_____________________________________________________________________________
_____________________________________________________________________________
FRANKLIN ELECTRIC CO., INC.
AMENDED AND RESTATED NOTE PURCHASE
AND PRIVATE SHELF AGREEMENT
$80,000,000 Maximum Aggregate Principal Amount
Private Shelf Facility
Dated as of March 1, 2002
_____________________________________________________________________________
_____________________________________________________________________________
2
TABLE OF CONTENTS
(Not Part of Agreement)
Page
----
1. AUTHORIZATION OF ISSUE OF NOTES..................................... 6
1A. Amendment and Restatement.................................... 6
1B. Authorization of Issue of Private Shelf Notes................ 6
2. PURCHASE AND SALE OF NOTES.......................................... 7
2A. Purchase and Sale of Private Shelf Notes..................... 7
2A(1). Facility........................................ 7
2A(2). Issuance Period................................. 7
2A(3). Request for Purchase............................ 7
2A(4). Rate Quotes..................................... 8
2A(5). Acceptance...................................... 8
2A(6). Market Disruption............................... 9
2A(7). Private Shelf Closing........................... 9
2A(8). Fees............................................ 10
2A(8)(i). Issuance Fee.................................... 10
2A(8)(ii). Delayed Delivery Fee............................ 10
2A(8)(iii). Cancellation Fee................................ 10
3. CONDITIONS OF CLOSING............................................... 11
3A. Certain Documents............................................ 11
3B. Representations and Warranties; No Default................... 12
3C. Payment of Fees.............................................. 12
3D. Purchase Permitted By Applicable Laws........................ 12
3E. Legal Matters................................................ 12
3F. Proceedings.................................................. 12
4. PREPAYMENTS......................................................... 13
4A(1). Required Prepayment of Series A Notes............... 13
4A(2). Required Prepayment of Private Shelf Notes.......... 13
4B. Optional Prepayment with Yield-Maintenance Amount............ 13
4C. Notice of Optional Prepayment................................ 13
4D. Application of Prepayments................................... 13
4E. Retirement of Notes.......................................... 14
5. AFFIRMATIVE COVENANTS............................................... 14
5A. Financial Statements......................................... 14
5B. Inspection of Property....................................... 15
5C. Covenant to Secure Notes Equally............................. 15
5D. Maintenance of Insurance..................................... 15
5E. Compliance with Laws......................................... 15
3
6. NEGATIVE COVENANTS.................................................. 16
6A. Current Ratio................................................ 16
6B. Credit and Other Restrictions................................ 16
6B(1). Lien Restrictions................................... 16
6B(2). Debt Restriction.................................... 17
6B(3). Loans, Advances and Investments..................... 17
6B(4). Disposition of Certain Assets....................... 18
6B(5). Sale of Stock and Debt of Subsidiaries.............. 18
6B(6). Xxxxxx and Consolidation............................ 18
6B(7). Sale or Discount of Receivables..................... 18
6B(8). Restricted Transactions............................. 18
6B(9). Current Obligation Coverage......................... 19
6B(10). Debt to EBITDA Ratio................................ 19
7. EVENTS OF DEFAULT................................................... 19
7A. Acceleration................................................. 19
7B. Rescission of Acceleration................................... 21
7C. Notice of Acceleration or Rescission......................... 22
7D. Other Remedies............................................... 22
8. REPRESENTATIONS, COVENANTS AND WARRANTIES........................... 22
8A. Organization................................................. 22
8B. Financial Statements......................................... 22
8C. Actions Pending.............................................. 23
8D. Outstanding Debt............................................. 23
8E. Title to Properties.......................................... 23
8F. Taxes........................................................ 24
8G. Conflicting Agreements and Other Matters..................... 24
8H. Offering of Notes............................................ 24
8I. Use of Proceeds.............................................. 24
8J. Compliance with ERISA........................................ 25
8K. Governmental Consent......................................... 25
8L. Environmental Compliance..................................... 25
8M. Hostile Tender Offers........................................ 25
8N. Disclosure................................................... 25
8O. Investment Company Status; Holding Company Status............ 25
9. REPRESENTATIONS OF THE PURCHASERS................................... 26
9A. Nature of Purchase........................................... 26
9B. Source of Funds.............................................. 26
10. DEFINITIONS......................................................... 26
10A. Yield-Maintenance Terms...................................... 26
10B. Other Terms.................................................. 28
10C. Accounting Principles, Xxxxx and Determinations.............. 37
4
11. MISCELLANEOUS....................................................... 37
11A. Note Payments................................................ 37
11B. Expenses..................................................... 37
11C. Consent to Amendments........................................ 38
11D. Form, Registration, Transfer and Exchange of Notes; Lost Notes 38
11E. Persons Deemed Owners; Participations........................ 39
11F. Survival of Representations and Warranties; Entire Agreement. 39
11G. Successors and Assigns....................................... 40
11H. Disclosure to Other Persons.................................. 40
11I. Notices...................................................... 40
11J. Payments Due on Non-Business Days............................ 41
11K. Severability................................................. 41
11L. Descriptive Headings......................................... 41
11M. Satisfaction Requirement..................................... 41
11N. Governing Law................................................ 41
11O. Payment Currency............................................. 41
11P. Payments Free and Clear of Taxes............................. 42
11Q. Counterparts................................................. 42
11R. Binding Agreement............................................ 43
5
LIST OF ATTACHMENTS
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PURCHASER SCHEDULE
EXHIBIT A -- FORM OF PRIVATE SHELF NOTE
EXHIBIT B -- FORM OF REQUEST FOR PURCHASE
EXHIBIT C -- FORM OF CONFIRMATION OF ACCEPTANCE
EXHIBIT D -- FORM OF OPINION OF COMPANY'S SPECIAL COUNSEL
EXHIBIT E -- CERTIFICATE AS TO REPRESENTATIONS, DEFAULTS, ETC.
SCHEDULE 6B(1) -- LIST OF EXISTING LIENS
SCHEDULE 6B(4) -- PERMITTED DISPOSITIONS
SCHEDULE 8A -- LIST OF SUBSIDIARIES
SCHEDULE 8G -- LIST OF AGREEMENTS RESTRICTING DEBT
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FRANKLIN ELECTRIC CO., INC.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
As of March 1, 2002
To: The Prudential Insurance Company
of America (herein called "PRUDENTIAL")
Each Prudential Affiliate which becomes
bound by this Agreement as hereinafter
provided (together with Prudential, the
"PURCHASERS")
c/o Prudential Capital Group
Two Xxxxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
The undersigned, Franklin Electric Co., Inc., an Indiana corporation
(herein called the "COMPANY"), hereby agrees with you as set forth below.
Reference is made to paragraph 10 hereof for definitions of capitalized terms
used herein and not otherwise defined herein.
1. AUTHORIZATION OF ISSUE OF NOTES.
1A. AMENDMENT AND RESTATEMENT. Effective as of the date hereof, the
parties agree that this agreement amends and restates in its entirety that
certain Note Purchase and Private Shelf Agreement dated as of November 10,
1993 (as amended from time to time prior to the date hereof, the "EXISTING
1993 SHELF AGREEMENT") between the Company and Prudential pursuant to which
the Series A Notes were issued. After giving effect to the purchase and sale
of the Series A Notes, the Available Facility Amount hereunder is $80,000,000
as described in greater detail in paragraph 2A (1) below. From and after the
effectiveness of this Agreement, the Existing 1993 Shelf Agreement shall be of
no force or effect whatsoever except to evidence the terms pursuant to which
the Series A Notes were originally issued.
1B. AUTHORIZATION OF ISSUE OF PRIVATE SHELF NOTES. The Company will
authorize the issue of, but shall not be obligated to issue, its additional
senior promissory notes (herein called the "PRIVATE SHELF NOTES") in the
aggregate principal amount of up to $80,000,000 (including the equivalent in
Available Currencies), to be dated the date of issue thereof, to mature, in
the case of each Private Shelf Note so issued, no less than five (5) years and
no more than fifteen (15) years after the date of original issuance thereof,
to have an average life, in the case of each Private Shelf Note so issued, no
more than twelve (12) years after the date of original issuance thereof, to
bear interest on the unpaid balance thereof from the date thereof at the rate
per annum (and to have such other particular terms) as shall be set forth in
the case of each Private Shelf Note so issued in the Confirmation of
Acceptance with respect to such Private Shelf Note delivered pursuant to
paragraph 2A(5), and to be substantially in the form of Exhibit A attached
hereto. The terms "PRIVATE SHELF NOTE" and "PRIVATE SHELF NOTES" as used
herein shall include each Private Shelf Note delivered pursuant to any
provision of this Agreement and each Private Shelf Note delivered in
substitution or exchange for any such Private Shelf Note pursuant to any such
7
provision. The terms "NOTE" or "NOTES" as used herein shall include the
Series A Note and each Private Shelf Note delivered pursuant to any provision
of this Agreement and each Note delivered in substitution or exchange for any
such Note pursuant to any such provision. Notes which have (i) the same final
maturity, (ii) the same principal prepayment dates, (iii) the same principal
prepayment amounts (as a percentage of the original principal amount of each
Note), (iv) the same interest rate, (v) the same interest payment periods,
(vi) the same currency denomination; (vii) the same date of issuance (which,
in the case of a Note issued in exchange for another Note, shall be deemed for
these purposes the date on which such Note's ultimate predecessor Note was
issued), and (viii) which are otherwise designated a "Series" hereunder or in
the Confirmation of Acceptance whether or not the foregoing conditions are
satisfied, are herein called a "SERIES" of Notes.
2. PURCHASE AND SALE OF NOTES.
2A. PURCHASE AND SALE OF PRIVATE SHELF NOTES.
2A(1). FACILITY. Prudential is willing to consider, in its sole
discretion and within limits which may be authorized for purchase by
Prudential and the Prudential Affiliates from time to time, the purchase of
Private Shelf Notes pursuant to this Agreement. The willingness of Prudential
to consider such purchase of Private Shelf Notes is herein called the
"FACILITY". At any time, the aggregate principal amount of Private Shelf
Notes stated in paragraph 1B, minus the aggregate principal amount of Private
Shelf Notes purchased and sold pursuant to this Agreement prior to such time,
minus the aggregate principal amount of Accepted Notes (as hereinafter
defined) which have not yet been purchased and sold hereunder prior to such
time is herein called the "AVAILABLE FACILITY AMOUNT" at such time. For
purposes of the preceding sentence, the aggregate principal amount of Private
Shelf Notes and Accepted Notes shall be calculated in Dollars with the
aggregate principal amount of Private Shelf Notes or Accepted Notes
denominated or to be denominated in any Available Currency other than Dollars
being converted to Dollars at the rate of exchange used by Prudential to
calculate the Dollar equivalent at the time of the applicable Acceptance under
paragraph 2A(5). NOTWITHSTANDING THE WILLINGNESS OF PRUDENTIAL TO CONSIDER
PURCHASES OF PRIVATE SHELF NOTES, THIS AGREEMENT IS ENTERED INTO ON THE
EXPRESS UNDERSTANDING THAT NEITHER PRUDENTIAL NOR ANY PRUDENTIAL AFFILIATE
SHALL BE OBLIGATED TO MAKE OR ACCEPT OFFERS TO PURCHASE PRIVATE SHELF NOTES,
OR TO QUOTE RATES, SPREADS OR OTHER TERMS WITH RESPECT TO SPECIFIC PURCHASES
OF PRIVATE SHELF NOTES, AND THE FACILITY SHALL IN NO WAY BE CONSTRUED AS A
CAPITAL COMMITMENT BY PRUDENTIAL OR ANY PRUDENTIAL AFFILIATE.
