Exhibit 10.19

 

 

 

AMENDMENT NO. 5 TO THE

 

FIRST LIEN SENIOR SECURED CREDIT AGREEMENT

 

Dated as of March 26, 2010

 

among

 

WII MERGER CORPORATION,
as the initial Borrower,

 

CREDIT SUISSE AG (fka Credit Suisse),
as Administrative Agent, Swing Line Lender and
an L/C Issuer,

 

The Other Lenders Parties Hereto

 

and

 

CREDIT SUISSE AG (fka Credit Suisse),
as Collateral Agent

 

 

 

 

 

CREDIT SUISSE SECURITIES (USA) LLC

 

Sole Lead Arranger and Sole Bookrunning Manager

 

 

 

 

 

 

 

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AMENDMENT NO.  5 TO THE
CREDIT AGREEMENT

 

Dated as of March 26, 2010

 

AMENDMENT NO. 5 TO THE CREDIT AGREEMENT (this “Amendment”) among WII COMPONENTS,
INC., a Delaware corporation (the “Borrower”), the Lenders party thereto and
CREDIT SUISSE AG (formerly known as Credit Suisse), acting through one or more
of its branches, or any Affiliate thereof (collectively, “Credit Suisse”), as
Administrative Agent, Swing Line Lender, an L/C Issuer and Collateral Agent.

 

PRELIMINARY STATEMENTS:

 

(1)           WII Merger Corporation and Credit Suisse entered into a Credit
Agreement dated as of January 9, 2007, as amended by Amendment No. 1 dated as of
February 7, 2007, Amendment No. 2 dated as of June 12, 2007, Amendment No. 3
dated February 19, 2008 and Amendment No. 4 dated as of March 30, 2009 (as so
amended, the “Credit Agreement”).  Capitalized terms not otherwise defined in
this Amendment have the same meanings as specified in the Credit Agreement.

 

(2)           Pursuant to the Merger and the Assumption Agreement, the Borrower
assumed all of the obligations of WII Merger Corporation under the Loan
Documents.

 

(3)           The Borrower has requested that the Required Lenders agree to
amend certain provisions of the Credit Agreement as described herein.

 

(4)           The Required Lenders have agreed, subject to the terms and
conditions stated below, to amend the Credit Agreement as hereinafter set forth.

 

SECTION 1.         Amendments to Credit Agreement.  The Credit Agreement is,
effective as of the date hereof and subject to the satisfaction of the
conditions precedent set forth in Section 2, hereby amended as follows:

 

(A)           SECTION 1.01 IS HEREBY AMENDED BY ADDING THE FOLLOWING DEFINITIONS
IN THE CORRECT ALPHABETICAL ORDER:

 

“Borrowing Base Certificate” means a certificate in substantially the form of
Exhibit N hereto, duly certified by the chief financial officer or the chief
executive officer of the Borrower.

 

“Borrowing Base Deficiency” has the meaning specified in Section 2.05(b)(vi).

 

“Eligible Collateral” means, collectively, Eligible Inventory and Eligible
Receivables.

 

“Eligible Inventory” means Inventory of the Loan Parties, other than the
following classes of Inventory, except to the extent otherwise expressly agreed
in writing by the Administrative Agent:

 

(a)   Inventory not in the possession of or under the sole control of any Loan
Party (other than (i) Inventory located on leased property (which is covered by
clause (b) below) and (ii) inventory consigned by a Borrower to a customer or

 

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located in a third party warehouse; provided, with respect to any such customer
or warehouseman, the Administrative Agent shall have received a collateral
access and subordination agreement reasonably acceptable to the Administrative
Agent);

 

(b)           Inventory located on leased property as to which  the landlord has
not entered into a collateral access and subordination agreement reasonably
acceptable to the Administrative Agent providing the Collateral Agent with the
right to repossess such Inventory and such other reasonable rights as may be
required by the Collateral Agent; provided, in the event such landlord does not
enter into a collateral access and subordination agreement, the Administrative
Agent shall establish a rent reserve of not more than two months with respect to
such location and Inventory located at such location shall not be excluded from
Eligible Inventory solely by reason of this clause (b);

 

(c)           Inventory that is obsolete, unusable or otherwise unfit for sale;

 

