Exhibit 4.3
INTERCREDITOR AGREEMENT
This
INTERCREDITOR AGREEMENT, dated as of April 23, 2004, is among
CREDIT
SUISSE FIRST BOSTON, acting through its
Cayman Islands Branch ("CSFB"), in its
capacity as Administrative Agent under the
Credit Agreement (as defined below)
(in such capacity, the "Administrative
Agent"), LAW DEBENTURE TRUST COMPANY OF
NEW YORK, as trustee and collateral agent
under the Indenture referred to below
(in its capacity as collateral agent, the
"Trustee"), MUELLER GROUP, INC., a
Delaware corporation (the "Company") and
each other Obligor (as defined below)
party hereto.
W I T N E S S E T H:
WHEREAS, the
Company, proposes to enter into a Second Amended and Restated
Credit Agreement, dated as of the Effective
Date (as amended, supplemented,
amended and restated or otherwise modified
from time to time, the "Credit
Agreement"), among the Company, the various
financial institutions and other
Persons from time to time party thereto as
lenders (the "Lenders"), Credit
Suisse First Boston, acting through its
Cayman Island Branch, as Administrative
Agent for the Lenders, and JPMorganChase
Bank and Deutsche Bank Securities,
Inc., as Syndication Agents for the
Lenders, amending and restating in its
entirety the Amended and Restated Credit
Agreement, dated as of June 24, 2002
(as amended or otherwise modified prior to
the Effective Date, the "Existing
Credit Agreement"), among the Company, the
various financial institutions and
other Persons from time to time parties
thereto as lenders, Bank One, NA, as
the administrative agent for the lenders,
CSFB, as the syndication agent for
the lenders, and Bayerische Hypo-und
Vereinsbank AG, New York Branch, as the
documentation agent for the lenders;
WHEREAS, the
Company proposes to enter into an Indenture, dated as of the
Effective Date (as amended, supplemented,
amended and restated or otherwise
modified from time to time, the
"Indenture") with the Trustee governing the
rights and duties of the Company under the
second priority senior secured
floating rate notes due 2011 issued by the
Company in an aggregate principal
amount of $100,000,000 (together with any
additional notes issued under such
Indenture, the "Notes");
WHEREAS, it is a
condition precedent to the effectiveness of the Credit
Agreement that the Administrative Agent
(for itself and for the benefit of the
Secured Parties), the Trustee (for itself
and for the benefit of the
Noteholders, as defined below) and the
Obligors party hereto enter into this
Agreement;
NOW, THEREFORE,
in consideration of the foregoing, the mutual covenants
and obligations herein set forth and for
other good and valuable consideration,
the adequacy and receipt of which are
hereby acknowledged, and in reliance upon
the representations, warranties and
covenants herein contained, the parties
hereto, intending to be legally bound,
hereby agree as follows:
SECTION 1.
Definitions. As used in this Agreement, the following terms
shall have the following meanings (such
meanings to be equally applicable to
both the singular and the plural
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form of the terms indicated) and
capitalized terms defined in the Credit
Agreement used (but not otherwise defined)
herein shall have the meanings
ascribed to them in the Credit
Agreement:
"Administrative
Agent" means, in addition to the Administrative Agent
defined in the preamble, the then acting
agent for the Secured Parties under
the Loan Documents and any successor
thereto exercising substantially the same
rights and powers.
"Agreement"
means this Intercreditor Agreement, as amended, supplemented,
amended and restated or otherwise modified
from time to time in accordance with
the terms hereof.
"Bankruptcy
Code" means title 11 of the United States Code (11 U.S.C. 101
et seq.), as in effect from time to time
and any successor statute.
"Common
Collateral" means all of the assets of the Obligors
constituting
both Lender Collateral and Noteholder
Collateral.
"Company" is
defined in the preamble.
"Comparable
Noteholder Collateral Document" means, in relation to any
Common Collateral subject to any Obligor
Pledge Agreement, that Noteholder
Collateral Document which creates a
security interest in the same Common
Collateral, granted by the same Obligor, as
applicable.