2A(2). ISSUANCE PERIOD. Private Shelf Notes may be issued and sold
pursuant to this Agreement until the earlier of (i) June 30, 2004 and (ii) the
thirtieth day after Prudential shall have given to the Company, or the Company
shall have given to Prudential, a written notice stating that it elects to
terminate the issuance and sale of Private Shelf Notes pursuant to this
Agreement (or if such thirtieth day is not a New York Business Day, the New
York Business Day next preceding such thirtieth day). The period during which
Private Shelf Notes may be issued and sold pursuant to this Agreement is
herein called the "ISSUANCE PERIOD".
2A(3). REQUEST FOR PURCHASE. The Company may from time to time during
the Issuance Period make requests for purchases of Private Shelf Notes (each
such request being herein called a "REQUEST FOR PURCHASE"). Each Request for
Purchase shall be made to Prudential by telecopier and confirmed by nationwide
overnight delivery service, and shall (i) specify the aggregate principal
amount and currency (which shall be an Available Currency) of Private Shelf
Notes covered thereby, which shall not be less than $5,000,000 (or its
equivalent in another Available Currency) and shall not be greater than the
Available Facility Amount at the time such Request for Purchase is made, (ii)
8
specify the principal amounts, final maturities, principal payment dates and
amounts and interest payment periods (quarterly or semi-annual in arrears) of
the Private Shelf Notes covered thereby, (iii) specify the use of proceeds of
such Private Shelf Notes, (iv) specify the proposed day for the closing of the
purchase and sale of such Private Shelf Notes, which shall be a Business Day
during the Issuance Period not less than five (5) Business Days and not more
than forty-two (42) days after the making of such Request for Purchase, (v)
specify the number of the account and the name and address of the depository
institution to which the purchase prices of such Private Shelf Notes are to be
transferred on the Private Shelf Closing Day for such purchase and sale, (vi)
certify that the representations and warranties contained in paragraph 8
hereof are true on and as of the date of such Request for Purchase except to
the extent of changes caused by the transactions herein contemplated and that
there exists on the date of such Request for Purchase no Event of Default or
Default (and that no Event of Default or Default shall arise as the result of
the purchase and sale of such Private Shelf Notes), and (vii) be substantially
in the form of Exhibit B attached hereto. Each Request for Purchase shall be
in writing and shall be deemed made when received by Prudential.
2A(4). RATE QUOTES. Not later than five (5) Business Days after the
Company shall have given Prudential a Request for Purchase pursuant to
paragraph 2A(3), Prudential may but shall be under no obligation to, provide
to the Company by telephone or telefacsimile, in each case between 9:30 A.M.
and 1:00 P.M. New York City local time (or such other time as Prudential may
elect) interest rate quotes for the several currencies, principal amounts,
maturities, prepayment schedules and interest payment periods of Private Shelf
Notes specified in such Request for Purchase (each such interest rate quote
provided in response to a Request for Purchase herein called a "QUOTATION").
Each Quotation shall represent the interest rate per annum payable on the
outstanding principal balance of such Private Shelf Notes until such balance
shall have become due and payable, at which Prudential or a Prudential
Affiliate would be willing to purchase such Private Shelf Notes at 100% of the
principal amount thereof.
2A(5). ACCEPTANCE. Within 30 minutes after Prudential shall have
provided any Quotation pursuant to paragraph 2A(4) or such shorter period as
Prudential may specify to the Company (such period herein called the
"ACCEPTANCE WINDOW"), an Authorized Officer of the Company may, subject to the
terms of paragraph 2B(6), elect to accept on behalf of the Company a Quotation
as to not less than $5,000,000 aggregate principal amount of the Private Shelf
Notes specified in the applicable Request for Purchase (in the Available
Currency specified in the Request for Purchase). Such election shall be made
by an Authorized Officer of the Company notifying Prudential by telephone or
telefacsimile within the Acceptance Window (but not earlier than 9:30 A.M. or
later than 2:00 P.M., New York City local time) that the Company elects to
accept such Quotation (each such Private Shelf Note being herein called an
"ACCEPTED NOTE") as to which such acceptance (herein called an "ACCEPTANCE")
relates. The day the Company notifies Prudential of an Acceptance with
respect to any Accepted Notes is herein called the "ACCEPTANCE DAY" for such
Accepted Notes. Any Quotation as to which Prudential does not receive an
Acceptance within the Acceptance Window shall expire, and no purchase or sale
of Private Shelf Notes hereunder shall be made based on any such expired
Quotation. Subject to paragraph 2A(6) and the other terms and conditions
hereof, the Company agrees to sell to Prudential or a Prudential Affiliate,
and Prudential agrees to purchase, or to cause the purchase by a Prudential
Affiliate of, the Accepted Notes at 100% of the principal amount of such
Notes, which purchase price shall be paid in the currency in which such Notes
are to be denominated. As soon as practicable following the Acceptance Day,
the Company, Prudential and each Prudential Affiliate which is to purchase any
such Accepted Notes will execute a confirmation of such Acceptance
substantially in the form of Exhibit C attached hereto (herein called a
"CONFIRMATION OF ACCEPTANCE"). If the Company should fail to execute and
9
return to Prudential within three Business Days following receipt thereof a
Confirmation of Acceptance with respect to any Accepted Notes, Prudential may
at its election at any time prior to its receipt thereof cancel the closing
with respect to such Accepted Notes by so notifying the Company in writing.
2A(6). MARKET DISRUPTION. Notwithstanding the provisions of paragraph
2A(5), if Prudential shall have provided Quotation pursuant to paragraph 2A(4)
and thereafter, prior to the time an Acceptance with respect to such Quotation
shall have been notified to Prudential in accordance with paragraph 2A(5), (i)
the domestic market for U.S. Treasury securities or derivatives shall have
closed or there shall have occurred a general suspension, material limitation
or significant disruption of trading in securities generally on the New York
Stock Exchange or in the domestic market for U.S. Treasury securities or
derivatives or (ii) in the case of Private Shelf Notes to be denominated in a
currency other than Dollars, there shall have occurred a general suspension,
material limitation or significant disruption of trading in the market for the
relevant government securities which, in the case of the Euro, shall be the
German Bund, or the spot or forward currency market, the financial futures
market or the interest rate swap market, then such Quotation shall expire, and
no purchase or sale of Private Shelf Notes hereunder shall be made based on
such expired interest rate quotes. If the Company thereafter notifies
Prudential of the Acceptance of any such Quotation, such Acceptance shall be
ineffective for all purposes of this Agreement, and Prudential shall promptly
notify the Company that the provisions of this paragraph 2A(6) are applicable
with respect to such Acceptance.
2A(7). PRIVATE SHELF CLOSING. Not later than 11:30 A.M. (Chicago
time) on the Private Shelf Closing Day for any Accepted Notes, the Company
will deliver to each Purchaser listed in the Confirmation of Acceptance
relating thereto at the offices of Prudential Capital Group, Two Xxxxxxxxxx
Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000-0000 Attention: Law Department, the
Private Shelf Notes to be purchased by such Purchaser in the form of one or
more authorized denominations as such Purchaser may request for each Series of
Accepted Notes to be purchased on the Private Shelf Closing Day, dated the
Private Shelf Closing Day and registered in such Purchaser's name (or in the
name of its nominee), against payment of the purchase price thereof by
transfer of immediately available funds for credit to the Company's account or
accounts specified in the Request for Purchase of such Private Shelf Notes.
If the Company fails to tender to any Purchaser the Accepted Notes to be
purchased by such Purchaser on the scheduled Private Shelf Closing Day for
such Accepted Notes as provided above in this paragraph 2A(7), or any of the
conditions specified in paragraph 3 shall not have been fulfilled by the time
required on such scheduled Private Shelf Closing Day, the Company shall, prior
to 1:00 P.M., New York City local time, on such scheduled Private Shelf
Closing Day notify Prudential in writing (which notification shall be deemed
received by each Purchaser) whether (x) such closing is to be rescheduled
(such rescheduled date to be a Business Day during the Issuance Period not
less than one Business Day and not more than ten Business Days after such
scheduled Private Shelf Closing Day (the "RESCHEDULED CLOSING DAY")) and
certify to Prudential (which certification shall be for the benefit of each
Purchaser) that the Company reasonably believes that it will be able to comply
with the conditions set forth in paragraph 3 on such Rescheduled Closing Day
and that the Company will pay the Delayed Delivery Fee, if any, in accordance
with paragraph 2A(8)(ii) or (y) such closing is to be cancelled. If a
Rescheduled Closing Day is established in respect of Private Shelf Notes
denominated in a currency other than Dollars, the Private Shelf Notes shall
have the same maturity date, principal prepayment dates and amounts and
interest payment dates as originally scheduled. In the event that the Company
shall fail to give such notice referred to in the preceding sentence,
Prudential (on behalf of each Purchaser) may at its election, at any time
after 1:00 P.M., New York City local time, on such scheduled Private Shelf
Closing Day, notify the Company in writing that such closing is to be
10
cancelled. Notwithstanding anything to the contrary appearing in this
Agreement, the Company may not elect to reschedule a closing with respect to
any given Accepted Notes on more than one occasion, unless Prudential shall
have otherwise consented in writing.
2A(8). FEES.
2A(8)(i). ISSUANCE FEE. The Company will pay to each Purchaser in
immediately available funds a fee (herein called the "ISSUANCE FEE") on each
Private Shelf Closing Day in an amount equal to 0.10% of the Dollar equivalent
(at the time of the applicable Acceptance) aggregate principal amount of Notes
sold to such Purchaser on such Private Shelf Closing Day. Such fee shall be
payable in Dollars.
