AMENDMENT TO CREDIT FACILITIES
This Amendment to Credit Facilities
(“Amendment”) is effective as of __________, 2007 (the
“Amendment Effective Date”) by Patrick Industries, Inc.
(“Company”) and JPMorgan Chase Bank, N.A.
(“Bank”).
RECITALS
A. Company
and Bank are parties to a Credit Agreement, dated February 2,
1997, as previously amended (as amended, the “Credit
Agreement”).
B. Under
the Credit Agreement Bank has provided Company a revolving line of
credit in the principal amount of up to $15,000,000 (the
“Revolving Credit Line”) and a $15,000,000 term loan.
In addition, 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
$4,000,000 (the “Letter of Credit Line”). Company and
Bank have also entered into an interest rate swap (the “Rate
Management Transaction”), and Bank, as Party A under
that Rate Management Transaction, consents to this
Amendment.
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C.
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The Company is obligated to Bank
under the following reimbursement agreements:
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(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”),
D. The
Company has requested Bank to amend the Credit Agreement to provide
for a new $7,500,000 Term Loan. Bank has agreed to amend the Credit
Agreement to provide for that new Term Loan, as set forth in this
Amendment, all subject to the terms and conditions of this
Amendment, including the conditions precedent set forth in
Section 8.
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 as of the Amendment Effective Date:
“ Notes ” means
the Revolving Credit Note and the Term Note and the 2007 Term Note,
and Note means either the Revolving Credit Note or the Term
Note or the 2007 Term Note as the context may require.
a. New
definitions of “2007 Term Loan,” “2007 Term Loan
Applicable Margin” and “2007 Term Note” are added
to Section 1 of the Credit Agreement to read as
follows:
“ 2007 Term Loan
” shall mean the loan made pursuant to Section 2.1(c)
and evidenced by the 2007 Term Note.
“ 2007 Term Note
” shall mean the promissory note of the Company evidencing
the Term Loan, in substantially the form of Exhibit 2.1(c), as
amended or modified from time to time and together with any
promissory note or notes issued in exchange for that promissory
note.
“ 2007 Term Loan Applicable
Margin ” shall mean, with respect to any Prime Rate
Advance or Eurodollar Advance, as the case may be, under the 2007
Term 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 5.1(d)(ii) of the Credit
Agreement:
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Ratio of Funded
Debt
to Consolidated
EBITDA
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2007 Term Loan
Applicable Margin
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greater than 3.00 to 1.00
but not greater than 3.25 to
1.00
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2.25 % per annum
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greater than 2.50 to 1.00
but not greater than 3.00 to
1.00
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2.00% per annum
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greater than 2.00 to 1.00
but not greater than 2.50 to
1.00
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1.75% per annum
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less than or equal to 2.00 to
1.00
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1.625% per annum
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b. A
new Subsection 2.1(c) is added to the Credit Agreement to
provide in its entirety as follows:
(c)
2007 Term Loan . Bank has made the 2007 Term Loan to Company
in the original principal amount of $7,500,000, evidenced by the
2007 Term Note, payable in sixty (60) consecutive monthly principal
payments each in the amount of $62,500, plus accrued interest, at
the 2007 Term Loan Applicable Margin, payable on the last day of
each month commencing February 28, 2007 until
December 31, 2011, with all remaining principal and accrued
interest (if not sooner due and payable as provided in the Credit
Agreement) due and payable on January 31, 2012.
c. Section 5.2(c)
of the Credit Agreement is amended to provide in its entirety as
follows:
(c)
Tangible Net Worth . Permit or suffer the consolidated
Tangible Net Worth of the Company and its Subsidiaries to be less
than $60,000,000 at any time.
d. Section 5.2(j)
of the Credit Agreement is amended to provide in its entirety as
follows:
(j)
Capital Expenditures . The Company shall not permit or
suffer its Capital Expenditures during any calendar year to exceed
$7,000,000 in the aggregate, without written approval of
Bank.
e. Section 5.2(k)
of the Credit Agreement is amended to provide in its entirety as
follows:
(k)
Debt Service Coverage . The Company shall not permit or
suffer its Debt Service Coverage to be less than 1.10 to 1.00
measured quarterly on a rolling four quarter basis, with the first
measured date being as of March 31, 2007 for the rolling four
quarter period then ended.
f. Section 5.2(l)
of the Credit Agreement is amended to provide in its entirety as
follows:
(l)
Funded Debt to EBITDA . The Company shall not permit or
suffer the ratio of its consolidated Funded Debt to its
consolidated EBITDA to be greater than the following ratios during
the following periods:
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Ratio
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Period
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3.25 to 1.0
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Effective Date through June 30,
2007
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3.00 to 1.0
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July 1, 2007 through
December 31, 2007
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2.50 to 1.0
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From and after January 1,
2008
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For purposes of determining
compliance with this covenant during 2007 only, the following
amounts will be deemed added to the Company’s consolidated
EBITDA as of the following fiscal quarters of 2007:
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Fiscal Quarter
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Amount
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First Quarter
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$1,042,000
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Second Quarter
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$ 729,000
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Third Quarter
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$ 417,000
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Fourth Quarter
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$ 104,000
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3.