"Credit
Agreement" is defined in the first recital; provided that (i)
the
term Credit Agreement shall (x) also
include any renewal, extension, refunding,
restructuring, replacement or refinancing
thereof (whether with the original
administrative agent and lenders or another
administrative agent or agents or
other lenders, whether provided under the
original Credit Agreement or any
other credit or other agreement or
indenture and whether entered into
concurrently with or subsequent to the
termination of the prior Credit
Agreement); provided that any such renewal,
extension, refunding,
restructuring, replacement or refinancing
does not increase the principal
amount thereof beyond the limit set forth
in the Indenture or any other
Noteholder Document and (y) exclude the
Notes and other Noteholder Documents
and (ii) if at any time a Discharge of
Lender Claims occurs with respect to the
Credit Agreement (without giving effect to
Section 5.6), then, to the extent
provided in Section 5.6, the term "Credit
Agreement" shall mean the Future
First-Lien Credit Facility designated by
the Company in accordance with the
terms of such section. The Credit
Agreement, as in effect on the Effective
Date, is attached hereto as Annex A.
"Discharge of
Lender Claims" means, except to the extent otherwise
provided in Sections 5.6 and 6.5, the
payment in full in cash of all
Obligations, the expiration, termination or
cash collateralization of all
Letters of Credit, pursuant (for purposes
of cash collateralization) to the
terms thereof and the Credit Agreement and
any Future First-Lien Credit
Facility, the termination of all
commitments to extend credit under the Credit
Agreement and any Future First-Lien Credit
Facility and all Rate Protection
Agreements and the payment in full in cash
of all other Lender Claims, other
than those that constitute Unasserted
Contingent Obligations.
"Effective Date" means April 23, 2004.
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"Existing Credit
Agreement" is defined in the first recital.
"Future
First-Lien Credit Facility" shall mean the Credit Agreement and
any Credit Facility (as defined in the
Indenture or any other Noteholder
Document) that is designated by the Company
as a "Credit Facility" which is
permitted to be secured by a first lien on
the Common Collateral for purposes
of the Indenture or any other Noteholder
Document; provided that the Secured
Parties under any Credit Agreement then in
effect have consented to such
designation.
"Indenture" is
defined in the second recital.
"Insolvency or
Liquidation Proceeding" means (a) any voluntary or
involuntary case or proceeding under the
Bankruptcy Code with respect to any
Obligor as a debtor, (b) any other
voluntary or involuntary insolvency,
reorganization or bankruptcy case or
proceeding, or any receivership,
liquidation, reorganization or other
similar case or proceeding with respect to
any Obligor as a debtor or with respect to
any substantial part its assets, (c)
any liquidation, dissolution,
reorganization or winding up of any Obligor
whether voluntary or involuntary and
whether or not involving insolvency or
bankruptcy or (d) any assignment for the
benefit of creditors or any other
marshalling of assets and liabilities of
any Obligor.
"Lender Claims"
means (a) all Indebtedness outstanding under one or more
of the Loan Documents or the Future
First-Lien Credit Facilities and (b) all
other Obligations (as defined in the Credit
Agreement or any Future First-Lien
Facility), in each case including all
claims under the Loan Documents for
interest, fees, expense reimbursements,
indemnification and other similar
claims. Lender Claims shall include all
interest accrued or accruing (or which
would, absent the commencement of an
Insolvency or Liquidation Proceeding,
accrue) after the commencement of an
Insolvency or Liquidation Proceeding in
accordance with and at the rate specified
in the applicable Loan Document
whether or not the claim for such interest
is allowed as a claim in such
Insolvency or Liquidation Proceeding. To
the extent any payment with respect to
the Lender Claims (whether by or on behalf
of any Obligor, as proceeds of
security, enforcement of any right of
setoff or otherwise) is declared to be
fraudulent or preferential in any respect,
set aside or required to be paid to
a debtor in possession, trustee, receiver
or similar Person, then the
Obligation (as defined in the Credit
Agreement or any Future First-Lien
Facility) or part thereof originally
intended to be satisfied shall be deemed
to be reinstated and outstanding as if such
payment had not occurred.
"Lender
Collateral" means any of the assets of the Obligors (as defined
in
the Credit Agreement) whether real,
personal or mixed, in which the Secured
Parties or any of them now or hereafter
holds a Lien as security for any Lender
Claim (regardless of the effect of the
application of any laws relating to
fraudulent transfers or conveyances).
