SECOND AMENDMENT AND WAIVER

SECOND AMENDMENT AND WAIVER

THIS SECOND AMENDMENT AND WAIVER dated as of December 11, 2008 (this " Amendment ") amends the Credit Agreement dated as of May 18, 2007 (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:

1.1.1    The definitions of Alternate Base Rate, Commitment Fee Rate, LC Fee Rate, Revolving Termination Date and Term Maturity Date are amended in their entirety to read as follows respectively:

" Alternate Base Rate " means, for any day, a rate per annum equal to the highest of (a) the Prime Rate as in effect on such day; (b) the sum of 0.50% per annum plus the Federal Funds Effective Rate as in effect on such day; and (c) the sum of 1.00% plus the LIBO Rate that would be applicable for an Interest Period of one month beginning on such day (or if such day is not a Business Day, the immediately preceding Business Day). Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the LIBO Rate, respectively.

" Commitment Fee Rate " means 0.50%.

" LC Fee Rate " means 4.50%.

" Revolving Termination Date " means the earlier of (a) January 3, 2011 and (b) the date on which the Revolving Commitments terminate pursuant to Section 2.8 or Article VII .

" Term Maturity Date " means the earlier of (a) January 3, 2011 and (b) the date on which the Term Loans are declared due and payable pursuant to Article VII .

1.1.2    The definitions of Applicable Margin, Consolidated Net Worth, Fixed Charge Coverage Ratio and Leverage Ratio are deleted.

-1-

" Account Debtor " means any Person that is obligated to a Loan Party under an Account Receivable.

" Account Receivable " means, with respect to any Person, any right of such Person to payment for goods sold or leased or for services rendered.

" Borrowing Base " means as of any date (beginning January 1, 2009), the lesser of (a) the sum of (i) 80% of the amount of all Eligible Accounts Receivable plus (ii) 50% of the amount of all Eligible Inventory measured at the lower of cost or fair market value; or (b) the amount set forth on Schedule 1.1(b) for such date.

" Borrowing Base Certificate " means a borrowing base certificate executed by a Financial Officer of the Borrower substantially in the form of Exhibit J .

" Collateral Access Agreement " means an agreement, in form and substance reasonably acceptable to the Administrative Agent, between the Administrative Agent and a third party relating to Inventory of any Loan Party located on the property of such third party.

" Eligible Account Receivable " means an Account Receivable owing to any Loan Party that meets each of the following requirements: (a) it is payable in Dollars; (b) it arises from the sale of goods or the rendering of services by the applicable Loan Party, such goods or services comply with the applicable Account Debtor’s specifications (if any) and, if it arises from the sale of goods, (c) it (i) is subject to a perfected Lien in favor of the Administrative Agent and (ii) is not subject to any other assignment, claim or Lien; (d) it is a valid, legally enforceable and unconditional obligation of the applicable Account Debtor, is not contingent in any respect or for any reason, and is not subject to any offset or contra account payable to the applicable Account Debtor, deduction, counterclaim, credit, allowance, discount, rebate or adjustment by the applicable Account Debtor or to any claim by such Account Debtor denying liability thereunder in whole or in part; (e) there is no bankruptcy, insolvency or liquidation proceeding by or against the Account Debtor with respect thereto; (f) the Account Debtor with respect thereto is a resident or citizen of, and is located within, the United States, unless the sale of goods or services giving rise to such Account Receivable is supported by a letter of credit, a banker’s acceptance, credit insurance or other credit support terms reasonably satisfactory to the Administrative Agent; (g) it is not an Account Receivable arising from a "sale on approval," "sale or return" or "consignment" or subject to any other repurchase or return agreement; (h) it arises in the ordinary course of business of a Loan Party; (i) if the Account Debtor is the United States or any department, agency or instrumentality thereof, the applicable Loan Party has assigned its right to payment of such Account Receivable to the Administrative Agent pursuant to the Assignment of Claims Act of 1940; (j) if a Loan Party maintains a credit limit for an Account Debtor, the aggregate dollar amount of Accounts Receivable due from such Account Debtor, including such Account Receivable, does not exceed such

-2-

credit limit ( provided that if any such credit limit is exceeded, otherwise eligible Accounts Receivable will be ineligible only to the extent of such excess); (k) such Account Receivable is not more than (i) 60 days past the due date thereof or (ii) 90 days past the original invoice date thereof, in each case according to the original terms of sale; (l) the Account Debtor with respect thereto is not a Loan Party or an Affiliate thereof; (m) it is not owed by an Account Debtor with respect to which 10% or more of the aggregate amount of outstanding Accounts Receivable owed at such time by such Account Debtor is classified as ineligible under clause (k) of this definition; (n) the Account Receivable is not evidenced by a promissory note or chattel paper unless such promissory note or chattel paper has been pledged and delivered to the Administrative Agent; and (o) the applicable Loan Party is not subject to a prohibition by the laws of the jurisdiction where the Account Debtor is located from bringing an action in the courts of that jurisdiction to enforce the Account Debtor’s obligation to pay the Account Receivable.