(d)           Inventory with respect to which the representations and warranties
set forth in the Collateral Documents applicable to Inventory are not true and
correct in all material respects;

 

(e)           Inventory consisting of promotional, marketing, packaging or
shipping materials and supplies;

 

(f)            Inventory that fails to meet all standards imposed by any
Governmental Authority having regulatory authority over such Inventory or its
use or sale;

 

(g)           Inventory that is subject to any licensing, patent, royalty,
trademark, trade name or copyright agreement with any third party from which any
Loan Party has received notice of a dispute with respect to infringing upon the
rights of such licensor or any other Person in respect of any such agreement;

 

(h)           Inventory located outside the United States and Canada; and

 

(i)            (i) Inventory located in the United States in respect of which
the Security Agreement, after giving effect to the related filings of financing
statements that have then been made, does not or has ceased to create a valid
and perfected first priority lien or security interest in favor of the
Collateral Agent for the benefit of the Secured Parties securing the Secured
Obligations under applicable laws of the United States or (ii) Inventory located
in Canada in respect of which the Security Agreement, after giving effect to the
related filings of financing statements that have then been made, does not or
has ceased to create a valid and perfected first priority lien or security
interest in favor of the Collateral Agent for the benefit of the Secured Parties
securing the Secured Obligations under applicable laws of Canada.

 

“Eligible Receivables” means Receivables of the Loan Parties, other than the
following classes of Receivables, except to the extent otherwise expressly
agreed in writing by the Administrative Agent:

 

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(a)           Receivables that do not arise out of sales of goods or rendering
of services in the ordinary course of the business of the Loan Parties;

 

(b)           Receivables on terms other than those normal or customary in the
business of the Loan Parties, as reasonably determined by the Borrower in good
faith;

 

(c)           Receivables owing from any Person that is an Affiliate of any Loan
Party or any of its Subsidiaries;

 

(d)           Receivables more than 120 days past the original invoice date or
more than 60 days past the date due;

 

(e)           Receivables owing from any Person from which an aggregate amount
of more than 35% of the Receivables owing from such Person and its Affiliates is
more than 60 days past due;

 

(f)            Receivables owing from any Person that has asserted any claim,
demand or liability against any Loan Party or any of its Subsidiaries, whether
by action, suit, counterclaim or otherwise, but only to the extent of any such
claim, demand, liability, counterclaim, suit,  deduction, defense, setoff or
dispute;

 

(g)           Receivables owing from any Person that shall take or be the
subject of any action or proceeding of a type described in
Section 8.01(f) (other than post-petition accounts payable of an account debtor
that is a debtor-in-possession under the Bankruptcy Code and reasonably
acceptable to the Administrative Agent);

 

(h)           Receivables owing from any Person that is also a supplier to or
creditor of any Loan Party unless such account debtor has executed a no-offset
letter reasonably satisfactory to the Administrative Agent, provided, that
Receivables shall be ineligible under this clause only to the extent of any
offset or claim of such account debtor;

 

(i)            Receivables arising out of sales to account debtors outside the
United States and Canada, unless such Receivable is supported by a letter of
credit or other similar obligation satisfactory to the Administrative Agent;

 

(j)            Receivables arising out of sales on a bill-and-hold, guaranteed
sale, sale-or-return, sale on approval or consignment basis or similar
arrangements;

 

(k)           Receivables owing from an account debtor that is an agency,
department or instrumentality of the United States or any State thereof; and

 

(l)            Receivables in respect of which the Security Agreement, after
giving effect to the related filings of financing statements that have then been
made, does not or has ceased to create a valid and perfected first priority lien
or security interest in favor of the Collateral Agent for the benefit of the
Secured Parties securing the Secured Obligations.

 

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“Inventory” means all Inventory referred to in Section 1(b) of the Security
Agreement.

 

“Loan Value” means, with respect to any Eligible Collateral:

 

(a)     in the case of Eligible Inventory, 65% of the lower of cost or book
value determined in accordance with GAAP; and

 

(b)     in the case of Eligible Receivables, 85% of the principal amount
thereof.

 

“Receivables” means all Receivables referred to in Section 1(c) of the Security
Agreement.