"Lender Liens"
means Liens on Common Collateral or Lender Collateral in
favor of the Administrative Agent on behalf
of the Secured Parties created as
collateral security for the Lender
Claims.
"Loan Documents"
means the Credit Agreement, the Loan Documents (as
defined in the Credit Agreement), and all
documents and instruments evidencing
any obligation under any Future First-Lien
Credit Facility, and any other
related document or instrument executed
or
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delivered pursuant to any Loan Document or
Future First-Lien Credit Facility at
any time or otherwise evidencing any Lender
Claims, as any such document or
instrument may from time to time be
amended, supplemented, amended and restated
or otherwise modified from time to time;
provided that any such modification
does not increase the principal amount
thereof beyond the limit set forth in
the Indenture or any other Noteholder
Document.
"Noteholder
Claims" means all Indebtedness, Obligations and other
liabilities (contingent or otherwise)
arising under or with respect to the
Noteholder Documents or any of them.
"Noteholder
Collateral" means any of the assets of the Obligors, whether
real, personal or mixed, in which the
Noteholders or the Trustee or any of them
now or hereafter holds a Lien as security
for any Noteholder Claim (regardless
of the effect of the application of any
laws relating to fraudulent transfers
or conveyances).
"Noteholder
Collateral Documents" means, collectively, the Noteholder
Security Agreements, and any document or
instrument executed and delivered
pursuant to any Noteholder Document at any
time or otherwise pursuant to which
a Lien is granted by an Obligor to secure
the Noteholder Claims or under which
rights or remedies with respect to any such
Lien are governed, as the same may
be amended, supplemented, amended and
restated or otherwise modified from time
to time.
"Noteholder
Documents" means, collectively, the Indenture, the Notes, the
Noteholder Collateral Documents, any other
Permitted Senior Secured Debt
Documents, and any other related document
or instrument executed and delivered
pursuant to any Noteholder Document at any
time or otherwise evidencing any
Noteholder Claims, as the same may be
amended, supplemented, amended and
restated or otherwise modified from time to
time.
"Noteholders"
means the Persons holding Noteholder Claims, including,
without limitation, holders of Permitted
Senior Secured Debt.
"Noteholder
Security Agreements" means (i) the Issuer Pledge and Security
Agreement, dated as of the Effective Date,
between the Company and the Trustee
and (ii) the Subsidiary Pledge and Security
Agreement dated as of the Effective
Date among the Obligors (other than the
Company) and the Trustee, in each case
as the same may be amended, supplemented,
amended and restated or otherwise
modified from time to time.
"Notes" is
defined in the second recital.
"Obligations"
means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages
and other liabilities payable under
the documentation governing any
Indebtedness (including, with respect to the
Lender Claims, "Obligations" (as defined in
the Credit Agreement) and any
obligation to post cash collateral in
respect of letters of credit and any
other obligations).
"Obligor Pledge
Agreements" means the Borrower Pledge and Security
Agreement, the Subsidiary Pledge and
Security Agreement and any and all
Mortgages.
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"Obligors" means
the Company and each of its Restricted Subsidiaries that
grants a Lien on its property in favor of
the Trustee.
"Permitted
Senior Secured Debt" means any Permitted Senior Debt that is
secured by a Lien on the Common
Collateral.
"Permitted
Senior Secured Debt Documents" means all Permitted Senior Debt
Documents that relate to any Permitted
Senior Secured Debt.
"Pledged
Collateral" means the certificated securities constituting
"Collateral" (as defined in the Obligor
Pledge Agreements), the "Intercompany
Notes" (as defined in the Obligor Pledge
Agreements), any other tangible
property in the possession of the
Administrative Agent (or its agents or
bailees) in which a security interest is
perfected by such possession or any
investment property or deposit account as
to which the Administrative Agent (or
its agents or bailees) have control and in
which a security interest is
perfected by such control.
"Recovery" shall
have the meaning set forth in Section 6.5 hereof.
"Required
Lenders" shall mean, with respect to any amendment or
modification of the Credit Agreement or
Future First-Lien Facility, or any
termination or waiver of any provision of
the Credit Agreement or Future
First-Lien Facility, or any consent or
departure by the Company therefrom,
those Secured Parties, the approval of
which is required to approve such
amendment or modification, termination or
waiver or consent or departure.