2A(8)(ii). DELAYED DELIVERY FEE. If the closing of the purchase and
sale of any Accepted Note is delayed for any reason beyond the original
Closing Day for such Accepted Note, the Company will pay to each Purchaser
which shall have agreed to purchase such Accepted Notes:
(a) in the case of an Accepted Note denominated in Dollars, on
the Cancellation Date or actual Closing Day of such purchase and sale, a
fee (herein called the "DOLLAR DELAYED DELIVERY FEE") equal to the
product of (i) the amount determined by Prudential to be the amount by
which the bond equivalent yield per annum of such Accepted Note exceeds
the investment rate per annum on an alternative Dollar investment of the
highest quality selected by Prudential and having a maturity date or
dates the same as, or closest to, the Rescheduled Closing Day or
Rescheduled Closing Days from time to time fixed for the delayed
delivery of such Accepted Note, (ii) the principal amount of such
Accepted Note and (iii) a fraction the numerator of which is equal to
the number of actual days elapsed from and including the original
Closing Day for such Accepted Note to but excluding the date of such
payment, and the denominator of which is 360; and
(b) in the case of an Accepted Note denominated in a currency
other than Dollars, on the Cancellation Date or the actual Closing Day
of such purchase and sale, a fee (herein called the "NON-DOLLAR DELAYED
DELIVERY FEE," and, together with the Dollar Delayed Delivery Fee, the
"DELAYED DELIVERY FEE") equal to the sum of (1) the product of (x) the
amount by which the bond equivalent yield per annum of such Accepted
Note exceeds the arithmetic average of Overnight Interest Rate on each
day from and including the original Closing Day for such Accepted Note,
(y) the principal amount of such Accepted Note and (z) a fraction the
numerator of which is equal to the number of actual days elapsed from
and including the original Closing Day for such Accepted Note to but
excluding the date of such payment, and the denominator of which is 360
and (2) the costs and expenses (if any) incurred by such Purchaser or
its affiliates with respect to any interest rate, currency exchange
agreement or similar agreement entered into by the Purchaser or any such
affiliate in connection with the delayed closing of such Accepted Notes.
In no case shall the Delayed Delivery Fee be less than zero. Nothing
contained herein shall obligate any Purchaser to purchase any Accepted
Note on any day other than the Closing Day for such Accepted Note, as
the same may be rescheduled from time to time in compliance with
paragraph 2A(7).
2A(8)(iii). CANCELLATION FEE. If the Company at any time notifies
Prudential in writing that the Company is canceling the closing of the
purchase and sale of any Accepted Note, or if Prudential notifies the Company
in writing under the circumstances set forth in the last sentence of paragraph
2A(5) or the penultimate sentence of paragraph 2A(7) that the closing of the
purchase and sale of such Accepted Note is to be canceled, or if the closing
11
of the purchase and sale of such Accepted Note is not consummated on or prior
to the last day of the Issuance Period (the date of any such notification, or
the last day of the Issuance Period, as the case may be, being herein called
the "CANCELLATION DATE"), the Company will pay the Purchaser which shall have
agreed to purchase such Accepted Note in immediately available funds on the
Cancellation Date an amount (the "CANCELLATION FEE") equal to:
(a) in the case of an Accepted Note denominated in Dollars, the
product of (A) the principal amount of such Accepted Note times (B) the
quotient (expressed in decimals) obtained by dividing (1) the excess of
the ask price (as determined by Prudential) of the Hedge Treasury
Note(s) on the Cancellation Date over the bid price (as determined by
Prudential) of the Hedge Treasury Note(s) on the Acceptance Day for such
Accepted Note by (2) such bid price, with the foregoing bid and ask
prices as reported on the Bridge\Telerate Service, or if such
information ceases to be available on the Bridge\Telerate Service, any
publicly available source of such market data selected by Prudential and
rounded to the second decimal place (such amount, the "U.S. CANCELLATION
FEE"); or
(b) in the case of an Accepted Note denominated in a currency
other than Dollars, the aggregate of all unwinding costs incurred by
such Purchaser or its affiliates on positions executed by or on behalf
of such Purchaser or such affiliates in connection with the proposed
lending in such currency and fixing the coupon in such currency (which
costs may include a U.S. Cancellation Fee), provided, however, that any
gain realized upon either unwinding of any such positions shall be
offset against any unwinding costs incurred in either instance. Such
positions include (without limitation) currency and interest rate swaps,
futures, forwards, government bond (including U.S. Treasury bond) xxxxxx
and currency exchange contracts, all of which may be subject to
substantial price volatility. Such costs may also include (without
limitation) losses incurred by such Purchaser or its affiliates as a
result of fluctuations in exchange rates. All unwinding costs incurred
by such Purchaser shall be determined by Prudential or its affiliate in
accordance with generally accepted financial practice.
In no case shall the Cancellation Fee be less than zero.
3. CONDITIONS OF CLOSING. Prudential's and any other Purchaser's
obligation to purchase and pay for any Private Shelf Notes, is subject in each
case to the satisfaction, on or before the applicable Closing Day for such
Notes, of the following conditions (any document required to be delivered
pursuant to this paragraph shall be deemed delivered if delivered to
Prudential Capital Group at the address specified in paragraph 2A):
3A. CERTAIN DOCUMENTS. Such Purchaser shall have received the
following dated the date of the applicable Closing Day:
(i) this Agreement;
(ii) the Notes to be purchased by such Purchaser;
(iii) a favorable opinion of Schiff, Hardin & Xxxxx, special
counsel to the Company (or such other counsel designated by the Company
and reasonably acceptable to the Purchaser(s)) reasonably satisfactory
to such Purchaser and substantially in the form of Exhibit D attached
hereto and as to such other matters as such Purchaser may reasonably
request. The Company hereby directs each such counsel to deliver such
opinion, agrees that the issuance and sale of any Notes will constitute
a reconfirmation of such direction and understands and agrees that each
Purchaser receiving such an opinion will and is hereby authorized to
12
rely on such opinion;
(iv) certified copies of the resolutions of the Board of
Directors of the Company authorizing the execution and delivery of this
Agreement and the issuance of the Notes, and of all documents evidencing
other necessary corporate action and governmental approvals, if any,
with respect to this Agreement and the Notes;
(v) a certificate of the secretary and one other officer of the
Company certifying the names and true signatures of the officers of the
Company authorized to sign this Agreement and the Notes and the other
documents to be delivered hereunder or thereunder;
(vi) certified copies of the Company's Certificate of
Incorporation and Bylaws (or, if not a corporation, similar governing
documents) or, alternatively, certification that no amendments or other
modifications have been made thereto since the date most recently
certified to Prudential or other Purchasers;
(vii) a Good Standing Certificate for the Company from the
Secretary of State of the state of Indiana dated as of a recent date and
such other evidence of the Status of the Company as such Purchaser may
reasonably request; and
(viii) additional documents or certificates with respect to legal
matters or corporate or other proceedings related to the transactions
contemplated hereby as may be reasonably requested by such Purchaser.
3B. REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The representations
and warranties contained in paragraph 8 hereof shall be true on and as of the
applicable Closing Day, except to the extent of changes caused by the
transactions herein contemplated; there shall exist on the applicable Closing
Day no Event of Default or Default; and the Company shall have delivered to
each Purchaser an Officer's Certificate in substantially the form of Exhibit E
attached hereto, dated the applicable Closing Day, to both such effects.
3C. PAYMENT OF FEES. The Company shall have paid to Prudential any
fees due it pursuant to or in connection with this Agreement, including any
Issuance Fee due pursuant to paragraph 2A(8)(i) and any Delayed Delivery Fee
pursuant to paragraph 2A(8)(ii).
3D. PURCHASE PERMITTED BY APPLICABLE LAWS. The purchase of and
payment for the Notes to be purchased on the applicable Closing Day on the
terms and conditions herein provided (including the use of the proceeds of
such Notes by the Company) shall not violate any applicable law or
governmental regulation (including, without limitation, Section 5 of the
Securities Act or Regulation T, U or X of the Board of Governors of the
Federal Reserve System) and shall not subject any Purchaser to any tax,
penalty, liability or other onerous condition under or pursuant to any
applicable law or governmental regulation, and such Purchaser shall have
received such certificates or other evidence to establish compliance with this
condition.
3E. LEGAL MATTERS. Counsel for the Purchasers shall be satisfied as
to all legal matters relating to such purchase and sale.
3F. PROCEEDINGS. All corporate and other proceedings taken or to be
taken in connection with the transactions contemplated hereby and all
documents incident thereto shall be reasonably satisfactory in substance and
form to each Purchaser, and each Purchaser shall have received all such
counterpart originals or certified or other copies of such documents as it may
reasonably request.
13
4. PREPAYMENTS. The Notes shall be subject to required prepayment
as and to the extent provided in paragraphs 4A(1) and 4A(2). The Notes shall
also be subject to prepayment under the circumstances set forth in paragraph
4B. Any prepayment made by the Company pursuant to any other provision of
this paragraph 4 shall not reduce or otherwise affect its obligation to make
any required prepayment as specified in paragraph 4A.
4A(1). REQUIRED PREPAYMENT OF SERIES A NOTES.
Subject to paragraph 4B, until the Series A Notes shall be paid in full,
the Company shall apply to the prepayment of the Series A Notes, without
Yield-Maintenance Amount, the sum of $1,000,000 annually on November 10 of
each year commencing on November 10, 1998 and continuing to and including
November 10, 2007, and such principal amounts of the Series A Notes, together
with interest accrued thereon to the payment dates shall become due on such
payment dates. The remaining unpaid principal amount of the Series A Notes,
together with interest accrued thereon, shall become due on the maturity date
of the Series A Notes.
4A(2). REQUIRED PREPAYMENT OF PRIVATE SHELF NOTES. Until each
respective Series of Private Shelf Notes shall be paid in full, each
respective Series of Private Shelf Notes shall be subject to such required
prepayments, if any, as are specified for such Series of Private Shelf Notes
in accordance with the provisions of paragraph 2A(3) hereof. Any prepayment
made by the Company pursuant to any other provision of this paragraph 4 shall
not reduce or otherwise affect its obligation to make any prepayment as
specified in the respective Series of Private Shelf Notes.
4B. OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE AMOUNT. Subject to
the limitations set forth below, the Notes shall be subject to prepayment, in
whole at any time or from time to time in part (in $100,000 increments and not
less than $1,000,000 per occurrence or, in each case, in the equivalent of the
currency in which the Notes of such Series are denominated), at the option of
the Company, at 100% of the principal amount so prepaid plus interest thereon
to the prepayment date and the Yield-Maintenance Amount, if any, with respect
to each Note so prepaid. Any partial prepayment of a Series of Notes pursuant
to this paragraph 4B shall be applied in satisfaction of required payments of
principal in the inverse order of their scheduled due dates.
4C. NOTICE OF OPTIONAL PREPAYMENT. The Company shall give to the
holder of each Note of a Series to be prepaid pursuant to paragraph 4B
irrevocable written notice of such prepayment pursuant to paragraph 4B with
respect to such Series not less than ten (10) Business Days prior to the
prepayment date, specifying (i) such prepayment date, (ii) the aggregate
principal amount of the Notes of such Series to be prepaid on such date, (iii)
the principal amount of the Notes of such Series held by such holder to be
prepaid on that date, and (iv) stating that such optional prepayment is to be
made pursuant to paragraph 4B. Notice of optional prepayment having been
given as aforesaid, the principal amount of the Notes specified in such
notice, together with interest thereon to the prepayment date and together
with the Yield-Maintenance Amount, if any, with respect thereto, shall become
due and payable on such prepayment date. The Company shall, on or before the
day on which it gives written notice of any prepayment pursuant to paragraph
4B, give telephonic notice of the principal amount of the Notes to be prepaid
and the prepayment date to each Holder which shall have designated a recipient
for such notices in the Purchaser Schedule attached hereto or the applicable
Confirmation of Acceptance or by notice in writing to the Company.