An Account Receivable that is at any time an Eligible Account Receivable, but that subsequently fails to meet any of the foregoing requirements, shall forthwith cease to be an Eligible Account Receivable. In addition, if the Administrative Agent at any time hereafter determines in good faith, that the prospect of payment or performance by the Account Debtor with respect to any Account Receivable is impaired for any reason whatsoever, the Administrative Agent may, upon not less than three Business Days’ notice to the Borrower, require that such Account Receivable cease to be an Eligible Account Receivable or set a different advance rate for such Account Receivable.

" Eligible Inventory " means Inventory of any Loan Party that meets each of the following requirements: (a) it (i) is subject to a perfected Lien in favor of the Administrative Agent and (ii) is not subject to any other assignment, claim or Lien (other than inchoate tax liens); (b) it consists of raw materials or finished goods that are salable, in the ordinary course of the applicable Loan Party’s business; (c) it is not Inventory produced in violation of the Fair Labor Standards Act and subject to the "hot goods" provisions contained in Title 29 U.S.C. §215; (d) if Inventory is held by a third Person or is located at property leased by the applicable Loan Party, as lessee, such Loan Party has used commercially reasonable efforts to cause such third Person or the lessor of such property, as applicable, to deliver a Collateral Access Agreement to the Administrative Agent; (e) it is not subject to any agreement that would restrict the Administrative Agent’s ability to sell or otherwise dispose of such Inventory; (f) it is located in the United States or any territory or possession of the United States that has adopted Article 9 of the Uniform Commercial Code (as revised in 2001); (g) it is not "in transit" to a Person other than a Loan Party; (h) it is not held by a Loan Party on consignment; (i) it is not "work in progress"; (j) it is not placed on consignment; and (k) it is not reserved against for obsolescence.

Inventory that is at any time Eligible Inventory but that subsequently fails to meet any of the foregoing requirements shall forthwith cease to be Eligible

-3-

Inventory. If the Administrative Agent at any time hereafter determines in good faith, that such Inventory is unacceptable due to age, type, category, quality or quantity, the Administrative Agent may, upon not less than three Business Days’ notice to the Borrower require that such Inventory cease to be Eligible Inventory or set a different advance rate for such Inventory.

" Inventory " has the meaning assigned to such term in the Uniform Commercial Code as in effect in the State of Illinois from time to time.

" Permitted Asset Sales " means collectively, the disposition (in one or more sales) of (i) the assets of the Borrower’s Patrick Metals division, which includes aluminum extrusion, distribution and fabrication operations and the real property located at 5020 Lincolnway, East Mishawaka,  IN  46544, (ii) the property located at 1609 SW 17th Ave, Ocala, Florida and (iii) the assets of the Borrower’s American Hardwoods division, including the real property located at 1401 East Hadley Street, Phoenix, Arizona.

" Revolving Availability " means the lesser of (a) the total Revolving Commitments and (b) the Borrowing Base or, prior to January 1, 2009, $22,300,000.

1.2        Amendments to Maximum Availability . Each of the first sentence of Section 2.1(b), Section 2.4, the third sentence of Section 2.5(a) and the last sentence of Section 2.5(b) is amended by deleting the words "total Revolving Commitments" and substituting therefor the words "Revolving Availability".

1.3        Amendment to Section 2.2(c) . The first sentence of Section 2.2(c) is amended by inserting the following phrase immediately after the words " provided that" therein: ", subject to Section 2.1(b) ,".

1.4.1    Section 2.11(c) is amended by inserting the following parenthetical clause immediately after the word "Subsidiary" therein "(excluding the proceeds of all inventory and accounts receivable resulting from the sale of the Borrower’s American Hardwoods division)".