"Secured
Parties" shall mean the "Secured Parties" (as defined in the
Credit Agreement) and any other Persons
holding Lender Claims, including the
Administrative Agent.
"Trustee" shall
include, in addition to the Trustee defined in the
preamble, (i) the then acting collateral
agent under the Indenture and any
successor thereto exercising substantially
the same rights and powers and (ii)
any representative of any then outstanding
Noteholder Claims under any
Permitted Senior Secured Debt Documents
other than Noteholder Claims under the
Indenture, the Notes and any other
Noteholder Document related thereto.
"Unasserted
Contingent Obligations" shall mean, at any time, Obligations
for taxes, costs, indemnifications,
reimbursements, damages and other
liabilities (except for (i) the principal
of and interest and premium (if any)
on, and fees relating to, any Indebtedness
and (ii) contingent reimbursement
obligations in respect of amounts that may
be drawn under letters of credit) in
respect of which no claim or demand for
payment has been made (or, in the case
of Obligations for indemnification, no
notice for indemnification has been
issued by the indemnitee) at such time.
SECTION 2. Lien
Priorities.
SECTION 2.1
Priority. Notwithstanding the date, manner or order of grant,
attachment or perfection of any Liens
granted to the Trustee or the Noteholders
on the Common Collateral or of any Liens
granted to the Secured Parties on the
Common Collateral and notwithstanding any
provision of the UCC, or any
applicable law, the avoidance or setting
aside of any Lien granted to the
Secured Parties in the Common Collateral,
or the Noteholder Documents or the
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Loan Documents or any other circumstance
whatsoever, the Trustee, on behalf of
itself and the Noteholders, hereby agrees
that: (i) any Lien on the Common
Collateral securing the Lender Claims now
or hereafter held by the Secured
Parties shall be first in priority to any
Lien on the Common Collateral
securing the Noteholder Claims; and (ii)
any Lien on the Common Collateral now
or hereafter held by the Trustee or the
Noteholders regardless of how acquired,
whether by grant, statute, operation of
law, subrogation or otherwise, shall be
second in priority in all respects to all
Liens on the Common Collateral
securing the Lender Claims. All Liens on
the Common Collateral securing the
Lender Claims shall be and remain first in
priority to all Liens on the Common
Collateral securing the Noteholder Claims
for all purposes, whether or not such
Lender Liens are subordinated to any Lien
securing any other obligation of any
Obligor.
SECTION 2.2
Prohibition on Contesting Liens. Each of the Trustee, for
itself and on behalf of each Noteholder,
and the Administrative Agent, for
itself and on behalf of each other Secured
Party, agrees that it shall not (and
hereby waives any right to) contest or
support any other Person in contesting,
in any proceeding (including any Insolvency
or Liquidation Proceeding), the
priority, validity or enforceability of a
Lien held by the Secured Parties in
the Lender Collateral or by the Noteholders
in the Common Collateral, as the
case may be.
SECTION 2.3 No
New Liens. So long as the Discharge of Lender Claims has
not occurred, (a) the parties hereto agree
that, (i) neither the Trustee nor
any Noteholder shall acquire any security
interest in and shall have no
interest in (including following avoidance
of any Lender Liens) any property,
real or otherwise, of Holdings or any
proceeds thereof and (ii) after the date
hereof, if the Trustee shall hold any Lien
on any assets of any Obligor
securing the Noteholder Claims that are not
also subject to the prior Lien of
the Secured Parties under the Loan
Documents, the Trustee will notify the
Administrative Agent in writing and, upon
demand by the Administrative Agent,
shall, either release such Lien or assign
it to the Secured Parties as security
for the Lender Claims (unless the
applicable Obligor shall promptly grant a
similar Lien on such assets in favor of
such Secured Parties and such lien
shall be prior to the Lien of the Trustee
on such assets) and (b) each Obligor
agrees it will not grant, and the Company
agrees it will not permit its
Subsidiaries to grant, any Lien on any of
its assets, in favor of the Trustee
or the Noteholders unless such Obligor has
granted a similar perfected prior
Lien on such assets in favor of the Secured
Parties.
SECTION 3.
Enforcement.
