Exhibit 10.21

 

Execution Version

 

AMENDMENT NO. 4 TO CREDIT AGREEMENT

 

This Amendment No. 4 to Credit Agreement (this “Agreement”) dated as of April
13, 2004 is made by and among WALTER INDUSTRIES, INC., a Delaware corporation
(the “Borrower”), BANK OF AMERICA, N.A., a national banking association
organized and existing under the laws of the United States (“Bank of America”),
in its capacity as administrative agent for the Lenders (as defined in the
Credit Agreement (as defined below)) (in such capacity, the “Administrative
Agent”), and each of the Lenders signatory hereto, and each of the Guarantors
(as defined in the Credit Agreement) signatory hereto.

 

WITNESSETH:

 

WHEREAS, the Borrower, the Administrative Agent and the Lenders have entered
into that certain Credit Agreement dated as of April 17, 2003, as amended by
Amendment No. 1 and Consent dated as of June 16, 2003, as further amended by
Amendment No. 2 to Credit Agreement dated as of October 28, 2003, and as further
amended by Amendment No. 3 to Credit Agreement dated as of March 24, 2004 (as so
amended, as hereby amended and as from time to time hereafter further amended,
modified, supplemented, restated, or amended and restated, the “Credit
Agreement”; the capitalized terms used in this Agreement not otherwise defined
herein shall have the respective meanings given thereto in the Credit
Agreement), pursuant to which the Lenders have made available to the Borrower a
term loan facility and a revolving credit facility, including a letter of credit
facility and a swing line facility; and

 

WHEREAS, each of the Guarantors has entered into a Guaranty pursuant to which it
has guaranteed certain or all of the obligations of the Borrower under the
Credit Agreement and the other Loan Documents; and

 

WHEREAS, the Borrower has requested that the Administrative Agent and the
Lenders agree to amend certain terms of the Credit Agreement, which the
Administrative Agent and the Lenders party hereto are willing to do on the terms
and conditions contained in this Agreement;

 

NOW, THEREFORE, in consideration of the premises and further valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

 

1.             Amendments to Credit Agreement. Subject to the terms and
conditions set forth herein, the Credit Agreement is hereby amended as follows:

 

(a)           The following new definitions are added to Section 1.01 in their
proper alphabetical order:

 

“Amendment No. 4” means that certain Amendment No. 4 to Credit Agreement dated
as of April 13, 2004 by and among the Borrower, the Guarantors, the
Administrative Agent and certain of the Lenders.

 

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“Convertible Notes” means Indebtedness of the Borrower in the form of notes
issued by the Borrower substantially simultaneously with the effectiveness of
Amendment No. 4 that (i) is subordinated in payment to the Obligations hereunder
and (ii) is convertible into common equity of the Borrower, all on terms and
subject to documentation reasonably satisfactory to the Administrative Agent.

 

“Maximum Repurchase Amount” means, at any date of computation thereof, the sum
of (a) $25,000,000 plus (b) up to $25,000,000 of the amount by which the initial
aggregate principal amount of the issuance of the Convertible Notes exceeds
$125,000,000 plus (c) the amount of repurchases permitted by Section 8.06(d) but
not utilized during the fiscal year of the Borrower ending December 31, 2004;
provided that (i) amounts set forth in subsection (c) above will be the first
dollars deemed to be utilized during the fiscal year of the Borrower ending
December 31, 2005, and (ii) this definition of “Maximum Repurchase Amount” shall
be reduced on January 1, 2006 by the amount provided in subsection (c) above but
not utilized prior to such date.

 

(b)           The following new Section 2.06(d)(iv) is hereby added after the
current Section 2.06(d)(iii):

 

(iv)          The Borrower shall make, or shall cause each applicable Restricted
Subsidiary to make, a prepayment in an amount equal to one hundred percent
(100%) of the Net Cash Proceeds of each private or public issuance of
Indebtedness of the Borrower or any Restricted Subsidiary permitted by Section
8.03(n). Each prepayment required to be made pursuant to this Section
2.06(d)(iv) shall be made simultaneously with the receipt of such Net Cash
Proceeds (or the next Business Day thereafter in the event such Net Cash
Proceeds are received later than the time necessary to make such prepayment on
the day of receipt thereof), with the Borrower providing written notice thereof
to the Administrative Agent simultaneously with the issuance of such
Indebtedness, which notice shall include a certificate of a Responsible Officer
of the Borrower setting forth in reasonable detail the calculations utilized in
computing the Net Cash Proceeds of such issuance; provided that in the event the
prepayment to be made pursuant to this Section 2.06(d)(iv) will be sufficient to
repay the Term Loan B in full, including all accrued interest and fees, and
terminate the Term Loan B, then the certificate of a Responsible Officer
provided by this sentence shall not be required.