1.4.2    Section 2.11 is amended by adding the following new clause (f) in proper sequence and designating existing clauses (f) and (g) as clauses (g) and (h), respectively:

(f)        If, on any date after January 1, 2009, the total Revolving Credit Exposures exceed the Revolving Availability, the Borrower shall promptly (and, in any event within one Business Day) prepay Revolving Loans or cash collateralize (pursuant to procedures substantially similar to those set forth in Section 2.5(j) ) Letters of Credit in an amount sufficient to eliminate such excess.

1.5        Amendments to Section 2.13 . Sections 2.13(a) and 2.13(b) are amended in their entirety to read as follows, respectively:

-4-

(a)       Subject to the provisions of Section 2.13(c) , the Loans comprising each ABR Borrowing shall bear interest at a rate per annum equal to the Alternate Base Rate plus (i) in the case of Revolving Loans, including Swingline Loans, 3.50%, and (ii) in the case of Term Loans, 6.5%.

(b)       Subject to the provisions of Section 2.13(c) and (e), the Loans comprising each Eurodollar Borrowing shall bear interest at a rate per annum equal to the LIBO Rate for each Interest Period in effect for such Borrowing plus (i) in the case of Revolving Loans, 4.50% and (ii) in the case of Term Loans, 7.50%; provided that the Borrower may, at its option by notice to the Administrative Agent, defer payment of any interest on Term Loans in excess of 4.50% (or, at any time that default interest is applicable pursuant to Section 2.13(c) , 6.50%) per annum to the Term Maturity Date (in which event such deferred interest shall bear interest at the rate per annum otherwise applicable to Term Loans, which interest shall be payable on the Term Maturity Date).

1.6        Amendments to Section 5.1 . Section 5.1 is amended by (a) inserting the following new clauses (f), (g) and (h) in proper sequence, (b) deleting the word "and" at the end of clause (e) and (c) designating the existing clause "(f)" as clause "(i)":

(f)        as soon as available, but not later than the 20 ^th day of each month, a Borrowing Base Certificate as of the close of business on the last Business Day of the preceding month; provided that at any time an Event of Default or Unmatured Event of Default exists, the Administrative Agent may require the Borrower to deliver Borrowing Base Certificates more frequently (including on a daily basis);

(g)       as soon as available, but not later than the 20 ^th (or in the case of the last month of a fiscal year, the 45 ^th ) day of each month (excluding any month ending on the last day of the first three quarters of a fiscal year), a certificate of a Financial Officer of the Borrower setting forth reasonably detailed calculations demonstrating compliance with Section 6.8(a) as of the end of the proceeding month;

(h)       as soon as available, but not later than 5:00 p.m. on the third Business Day of each week, commencing with the week beginning on December 15, 2008 a report, in form and substance reasonably acceptable to the Required Lenders and the Administrative Agent, that includes (i) a forecast of cash flows and liquidity for the immediately succeeding thirteen weeks, and (ii) a comparison of actual cash flows and liquidity to budget for the period since the most recent such report; and

1.7        Amendment to Section 5.6 . Section 5.6 is amended by inserting the following phrase prior to the semicolon in the first sentence thereto:

; and permit, and cause each Subsidiary to permit, the Administrative Agent to perform periodic field examinations of the Borrower and its Subsidiaries at reasonable intervals and at such reasonable times as the

-5-

Administrative Agent or the Required Lenders (in each case in consultation with the Borrower) may elect

1.8        Additional Affirmative Covenants . Article V is amended by adding the following Sections 5.11, 5.12 and 5.13 at the end thereof:

5.11      Monthly Calls . Beginning in February, 2009, participate in a conference call with the Administrative Agent and the Lenders within five Business Days after the submission of each Borrowing Base Certificate pursuant to Section 5.1(f) , in each case at a time mutually agreeable to the Administrative Agent and the Borrower.

5.12      Financial Advisor . Continue to retain PwC Corporate Advisory & Restructuring LLC (or another firm acceptable to the Administrative Agent and the Required Lenders) as a financial advisor to the Borrower and its Subsidiaries and (i) cause such financial advisor to be available to discuss with the Administrative Agent and the Lenders on a monthly basis, during business hours and upon reasonable prior notice, the business, financial condition and operations of the Borrower and its Subsidiaries and (ii) deliver to the Administrative Agent copies of all management and similar reports delivered by such financial advisor to the Borrower.

5.13 Appraisal . Not later than March 31, 2009, deliver to the Administrative Agent and the Lenders an updated machinery and equipment appraisal from a firm acceptable to the Required Lenders (it being understood that such appraisal may include "desktop appraisals" but shall include an on-site appraisal of at least one representative plant).