Construction . If there is any conflict or inconsistency
between the provisions of the Revolving Credit Note or the Term
Note or the 2007 Term Note, on the one hand, and the Credit
Agreement, on the other hand, the provisions of the Revolving
Credit Note or Term Note or the 2007 Term Note, as the case may be,
shall control over conflicting or inconsistent provisions of the
Credit Agreement, except that any Events of Default/Acceleration
identified in the Revolving Credit Note or the Term Note or the
2007 Term Note shall be in addition to any Events of Default
identified in the Credit Agreement.
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4.
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Representations and
Warranties . The Company
represents and warrants to Bank that:
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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 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
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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.
5.
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 RELEASED PARTIES AND WHICH WAS MADE OR EXTENDED OR WHICH OCCURRED AT ANY TIME OR TIMES 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 AGREEMENT TO OBTAIN PAYMENT OF ANY OBLIGATIONS OR TO OTHERWISE ENFORCE OR EXERCISE ANY RIGHT OR PURPORTED RIGHT OF BANK AS A CREDITOR; (II) ANY FAILURE OR REFUSAL TO MAKE ANY LOAN OR ADVANCE; AND (III) 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.
6.
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
2007 Term Note shall have been executed and delivered by the
Company to the Bank.
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c. National
City Bank shall participate in 50% of the 2007 Term Loan pursuant
to an amendment to the Loan Participation Agreement between Bank
and National City Bank in form and substance satisfactory to
Bank.
d. 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.
7.
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.
8.
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.
(The remainder of this page was
intentionally left blank)
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IN WITNESS WHEREOF, the parties
hereto have caused this Amendment to be duly executed and delivered
as of the Amendment Effective Date.
JPMORGAN CHASE BANK, N.A.
PATRICK INDUSTRIES, INC.
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Consented to by:
NATIONAL CITY BANK, as Participant
under a certain Loan Participation Agreement, as amended, relating
to the Credit Agreement
ELDS01 JST 201716v3
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AMENDMENT TO LOAN PARTICIPATION AGREEMENT
This Amendment to Loan Participation
Agreement (“Amendment”) is entered into on
January __, 2007, between JPMorgan Chase Bank, N.A., with
principal offices at 121 West Franklin Street, Elkhart, Indiana
46516 (“Lead Bank”) and National City Bank, with
offices at 101 North Main Street, Elkhart, Indiana 46516
(“Participant”).
RECITALS
Lead Bank and Participant are
parties to a Loan Participation Agreement dated April 11, 2003
(the “Agreement”) regarding credit extended by Lead
Bank to Patrick Industries, Inc., an Indiana corporation
(“Borrower”), whose address is 107 W. Franklin Street,
Elkhart, Indiana 46515, in accordance with the commercial loan
agreement and industrial revenue bond letter of credit
reimbursement agreements described in Section 1(c) of the
Agreement. Borrower has requested a new $7,500,000 term loan (the
“2007 Term Loan”). Participant desires to obtain a
participation interest in the $7,500,000 2007 Term Loan made or to
be made by Lead Bank to Borrower, and Lead Bank is willing to sell
Participant a participation interest in the $7,500,000 2007 Term
Loan to Borrower on the terms and conditions contained in the
Agreement.
Lead Bank and Participant agree as
follows:
AGREEMENT
1. Lead
Bank agrees to sell and Participant agrees to purchase a
participation of fifty percent (50%) of the $7,500,000 2007 Term
Loan on the same terms and conditions as for the other Loans
defined in the Agreement, and Lead Bank and Participant agree that
the $7,500,000 2007 Term Loan shall be deemed included in the
definition of “Loan” or “Loans” for all
purposes of the Agreement.
2. Except
as specifically amended by this Amendment all other provisions of
the Agreement remain in full force and effect.
“LEAD BANK”
JPMorgan Chase Bank, N.A. (formerly
Bank One, NA)
“PARTICIPANT”
National City Bank
ELDS01 JST 201722v1
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CHASE [logo]
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Term Note
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$7,500,000.00
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Due: January
31, 2012
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Date: January __, 2007
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Promise to Pay.