SECTION 3.1
Exercise of Remedies. (a) So long as the Discharge of Lender
Claims has not occurred, whether or not any
Insolvency or Liquidation
Proceeding has been commenced by or against
any Obligor, (i) the Trustee and
the Noteholders will not exercise or seek
to exercise any rights or remedies
(including by way of setoff) with respect
to any Common Collateral, institute
any action or proceeding with respect to
such rights or remedies, including any
action of foreclosure, or contest, protest
or object to any foreclosure
proceeding or action brought by the
Administrative Agent or any other Secured
Party, any exercise of any right under any
control agreement in respect of a
deposit account or securities entitlement
constituting Common Collateral, or
any bailee's letter or similar agreement or
arrangement to which the Trustee or
any Noteholder is a party, or any other
exercise by any such party, of any
rights and remedies relating to the Common
Collateral under the Loan Documents
or otherwise, or object to the forbearance
by the Secured Parties from bringing
or pursuing any foreclosure proceeding
or
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action or any other exercise of any rights
or remedies relating to the Common
Collateral and (ii) the Administrative
Agent and the other Secured Parties
shall have the exclusive right to enforce
rights, exercise remedies (including
by way of setoff and the right to credit
bid their debt), refrain from
enforcing or exercising remedies, and make
determinations regarding release,
disposition, or restrictions with respect
to the Common Collateral without any
consultation with or the consent of the
Trustee or any Noteholder, all as if
the Lien of the Trustee under the
Noteholder Collateral Documents did not
exist; provided that (A) in any Insolvency
or Liquidation Proceeding commenced
by or against any Obligor, the Trustee or
any Noteholder may file a claim or
statement of interest with respect to the
Noteholder Claims, (B) the Trustee or
any Noteholder may take any action not
adverse to the Liens on the Common
Collateral securing the Lender Claims in
order to establish, preserve, perfect
or protect its rights in the Common
Collateral, (C) solely to the extent it
would not prevent, restrict or otherwise
limit any rights granted or created
hereunder or under any Loan Document in
favor of the Administrative Agent or
any other Secured Party in respect of the
Common Collateral, the Trustee or any
Noteholder shall be entitled to file any
necessary responsive or defensive
pleadings in opposition to any motion,
claim, adversary proceeding or other
pleadings made by any person objecting to
or otherwise seeking the disallowance
of the Noteholder Claims, including without
limitation any claims secured by
the Common Collateral, if any, in each case
in accordance with the terms of
this Agreement, or (D) the Trustee or any
Noteholder shall be entitled to file
any pleadings, objections, motions or
agreements which assert rights or
interests available to unsecured creditors
of the Obligors arising under either
the Bankruptcy Code or applicable
non-bankruptcy law, in each case in
accordance with the terms of this
Agreement. In exercising rights and remedies
with respect to the Common Collateral, the
Administrative Agent or any other
Secured Parties may enforce the provisions
of the Loan Documents and exercise
remedies thereunder, all in such order and
in such manner as it may determine
in the exercise of its sole discretion.
Such exercise and enforcement shall
include the rights of an agent appointed by
the Administrative Agent and the
other Secured Parties to sell or otherwise
dispose of Common Collateral upon
foreclosure, to incur expenses in
connection with such sale or disposition, and
to exercise all the rights and remedies of
a secured party under the UCC of any
applicable jurisdiction and of a secured
creditor under bankruptcy or similar
laws of any applicable jurisdiction.
(b) The Trustee,
on behalf of itself and the Noteholders, agrees that it
will not, in connection with the exercise
of any right or remedy (including by
way of setoff) with respect to any Common
Collateral, take or receive any
Common Collateral or any proceeds of Common
Collateral unless and until the
Discharge of Lender Claims has occurred. In
the event any such proceeds are
received by the Trustee in violation of
this Agreement, such proceeds shall be
segregated and held in trust for the
benefit of the Secured Parties in the same
form as received, and shall not be applied
to the satisfaction of any
Noteholder Claims unless and until the
Discharge of the Lender Claims has
occurred. Without limiting the generality
of the foregoing, unless and until
the Discharge of Lender Claims has
occurred, except as expressly provided in
the proviso in clause (a)(ii) of Section
3.1, the sole right of the Trustee and
the Noteholders as secured parties with
respect to the Common Collateral is to
hold a perfected Lien on the Common
Collateral pursuant to the Noteholder
Documents for the period and to the extent
granted therein and to receive a
share of the proceeds thereof, if any,
after the Discharge of the Lender Claims
has occurred.
