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Exhibit 10.20  


Execution Version  


 
 

AMENDMENT NO. 3 TO CREDIT AGREEMENT    
    


        This
Amendment No. 3 to Credit Agreement (this "Agreement") dated as of March 24, 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. 


 
 

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 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 (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
definition of "Consolidated EBITDA" in Section 1.01 word is
hereby amended (A) by deleting the word "and" following the comma at the end of subpart (xi) thereof, (B) deleting the semicolon at the end of subpart (xii) thereof and
adding in its place ", and", and (C) adding the following new subpart (xiii) after the current subpart (xii) thereof: 




	minus (xiii)	 	any cash expenditure made on or after July 1, 2004 in connection with other postemployment benefits to the extent such expenditures are not deducted in computing Consolidated Net Income;







        (b)   Section 1.03(c) is hereby amended by deleting the reference therein to
"Section 8.05(h)" and replacing such reference with "Section 8.05(g)". 


        (c)   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 3.30 to 1.00. 




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



        (c)   Fixed Charge Coverage Ratio.    Permit the Consolidated Fixed Charge Coverage Ratio as of the end of any
Four-Quarter Period to be less than 1.25 to 1.00; provided that in the event that there have been no CMO Financing Cash Proceeds during the
Four-Quarter Period ending June 30, 2004, the Consolidated Fixed Charge Coverage Ratio shall not be tested as of the end of the Four-Quarter Period ending
June 30, 2004. 





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




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        (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 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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AMENDMENT NO. 3 TO CREDIT AGREEMENT

W I T N E S S E T H