 

(B)           SECTION 2.05(B)(VI) IS HEREBY AMENDED BY ADDING A NEW SENTENCE AT
THE END THEREOF TO READ AS FOLLOWS:

 

“The Borrower shall,  within one Business Day of the Business Day on which the
aggregate amount of Total Outstandings exceeds the sum of the Loan Values of the
Eligible Collateral on such Business Day (the amount of any such excess being
referred to as the “Borrowing Base Deficiency”), prepay an aggregate principal
amount of the Revolving Credit Loans and the Swing Line Advances and, after
prepayment in full of all such Revolving Credit Loans and Swing Line Advances,
Cash Collateralize the L/C Obligations, in an aggregate amount equal to such
Borrowing Base Deficiency.”

 

(C)           SECTION 4.02(A) IS HEREBY AMENDED TO ADD A NEW CLAUSE AT THE END
THEREOF TO READ AS FOLLOWS:

 

“; and the sum of the Loan Values of the Eligible Collateral exceeds the
aggregate principal amount of the Total Outstandings plus the amount of such
Credit Extension”.

 

(D)           A NEW SECTION 6.22 IS HEREBY ADDED TO READ AS FOLLOWS:

 

“6.22.  Borrowing Base Certificates.  As soon as available and in any event
within 20 days after the end of each month, a Borrowing Base Certificate, as at
the end of the previous month, certified by the chief financial officer of the
Borrower and in form and substance satisfactory to the Administrative Agent.”

 

(E)           SECTION 7.02(A)(II) IS HEREBY AMENDED BY DELETING THE DATE
“MARCH 31, 2010” APPEARING THEREIN AND REPLACING IT WITH THE DATE “MARCH 31,
2011”.

 

(F)            SECTION 7.06(K) IS HEREBY AMENDED BY  DELETING EACH REFERENCE TO
THE DATE “MARCH 31, 2010” APPEARING THEREIN AND REPLACING IT WITH THE DATE
“MARCH 31, 2011”.

 

(G)           FOR EACH PERIOD OF FOUR FISCAL QUARTERS ENDING AFTER DECEMBER 31,
2009, THE GRID IN SECTION 7.11(A)(I) IS HEREBY AMENDED TO READ AS FOLLOWS (IT
BEING UNDERSTOOD AND AGREED THAT SUCH GRID FOR PRIOR PERIODS SHALL REMAIN IN
EFFECT NOTWITHSTANDING SUCH AMENDMENT):

 

Four Fiscal Quarters Ending

 

Maximum Consolidated
Leverage Ratio

March 31, 2010

 

17.15:1.00

 

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Four Fiscal Quarters Ending

 

Maximum Consolidated
Leverage Ratio

June 30, 2010

 

18.00:1.00

September 30, 2010

 

18.50:1.00

December 31, 2010

 

20.15:1.00

March 31, 2011 through December 31, 2011

 

6.00:1.00

March 31, 2012

 

4.20:1.00

June 30, 2012

 

4.00:1.00

September 30, 2012

 

3.90:1.00

December 31, 2012

 

3.80:1.00

 

(H)           FOR EACH PERIOD OF FOUR FISCAL QUARTERS ENDING AFTER DECEMBER 31,
2009, THE GRID IN SECTION 7.11(C)(I) IS HEREBY AMENDED TO READ AS FOLLOWS (IT
BEING UNDERSTOOD AND AGREED THAT SUCH GRID FOR PRIOR PERIODS SHALL REMAIN IN
EFFECT NOTWITHSTANDING SUCH AMENDMENT):

 

Four Fiscal Quarters Ending

 

Minimum Consolidated
Interest Coverage Ratio

March 31, 2010 through December 31, 2010

 

1.10:1.00

March 31, 2011

 

3.90:1.00

June 30, 2011

 

4.00:1.00

September 30, 2011 through December 31, 2011

 

4.10:1.00

March 31, 2012

 

4.70:1.00

June 30, 2012

 

5.40:1.00

September 30, 2012

 

6.20:1.00

December 31, 2012

 

7.10:1.00

 

(I)            SECTION 8.01(O) IS HEREBY AMENDED BY DELETING THE DATE “MARCH 31,
2010” APPEARING THEREIN AND REPLACING IT WITH THE DATE “MARCH 31, 2011”.

 

(J)            A NEW EXHIBIT N IS HEREBY ADDED TO THE CREDIT AGREEMENT IN THE
FORM OF EXHIBIT N HERETO.