(c)
[Intentionally Omitted]
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(d) Subject to
the proviso in clause (a)(ii) of Section 3.1, (i) the
Trustee, for itself and on behalf of the
Noteholders, agrees that the Trustee
and the Noteholders will not take any
action that would hinder or cause to
delay any exercise of remedies undertaken
by the Administrative Agent or any
other Secured Party under the Loan
Documents as secured parties in respect of
any Common Collateral, including any sale,
lease, exchange, transfer or other
disposition of the Common Collateral,
whether by foreclosure or otherwise, and
(ii) the Trustee, for itself and on behalf
of the Noteholders, hereby waives
any and all rights it or the Noteholders
may have as a junior lien creditor or
otherwise (whether arising under the UCC or
any other law) to object to the
manner in which the Administrative Agent or
the other Secured Parties seek to
enforce the Liens granted in any of the
Lender Collateral.
(e) The Trustee
hereby acknowledges and agrees that no covenant, agreement
or restriction contained in the Noteholder
Collateral Documents or any other
Noteholder Document shall be deemed to
restrict in any way the rights and
remedies of the Administrative Agent or the
Secured Parties with respect to the
Common Collateral as set forth in this
Agreement and the Loan Documents.
SECTION 3.2
Cooperation. Subject to the proviso in clause (a)(ii) of
Section 3.1, the Trustee, on behalf of
itself and the Noteholders, agrees that,
unless and until the Discharge of Lender
Claims has occurred, it will not
commence, or join with any Person (other
than the Secured Parties upon the
request thereof) in commencing, any
enforcement, collection, execution, levy or
foreclosure action or proceeding with
respect to any Lien held by it under any
of the Noteholder Documents.
SECTION 4.
Application of Proceeds. As long as the Discharge of Lender
Claims has not occurred, the cash proceeds
of Common Collateral received in
connection with the sale of, or collection
on, such Common Collateral upon the
exercise of remedies, shall be applied by
the Administrative Agent to the
Lender Claims in such order as specified in
the Credit Agreement and any Future
First-Lien Credit Facility until the
Discharge of Lender Claims has occurred.
Upon the Discharge of the Lender Claims,
the Administrative Agent shall deliver
to the Trustee (for application in such
order as specified in the Indenture and
the other applicable Noteholder Documents)
any proceeds of Common Collateral
held by it in the same form as received,
with any necessary endorsements or as
a court of competent jurisdiction may
otherwise direct.
SECTION 5. Other
Agreements.
SECTION 5.1
Releases.
(a) At such time
as:
(i) the Discharge of the Lender Claims; or
(ii) the Secured Parties have released the Lender Liens on all or
any
portion of the
Common Collateral,
the Liens granted to the Trustee or the
Noteholders on the Common Collateral
(or, in the case of a release of the Lender
Liens referred to in clause (a)(ii)
on only a portion of the Common Collateral,
the portion of the Common
Collateral in respect of which the Lender
Liens were
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released) shall be automatically,
unconditionally and simultaneously released
and the Trustee, for itself and on behalf
of the Noteholders, promptly shall
execute and deliver to the Administrative
Agent and the Company such
termination statements, releases and other
documents as the Administrative
Agent and the Company may request to
effectively confirm such release; provided
that, (A) in the case of clause (a)(i), in
the event that an event of default
under the Indenture or any other Noteholder
Document has occurred and is
continuing as of the date on which the
Discharge of Lender Claims occurs, the
Liens granted to the Trustee or the
Noteholders on the Common Collateral will
not be released, except to the extent that
the Common Collateral, or any
portion thereof, was disposed of in order
to repay the Lender Claims, and
thereafter, the Trustee (acting at the
direction of the Noteholders) will have
the right to exercise remedies with respect
to the Common Collateral (but in
such event, the Liens granted to the
Trustee or the Noteholders on the Common
Collateral shall be released when such
event of default (and all other events
of default under the Indenture or any other
Noteholder Document) cease to
exist), and (B) in the case of clause
(a)(ii), if the Lender Claims (or any
portion thereof) are thereafter secured by
assets that wou
