Securities Purchase Agreement (2007)Full Document 

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SECURITIES PURCHASE AGREEMENT

BY AND AMONG

TONTINE CAPITAL PARTNERS, L.P.,

TONTINE CAPITAL OVERSEAS MASTER FUND, L.P.

AND

PATRICK INDUSTRIES, INC.

 

 

APRIL 10, 2007

 


TABLE OF CONTENTS

                                                                                     Page

ARTICLE 1 Definitions

1

ARTICLE 2

Purchase and Sale of Shares and Issuance of Note

4

 

2.1

Purchase of Shares

4

 

2.2

Issuance of Note

4

 

2.3

Purchase Price for Shares and Form of Payment; Delivery

4

 

2.4

Closing Date

4

ARTICLE 3 Buyers’ Representations and Warranties

4

 

3.1

Organization and Qualification

4

 

3.2

Authorization; Enforcement

4

 

3.3

Securities Matters

5

 

3.4

Information

5

 

3.5

Restrictions on Transfer

5

 

3.6

Stock Ownership

6

ARTICLE 4 Representations and Warranties of the Company

6

 

4.1

Organization and Qualification

6

 

4.2

Authorization; Enforcement

6

 

4.3

Capitalization; Valid Issuance of Securities

6

 

4.4

No Conflicts

7

 

4.5

SEC Documents; Financial Statements.

8

 

4.6

Absence of Certain Changes

8

 

4.7

Absence of Litigation

8

 

4.8

Intellectual Property

9

 

4.9

Tax Status

9

 

4.10

Permits; Compliance.

9

 

4.11

Environmental Matters

10

 

4.12

Title to Property

11

 

4.13

No Investment Company or Real Property Holding Company

11

 

4.14

No Brokers

11

 

4.15

Registration Rights

11

 

4.16

Exchange Act Registration

11

 

4.17

Labor Relations

11

 

4.18

Transactions with Affiliates and Employees

11

 

4.19

Insurance

11

 

4.20

Approved Acquisitions of Securities; No Anti-Takeover Provisions

12

 

4.21

ERISA

12

 

4.22

Disclosure

12

ARTICLE 5 Covenants

13

 

5.1

Form D; Blue Sky Laws

13

 

5.2

Use of Proceeds

13

 

5.3

Expenses

13

 

5.4

No Integration

13

 

5.5

Board Designee(s)

13

 

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5.6

Future Acquisitions

13

 

5.7

Announcement of Rights Offering

14

ARTICLE 6 Conditions To The Company’s Obligation

14

 

6.1

Delivery of Transaction Documents

14

 

6.2

Payment of Purchase Price

14

 

6.3

Representations and Warranties

14

 

6.4

Litigation

14

ARTICLE 7 Conditions to The Buyers’ Obligation

14

 

7.1

Delivery of Transaction Documents; Issuance of Securities

14

 

7.2

Representations and Warranties

14

 

7.3

Consents

15

 

7.4

Litigation

15

 

7.5

Project A

15

 

7.6

Opinion

15

 

7.7

No Material Adverse Effect

15

 

7.8

Board Approval

15

 

7.9

Amendment of Rights Plan

15

 

7.10

Control Share Statute

15

ARTICLE 8 Termination

15

 

8.1

Termination Provisions

15

 

8.2

Effect of Termination

16

ARTICLE 9 Indemnification

16

 

9.1

Indemnification by the Company

16

 

9.2

Notification

16

ARTICLE 10 Governing Law; Miscellaneous

17

 

10.1

Governing Law

17

 

10.2

Counterparts; Electronic Signatures

17

 

10.3

Headings

17

 

10.4

Severability

17

 

10.5

Entire Agreement; Amendments

17

 

10.6

Notices

18

 

10.7

Successors and Assigns

19

 

10.8

Third Party Beneficiaries

19

 

10.9

Publicity

19

 

10.10

Further Assurances

19

 

10.11

No Strict Construction

19

 

10.12

Rights Cumulative

19

 

10.13

Survival

19

 

10.14

Knowledge

19

 

 

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SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE AGREEMENT, dated as of April 10, 2007, is entered into by and among PATRICK INDUSTRIES, INC., an Indiana corporation (the “Company”), and the investors identified on the signature page hereto (each a “Buyer” and collectively, the “Buyers”).

RECITALS:

A.           The Buyers desire to provide financing to the Company, and the Company desires to obtain financing from the Buyers, upon the terms and conditions set forth in this Agreement, in connection with the Company’s proposed acquisition of Adorn Holdings, Inc. (“Target”);

B.            The total financing being provided by the Buyers to the Company hereunder shall consist of the purchase by the Buyers of 980,000 shares (the “Shares”) of common stock, no par value, of the Company, which constitutes 19.95% of the common stock currently outstanding, at $11.25 per share, for a total purchase price of $11,025,000.00, and the provision by the Buyers of interim debt financing of up to $16,500,000.00, but not less than $13,975,000.00 (the “Debt Financing”), in exchange for Senior Subordinated Promissory Notes from the Company in like principal amount, substantially in the form attached hereto as Exhibit A (individually, a “Note” and collectively, the “Notes”);

C.            The Company and the Buyers are executing and delivering this Agreement in reliance upon the exemptions from securities registration afforded by Section 4(2) of the 1933 Act and Rule 506; and

D.           At the Closing (as defined below), the parties hereto will execute and deliver an Amended and Restated Registration Rights Agreement, in the form attached hereto as Exhibit B, pursuant to which the Company has agreed under certain circumstances to register the resale of the Shares under the 1933 Act and the rules and regulations promulgated thereunder, and applicable state securities laws.

AGREEMENT

NOW THEREFORE, the Company and the Buyers hereby agree as follows:

ARTICLE 1

DEFINITIONS

1933 Act means the Securities Act of 1933, as amended.

1934 Act means the Securities Exchange Act of 1934, as amended.

Acquisition” means the proposed acquisition by the Company of the Target pursuant to that certain Securities Purchase Agreement dated April 10, 2007 among the Company, Target and the additional parties thereto (the “Target SPA”).

Action means any action, suit claim, inquiry, notice of violation, proceeding (including any partial proceeding such as a deposition) or investigation against or affecting the Company, any of its Subsidiaries or any of their respective properties before or by any court, arbitrator, governmental or administrative agency, regulatory authority (federal, state, county, local or foreign), public board, stock market, stock exchange or trading facility.

 

1

 


Agreement means this Securities Purchase Agreement.

Amended and Restated Registration Rights Agreement means the Amended and Restated Registration Rights Agreement, in the form attached hereto as Exhibit B, to be executed and delivered at the Closing pursuant to which the Company has agreed under certain circumstances to register the resale of the Shares under the 1933 Act and the rules and regulations promulgated thereunder, and applicable state securities laws.

Buyer” and “Buyers” have the meaning set forth in the preamble.

Claim” has the meaning set forth in Section 8.2.

Closing” has the meaning set forth in Section 2.4.

Closing Date” has the meaning set forth in Section 2.4.

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