Exhibit 10.11.1


 


AMENDMENT NO. 1 TO CREDIT AGREEMENT AND WAIVER


 


This Amendment No. 1 to Credit Agreement and Waiver (this “Agreement”) dated as
of January 24, 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 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


 

















 


(a)           Section 7.02(f)
is hereby amended by replacing “60 days” therein with “75 days”;


(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 (x) 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, and (y) following the consummation of a Permitted Securities
Transaction described in clause (b) of the definition of such term, and so long
as no Default shall have occurred and be continuing or arise therefrom, in the
form of capital contributions to New Holdco applied solely, and substantially
simultaneously with the receipt thereof by New Holdco, to the prepayment of the
Subordinated New Holdco Note.” ; and


(c)           Section 8.11(a)
is hereby amended by deleting the parenthetical phrase in line 4 thereof and
substituting in lieu thereof the following: (except that, following the
consummation of a Permitted Securities Transaction described in clause (b) of
the definition of such term, the Borrower’s guaranty obligations of the
Subordinated New Holdco Note may be prepaid pursuant to Section 8.02(r)
by the Borrower).


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 a prepayment of the Outstanding Amount
of the Term Loan pursuant to Section 2.06(d)(vi) of the Credit Agreement
in an amount in excess of $100,000,000 (the “Maximum Amount”) from the Net Cash
Proceeds received by New Holdco from the IPO,


(b)           hereby waive any
requirement in Section 2.06(d)(vi) of the Credit Agreement to make a
prepayment in excess of the Maximum Amount, and


(c)           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 so
long as the prepayment required by Section 2.06(d)(vi), as modified by
clauses (a) and (b) of this Paragraph 2, is made.


3.             Partial Waiver
of Section 8.04. Subject to the terms and conditions set forth herein, the
parties hereto waive any Default arising from the dissolution of Jim Walter
Computer Services, Inc., previously a Subsidiary and a Guarantor.


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


5.             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 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.


6.             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;


 


(d)           At
the time of the dissolution of Jim Walter Computer Services, Inc. referred to
in Paragraph 3, such Person was inactive, owned no Equity Interests in
any Subsidiary and had assets with a fair market value of less than $2,000,000,
all of which were transferred to the Borrower upon the consummation of such
dissolution; and


 


 

















 


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


 


7.             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.


8.             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.


9.             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.


10.           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.


11.           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.


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


13.           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.]