On or before January 31, 2012,
on the payment dates specified below, for value received, Patrick
Industries, Inc. (the "Borrower") promises to pay to JPMorgan Chase
Bank, N.A., 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 Seven Million Five Hundred Thousand and 00/100
Dollars ($7,500,000.00) plus interest as provided below.
Definitions.
As used in this Note, the following
terms have the following respective meanings:
"Collateral"
means all real or personal property
described in all security agreements, pledge agreements, mortgages,
deeds of trust, assignments, or other instruments now or hereafter
executed in connection with this Note or in connection with any of
the Liabilities. If applicable, the Collateral secures the payment
of this Note and the Liabilities.
"Credit Agreement"
means a certain Credit Agreement,
dated February 2, 1997, between the Borrower and the Bank, as
amended.
"Liabilities"
means all obligations, indebtedness
and liabilities of the Borrower to any one or more of the Bank,
JPMorgan Chase & Co., and any of their subsidiaries, affiliates
or successors, now existing or later arising, including, without
limitation, all loans, advances, interest, costs, overdraft
indebtedness, credit card indebtedness, lease obligations, or
obligations relating to any Rate Management Transaction, all
monetary obligations incurred or accrued during the pendency of any
bankruptcy, insolvency, receivership or other similar proceedings,
regardless of whether allowed or allowable in such proceeding, and
all renewals, extensions, modifications, consolidations or
substitutions of any of the foregoing, whether the Borrower may be
liable jointly with others or individually liable as a debtor,
maker, co-maker, drawer, endorser, guarantor, surety or otherwise,
and whether voluntarily or involuntarily incurred, due or not due,
absolute or contingent, direct or indirect, liquidated or
unliquidated.
"Principal Payment
Date" is defined in the
paragraph entitled "Principal Payments" below.
"Rate Management
Transaction" means any
transaction (including an agreement with respect thereto) now
existing or hereafter entered into among the Borrower, the Bank or
JPMorgan Chase & Co., or any of its subsidiaries or affiliates
or their successors, which is a rate swap, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity
index swap, equity or equity index option, bond option, interest
rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, forward transaction, currency swap
transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect
to any of these transactions) or any combination thereof, whether
linked to one or more interest rates, foreign currencies, commodity
prices, equity prices or other financial measures.
“Related
Documents” means
all loan agreements, credit agreements, reimbursement agreements,
security agreements, mortgages, deeds of trust, pledge agreements,
assignments, guaranties, or any other instrument or document
executed in connection with this Note or in connection with any of
the Liabilities.
"Term Loan 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.
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Funded Debt to EBITDA Ratio
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Term Loan Applicable Margin
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Prime Rate Advance
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Eurodollar Advance
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Greater than 3.00 to 1.00 but not
greater than 3.25 to 1.00
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0%
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2.25%
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Greater than 2.50 to 1.00 but not
greater than 3.00 to 1.00
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0%
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2.00%
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Greater than 2.00 to 1.00 but not
greater than 2.50 to 1.00
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0%
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1.75%
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Less than or equal to 2.00 to
1.00
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0%
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1.625%
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The Term Loan 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 Term Loan 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.
The Term Loan 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 Term Loan Applicable Margin for Prime Rate Advances is
0% and for Eurodollar Advances is 2.00%.
Capitalized terms used but not
defined in this Note have the meanings ascribed to them in the
Credit Agreement.
Interest Rates.
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 the Applicable Margin and
each Eurodollar Advance at the Eurodollar Rate. Interest shall be
calculated on the basis of the actual number of days elapsed in a
year of 360 days. In no event shall the interest rate applicable to
any Advance exceed the maximum rate allowed by law. Any interest
payment which would for any reason be deemed unlawful under
applicable law shall be applied to principal.
Bank Records.
The Bank shall, in the ordinary
course of business, make notations in its records of the date,
amount, interest rate and Interest Period of each Advance
hereunder, the amount of each payment on the Advances, and other
information. Such records shall, in the absence of manifest error,
be conclusive as to the outstanding principal balance of and
interest rate or rates applicable to this Note.
Notice and Manner of Electing
Interest Rates on Advances. The Borrower shall give the Bank written notice
(effective upon receipt) of the Borrower's intent to draw down an
Advance under this Note no later than 11:00 a.m. Eastern time, one
(1) Business Day before disbursement, if the full amount of the
drawn Advance is to be disbursed as a Prime Rate Advance and three
(3) Business Days before disbursement, if any part of
suc
