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 


 

















 


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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