 

(c)           The following new sentence is added to the end of Section 2.06(d):

 

Notwithstanding anything to the contrary in this Section 2.06(d), prepayments
made under Section 2.06(d)(iv) shall only be applied the Outstanding Amount of
the Term Loan B, and following the repayment in full of the Term Loan B no
prepayment of the Outstanding Amount under the Revolving Credit Facility, and no
reduction of the Aggregate Revolving Credit Commitments, shall be required with
the Net Cash Proceeds described in Section 2.06(d)(iv).

 

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(d)           The word “and” following Section 8.03(1) is hereby deleted, the
period following Section 8.03(m) is hereby deleted and replaced with “; and”,
and the following new Section 8.03(n) is hereby added after the current Section
8.03(m):

 

(n)           a single issuance (including any exercise of an increase option in
connection with such issuance) of Convertible Notes in an initial aggregate
principal amount of not less than $125,000,000 but not in excess of
$175,000,000, so long as such issuance occurs on or prior to July 31, 2004.

 

(e)            Section 8.06(d) is hereby deleted in its entirety and replaced
with the following:

 

(d)           without limiting Section 8.06(e), at any time during the fiscal
year of the Borrower ending December 31, 2004 the Borrower may make one or more
repurchases of its own capital stock from holders of such capital stock in an
aggregate amount not to exceed $50,000,000 so long as (i) the Borrower has
issued the Indebtedness described in Section 8.03(n) within the time provided
therein in an initial principal amount not less than $125,000,000 prior to the
date of any such repurchase, (ii) the Term Loan B has been paid in full and
terminated prior to the date of any such repurchase, and (iii) after giving pro
forma effect to each such repurchase no Default shall have occurred and be
continuing;

 

(f)            Section 8.06(e) is hereby amended by deleting the clause “without
duplication of Section 8.06(d)” and replaced such clause with “without limiting
Section 8.06(d) or (f)”.

 

(g)           The following new Section 8.06(f) is hereby added after the
current Section 8.06(e):

 

(f)            without limiting Section 8.06(e), at any time after December 31,
2004 the Borrower may repurchase shares of its own capital stock for cash in an
aggregate amount not to exceed the Maximum Repurchase Amount so long as (i) the
Borrower has issued the Indebtedness described in Section 8.03(n) in an initial
principal amount not less than $125,000,000 within the time provided therein and
prior to the date of any such repurchase, (ii) the Term Loan B has been paid in
full and terminated prior to the date of any such repurchase, and (iii) after
giving pro forma effect to each such repurchase (A) the Consolidated Leverage
Ratio is not greater than 1.75 to 1.00, (B) the remaining amount available to be
drawn under the Revolving Credit Facility is not less than $100,000,000, and (C)
no Default shall have occurred and be continuing.

 

(h)           Section 8.12(a) is hereby deleted in its entirety and replaced
with the following:

 

(c)           Consolidated Leverage Ratio. Permit the Consolidated Leverage
Ratio (i) at any time to be greater than 2.75 to 1.00 except as provided in
subpart (ii) below with respect only to the fiscal quarter of the Borrower
ending June 30, 2004, or (ii) in the event that there have been no CMO Financing
Cash Proceeds during the Four-Quarter Period ending June 30, 2004, at any time
during the fiscal quarter of the Borrower ending June 30, 2004 to be greater
than (x) 4.25 to 1.00 if

 

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the Borrower issues the Indebtedness permitted by Section 8.03(n) within the
time provided therein, or (y) 3.30 to 1.00 otherwise.

 

2.              Effectiveness; Conditions Precedent, The effectiveness of this
Agreement and the amendments to the Credit Agreement provided in Paragraph 1
hereof are all subject to the satisfaction of each the following conditions
precedent:

 

(a)            The Administrative Agent shall have received each of the
following documents or instruments in form and substance reasonably acceptable
to the Administrative Agent:

 

(i)            counterparts of this Agreement, duly executed by the Borrower,
the Administrative Agent, each Guarantor and the Required Lenders, together with
all schedules and exhibits thereto duly completed, which counterparts may be
delivered by telefacsimile or other electronic means, but such delivery will be
promptly followed by the delivery of four (4) original signature pages by each
Person party hereto unless waived by the Administrative Agent;

 

(ii)           such other assurances, certificates, documents, consents or
opinions as the Administrative Agent reasonably may require.

