Exhibit
10.1


 


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 MUELLER
GROUP, LLC, a Delaware limited liability company (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 or Parent 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  
New Holdco intends to effect an initial public offering of Equity
Interests (the “IPO”)
and, in connection therewith, both Mueller Water Products, LLC and Mueller
Water Products Co-Issuer, Inc. will merge with and into New Holdco and New Holdco will change its name to
Mueller Water Products, Inc. (the “Holdco Merger”); 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 provide limited waivers of
certain provisions of the Credit Agreement described below, 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)           The definition of “Excess Cash Flow in
Section 1.01 is hereby amended by:


(i)            deleting subpart
(b)(ix) of such definition and inserting “(ix) Restricted Payments of the type
described in clause (e) of Section 8.06 and Restricted Payments of the
type described in clause (f) of Section 8.06, in each case to the extent
made during such period plus” in lieu thereof; and


(ii)           deleting
the proviso following clause (b) of such definition;


(b)           Without limiting the
generality of Section 1.02(a)(ii) of the Credit Agreement, after the
effectiveness of the Holdco Merger all references in the Credit Agreement and
the other Loan Documents to either New Holdco or to Mueller Water Products
shall be deemed to refer to Mueller Water Products, Inc., the surviving entity
of the Holdco Merger;


(c)           Section
1.03(a) is hereby amended by deleting the second sentence thereof in its
entirety;


(d)           Section
1.03(c) is hereby amended by deleting the reference to “December 31, 2006”
in the last sentence and inserting a reference to “September 30, 2006” in lieu
thereof;


(e)           Section 2.06(d)(iv) is hereby amended so that, as amended, it shall
read in its entirety as follows:


“(iv)        Within ten Business
Days after financial statements for each fiscal year of the Borrower ending on
or after September 30, 2006 have been delivered pursuant to Section 7.01(a)
and the related Compliance Certificate has been delivered pursuant to Section
7.02(b), the Borrower shall make a prepayment of the Outstanding Amount of
the Term Loan in an amount equal to 50% of Excess Cash Flow for the fiscal year
covered by such financial statements; provided that such prepayment
shall only be required to the extent the amount of Consolidated Senior Secured
Indebtedness, as reduced by giving effect to such prepayment, would result in a
Consolidated Senior Secured Leverage Ratio of greater than or equal to 1.50 to
1.00 on a pro forma basis as of the date of such prepayment.


(f)            Section 7.01(a)
is hereby amended by deleting therefrom the parenthetical phrase “(subject to Section
1.03(a) with respect to the fiscal year ending December 31, 2005)”;


(g)           Section 7.02(e)
is hereby amended by replacing “60 days” therein with the following phrase: “(x)
in the case of the fiscal year of the Borrower commencing October 1, 2005,
March 15, 2006, and (y) in the case of each other fiscal year of the Borrower,
75 days”;


(h)           Section 7.15
is hereby amended by deleting the phrase “on the Closing Date” in the fourth
line and substituting in lieu thereof the phrase “outstanding at any time (such
amount as of any date being equal to the amount of Consolidated Funded
Indebtedness reflected on the


 

















 


most recent
financial statements delivered pursuant to Sections 7.01(a) or (b))”;


(i)            Upon the later to
occur of the effectiveness of this Agreement and the consummation of the IPO,
and without further action, Section 8.06(f)  shall be and be deemed amended so that, as
amended, it shall read as follows:


                “(f)          the Borrower shall be permitted to
make Restricted Payments in the form of cash dividends to New Holdco for
further distribution to the shareholders of New Holdco in an aggregate amount
in any fiscal year not to exceed $8,500,000; provided that, any amount
of cash dividends permitted to be paid by this clause (f) but not paid in
respect of any fiscal year commencing on or after October 1, 2005, may be
carried forward and paid in any subsequent fiscal year.”; and


(j)            Section 8.12(d)
is hereby amended by deleting therefrom the parenthetical phrase “(calculated
for the entire fiscal year ending December 31, 2005, including the period prior
to the Closing Date) “ and substituting in lieu thereof the phrase “(commencing
with the fiscal year beginning October 1, 2005)”.


2.             Waivers.  Subject to the terms and conditions set forth
herein:


(a)           The parties hereto agree that the
Borrower shall not be required to change its fiscal year end to December 31 as
required by Section 1.03(a) prior to the effectiveness of this
Amendment, and hereby waive any Default arising from the Borrower’s failure to
so comply with such provisions of Section 1.03(a);


(b)           The parties hereto hereby waive the
Default arising from the Borrower’s failure to deliver its consolidated
business plan and related documents within the time period required by Section
7.02(e) as in effect prior to the effectiveness of this Amendment; and


(c)           The parties hereto hereby waive any
further or other advance notice of the Holdco Merger or the change of the name
of Mueller Holding Company, Inc. to Mueller Water Products, Inc. in connection
with the Holdco Merger provided for in Section 3.03 or in any of the
Security Instruments; provided, however, that this waiver shall
not limit in any way any other obligation of any Loan Party or any right of the
Administrative Agent or any Lender provided for in the Loan Documents
pertaining to the Holdco Merger or such name change.


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


4.             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.


5.             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; and


 


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


 


6.             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.


7.             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.


8.             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.


9.             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.


10.           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.


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


12.           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.]