4D. APPLICATION OF PREPAYMENT. In the case of each prepayment
pursuant to paragraphs 4A or 4B of less than the entire unpaid principal
amount of all outstanding Notes of any Series (including, for the purpose of
this paragraph 4D only, all Notes prepaid or otherwise retired or purchased or
14
otherwise acquired by the Company or any of its Affiliates other than by
prepayment pursuant to paragraph 4A or 4B), the amount to be prepaid shall be
applied pro rata to all outstanding Notes of such Series according to the
respective unpaid principal amounts thereof.
4E. RETIREMENT OF NOTES. The Company shall not, and shall not permit
any of its Subsidiaries or Affiliates to, prepay or otherwise retire in whole
or in part prior to their stated final maturity (other than (i) by prepayment
pursuant to paragraphs 4A or 4B or (ii) upon acceleration of such final
maturity pursuant to paragraph 7A), or purchase or otherwise acquire, directly
or indirectly, Notes of any Series held by any holder unless the Company or
such Subsidiary or Affiliate shall have offered to prepay or otherwise retire
or purchase or otherwise acquire, as the case may be, the same proportion of
the aggregate principal amount of Notes of such Series held by each other
holder of Notes of such Series. The Company will promptly cancel all Notes
acquired by the Company or any Subsidiary or any such other Affiliate pursuant
to any payment, prepayment or purchase of Notes pursuant to any provision of
this Agreement, and no Notes may be issued in substitution or exchange for any
such Notes.
5. AFFIRMATIVE COVENANTS.
5A. FINANCIAL STATEMENTS. The Company covenants that it will deliver
to each Significant Holder of any Notes in triplicate:
(i) as soon as practicable and in any event within sixty (60)
days after the end of each quarterly period (other than the last
quarterly period) in each fiscal year, consolidated statements of
income, stockholders' equity and cash flows of the Company and its
Subsidiaries for the period from the beginning of the current fiscal
year to the end of such quarterly period, and a consolidated balance
sheet of the Company and its Subsidiaries as at the end of such
quarterly period, setting forth in each case in comparative form figures
for the corresponding period in the preceding fiscal year, all in
reasonable detail and certified by an authorized financial officer of
the Company, subject to changes resulting from audit and year-end
adjustments; provided, however, that delivery pursuant to clause (iii)
below of copies of the Quarterly Report on Form 10-Q of the Company for
such quarterly period filed with the Securities and Exchange Commission
shall be deemed to satisfy the requirements of this clause (i);
(ii) as soon as practicable and in any event within ninety (90)
days after the end of each fiscal year, consolidating and consolidated
statements of income and cash flows and a consolidated statement of
stockholders' equity of the Company and its Subsidiaries for such year,
and a consolidating and consolidated balance sheet of the Company and
its Subsidiaries as at the end of such year, setting forth in each case
in comparative form corresponding consolidated figures from the
preceding annual audit, all in reasonable detail and satisfactory in
form to the Required Holder(s) and, as to the consolidated statements,
reported on by independent public accountants of recognized national
standing selected by the Company whose report shall be without
limitation as to scope of the audit and satisfactory in substance to the
Required Holder(s) and, as to the consolidating statements, certified by
an authorized financial officer of the Company; provided, however, that
delivery pursuant to clause (iii) below of copies of the Annual Report
on Form 10-K of the Company for such fiscal year filed with the
Securities and Exchange Commission shall be deemed to satisfy the
requirements of this clause (ii);
(iii) promptly upon transmission thereof, copies of all such
financial statements, proxy statements, notices and reports as it shall
15
send to its public stockholders and copies of all registration
statements (without exhibits) and all reports which it files with the
Securities and Exchange Commission (or any governmental body or agency
succeeding to the functions of the Securities and Exchange Commission);
(iv) promptly upon request, a copy of each other report submitted
to the Company or any Subsidiary by independent accountants in
connection with any annual, interim or special audit made by them of the
books of the Company or any Subsidiary; and
(v) with reasonable promptness, such other financial data as such
Significant Holder may reasonably request.
Together with each delivery of financial statements required by clauses (i)
and (ii) above, the Company will deliver to each Significant Holder an
Officer's Certificate demonstrating (with computations in reasonable detail)
compliance by the Company and its Subsidiaries with the provisions of
paragraph 6 and stating that there exists no Event of Default or Default, or,
if any Event of Default or Default exists, specifying the nature and period of
existence thereof and what action the Company proposes to take with respect
thereto.
The Company also covenants that immediately after any Responsible
Officer obtains knowledge of an Event of Default or Default, it will deliver
to each Significant Holder an Officer's Certificate specifying the nature and
period of existence thereof and what action the Company proposes to take with
respect thereto.
5B. INSPECTION OF PROPERTY. The Company covenants that, to the extent
permitted by law, it will permit any Person designated by any Significant
Holder in writing, at such Significant Holder's expense, if no Default or
Event of Default exists and at the Company's expense if a Default or Event of
Default does exist, to (i) visit and inspect any of the properties of the
Company and its Subsidiaries, to examine the corporate books and financial
records of the Company and its Subsidiaries and make copies thereof or
extracts therefrom and to discuss the affairs, finances and accounts of any of
such corporations with the principal officers of the Company and, (ii) upon
reasonable notice to the Company and opportunity for management of the Company
to be present or represented, to discuss the affairs, finances and accounts of
any of such corporations (which such Significant Holder has not been able to
satisfactorily discuss with or obtain from the Company) with the independent
public accountants of the Company and its Subsidiaries, all at such reasonable
times and as often as such Significant Holder may reasonably request.
5C. COVENANT TO SECURE NOTES EQUALLY. The Company covenants that, if
it or any Subsidiary shall create or assume any Lien upon any of its property
or assets, whether now owned or hereafter acquired, other than Liens permitted
by the provisions of paragraph 6B(1) (unless prior written consent to the
creation or assumption thereof shall have been obtained pursuant to paragraph
11C), it will make or cause to be made effective provision whereby the Notes
will be secured by such Lien equally and ratably with any and all other Debt
thereby secured so long as any such other Debt shall be so secured.
5D. MAINTENANCE OF INSURANCE. The Company covenants that it shall,
and shall cause each Subsidiary to, maintain or cause to be maintained, with
financially sound and reputable insurers, insurance with respect to its
properties and business and the properties and business of its Subsidiaries
(which may include a reasonable self-insurance program) as is customarily
maintained by other companies operating similar businesses.
5E. COMPLIANCE WITH LAWS. The Company covenants that it shall, and
shall cause each of its Subsidiaries to, comply with all laws, ordinances or
16
governmental rules or regulations to which each of them is subject, including,
without limitation, environmental laws, and will obtain and maintain in effect
all licenses, certificates, permits, franchises and other governmental
authorizations necessary to the ownership of their respective properties or to
the conduct of their respective businesses, in each case to the extent
necessary to ensure that non-compliance with decrees and orders of all
Federal, state, local or foreign courts or governmental agencies, authorities,
instrumentalities or regulatory bodies the noncompliance with which could be
reasonably expected to result in a material adverse effect on the business,
assets, operations or condition (financial or otherwise) of the Company and
its Subsidiaries taken as a whole.
6. NEGATIVE COVENANTS. During the Issuance Period and so long
thereafter as any Note or other amount due hereunder is outstanding and
unpaid, the Company covenants as follows:
6A. CURRENT RATIO. The Company covenants that it will not permit
the ratio (expressed as a percentage) of Consolidated Current Assets to
Consolidated Current Liabilities to fall below 140% at any time.
6B. CREDIT AND OTHER RESTRICTIONS. The Company covenants that it
will not and will not permit any Subsidiary to:
6B(1). LIEN RESTRICTIONS. Create, incur, assume or suffer to exist any
Lien upon any of its property or assets, whether now owned or hereafter
acquired (whether or not provision is made for the equal and ratable securing
of Notes in accordance with the provisions of paragraph 5C hereof), except:
(i) Liens existing on the date hereof encumbering the property
and securing the Indebtedness identified on Schedule 6B(1) attached
hereto and Liens securing the refinancing, renewal or refunding of any
such Indebtedness provided that the principal amount secured is not
increased over the amount of such Indebtedness outstanding immediately
prior to such refinancing, renewal or refunding and such Lien is not
extended to any other property or assets;
(ii) Liens for taxes or other governmental charges not yet due or
which are being actively contested in good faith by appropriate
proceedings;
(iii) Liens incidental to the conduct of its business which were
not incurred in connection with the borrowing of money or obtaining
credit or advances and which do not in the aggregate materially detract
from the value of its property or assets or materially impair the use
thereof in the operation of its business;
(iv) Liens on property or assets of a Subsidiary to secure
obligations of such Subsidiary to the Company or another Subsidiary;
(v) Liens with respect to leased equipment incurred in connection
with equipment leases entered into in the ordinary course of business;
(vi) Liens on assets of Subsidiaries which are not U.S.
Subsidiaries securing obligations for money borrowed owing to foreign
financial institutions;
(vii) any Lien existing on any asset of any corporation or other
Person at the time such corporation or other Person becomes a Subsidiary
and not created in contemplation of such event;
(viii) any Lien on any asset of any corporation or other Person
existing at the time such corporation or other Person is merged or
17
consolidated with or into the Company or a Subsidiary and not created in
contemplation of such event;
(ix) any Lien existing on any asset prior to the acquisition
thereof by the Company or a Subsidiary and not created in anticipation
of such acquisition; and
(x) Liens not otherwise permitted by the foregoing clauses
securing Debt (other than the Notes) in an aggregate principal amount
outstanding not to exceed 15% of Consolidated Net Worth.
6B(2). DEBT RESTRICTION. Create, incur, assume or suffer to exist any
Debt, except:
(i) Current Debt of the Company and its Subsidiaries provided that
commencing on January 1, 2002 and at all times thereafter there shall
have been a period of at least thirty (30) consecutive days within the
twelve month period immediately preceding the date of determination
during which the aggregate principal amount of Current Debt of the
Company and its Subsidiaries outstanding as of the close of business on
each day during such thirty day period did not exceed an amount equal to
the amount of Funded Debt which would have been permitted as additional
Funded Debt under clause (ii) of this paragraph 6B(2) as of the close of
business on each such day during such thirty day period;
(ii) Funded Debt of the Company or any Subsidiary (including Debt
represented by the Notes), provided that (a) the aggregate principal
amount of all Funded Debt of the Company and its Subsidiaries at no time
exceeds forty percent (40%) of Consolidated Total Capitalization and (b)
the aggregate amount of (I) Debt of U.S. Subsidiaries which is
Guaranteed by the Company and (II) Debt of the Company secured by Liens
at no time exceeds fifteen percent (15%) of Consolidated Net Worth; and
(iii) Debt of the Company or any Subsidiary owing to the Company or
to any Subsidiary.