 

(b)            All fees and expenses payable to the Administrative Agent and the
Lenders (including the reasonable fees and expenses of counsel to the
Administrative Agent) shall have been paid in full (without prejudice to final
settling of accounts for such fees and expenses).

 

3.              Consent of the Guarantors.  Each Guarantor hereby consents,
acknowledges and agrees to the amendments and other matters set forth herein and
hereby confirms and ratifies in all respects the Guaranty to which such
Guarantor is a party (including without limitation the continuation of such
Guarantor’s payment and performance obligations thereunder upon and after the
effectiveness of this Agreement and the amendments, waivers and consents
contemplated hereby) and the enforceability of such Guaranty against such
Guarantor in accordance with its terms.

 

4.              Representations and Warranties. In order to induce the
Administrative Agent and the Lenders to enter into this Agreement, the Borrower
represents and warrants to the Administrative Agent and the Lenders as follows:

 

(a)            The representations and warranties made by the Borrower in
Article VI of the Credit Agreement and in each of the other Loan Documents to
which it is a party are true and correct in all material respects on and as of
the date hereof, except to the extent that such representations and warranties
expressly relate to an earlier date;

 

(b)           Since December 31, 2002, no event or circumstance has occurred,
and no action, suit, investigation or proceeding has been brought or, to the
best of the Borrower’s knowledge, threatened in any court or before any
arbitrator or Governmental Authority that has had or could be reasonably
expected to have, either individually or in the

 

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aggregate, a Material Adverse Effect, except to the extent previously disclosed
to the Administrative Agent and the Lenders;

 

(c)           The Persons appearing as Guarantors on the signature pages to this
Agreement constitute all Persons who are required to be Guarantors pursuant to
the terms of the Credit Agreement and the other Loan Documents, including
without limitation all Persons who became Subsidiaries or were otherwise
required to become Guarantors after the Closing Date, and each of such Persons
has become and remains a party to a Guaranty as a Guarantor;

 

(d)           This Agreement has been duly authorized, executed and delivered by
the Borrower and Guarantors party hereto and constitutes a legal, valid and
binding obligation of such parties, except as may be limited by general
principles of equity or by the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting creditors’ rights generally;
and

 

(e)           After giving effect to this Agreement, no Default or Event of
Default has occurred and is continuing.

 

5.              Entire Agreement.  This Agreement, together with all the Loan
Documents (collectively, the “Relevant Documents”), sets forth the entire
understanding and agreement of the parties hereto in relation to the subject
matter hereof and supersedes any prior negotiations and agreements among the
parties relating to such subject matter. No promise, condition, representation
or warranty, express or implied, not set forth in the Relevant Documents shall
bind any party hereto, and no such party has relied on any such promise,
condition, representation or warranty. Each of the parties hereto acknowledges
that, except as otherwise expressly stated in the Relevant Documents, no
representations, warranties or commitments, express or implied, have been made
by any party to the other. None of the terms or conditions of this Agreement may
be changed, modified, waived or canceled orally or otherwise, except in writing
and in accordance with Section 11.01 of the Credit Agreement.

 

6.              Full Force and Effect of Agreement.  Except as hereby
specifically amended, modified or supplemented, the Credit Agreement and all
other Loan Documents are hereby confirmed and ratified in all respects and shall
be and remain in full force and effect according to their respective terms.

 

7.              Counterparts.  This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original as against any party
whose signature appears thereon, and all of which shall together constitute one
and the same instrument.

 

8.              Governing Law.  This Agreement shall in all respects be governed
by, and construed in accordance with, the laws of the State of New York
applicable to contracts executed and to be performed entirely within such State,
and shall be further subject to the provisions of Sections 11.16(b) and 11.17 of
the Credit Agreement.

 

9.              Enforceability.  Should any one or more of the provisions of
this Agreement be determined to be illegal or unenforceable as to one or more of
the parties hereto, all other

 

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provisions nevertheless shall remain effective and binding on the parties
hereto.

 

10.            References.  All references in any of the Loan Documents to the
“Credit Agreement” shall mean the Credit Agreement, as amended hereby.

 

11.            Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the Borrower, the Administrative Agent and each of the
Guarantors and Lenders, and their respective successors, legal representatives,
and assignees to the extent such assignees are permitted assignees as provided
in Section 11.07 of the Credit Agreement.

 

 

[Signature pages omitted.]

 

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