 

SECTION 2.         Conditions of Effectiveness.  This Amendment shall become
effective as of the date first above written when, and only when,

 

(A)           THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED COUNTERPARTS OF THIS
AMENDMENT EXECUTED BY EACH LOAN PARTY AND THE REQUIRED LENDERS;

 

(B)           THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED, IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT, A CERTIFICATE OF
THE SECRETARY OR AN ASSISTANT SECRETARY OF EACH LOAN PARTY CERTIFYING THAT THE
CERTIFIED RESOLUTIONS OF THE BOARD OF DIRECTORS (OR SIMILAR GOVERNING BODY) OF
EACH LOAN PARTY DELIVERED IN CONNECTION WITH THE CREDIT AGREEMENT HAVE NOT BEEN
AMENDED, MODIFIED OR REVOKED AND ARE IN FULL FORCE AND EFFECT ON THE DATE
HEREOF; AND

 

(C)           ALL EXPENSES AND REASONABLE FEES OF THE ADMINISTRATIVE AGENT
(INCLUDING ALL REASONABLE FEES AND EXPENSES OF COUNSEL TO THE ADMINISTRATIVE
AGENT), TO THE EXTENT INVOICED AND DUE PRIOR TO THE DATE HEREOF, SHALL HAVE BEEN
PAID.

 

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SECTION 3.         Confirmation of Representations and Warranties and No Event
of Default.  Each of the Loan Parties hereby represents and warrants (a) on and
as of the date hereof, that the representations and warranties contained in the
Loan Documents are true and correct in all material respects on and as of the
date hereof, but after giving effect to this Amendment, as though made on and as
of the date hereof, other than any such representations or warranties that, by
their terms, refer to a specific date and (b) after giving effect to this
Amendment, no event has occurred and is continuing that constitutes a Default.

 

SECTION 4.         Affirmation of Guarantors.  Each Guarantor hereby consents to
the amendments to the Credit Agreement effected hereby, and hereby confirms and
agrees that, notwithstanding the effectiveness of this Amendment, the
obligations of such Guarantor contained in the Holdings Guaranty or the
Subsidiary Guaranty (as the case may be), or in any other Loan Document to which
it is a party are, and shall remain, in full force and effect and are hereby
ratified and confirmed in all respects, except as set forth in
Section 6(a) below.

 

SECTION 5.         REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS.  (A) ON AND
AFTER THE EFFECTIVENESS OF THIS AMENDMENT, EACH REFERENCE IN THE CREDIT
AGREEMENT TO “THIS AGREEMENT”, “HEREUNDER”, “HEREOF” OR WORDS OF LIKE IMPORT
REFERRING TO THE CREDIT AGREEMENT, AND EACH REFERENCE IN EACH OF THE OTHER LOAN
DOCUMENTS TO “THE CREDIT AGREEMENT”, “THEREUNDER”, “THEREOF” OR WORDS OF LIKE
IMPORT REFERRING TO THE CREDIT AGREEMENT, SHALL MEAN AND BE A REFERENCE TO THE
CREDIT AGREEMENT, AS AMENDED BY THIS AMENDMENT.

 

(B)   THE CREDIT AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS, AS SPECIFICALLY
AMENDED BY THIS AMENDMENT, ARE AND SHALL CONTINUE TO BE IN FULL FORCE AND EFFECT
AND ARE HEREBY IN ALL RESPECTS RATIFIED AND CONFIRMED.

 

(C)   THE EXECUTION, DELIVERY AND EFFECTIVENESS OF THIS AMENDMENT SHALL NOT,
EXCEPT AS EXPRESSLY PROVIDED HEREIN, OPERATE AS A WAIVER OF ANY RIGHT, POWER OR
REMEDY OF ANY LENDER OR THE ADMINISTRATIVE AGENT UNDER THE CREDIT AGREEMENT, NOR
CONSTITUTE A WAIVER OF ANY PROVISION OF THE CREDIT AGREEMENT OR ANY OTHER LOAN
DOCUMENT.

 

SECTION 6.         Costs, Expenses.  The Borrower agrees to pay on demand all
costs and expenses of the Administrative Agent (including, without limitation,
the reasonable fees and expenses of counsel for the Administrative Agent) in
connection with the preparation, execution, delivery and administration,
modification and amendment of this Amendment and the other instruments and
documents to be delivered hereunder, in accordance with the terms of
Section 10.04 of the Credit Agreement.

