Exhibit 10.11.2

 

Execution Version

 

AMENDMENT NO. 2 TO CREDIT AGREEMENT AND WAIVER

 

This Amendment No. 2 to Credit Agreement and Waiver (this “Agreement”) dated as
of February 14, 2006, 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.

 

W I T N E S S E T H:

 

WHEREAS, the Borrower, the Administrative Agent and the Lenders have entered
into that certain Credit Agreement dated as of October 3, 2005 (as amended by
Amendment No. 1 to Credit Agreement dated as of January 24, 2006, 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 informed the Administrative Agent and the Lenders that
it intends to effect an initial public offering of Equity Interests in New
Holdco (the “IPO”); 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; and

 

WHEREAS, the Borrower has requested that the Administrative Agent and the
Lenders agree waive a portion of a mandatory prepayment otherwise required by
the 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; and

 

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:

 

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(a)           A new Section 1.07 is hereby added to the Credit Agreement after
Section 1.06 thereof that reads as follows:

 

“1.07      Certain Calculations of Consolidated EBITDA.  In the event that any
provision of this Agreement requires a calculation of Consolidated EBITDA prior
to the date that the Borrower is required to deliver financial statements for
the fiscal year ending December 31, 2005 pursuant to Section 7.01(a),
Consolidated EBITDA shall be calculated using the Borrower’s unaudited financial
statements for the Four-Quarter Period ending December 31, 2005 so long as (a)
such financial statements have been previously delivered to the Administrative
Agent in the detail and with the certification that would be required pursuant
to Section 7.01(b), and (b) prior to or simultaneously with the first time
Consolidated EBITDA is calculated for any purpose in accordance with this
Section 1.07, the Borrower has also delivered to the Administrative Agent a
Compliance Certificate calculated as of December 31, 2005 utilizing such
unaudited financial statements.”

 

(b)           Section 8.02(r) is hereby amended so that, as amended, it shall
read as follows:

 

“(r)          Investments by the Borrower in New Holdco on the Closing Date of
those amounts necessary to consummate the Merger and the other Transactions in
accordance with the sources and uses of funds provided to the Lenders prior to
the Closing Date.”

 

(c)           Section 8.06(e) is hereby amended so that, as amended, it shall
read as follows:

 

“(e)         the Borrower may make a Restricted Payment to its shareholders of
all or any portion of the Equity Interests in New Holdco owned by the Borrower
in a Permitted Securities Transaction so long as prior to the making of any such
Restricted Payment the Borrower has made prepayments (whether optional
prepayments pursuant to Section 2.06(a) or mandatory prepayments pursuant to
Section 2.06(d), or any combination thereof) of the Term Loan in an aggregate
amount of not less than $50,000,000 (exclusive of any prepayments pursuant to
Section 2.06(d)(iv)).”

 

(d)           Section 8.11(a) is hereby amended by deleting the parenthetical
phrase in line 4 thereof and substituting in lieu thereof the following:

 

“(including, the Borrower’s guaranty obligations under the Subordinated New
Holdco Note).”

 

2.             Partial Waiver of Mandatory Prepayment and Section 8.15(c). 
Subject to the terms and conditions set forth herein, the parties hereto:

 

(a)           agree that the Borrower shall not be required to make any
prepayment of the Outstanding Amount of the Term Loan pursuant to Section
2.06(d)(vi) of the Credit Agreement from any portion of the Net Cash Proceeds
received by New Holdco from the IPO so long as, prior to or simultaneously with
the IPO, the Borrower has made prepayments (whether optional prepayments
pursuant to Section 2.06(a) or mandatory prepayments pursuant to Section
2.06(d), or any combination thereof) of the Term Loan

 

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in an aggregate amount of not less than $50,000,000 (exclusive of any
prepayments pursuant to Section 2.06(d)(iv)); and

 

(b)           agree that the requirement in Section 8.15(c) regarding the
Borrower’s ownership of the Equity Interests of New Holdco shall be satisfied as
a result of the dilution of the Borrower’s percentage ownership of New Holdco
resulting from the IPO (regardless of  whether or not at least 50% of the Net
Cash Proceeds from the IPO are received by the Borrower) so long as the
prepayment required by Section 2.06(d)(vi), as modified by clause (a) of this
Paragraph 2, is made.

 

3.             Effectiveness; Conditions Precedent.  The effectiveness of this
Agreement, the amendments to the Credit Agreement provided in Paragraph 1 hereof
and the waivers provided in Paragraph 2 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, 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; and

 

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

 

(b)           The Administrative Agent shall have received for its own account
and for the account of each Lender party to this Agreement, an amendment fee for
each Lender party to this Agreement whose signature page has been received by
the Administrative Agent or its counsel not later than 5:00 p.m. Eastern
Standard Time on Tuesday, February 14, 2006 (collectively, the “Amendment Fees”)
in an amount equal to the product of (i) 0.100%, multiplied by, (ii) the sum of
(A) the amount of such Lender’s Revolving Credit Commitment, plus (B) the
Outstanding Amount of such Lender’s portion of the Term Loan.  The Amendment
Fees shall be nonrefundable and shall be deemed to have been earned in full when
this Agreement has been executed and delivered to the Administrative Agent by
the Borrower and Lenders constituting the Required Lenders, whether or not this
Agreement becomes effective.

 

(c)           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).

 

4.             Consent of the Guarantors.  Each Guarantor hereby consents,
acknowledges and agrees to the amendments, the waiver and other matters set
forth herein and hereby confirms and

 

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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.

 

5.             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)           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;

 

(c)           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; and

 

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

 

6.             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 in relation to the subject matter hereof or thereof. 
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.

 

7.             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.

 

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8.             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.

 

9.             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 11.14 and 11.15 of
the Credit Agreement.

 

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

 

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

 

12.           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 11.06 of the Credit Agreement.

 

[Signature pages omitted.]

 

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