6B(3). LOANS, ADVANCES AND INVESTMENTS. Make or permit to remain
outstanding loans or advances to, or own, purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contributions to, any Person (collectively, "INVESTMENTS"), except as
permitted by paragraphs 6B(4), 6B(5) and 6B(6) and except that the Company or
any Subsidiary may:
(i) make or permit to remain outstanding loans or advances to
the Company or any Subsidiary;
(ii) own, purchase or acquire stock, obligations or securities of
a Subsidiary or of a corporation which immediately after such purchase
or acquisition will be a Subsidiary;
(iii) acquire and own stock, obligations or securities received in
settlement of debts (created in the ordinary course of business) owing
to the Company or any Subsidiary;
(iv) own, purchase or acquire prime commercial paper, banker's
acceptances and certificates of deposit in commercial banks with a
capital of $100,000,000 or more or whose credit is reasonably
satisfactory to Prudential; repurchase agreements with respect to the
foregoing; fixed income obligations of companies organized under Federal
or state law; obligations of the United States Government (or any State
thereof); obligations fully guaranteed by the United States Government
(or any State thereof); obligations of counties or municipalities
18
located in the United States or agencies or departments thereof in each
case rated "A" or better by Standard & Poors Corporation or the
equivalent thereof by any nationally recognized rating agency and mutual
fund accounts which exclusively invest in any one or more of the
foregoing;
(v) make or permit to remain outstanding loans or advances to
officers and employees in the ordinary course of business reasonably
consistent with the Company's business practices as of the date of this
Agreement;
(vi) make or permit to remain outstanding loans to the existing
employee stock ownership plan of the Company and any new employee stock
ownership plan of the Company which is approved by the Company's
shareholders;
(vii) make or permit to remain outstanding loans to senior
management of the Company pursuant to the Company's stock purchase plan
not to exceed in the aggregate at any time outstanding $5,000,000;
(viii) own treasury stock, and so long as no Default or Event of
Default shall be continuing, repurchase from time to time of the capital
stock of the Company as authorized by the Company's board of directors
from time to time; and
(ix) make other new Investments not to exceed an amount equal to
twenty-five percent (25%) of Consolidated Net Worth.
6B(4). DISPOSITION OF CERTAIN ASSETS. Except for Permitted
Dispositions, sell, lease, transfer or otherwise dispose of any assets of the
Company or any Subsidiary.
6B(5). SALE OF STOCK AND DEBT OF SUBSIDIARIES. Except for Permitted
Dispositions, sell or otherwise dispose of, or part with control of, any
shares of stock or Indebtedness of any Subsidiary, except to the Company or
any Subsidiary.
6B(6). MERGER AND CONSOLIDATION. Merge with or consolidate into any
other Person, except:
(i) Subsidiaries may be merged into the Company or any other
Subsidiary; and
(ii) so long as no Default or Event of Default would exist after
giving effect thereto or as a result therefrom (x) the Company may merge
with another entity provided that the Company is the surviving
corporation and (y) any Subsidiary may merge with another entity.
6B(7). SALE OR DISCOUNT OF RECEIVABLES. Sell with recourse, discount
or pledge or otherwise sell any of its notes or accounts receivable excluding,
however, the sale on a non-recourse basis of receivables owing from foreign
account debtors.
6B(8). RESTRICTED TRANSACTIONS. Deal directly or indirectly with an
Affiliate, any Person related by blood, adoption, or marriage to any Affiliate
or any Person owning 5% or more of the Company's or any Subsidiary's stock,
provided that (i) the Company may deal with such persons in the ordinary
course of business at arm's length, (ii) the Company and its Subsidiaries may
make loans and advances permitted by paragraph 6B(3), (iii) in addition to the
foregoing, so long as the stock of the Company is publicly held, the Company
may deal with such Persons so long as the aggregate amount of such
transactions does not exceed $125,000 in any fiscal year and (iv) such
19
prohibition shall not apply to transactions between Subsidiaries or between
the Company and its Subsidiaries, including (without limitation) the right or
ability of any Subsidiary to declare or pay a dividend.
6B(9). CURRENT OBLIGATION COVERAGE. Commencing with the Fiscal Quarter
ending on March 31, 2002 and on the last day of any Fiscal Quarter thereafter,
permit the ratio of Income Available for Fixed Charges for the period of four
consecutive Fiscal Quarters then ended to Current Obligations for such period
of four consecutive Fiscal Quarters to be less than 2.5 to 1.0.
6B(10). DEBT TO EBITDA RATIO. At the end of each Fiscal Quarter,
commencing with the Fiscal Quarter ending on March 31, 2002, the ratio of
Consolidated Total Debt as at the end of such Fiscal Quarter to Consolidated
EBITDA for the period of four consecutive Fiscal Quarters then ended shall not
exceed 3.0 to 1.0.
7. EVENTS OF DEFAULT.
7A. ACCELERATION. If any of the following events shall occur and be
continuing for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law or
otherwise):
(i) the Company defaults in the payment of any principal of, or
Yield-Maintenance Amount payable with respect to, any Note when the same
shall become due, either by the terms thereof or otherwise as herein
provided; or
(ii) the Company defaults in the payment of any interest on any
Note for more than 10 days after the date due; or
(iii) the Company or any Subsidiary defaults (whether as primary
obligor or as guarantor or other surety) in any payment of principal of
or interest on any other Indebtedness (or any Capitalized Lease
Obligation, any obligation under a conditional sale or other title
retention agreement, any obligation issued or assumed as full or partial
payment for property whether or not secured by a purchase money mortgage
or any obligation under notes payable or drafts accepted representing
extensions of credit) beyond any period of grace provided with respect
thereto, or the Company or any Subsidiary fails to perform or observe
any other agreement, term or condition contained in any agreement under
which any such Indebtedness is created (or if any other event thereunder
or under any such agreement shall occur and be continuing) and the
effect of such failure or other event is to cause, or to permit the
holder or holders of such Indebtedness (or a trustee on behalf of such
holder or holders) to cause, such obligation to become due (or to be
repurchased by the Company or any Subsidiary) prior to any stated
maturity, provided that the aggregate amount of all Indebtedness as to
which such a payment default shall occur and be continuing or such a
failure or other event causing or permitting acceleration (or resale to
the Company or any Subsidiary) shall occur and be continuing exceeds
$10,000,000; or
(iv) any representation or warranty made by the Company herein or
by the Company or any of its officers in any writing furnished in
connection with or pursuant to this Agreement shall be false in any
material respect on the date as of which made; or
(v) the Company fails to perform or observe any agreement
contained in paragraph 6; or
(vi) the Company fails to perform or observe any other agreement,
20
term or condition contained herein and such failure shall not be
remedied within 30 days after any Responsible Officer obtains actual
knowledge thereof; or
(vii) the Company or any Subsidiary (other than an Unrestricted
Subsidiary) makes an assignment for the benefit of creditors or is
generally not paying its debts as such debts become due; or
(viii) any decree or order for relief in respect of the Company or
any Subsidiary (other than an Unrestricted Subsidiary) is entered under
any bankruptcy, reorganization, compromise, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law, whether
now or hereafter in effect (herein called the "BANKRUPTCY LAW"), of any
jurisdiction; or
(ix) the Company or any Subsidiary (other than an Unrestricted
Subsidiary) petitions or applies to any tribunal for, or consents to,
the appointment of, or taking possession by, a trustee, receiver,
custodian, liquidator or similar official of the Company or any
Subsidiary (other than an Unrestricted Subsidiary), or of any
substantial part of the assets of the Company or any Subsidiary (other
than an Unrestricted Subsidiary), or commences a voluntary case under
the Bankruptcy Law of the United States or any proceedings (other than
proceedings for the voluntary liquidation and dissolution of a
Subsidiary) relating to the Company or any Subsidiary (other than an
Unrestricted Subsidiary) under the Bankruptcy Law of any other
jurisdiction; or
(x) any such petition or application is filed, or any such
proceedings are commenced, against the Company or any Subsidiary (other
than an Unrestricted Subsidiary) and the Company or such Subsidiary by
any act indicates its approval thereof, consent thereto or acquiescence
therein, or an order, judgment or decree is entered appointing any such
trustee, receiver, custodian, liquidator or similar official, or
approving the petition in any such proceedings, and such order, judgment
or decree remains unstayed and in effect for more than 60 days; or
(xi) any order, judgment or decree is entered in any proceedings
against the Company decreeing the dissolution of the Company and such
order, judgment or decree remains unstayed and in effect for more than
60 days; or
(xii) any order, judgment or decree is entered in any proceedings
against the Company or any Subsidiary decreeing a split-up of the
Company or such Subsidiary which requires the divestiture of assets
representing a substantial part, or the divestiture of the stock of a
Subsidiary whose assets represent a substantial part, of the
consolidated assets of the Company and its Subsidiaries (determined in
accordance with generally accepted accounting principles) or which
requires the divestiture of assets, or stock of a Subsidiary, which
shall have contributed a substantial part of the consolidated net income
of the Company and its Subsidiaries (determined in accordance with
generally accepted accounting principles) for any of the three fiscal
years then most recently ended, and such order, judgment or decree
remains unstayed and in effect for more than 60 days; or
(xiii) a final judgment in an amount in excess of $2,000,000 is
rendered against the Company or any Subsidiary and, within 60 days after
entry thereof, such judgment is not discharged or execution thereof
stayed pending appeal, or within 60 days after the expiration of any
such stay, such judgment is not discharged; or
21
(xiv) the Company or any member of the Controlled Group shall fail
to pay when due any material amount which it shall have become liable to
pay to the PBGC or to a Plan under Title IV of ERISA; or notice of
intent to terminate a Plan or Plans shall be filed under Title IV of
ERISA by the Company, any member of the Controlled Group, any plan
administrator or any combination of the foregoing which results in
liability of the Company or any member of the Controlled Group of
greater than $2,000,000; or the PBGC shall institute proceedings under
Section 4042 of ERISA to terminate or to cause a trustee to be appointed
to administer any such Plan or Plans or a proceeding shall be instituted
by a fiduciary of any such Plan or Plans to enforce Section 515 or
4219(c)(5) of ERISA and such proceeding shall not have been dismissed
within 60 days thereafter; or a condition shall exist by reason of which
the PBGC would be entitled to obtain a decree adjudicating that any such
Plan or Plans must be terminated; or the Company or any other member of
the Controlled Group shall incur any withdrawal liability in excess of
$2,000,000 with respect to a Multiemployer Plan; or
then (a) if such event is an Event of Default specified in clause (i) or (ii)
of this paragraph 7A, the holder of any Note may at its option, by notice in
writing to the Company, declare such Note to be, and such Note shall thereupon
be and become, immediately due and payable together with interest accrued
thereon and together with the Yield-Maintenance Amount, if any, with respect
to each such Note, without presentment, demand, protest or notice of any kind,
all of which are hereby waived by the Company, (b) if such event is an Event
of Default specified in clause (viii), (ix) or (x) of this paragraph 7A with
respect to the Company, all of the Notes at the time outstanding shall
automatically become immediately due and payable at par together with interest
accrued thereon, and together with the Yield-Maintenance Amount, if any, with
respect to each Note, without presentment, demand, protest or notice of any
kind, all of which are hereby waived by the Company, and (c) with respect to
any event constituting an Event of Default, (including any event described in
clause (a) above), the Required Holder(s) of the Notes of any Series may at
their option, by notice in writing to the Company, declare all of the Notes of
such Series to be, and all of the Notes shall thereupon be and become,
immediately due and payable together with interest accrued thereon and
together with the Yield-Maintenance Amount, if any, with respect to each Note
of such Series, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Company, provided that the Yield-
Maintenance Amount, if any, with respect to each Note shall be due and payable
upon such declaration only if (x) such event is an Event of Default specified
in any of clauses (i) to (vii), inclusive, or clauses (xi) through (xiv),
inclusive, of this paragraph 7A, (y) the Required Holders shall have given to
the Company, at least 10 Business Days before such declaration, written notice
stating its or their intention so to declare the Notes to be immediately due
and payable and identifying one or more such Events of Default whose
occurrence on or before the date of such notice permits such declaration, and
(z) one or more of the Events of Default so identified shall be continuing at
the time of such declaration.