1.9        Amendment to Section 6.6 . Section 6.6 is amended in its entirety to read as follows:

6.6        Restricted Payments. Not, and not permit any Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except (a) any Subsidiary may declare and pay dividends to the Borrower or any other Loan Party and (b) the Borrower may make Restricted Payments pursuant to and in accordance with stock option plans or other benefit plans for management or employees of the Borrower and its Subsidiaries in amounts that are consistent with past practice.

1.10      Amendments to Section 6.8 . Section 6.8 is amended in its entirety to read as follows:

6.8 Financial Covenants . Not permit:

(a)        Minimum EBITDA . Consolidated EBITDA for any one month or two month period to be less than the amount specified for such period on Schedule 6.8 .

-6-

(b)        Capital Expenditures . Capital Expenditures in any fiscal year to exceed $2,250,000.

1.11.1  Section 6.9 (c) is amended by inserting the following phrase immediately before the words "California Property" therein: "or both"

1.13      Schedule 1.1(b) and Schedule 6.8 hereto are added as Schedule 1.1(b) and Schedule 6.8 to the Credit Agreement.

1.14      Amendment to Exhibits . Exhibit J hereto is added as Exhibit J to the Credit Agreement.

SECTION 2.    WAIVER . Subject to the conditions precedent set forth in Section 4 , the Required Lenders waive any Event of Default resulting from (a) the Borrower’s non-compliance with Section 6.8 of the Credit Agreement for the Computation Period ended September 30, 2008; and (b) the inability of the Borrower to cause a Mortgage in favor of the Administrative Agent to be recorded on the Borrower’s property located at 201 Industrial Road, Halstead, Kansas due to the failure of the City of Halstead to timely deliver a deed conveying title to such property to the Borrower.

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.

(c)       A Borrowing Base Certificate, substantially in the form of Exhibit J , as of November 30, 2008 signed by a Financial Officer of the Borrower.

-7-

(d)       A Warrant for each Lender, substantially in the form of Exhibit B , exercisable for such Lender’s Total Percentage of 4.9% of the common stock of the Borrower on a fully-diluted basis.

(e)       An amendment fee for each Lender that, on or prior to 4:00 p.m. (Chicago time) on December 11, 2008, delivers a signed counterpart of this Amendment to the Administrative Agent, such fee to equal to the product of 0.50% multiplied by the sum of (i) such Lender’s pro rata share (based upon its Revolving Percentage) of the Revolving Commitment and (ii) the outstanding principal amount of such Lender’s Term Loan.

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

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.

[Remainder Of Page Intentionally Left Blank]

-8-

            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

JPMORGAN CHASE BANK, N.A., individually and as Administrative Agent

By /s/ Michael E. Lewis

FIFTH THIRD BANK

By /s/ Craig Ellis

BANK OF AMERICA, N.A., as successor to LaSalle Bank National Association

By /s/ Anthony D. Healey

KEY BANK, NATIONAL ASSOCIATION

By /s/ Geoffrey R. Henry

RBS CITIZENS, NATIONAL ASSOCIATION, as successor by merger with Charter One Bank

By /s/ Peter Coates

ASSOCIATED BANK

By /s/ Viktor R. Gottlieb

NATIONAL CITY BANK

By /s/ Josh Stehlin

1 ^ST SOURCE BANK

By /s/ Jeff Buhr

SCHEDULE 1.1(b)

BORROWING BASE AMOUNTS

SCHEDULE 6.8

CONSOLIDATED EBITDA

EXHIBIT A

FORM OF CONFIRMATION

December 11, 2008

Agent, and the other financial institutions that are

parties to the Credit Agreement referred to below

Please refer to the Second 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.   

ADORN, LLC

EXHIBIT B

FORM OF WARRANT AGREEMENT

WARRANT AGREEMENT

THIS WARRANT AGREEMENT (this " Agreement " ) dated as of December 11, 2008 is among PATRICK INDUSTRIES, INC., an Indiana corporation (the " Company "), and the holders of Warrants (as defined below) listed on the signature page hereof (along with their permitted transferees, the " Holders ").

WHEREAS, to induce the lenders under the Credit Agreement dated as of May 18, 2007 among the Company, various lenders and JPMorgan Chase Bank, N.A., as administrative agent, to enter into a Second Amendment and Waiver to such Credit Agreement on the date hereof, the Company has agreed to issue warrants (the " Warrants ") to purchase up to an aggregate of 474,049 shares, subject to adjustment, of its common stock, without par value (the " Common Stock ").

