Inc. (the "Borrower") promises
to pay to Bank One, NA, with its main
office in Chicago, IL, whose address is 121
W. Franklin St., Elkhart, IN 46516
(the "Bank") or order, in lawful money of
the United States of America, the sum
of Ten Million and 00/100 Dollars
($10,000,000.00) or such lesser sum as is
indicated on Bank records, plus interest as
provided below.
DEFINITIONS. As used in this Note, the
following terms have the following
respective meanings:
"ADVANCE" means a Eurodollar Advance or a
Prime Rate Advance and "ADVANCES"
means all Eurodollar Advances and all Prime
Rate Advances under this Note.
"APPLICABLE MARGIN" means with respect to
any Prime Rate Advance or Eurodollar
Advance, as the case may be, the rate per
annum set forth below opposite the
applicable Funded Debt to EBITDA Ratio.
Funded Debt to EBITDA Ratio is defined
in the Credit Agreement.
----------------------------------------------------------------------------
Funded Debt to EBITDA Ratio
Applicable Margin
----------------------------------------------------------------------------
Prime Rate
Eurodollar
Advance
Advance
----------------------------------------------------------------------------
Greater than 3.00 to
1.00
0.00%
1.75%
----------------------------------------------------------------------------
Less than or equal
3.00 to 1.00 but
0.00%
1.625%
greater than 2.50 to
1.00
----------------------------------------------------------------------------
Less than or equal to
2.50 to 1.00
0.00%
1.50%
but greater than 2.00
to 1.00
----------------------------------------------------------------------------
Less than or equal to
2.00 to 1.00
0.00%
1.375%
----------------------------------------------------------------------------
The Applicable Margin shall, in each case,
be determined and adjusted quarterly
on the first day of the month after the
date of delivery of the quarterly and
annual financial statements required by the
Credit Agreement, provided, however,
that if such financial statements are not
delivered within two Business Days
after the required date (each, an "Interest
Determination Date"), the Applicable
Margin shall increase to the maximum
percentage amount set forth in the table
above from the date such financial
statements were required to be delivered to
the Bank until received by the Bank, and
provided further, that after such
financial statements are received by the
Bank, the Applicable Margin shall be
determined and adjusted retroactive to the
date the financial statements were
required to have been delivered to the
Bank. The Applicable Margin shall be
effective from an Interest Determination
Date until the next Interest
Determination Date. Such determinations by
the Bank shall be conclusive absent
manifest error. The initial Applicable
Margin for Prime Rate Advances is 0.00%
and for Eurodollar Advances is 1.50 %.
"CREDIT AGREEMENT" means a certain Credit
Agreement, dated January 28, 2000,
between the Borrower and the Bank, as
amended.
"BUSINESS DAY" means (i) with respect to
any borrowing, payment or rate
selection of Eurodollar Advances, a day
(other than a Saturday or Sunday) on
which banks generally are open in Indiana
and/or New York for the conduct of
substantially all of their commercial
lending activities and on which dealings
in United States dollars are carried on in
the London interbank market and (ii)
for all other purposes, a day other than a
Saturday, Sunday or any other day on
which national banking associations are
authorized to be closed.
"EURODOLLAR BASE RATE" means, with respect
to the relevant Interest Period, the
applicable British Bankers' Association
LIBOR rate for deposits in U.S. dollars
as reported by any generally recognized
financial information service as of
11:00 a.m. (London time) two Business Days
prior to the first day of such
Interest Period, and having a maturity
equal to such Interest Period, provided
that, if no such British Bankers'
Association LIBOR rate is available to the
Bank, the applicable Eurodollar Base Rate
for the relevant Interest Period shall
instead be the rate determined by the Bank
to be the rate at which BANK ONE
CORPORATION or one of its affiliate banks
offers to place deposits in U.S.
dollars with first-class banks in the
London interbank market at approximately
<PAGE>
11:00 a.m. (London time) two Business Days
prior to the first day of such
Interest Period, in the approximate amount
of the principal amount outstanding
on such date and having a maturity equal to
such Interest Period.
"EURODOLLAR ADVANCE" means any borrowing
under this Note when and to the extent
that its interest rate is determined by
reference to the Eurodollar Rate.
"EURODOLLAR RATE" means, with respect to a
Eurodollar Advance for the relevant
Interest Period, the sum of (i) the
Applicable Margin plus (ii) the quotient of
(a) the Eurodollar Base Rate applicable to
such Interest Period, divided by (b)
one minus the Reserve Requirement
(expressed as a decimal) applicable to such
Interest Period.
"INTEREST PERIOD" means, with respect to a
Eurodollar Advance, a period of one
(1), two (2), three (3) or six (6) month(s)
commencing on a Business Day
selected by the Borrower pursuant to this
Note. Such Interest Period shall end
on the day which corresponds numerically to
such date one (1), two (2), three
(3) or six (6) month(s) thereafter, as
applicable, provided, however, that if
there is no such numerically corresponding
day in such first, second, third or
sixth succeeding month(s), as applicable,
such Interest Period shall end on the
last Business Day of such first, second,
third or sixth succeeding month(s), as
applicable. If an Interest Period would
otherwise end on a day which is not a
Business Day, such Interest Period shall
end on the next succeeding Business
Day, provided, however, that if said next
succeeding Business Day falls in a new
calendar month, such Interest Period shall
end on the immediately preceding
Business Day.
"PRIME RATE" means a rate per annum equal
to the prime rate of interest
announced from time to time by the Bank or
its parent (which is not necessarily
the lowest rate charged to any customer),
changing when and as said prime rate
changes.
"PRIME RATE ADVANCE" means any Advance
under this Note when and to the extent
that its interest rate is determined by
reference to the Prime Rate. "PRINCIPAL
PAYMENT DATE" is defined in the paragraph
entitled "Principal Payments" below.
"REGULATION D" means Regulation D of the
Board of Governors of the Federal
Reserve System as from time to time in
effect and any successor thereto or other
regulation or official interpretation of
said Board of Governors relating to
reserve requirements applicable to member
banks of the Federal Reserve System.
"RESERVE REQUIREMENT" means, with respect
to an Interest Period, the maximum
aggregate reserve requirement (including
all basic, supplemental, marginal and
other reserves) which is imposed under
Regulation D. INTEREST RATES. The
aggregate number of Eurodollar Advances
outstanding at any one time evidenced by
this Note may not exceed five (5). The
Borrower shall pay interest to the Bank
on the outstanding and unpaid principal
amount of each Prime Rate Advance at the
Prime Rate plus th