 

SECTION 7.         Execution in Counterparts.  This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute but one and the same
agreement.  Delivery of an executed counterpart of a signature page to this
Amendment by facsimile shall be effective as delivery of a manually executed
counterpart of this Amendment.

 

SECTION 8.         Governing Law.  This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.

 

[The remainder of this page intentionally left blank.]

 

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

 

 

 

WII COMPONENTS, INC., as Borrower

 

 

 

 

 

 

By

/s/ Dale B. Herbst

 

 

Name: Dale B. Herbst

 

 

Title: CFO

 

 

 

 

 

 

 

WII HOLDING, INC.,

 

as Guarantor

 

 

 

 

 

 

 

By

/s/ Dale B. Herbst

 

 

Name: Dale B. Herbst

 

 

Title: CFO

 

 

 

 

 

 

 

WOODCRAFT INDUSTRIES, INC.,

 

as Guarantor

 

 

 

 

 

 

 

By

/s/ Dale B. Herbst

 

 

Name: Dale B. Herbst

 

 

Title: CFO

 

 

 

 

 

 

 

BRENTWOOD ACQUISITION CORP.,

 

as Guarantor

 

 

 

 

 

 

 

By

/s/ Dale B. Herbst

 

 

Name: Dale B. Herbst

 

 

Title: CFO

 

 

 

 

 

 

 

PRIMEWOOD, INC.,

 

as Guarantor

 

 

 

 

 

 

 

By

/s/ Dale B. Herbst

 

 

Name: Dale B. Herbst

 

 

Title: CFO

 

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CREDIT SUISSE AG (formerly known as Credit Suisse), Cayman Islands Branch,

 

as Administrative Agent and Collateral Agent

 

 

 

 

 

 

By

/s/ Bill O’Daly

 

 

Name: Bill O’Daly

 

 

Title: Director

 

 

 

 

 

 

 

By

/s/ Vipul Dhadda

 

 

Name: Vipul Dhadda

 

 

Title: Associate

 

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CREDIT SUISSE AG (formerly known as Credit Suisse), Cayman Islands Branch,

 

as Lender

 

 

 

 

 

 

 

By

/s/ Bill O’Daly

 

 

Name: Bill O’Daly

 

 

Title: Director

 

 

 

 

 

 

 

By

/s/ Vipul Dhadda

 

 

Name: Vipul Dhadda

 

 

Title: Associate

 

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EXHIBIT N

 

FORM OF BORROWING BASE CERTIFICATE

 

To:          Credit Suisse AG, as Administrative Agent

 

Date:         ,

 

(1)          Accounts Receivable

 

(2)           Total Ineligible Receivables

 

(3)           Eligible Receivables       (line 1 — line 2)

 

(4)           Loan Value of Eligible Receivables (85% of line 3)

 

(5)           Inventory

 

(6)           Ineligible Inventory

 

(7)           Rent Reserve and other adjustments*

 

(8)           Eligible Inventory (line 5 — line 6 — line 7)

 

(9)           Loan Value of Eligible Inventory (65% of line 8)

 

(10)         Loan Value of Eligible Collateral (line 4 + line 9)

 

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*Explain:

 

This report (this “Certificate”) is submitted pursuant to the Credit Agreement,
dated as of January 9, 2007 (as amended, restated, extended, supplemented or
otherwise modified in writing from time to time, the “Credit Agreement”), among
WII COMPONENTS, Inc., a Delaware corporation (the “Borrower”), the Lenders from
time to time party thereto, and CREDIT SUISSE AG (formerly known as Credit
Suisse), acting through one or more of its branches or any Affiliate thereof, as
Administrative Agent, Swing Line Lender, an L/C Issuer and Collateral Agent. 
Unless otherwise indicated, capitalized terms used but not defined herein shall
have the meanings ascribed to them in the Credit Agreement.

 

The undersigned hereby certifies, solely in his/her capacity as an authorized
officer of the Borrower and not in his/her individual capacity, as of the date
first written above, that the amounts and calculations herein accurately reflect
the Eligible Collateral.

 

 

WII COMPONENTS, INC.

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

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