The Company acknowledges and the parties hereto agree, that each holder
of a Note has the right to maintain its investment in the Notes free from
repayment by the Company (except as herein specifically provided for) and that
the provision for payment of the Yield-Maintenance Amount by the Company in
the event that the Notes are pre-paid or are accelerated as a result of an
Event of Default, is intended to provided compensation of such right under
such circumstances.
7B. RESCISSION OF ACCELERATION. At any time after any or all of the
Notes shall have been declared immediately due and payable pursuant to
paragraph 7A, the Required Holder(s) may, by notice in writing to the Company,
rescind and annul such declaration and its consequences if (i) the Company
22
shall have paid all overdue interest on the Notes, the principal of and Yield-
Maintenance Amount, if any, payable with respect to any Notes which have
become due otherwise than by reason of such declaration, and interest on such
overdue interest and overdue principal and Yield-Maintenance Amount at the
rate specified in the Notes, (ii) the Company shall not have paid any amounts
which have become due solely by reason of such declaration, (iii) all Events
of Default and Defaults, other than non-payment of amounts which have become
due solely by reason of such declaration, shall have been cured or waived
pursuant to paragraph 11C, and (iv) no judgment or decree shall have been
entered for the payment of any amounts due pursuant to the Notes or this
Agreement. No such rescission or annulment shall extend to or affect any
subsequent Event of Default or Default or impair any right arising therefrom.
7C. NOTICE OF ACCELERATION OR RESCISSION. Whenever any Note shall
be declared immediately due and payable pursuant to paragraph 7A or any such
declaration shall be rescinded and annulled pursuant to paragraph 7B, the
Company shall forthwith give written notice thereof to the holder of each Note
at the time outstanding.
7D. OTHER REMEDIES. If any Event of Default or Default shall occur
and be continuing, the holder of any Note (in the case of a Default or Event
of Default under paragraph 7A(i) or (ii)) or the Required Holder(s) (in the
case of any other Default or Event of Default) may proceed to protect and
enforce their rights under this Agreement and such Note by exercising such
remedies as are available in respect thereof under applicable law, either by
suit in equity or by action at law, or both, whether for specific performance
of any covenant or other agreement contained in this Agreement or in aid of
the exercise of any power granted in this Agreement. No remedy conferred in
this Agreement upon the holder of any Note is intended to be exclusive of any
other remedy, and each and every such remedy shall be cumulative and shall be
in addition to every other remedy conferred herein or now or hereafter
existing at law or in equity or by statute or otherwise.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company
represents, covenants and warrants as follows:
8A. ORGANIZATION. The Company is a corporation duly organized and
existing in good standing under the laws of the State of Indiana and has the
corporate power to own its property and to carry on its business as now being
conducted. Each Subsidiary is duly organized and existing in good standing
under the laws of its jurisdiction of incorporation and has the corporate
power to own its property and to carry on its business as now being conducted
except in such instances where the failure could not be reasonably expected to
result in a material adverse effect on the business, assets, operations or
condition (financial or otherwise) of the Company and its Subsidiaries taken
as a whole. The names and jurisdictions of incorporation of each Subsidiary
as of the date of this Agreement are set forth on Schedule 8A.
8B. FINANCIAL STATEMENTS. The Company has furnished each Purchaser
of the Series A Notes and any Accepted Notes with the following financial
statements, identified by a principal financial officer of the Company: (i) a
consolidated balance sheet of the Company and its Subsidiaries as of the last
day in each of the five fiscal years of the Company most recently completed
prior to the date as of which this representation is made or repeated to such
Purchaser (other than fiscal years completed within 90 days prior to such date
for which audited financial statements have not been released) and a
consolidated statement of income and statement of cash flows of the Company
and its Subsidiaries for each such year, all certified by Deloitte & Touche
(or such other independent accountants of national standing or such other
accounting firm as may be reasonably acceptable to such Purchaser); (ii) a
consolidated balance sheet of the Company and its Subsidiaries as at the end
of the quarterly period (if any) most recently completed prior to such date
23
and after the end of such fiscal year (other than quarterly periods completed
within sixty (60) days prior to such date for which financial statements have
not been released) and the comparable quarterly period in the preceding fiscal
year and consolidated statements of income, stockholders' equity and cash
flows of the Company and its Subsidiaries for the periods from the beginning
of the fiscal years in which such quarterly periods are included to the end of
such quarterly periods, prepared by the Company and (iii) a consolidated
balance sheet of the Company and its Subsidiaries as of September 29, 2001 and
a consolidated statement of income and statement of cash flows of the Company
and its Subsidiaries for the period from December 31, 2000 through September
29, 2001. Delivery of copies of the Annual Reports filed with the Securities
and Exchange Commission on Form 10-K of the Company for the fiscal years
described in clause (i) of the immediately preceding sentence and delivery of
copies of the Quarterly Reports filed with the Securities and Exchange
Commission on Form 10-Q of the Company for the quarterly periods described in
clauses (ii) and (iii) of the immediately preceding sentence, shall be deemed
to satisfy the requirements of the immediately preceding sentence. Such
financial statements (including any related schedules and/or notes) are true
and correct in all material respects (subject, as to interim statements, to
changes resulting from audits and year-end adjustments), have been prepared in
accordance with generally accepted accounting principles consistently followed
throughout the periods involved and show all liabilities, direct and
contingent, of the Company and its Subsidiaries required to be shown in
accordance with such principles. The balance sheets fairly present the
condition of the Company and its Subsidiaries as at the dates thereof, and the
statements of income and statements of cash flows fairly present the results
of the operations of the Company and its Subsidiaries for the periods
indicated. There has been no material adverse change in the business, assets,
operations or condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole since the end of the most recent fiscal year for
which such audited financial statements have been furnished.
8C. ACTIONS PENDING. There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Company, threatened against the
Company or any Subsidiary or any properties or rights of the Company or any
Subsidiary, by or before any court, arbitrator or administrative or
governmental body which could be reasonably expected to result in any material
adverse change in the business, assets, operations or condition (financial or
otherwise) of the Company and its Subsidiaries taken as a whole.
8D. OUTSTANDING DEBT. Neither the Company nor any Subsidiary has
any outstanding Debt except as permitted by paragraph 6B(2). There exists no
matured default or to the best of the Company's knowledge any unmatured
default under the provisions of any instrument evidencing such Debt in excess
of $1,000,000 or of any agreement relating thereto.
8E. TITLE TO PROPERTIES. The Company has, and each Subsidiary has,
good and indefeasible title to its respective real properties (other than
properties which it leases) and good title to all of its other properties and
assets necessary in any respect for the conduct of their respective
businesses, including the properties and assets reflected in the most recent
audited balance sheet referred to in paragraph 8B (other than properties and
assets disposed of in the ordinary course of business), subject to no Lien of
any kind except Liens permitted by paragraph 6B(1). The Company and each
Subsidiary enjoys peaceful and undisturbed possession of all leases necessary
in any material respect for the conduct of their respective businesses, none
of which contains any unusual or burdensome provisions which could be
reasonably expected to materially affect or impair the business, assets,
operations or condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole. All such leases are valid and subsisting and
are in full force and effect.
24
8F. TAXES. The Company has, and each Subsidiary has, filed all
Federal, State, local and other income tax returns (other than non-material
foreign tax returns) which, to the best knowledge of the officers of the
Company, are required to be filed, and each has paid or made adequate
provision for paying all taxes as shown on such returns and on all assessments
received by it to the extent that such taxes have become due, except such
taxes as are being contested in good faith by appropriate proceedings for
which adequate reserves or other appropriate provisions have been established
in accordance with generally accepted accounting principles.
8G. CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the Company
nor any of its Subsidiaries is a party to any contract or agreement or subject
to any charter or other corporate restriction which materially and adversely
affects its business, property or assets, or financial condition. Neither the
execution nor delivery of this Agreement or the Notes, nor the offering,
issuance and sale of the Notes, nor fulfillment of nor compliance with the
terms and provisions hereof and of the Notes will conflict with, or result in
a breach of the terms, conditions or provisions of, or constitute a default
under, or result in any violation of, or result in the creation of any Lien
upon any of the properties or assets of the Company or any of its Subsidiaries
pursuant to, the charter or by-laws (or comparable governing documents) of the
Company or any of its Subsidiaries, any award of any arbitrator or any agree-
ment (including any agreement with stockholders), instrument, order, judgment,
decree, statute, law, rule or regulation to which the Company or any of its
Subsidiaries is subject. Neither the Company nor any of its Subsidiaries is a
party to, or otherwise subject to any provision contained in, any instrument
evidencing indebtedness of the Company or any of its Subsidiaries, any
agreement relating thereto or any other contract or agreement (including its
charter or comparable governing documents) which limits the amount of, or
otherwise imposes restrictions on the incurring of, indebtedness of the
Company of the type to be evidenced by the Notes except as set forth in the
agreements listed in Schedule 8G attached hereto.
8H. OFFERING OF NOTES. Neither the Company nor any agent acting on
its behalf has, directly or indirectly, offered the Notes or any similar
security of the Company for sale to, or solicited any offers to buy the Notes
or any similar security of the Company from, or otherwise approached or
negotiated with respect thereto with, any Person other than Institutional
Investors, and neither the Company nor any agent acting on its behalf has
taken or will take any action which would subject the issuance or sale of the
Notes to the provisions of section 5 of the Securities Act or to the
provisions of any securities or Blue Sky law of any applicable jurisdiction.
8I. USE OF PROCEEDS. Neither the Company nor any Subsidiary owns or
has any present intention of acquiring any "Margin Stock" as defined in
Regulation U (12 CFR Part 207) of the Board of Governors of the Federal
Reserve System (herein called "MARGIN STOCK"). The proceeds of sale of the
Private Shelf Notes will be used primarily to refinance certain existing bank
indebtedness of the Company, for working capital purposes, capital
expenditures and other purposes permitted by or not in contravention of any
provision of this Agreement and the proceeds of the sale of any Private Shelf
Notes will be used for the purposes stated in the relevant Request for
Purchase. None of such proceeds will be used, directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of purchasing or carrying
any margin stock or for the purpose of maintaining, reducing or retiring any
indebtedness which was originally incurred to purchase or carry any stock that
is currently a margin stock or for any other purpose which might constitute
this transaction a "purpose credit" within the meaning of such Regulation U.