WHEREAS, the Company and the Holders have agreed to set forth herein the terms of the Warrants and certain agreements relating to, among other things, the exercise and transfer of the Warrants.

NOW, THEREFORE, for valuable consideration, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

Section 1.1 Definitions . As used in this Agreement, the following terms shall have the following meanings:

" Additional Shares of Common Stock " means (without duplication) all shares (including treasury shares) of Common Stock issued or sold (or, pursuant to Section 3.3 or 3.4 , deemed to be issued) by the Company on or after the date hereof, whether or not subsequently reacquired or retired by the Company, other than (a) shares issued upon the exercise of the Warrants and (b) such number of additional shares as may become issuable upon the exercise of the Warrants by reason of adjustments required pursuant to the provisions of such Warrants as in effect on the date hereof.

" Applicable Number of Shares " means at any date of determination a number of shares of Common Stock equal to the difference between (a) the Initial Number of Shares, less (b) the number of shares of Common Stock which were issued pursuant to the exercise of any Warrant, as determined immediately prior to such date (giving effect to any stock splits or combinations, or any dividends paid or payable in shares of Common Stock, after the issuance of such shares).

" Business Day " means any day other than a Saturday or a Sunday or a day on which commercial banking institutions in the City of New York are authorized by law to be closed. Any reference to "days" (unless Business Days are specified) shall mean calendar days.

" Common Stock " has the meaning specified in the recitals to this Agreement and includes any capital stock into which the Common Stock shall have been changed or any capital stock resulting from any reclassification of Common Stock, and all other capital stock of any class or classes (however designated) of the Company the holders of which have the right, without limitation as to amount, either to all or to a share of the balance of current dividends and liquidating dividends after the payment of dividends and distributions on any shares entitled to preference.

" Company " has the meaning specified in the introduction to this Agreement.

" Convertible Security " means any evidence of indebtedness, share of stock (other than Common Stock) or other security directly or indirectly convertible into or exercisable or exchangeable for Additional Shares of Common Stock.

" Current Market Price " means, on any date specified herein, the average of the daily Market Price during the five consecutive trading days before such date, except that, if on any such date the shares of Common Stock are not listed or admitted for trading on any national securities exchange or quoted in the over-the-counter market, the Current Market Price shall be the Market Price on such date.

" Exchange Act " means the Securities Exchange Act of 1934.

" Exercise Notice " has the meaning specified in Section 2.1(a) .

" Exercise Price " means the Initial Price, as adjusted from time to time as provided herein.

" Expiration Date " means 11:59 p.m., New York City time, on December 11, 2018.

" Fair Value " means, on any date specified herein (i) in the case of cash, the dollar amount thereof, (ii) in the case of a security, the Market Price, and (iii) in all other cases, the fair value thereof (as of a date which is within 20 days of the date as of which the determination is to be made) determined in good faith jointly by the Company and a Majority of the Holders; provided that if such parties are unable to reach agreement within a reasonable period of time, the Fair Value shall be determined in good faith by an independent investment banking firm selected jointly by the Company and a Majority of the Holders or, if that selection cannot be made within ten days, by an independent investment banking firm selected by the American Arbitration Association in accordance with its rules; and provided , further , that the Company shall pay all of the fees and expenses of any third parties incurred in connection with determining the Fair Value.

" Holder " has the meaning specified in the introduction to this Agreement.

" Initial Number of Shares " means 474,049 shares of Common Stock.

" Initial Price " means $1.00 per share.

" Majority of the Holders " means Holders of Warrants that would be, upon exercise of the Warrants, entitled to purchase more than 50% of all shares of Common Stock then issuable under all of the Warrants.

" Market Price " means, on any date specified herein, the amount per share of Common Stock equal to (a) the last reported sale price of the Common Stock at or prior to 4:00 p.m., New York City time, on such date or, if no such sale takes place on such date, the average of the closing bid and asked prices thereof as of 4:00 p.m., New York City time, on such date, in either case as officially reported on the principal national securities exchange on which the Common Stock is then listed or admitted for trading, (b) if the Common Stock is not then listed or admitted for trading on any national securities exchange but is traded in the over-the-counter market, the last reported sale price of Common Stock at or prior to 4:00 p.m., New York City time, on such date or, if no such sale takes place on such date, the average of the closing bid and asked prices thereof as of 4:00 p.m., New York City time, on such date, in either case as reported by Bloomberg Financial Markets, or (c) if Common Stock is not then listed or admitted for trading on any national exchange or quoted in the over-the-counter market, the fair value thereof (as of a date that is within 20 days of the date as of which the determination is to be made) determined in good faith jointly by the Company and a Majority of the Holders; provided that if such parties are unable to reach agreement within a reasonable period of time, the Market Price shall be determined in good faith by an independent investment banking firm selected jointly by the Company and a Majority of the Holders or, if that selection cannot be made within ten days, by an independent investment banking firm selected by the American Arbitration Association in accordance with its rules; and provided , further , that the Company shall pay all fees and expenses of any third party incurred in connection with determining the Market Price.

