Exhibit 10.12

 

AMENDMENT NO. 7 TO CREDIT AGREEMENT

 

This Amendment No. 7 to Credit Agreement (this “Amendment”) dated as of November
23, 2010, is made by and among WALTER ENERGY, INC., a Delaware corporation
formerly known as Walter Industries, Inc. (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.

 

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 and Waiver dated as of January 24, 2006, as
further amended by Amendment No. 2 to Credit Agreement and Waiver dated as of
February 14, 2006, as further amended by Amendment No. 3 to Credit Agreement
dated as of September 14, 2006, as further amended by Amendment No. 4 to Credit
Agreement dated as of October 9, 2007, as further amended by Amendment No. 5 to
Credit Agreement dated as of April 30, 2008, as further amended by Amendment No.
6 to Credit Agreement dated as of September 3, 2009, 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 Amendment 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, 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 Amendment;

 

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.             Amendment to Credit Agreement.  Subject to the terms and
conditions set forth herein, Section 8.02(n) of the Credit Agreement is hereby
amended by deleting such subsection in its entirety and replacing it with the
following in lieu thereof:

 

“(n)         (i) other Investments within the meaning of clause (a) and (b) of
the definition of “Investment” (and otherwise excluding Homebuilding Assets) not
exceeding $25,000,000 in any fiscal year of the Borrower, provided that (A) the
aggregate of all Investments made under this clause (n) at any time outstanding
shall not exceed $75,000,000 and (B) the aggregate amount of all Investments in
New Holdco or any of its Subsidiaries made under this clause (n) at any time
outstanding shall not exceed $15,000,000 (without increasing the aggregate limit
in the preceding clause (n)(ii)); provided further that (x) the

 

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aggregate amount of Investments at any time outstanding under clause (i) of the
immediately preceding proviso shall be increased on any date of measurement
thereof by an amount equal to the sum of fifty percent (50%) of the portion of
Excess Cash Flow each year not required to be paid to reduce the Term Loan
pursuant to Section 2.06(d)(iv) plus fifty percent (50%) of the portion of the
Net Cash Proceeds from the public or private issuance of Equity Interests of the
Borrower or any Restricted Subsidiary not required to be paid to reduce the Term
Loan pursuant to Section 2.06(d)(iii) plus fifty percent (50%) of the portion of
the Net Cash Proceeds from a Permitted Securities Transaction actually received
by the Borrower and paid to reduce the Term Loan pursuant to Section
2.06(d)(vi), in each case net of any such amounts utilized in Section 8.06(c)
and/or in Section 8.13 on or prior to such date, and (y) the annual limit of
$25,000,000 provided in this Section 8.02(n) shall be increased on any date of
measurement thereof by an amount equal to 1/3 of the amount by which the
$75,000,000 limit is increased pursuant to the immediately preceding proviso (A)
as of such date; and (ii) Investments pursuant to the Borrower’s agreement to
purchase 25,274,745 shares of common stock of Western Coal Corp. from affiliates
of Audley Capital for CAD $11.50 per share;”

 

2.             Effectiveness; Conditions Precedent.  The effectiveness of this
Amendment and the amendment to the Credit Agreement provided in Section 1 hereof
are subject to the satisfaction of each the following conditions precedent:

 

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

 

(i)                                     counterparts of this Amendment, duly
executed by the Borrower, the Administrative Agent and the Required Lenders,
which counterparts may be delivered by telefacsimile or other electronic means
(including .pdf), 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)           an amendment fee payable to each Lender that executes this
Amendment by 5:00 p.m. Eastern Time on Tuesday, November 23, 2010, such
amendment fee for each Lender’s own account, in an amount equal to (a) for each
such Revolving Lender, seven and one-half basis points (7.5 “bps”) multiplied by
such Revolving Lender’s Revolving Credit Commitment immediately prior to the
effective date of this Amendment and (b) for each Term Loan Lender, seven and
one-half basis points (7.5 “bps”) multiplied by such Term Loan Lender’s
Outstanding Amount with respect to the Term Loan immediately prior to the
effective date of this Amendment; and

 

(c)           in addition to the amendment fee, all other fees and expenses
payable to

 

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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.             Representations and Warranties.  In order to induce the
Administrative Agent and the Lenders to enter into this Amendment, 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)           This Amendment has been duly authorized, executed and delivered by
the Borrower and constitutes a legal, valid and binding obligation of such
parties; and

 

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

 

4.             Entire Agreement.  This Amendment, 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 Amendment may be changed, modified,
waived or canceled orally or otherwise, except in writing and in accordance with
Section 11.01 of the Credit Agreement.

 

5.             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.

 

6.             Counterparts.  This Amendment 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.  Delivery of an executed counterpart of a signature
page of this Amendment by telecopy or other electronic means (including .pdf)
shall be effective as delivery of a manually executed counterpart of this
Amendment.

 

7.             Governing Law.  This Amendment 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

 

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Sections 11.14 and 11.15 of the Credit Agreement.

 

8.             Enforceability.  Should any one or more of the provisions of this
Amendment 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.

 

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

 

10.           Successors and Assigns.  This Amendment 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 intentionally ommitted.]

 

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