Neither the Company nor any agent acting on its behalf has taken or will take
any action which might cause this Agreement or the Notes to violate Regulation
U, Regulation T or any other regulation of the Board of Governors of the
Federal Reserve System or to violate the Securities Exchange Act of 1934, as
25
amended, in each case as in effect now or as the same may hereafter be in
effect.
8J. COMPLIANCE WITH XXXXX. (a) The Company and each member of the
Controlled Group have fulfilled their obligations under the minimum funding
standards of ERISA and the Code with respect to each Plan and are in
compliance in all material respects with the presently applicable provisions
of ERISA and the Code, and have not incurred any liability (other than
liabilities incurred in the ordinary course of business) to the PBGC or a Plan
under Title IV of ERISA.
(b) Either (i) neither the Company nor any member of the Controlled
Group is or within the preceding five (5) years ever has been obligated to
contribute to any Multiemployer Plan, or (ii) if the Company or any member of
the Controlled Group is or within the preceding five (5) years has been
obligated to contribute to any Multiemployer Plan, neither the Company nor any
member of the Controlled Group has incurred any withdrawal liability in excess
of $2,000,000 with respect to any Multiemployer Plan under Title IV of ERISA.
8K. GOVERNMENTAL CONSENT. Neither the nature of the Company or of
any Subsidiary, nor any of their respective businesses or properties, nor any
relationship between the Company or any Subsidiary and any other Person, nor
any circumstance in connection with the offering, issuance, sale or delivery
of the Notes is such as to require any authorization, consent, approval,
exemption or other action by or notice to or filing with any court or
administrative or governmental body (other than routine filings after the date
of closing with the Securities and Exchange Commission and/or state Blue Sky
authorities or consents which will be obtained prior to any applicable closing
day) in connection with the execution and delivery of this Agreement, the
offering, issuance, sale or delivery of the Notes or fulfillment of or
compliance with the terms and provisions of this Agreement.
8L. ENVIRONMENTAL COMPLIANCE. The Company and its Subsidiaries and
all of their respective properties and facilities have complied at all times
and in all respects with all federal, state, local and regional statutes,
laws, ordinances and judicial or administrative orders, judgments, rulings and
regulations relating to protection of the environment except, in any such
case, where failure to comply could not reasonably be expected to result in a
material adverse effect on the business, assets, operations or condition
(financial or otherwise) of the Company and its Subsidiaries taken as a whole.
8M. HOSTILE TENDER OFFERS. None of the proceeds of the sale of any
Notes will be used to finance a Hostile Tender Offer.
8N. DISCLOSURE. Neither this Agreement nor any other document,
certificate or statement furnished to any Purchaser by or on behalf of the
Company in connection herewith contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the state-
ments contained herein and therein not misleading. There is no fact peculiar
to the Company or any of its Subsidiaries which materially adversely affects
or in the future may (so far as the Company can now foresee) materially
adversely affect the business, property or assets, or financial condition of
the Company and its Subsidiaries taken as a whole and which has not been set
forth in this Agreement or in the other documents, certificates and statements
furnished to the Purchasers by the Company prior to the date hereof in
connection with the transactions contemplated hereby.
8O. INVESTMENT COMPANY STATUS; HOLDING COMPANY STATUS. Neither the
Company nor any Subsidiary of the Company is (a) an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended or an "investment adviser" within
26
the meaning of the Investment Advisors Act of 1940, as amended, or (b) a
"holding company" or a "subsidiary company" of a "holding company" or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company" or a "public utility", within the meaning of the Public Utility
Holding Company Act of 1935, as amended, or a "public utility" within the
meaning of the Federal Power Act, as amended.
9. REPRESENTATIONS OF THE PURCHASERS.
Each Purchaser represents as follows:
9A. NATURE OF PURCHASE. Such Purchaser is not acquiring the Notes
to be purchased by it hereunder with a view to or for sale in connection with
any distribution thereof within the meaning of the Securities Act, provided
that the disposition of such Purchaser's property shall at all times be and
remain within its control.
9B. SOURCE OF FUNDS. The source of the funds being used by such
Purchaser to pay the purchase price of the Notes being purchased by such
Purchaser hereunder constitutes assets (i) allocated to the "insurance company
general account" of such Purchaser (as such term is defined under Section V of
the United States Department of Labor's Prohibited Transaction Class Exemption
("PTCE") 95-60), and as of the date of the purchase of the Notes such
Purchaser satisfies all of the applicable requirements for relief under
Section I and IV of PTCE 95-60, (ii) allocated to a separate account
maintained by such Purchaser in which no employee benefit plan, other than
employee benefit plans identified on a list which has been furnished by such
Purchaser to the Company, participates to the extent of 10% or more or (iii)
of any investment fund, the assets of which do not include assets of any
employee benefit plan within the meaning of ERISA or (iv) which do not include
assets of any employee benefit plan other than a plan exempt from the coverage
of ERISA. For the purpose of this paragraph 9B, the terms "separate account"
and "employee benefit plan" shall have the respective meanings specified in
section 3 of ERISA.
10. DEFINITIONS. For the purpose of this Agreement, the terms
defined in paragraphs 1 and 2 shall have the respective meanings specified
therein, and the following terms shall have the meanings specified with
respect thereto below:
10A. YIELD-MAINTENANCE TERMS.
"CALLED PRINCIPAL" shall mean, with respect to any Note, the principal
of such Note that is to be prepaid pursuant to paragraph 4B or has become or
is declared to be immediately due and payable pursuant to paragraph 7A, as the
context requires.
"DISCOUNTED VALUE" shall mean, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due
dates to the Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount factor
(calculated on the same periodic basis as that on which interest on such Note
is payable) equal to the Reinvestment Yield with respect to such Called
Principal.
"IMPLIED DOLLAR YIELD" shall mean, with respect to the Called Principal
of any Note, the yield to maturity implied by (i) the yields reported, as of
10:00 a.m. (New York time) on the Business Day next preceding the Settlement
Date with respect to such Called Principal, on the display designated as "Page
678" on the Bridge\Telerate Service (or such other display as may replace page
678 on the Bridge\Telerate Service) for actively traded U.S. Treasury
27
securities having a maturity equal to the Remaining Average Life of such
Called Principal as of such Settlement Date, or if such yields shall not be
reported as of such time or the yields reported as of such time shall not be
ascertainable, (ii) the Treasury Constant Maturity Series yields reported, for
the latest day for which such yields shall have been so reported as of the
Business Day next preceding the Settlement Date with respect to such Called
Principal, in Federal Reserve Statistical Release H.15 (519) (or any
comparable successor publication) for actively traded U.S. Treasury securities
having a constant maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date. Such implied yield shall be determined,
if necessary, by (a) converting U.S. Treasury bill quotations to bond-
equivalent yields in accordance with accepted financial practice and (b)
interpolating linearly between (1) the actively traded U.S. Treasury security
with the maturity closest to and greater than the Remaining Average Life of
such Called Principal and (2) the actively traded U.S. Treasury security with
the maturity closest to and less than the Remaining Average Life of such
Called Principal.
"IMPLIED EURO YIELD" shall mean, with respect to the Called Principal of
any Note, the yield to maturity implied by (i) the yields reported, as of
10:00 a.m. (New York time) on the second Business Day preceding the Settlement
Date with respect to such Called Principal, on the display designated as "Page
0#DEBMK" on the Reuters Screen (or such other display as may replace "Page
0#DEBMK" on the Reuters Screen) for the actively traded benchmark German Bunds
having a maturity equal to the Remaining Average Life of such Called Principal
as of such Settlement Date, or if such yields are not reported as of such time
or the yields reported shall not be ascertainable, (ii) the average of the
yields for such securities as determined by Recognized German Bund Market
Makers. Such implied yield will be determined, if necessary, by (a)
converting quotations to bond-equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly between (1) the actively
traded benchmark German Bunds with the maturity closest to and greater than
the Remaining Average Life of such Called Principal and (2) the actively
traded benchmark German Bunds with the maturity closest to and less than the
Remaining Average Life of such Called Principal.
"RECOGNIZED GERMAN BUND MARKET MAKERS" shall mean two internationally
recognized dealers of German Bunds reasonably selected by Prudential.
"REINVESTMENT YIELD" shall mean, with respect to the Called Principal of
any Note denominated in (i) Dollars, the Implied Dollar Yield, and (ii) Euros,
the Implied Euro Yield. The Reinvestment Yield will be rounded to that number
of decimals as appears in the coupon for the applicable Note.
"REMAINING AVERAGE LIFE" shall mean, with respect to the Called
Principal of any Note, the number of years (calculated to the nearest one-
twelfth year) obtained by dividing (i) such Called Principal into (ii) the sum
of the products obtained by multiplying (a) each Remaining Scheduled Payment
of such Called Principal by (b) the number of years (calculated to the nearest
one-twelfth year) which will elapse between the Settlement Date with respect
to such Called Principal and the scheduled due date of such Remaining
Scheduled Payment.
"REMAINING SCHEDULED PAYMENTS" shall mean, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to its
scheduled due date.
"SETTLEMENT DATE" shall mean, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid pursuant to
paragraph 4B or has become or is declared to be immediately due and payable
28
pursuant to paragraph 7A, as the context requires.
"YIELD-MAINTENANCE AMOUNT" shall mean, with respect to any Note, an
amount equal to the excess, if any, of the Discounted Value of the Called
Principal of such Note over the sum of (i) such Called Principal plus (ii)
interest accrued thereon as of (including interest due on) the Settlement Date
with respect to such Called Principal, provided that the Yield-Maintenance
Amount may in no event be less than zero.
10B. OTHER TERMS.
"ACCEPTANCE" shall have the meaning specified in paragraph 2A(5).
"ACCEPTANCE DAY" shall have the meaning specified in paragraph 2A(5).
"ACCEPTANCE WINDOW" shall have the meaning specified in paragraph 2A(5).
"ACCEPTED NOTE" shall have the meaning specified in paragraph 2A(5).
"AFFILIATE" shall mean any Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, the Company,
except a Subsidiary. A Person shall be deemed to control a corporation if
such Person possesses, directly or indirectly, the power to direct or cause
the direction of the management and policies of such corporation, whether
through the ownership of voting securities, by contract or otherwise.