" Options " means any rights, options or warrants to subscribe for, purchase or otherwise acquire Additional Shares of Common Stock or Convertible Securities.

" Other Securities " means any capital stock (other than Common Stock) and other securities of the Company or any other Person that the holders of the Warrants at any time shall be entitled to receive, or shall have received, upon the exercise of the Warrants, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to Article IV or otherwise.

" Person " means any individual, firm, partnership, corporation, trust, joint venture, association, joint stock company, limited liability company, unincorporated organization or any other entity or organization, including a government or agency or political subdivision thereof, and shall include any successor (by merger or otherwise) of such entity.

" Purchase Price " has the meaning specified in Section 2.1(a) .

" Registration Rights Agreement " means the Second Amended and Restated Registration Rights Agreement dated as of the date hereof among the Company, the Holders, Tontine Capital Partners, L.P. and Tontine Capital Overseas Master Fund, L.P.

" Securities Act " means the Securities Act of 1933.

" Warrants " has the meaning specified in the recitals to this Agreement.

" Warrant Shares " means (a) any shares of Common Stock (or Other Securities) issued or issuable upon the exercise of Warrants and (b) any shares of Common Stock (or Other Securities) issued subsequent to the exercise of any of the Warrants as a dividend or other distribution with respect to, or resulting from a subdivision of the outstanding shares of Common Stock (or Other Securities) into a greater number of shares by reclassification, stock split, reverse stock split or otherwise, or in exchange for or in replacement of the Common Stock (or Other Securities) issued upon such exercise.

" Waiver Notice " has the meaning specified in Section 2.4(a) .

Section 1.2 Interpretation . For purposes of this Agreement, (a) definitions shall apply equally to the singular and plural forms of the terms defined; (b) words of any gender shall be deemed to include each other gender; (c) Article and Section headings are for convenience only and shall not limit or otherwise affect the meaning hereof; (d) the word "including" and words of similar import shall be deemed to be followed by the phrase "without limitation"; and (e) unless otherwise specified or the context otherwise requires, (i) any reference to an agreement or other document means such agreement or other document as amended, restated or otherwise modified from time to time, (ii) any reference to a Person shall be deemed to include such Person’s successors and assigns, (iii) any reference to an Article , a Section , an Exhibit or a Schedule means an Article or a Section of, or an Exhibit or Schedule to, this Agreement and (e) any reference to a statute or regulation includes all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such statute or regulation

ARTICLE II

ISSUANCE AND EXERCISE OF WARRANTS

Section 2.1. Issuance of Warrants; Manner of Exercise; Payment of the Purchase Price . (a) Subject to the terms and conditions of this Agreement, the Company hereby issues to each initial Holder a Warrant (each in the form of Exhibit A ) to purchase, at the Exercise Price, shares of fully paid and nonassessable Common Stock in the amount set forth on Schedule A and listed adjacent to such Holder’s name. Each Warrant may be exercised by the Holder thereof, in whole or in part, from time to time prior to the Expiration Date, for a number of shares of Common Stock not greater than the then-Applicable Number of Shares determined as of the date of exercise, by surrendering to the Company at its principal office such Warrant, with an Election to Purchase Shares (an " Exercise Notice ") in the form of Exhibit B (or a reasonable facsimile thereof) duly executed by the Holder. An Exercise Notice shall specify the number of shares of

Common Stock to be issued to such Holder and shall be accompanied by payment of the applicable purchase price (the " Purchase Price ") in an amount equal to the product of (i) the Exercise Price and (ii) the number of shares of Common Stock to be issued.

(b) Payment of the Purchase Price may be made as follows: (i) in United States currency by cash or delivery of a certified check or bank draft payable to the order of the Company or by wire transfer to the Company; (ii) by cashless exercise pursuant to Section 2.1(c) ; (iii) by surrender to the Company for cancellation of certificates representing shares of Common Stock of the Company owned by the Holder (properly endorsed for transfer in blank) having a Current Market Price on the date of Warrant