"AUTHORIZED OFFICER" shall mean (i) in the case of the Company, its
chief executive officer, its chief financial officer, its Vice President-
Finance, its Treasurer and any vice president of the Company designated as an
"Authorized Officer" of the Company for the purpose of this Agreement in an
Officer's Certificate executed by the Company's chief executive officer or
chief financial officer and delivered to Prudential, and (ii) in the case of
Prudential, P. Xxxxx xxx Xxxxxxx, Xxxxxxx Xxxxxxxxx, Xxxxxx Xxxxx, Xxxxx
Xxxxxxx, any vice president of Prudential as designated from time to time by
Prudential or any officer of Prudential designated as its "Authorized Officer"
for the purpose of this Agreement in a certificate executed by one of its
Authorized Officers or a member of its law department. Any action taken under
this Agreement on behalf of the Company by any individual who on or after the
date of this Agreement shall have been an Authorized Officer of the Company
and whom Prudential in good faith believes to be an Authorized Officer of the
Company at the time of such action shall be binding on the Company even though
such individual shall have ceased to be an Authorized Officer of the Company,
and any action taken under this Agreement on behalf of Prudential by any
individual who on or after the date of this Agreement shall have been an
Authorized Officer of Prudential and whom the Company in good faith believes
to be an Authorized Officer of Prudential at the time of such action shall be
binding on Prudential even though such individual shall have ceased to be an
Authorized Officer of Prudential.
"AVAILABLE CURRENCIES" shall mean Dollars and Euros.
"AVAILABLE FACILITY AMOUNT" shall have the meaning specified in
paragraph 2A(1).
"BANKRUPTCY LAW" shall have the meaning specified in clause (viii) of
paragraph 7A.
"BUSINESS DAY" shall mean (i) other than as provided in clauses (ii) and
(iii) below, any day other than a Saturday, a Sunday or a day on which
commercial banks in New York City are authorized or required to be closed,
(ii) for purposes of paragraph 2A(3) only, any day which is both a New York
Business Day and a day on which Prudential is open for business and (iii) for
29
purposes of paragraph 10A only, (a) if with respect to Notes denominated in
Dollars, a New York Business Day and (b) if with respect to Notes denominated
in Euros, any day which is both a New York Business Day and a day on which
commercial banks are not required or authorized to be closed in Frankfurt and
Brussels.
"CANCELLATION DATE" shall have the meaning specified in paragraph
2A(8)(iii).
"CANCELLATION FEE" shall have the meaning specified in paragraph
2A(8)(iii).
"CAPITAL EXPENDITURES" shall mean, for any period, the sum of all
capital expenditures incurred during such period by the Company and its
Consolidated Subsidiaries, as determined in accordance with generally accepted
accounting principles.
"CAPITALIZED LEASE OBLIGATION" shall mean any rental obligation which,
under generally accepted accounting principles, is or will be required to be
capitalized on the books of the Company or any Subsidiary, taken at the amount
thereof accounted for as indebtedness (net of interest expenses) in accordance
with such principles.
"CLOSING DAY" shall mean the Series A Notes Closing Day, a Private Shelf
Closing Day, and with respect to any Accepted Note, the Business Day
specified for the closing of the purchase and sale of such Accepted Note in
the Confirmation of Acceptance of such Accepted Note, provided that (i) if the
Company and the Purchaser which is obligated to purchase such Accepted Note
agree on an earlier Business Day for such closing, the "CLOSING DAY" for such
Accepted Note shall be such earlier Business Day, and (ii) if the closing of
the purchase and sale of such Accepted Note is rescheduled pursuant to
paragraph 2A(7), the Closing Day for such Accepted Note, for all purposes of
this Agreement except references to "original Closing Day" in paragraph
2A(8)(ii), shall mean the Rescheduled Closing Day with respect to such
Accepted Note.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMPETITOR" shall have the meaning specified in paragraph 11H.
"CONFIRMATION OF ACCEPTANCE" shall have the meaning specified in
paragraph 2A(5).
"CONSOLIDATED CURRENT ASSETS" and "CONSOLIDATED CURRENT LIABILITIES"
shall mean the consolidated current assets and consolidated current
liabilities of the Company and its Subsidiaries each determined in accordance
with generally accepted accounting principles.
"CONSOLIDATED EBIT" for any period means the sum of (i) Consolidated Net
Income for such period, (ii) Consolidated Interest Expense for such period and
(iii) taxes on income of the Company and its Consolidated Subsidiaries for
such period to the extent deducted in determining Consolidated Net Income for
such period. In determining Consolidated EBIT for any period, (a) any
Consolidated Subsidiary acquired during such period by the Company or any
other Consolidated Subsidiary shall be included on a pro forma, historical
basis as if it had been a Consolidated Subsidiary during such entire period
and (b) any amounts which would be included in a determination of Consolidated
EBIT for such period with respect to assets acquired during such period by the
Company or any Consolidated Subsidiary shall be included in the determination
of Consolidated EBIT for such period and the amount thereof shall be
calculated on a pro forma, historical basis as if such assets had been
acquired by the Company or such Consolidated Subsidiary prior to the first day
30
of such period.
"CONSOLIDATED EBITDA" for any period means the sum of (i) Consolidated
EBIT for such period, (ii) Depreciation for such period, (iii) amortization of
intangible assets of the Company and its Consolidated Subsidiaries for such
period, and (iv) extraordinary or other non-operating losses for such period,
minus extraordinary or other non-operating gains for such period, all
determined in accordance with generally accepted accounting principles. In
determining Consolidated EBITDA for any period, (a) any Consolidated
Subsidiary acquired during such period by the Company or any other
Consolidated Subsidiary shall be included on a pro forma, historical basis as
if it had been a Consolidated Subsidiary during such entire period and (b) any
amounts which would be included in a determination of Consolidated EBITDA for
such period with respect to assets acquired during such period by the Company
or any Consolidated Subsidiary shall be included in the determination of
Consolidated EBITDA for such period and the amount thereof shall be calculated
on a pro forma, historical basis as if such assets had been acquired by the
Company or such Consolidated Subsidiary prior to the first day of such period.
"CONSOLIDATED FIXED CHARGES" shall mean, for any period, the sum of (i)
Consolidated Interest Expense for such period, and (ii) Depreciation for such
period.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any period, interest
expense in respect of Indebtedness of the Company or any of its Consolidated
Subsidiaries outstanding during such period, determined on a consolidated
basis as of such date in accordance with generally accepted accounting
principles.
"CONSOLIDATED NET EARNINGS" shall mean with respect to any period:
(i) consolidated gross revenues of the Company and its
Subsidiaries for such period less
(ii) all operating and non-operating expenses of the Company and
its Subsidiaries for such period including all charges of a proper
character (including current and deferred taxes on income, provision for
taxes on unremitted foreign earnings which are included in gross
revenues, and current additions to reserves),
but not including in gross revenues:
(a) any gains (net of expenses and taxes applicable
thereto) in excess of losses resulting from the sale, conversion
or other disposition of capital assets (i.e., assets other than
current assets) other than in the ordinary course of business;
(b) any gains resulting from the write-up of assets;
(c) any equity of the Company or any Subsidiary in the
unremitted earnings of any corporation which is not a Subsidiary;
(d) undistributed earnings of any Subsidiary to the extent
that such Subsidiary is not at the time permitted to make or pay
dividends to the Company, repay intercompany indebtedness to the
Company, repatriate earnings to the Company or otherwise transfer
property or assets to the Company whether by the terms of its
charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to such
Subsidiary; or
(e) any deferred credit representing the excess of equity
31
in any Subsidiary at the date of acquisition over the cost of the
investment in such Subsidiary;
all determined in accordance with generally accepted accounting principles as
in effect on the date hereof and applied on a consistent basis.
"CONSOLIDATED NET INCOME" shall mean, for any period, the net income,
after taxes, of the Company and its Consolidated Subsidiaries, determined on a
consolidated basis for such period in accordance with generally accepted
accounting principles, but excluding extraordinary and other non-recurring
items.
"CONSOLIDATED NET WORTH" shall mean the sum of (i) the par value (or
value stated on the books of the Company) of the capital stock of all classes
of the Company, plus (or minus in the case of a surplus deficit) (ii) the
amount of the consolidated surplus, whether capital or earned, of the Company
and its Subsidiaries after subtracting therefrom the aggregate of treasury
stock and any other contra-equity accounts including, without limitation,
minority interests; all determined in accordance with generally accepted
accounting principles.
"CONSOLIDATED SUBSIDIARY" at any date, any Subsidiary or other entity
the accounts of which, in accordance with generally accepted accounting
principles, are consolidated with those of the Company in its consolidated
financial statements as of such date.
"CONSOLIDATED TOTAL CAPITALIZATION" shall mean the sum of Consolidated
Net Worth and Debt.
"CONSOLIDATED TOTAL DEBT" means at any date all Indebtedness of the
Company and its Consolidated Subsidiaries at such date, determined on a
consolidated basis as of such date.
"CONTROLLED GROUP" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Company, are treated as a single
employer under Section 414 of the Code.
"CURRENT DEBT" shall mean, with respect to any Person, all Indebtedness
of such Person for borrowed money which by its terms or by the terms of any
instrument or agreement relating thereto matures on demand or within one year
from the date of the creation thereof.
"CURRENT MATURITIES" shall mean all payments in respect of Funded Debt
that are required to be made by the Company or any Consolidated Subsidiary
within one year from the date of determination, whether or not the obligation
to make such payments would constitute a current liability of the Company or
such Consolidated Subsidiary under generally accepted accounting principles.
"CURRENT OBLIGATIONS" shall mean, for any period, the sum of (i)
Consolidated Interest Expense for such period and (ii) Current Maturities for
such period.
"DEBT" shall mean Current Debt and Funded Debt.
"DELAYED DELIVERY FEE" shall have the meaning specified in paragraph
2A(8)(ii).
"DEPRECIATION" shall mean, for any period, the sum of all depreciation
and amortization expenses of the Company and its Consolidated Subsidiaries for
such period, as determined on a consolidated basis in accordance with
generally accepted accounting principles.
32
"DOLLAR DELAYED DELIVERY FEE" shall have the meaning specified in
paragraph 2A(8)(ii).
"DOLLARS" shall mean dollars in lawful currency of the United States of
America.
"EMU" shall mean Economic and Monetary Union as contemplated in the
Treaty on European Union.
"EMU LEGISLATION" shall mean legislative measures of the European
Council (including European Council regulations) for the introduction of,
changeover to or operation of a single or unified European currency (whether
known as the Euro or otherwise), being in part the implementation of the third
stage of EMU.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA AFFILIATE" shall mean any corporation which is a member of the
same controlled group of corporations as the Company within the meaning of
section 414(b) of the Code, or any trade or business which is under common
control with the Company within the meaning of section 414(c) of the Code.
"EURO" shall mean the currency unit of the Euro as defined in the EMU
Legislation.
"EVENT OF DEFAULT" shall mean any of the events specified in paragraph
7A, provided that there has been satisfied any requirement in connection with
such event for the giving of notice, or the lapse of time, or the happening of
any further condition, event or act, and "DEFAULT" shall mean any of such
events, whether or not any such requirement has been satisfied.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"EXISTING 1993 SHELF AGREEMENT" shall have the meaning specified in
paragraph 1A.
"FACILITY" shall have the meaning specified in paragraph 2A(1).
"FISCAL QUARTER" shall mean any fiscal quarter of the Company.
"FUNDED DEBT" shall mean, with respect to any Person, as of any time of
determination thereof and without duplication, the sum of (i) any obligation
payable more than one year from the date of creation thereof, including all
payments thereof required to be made within one year (including Capitalized
Lease Obligations but excluding reserves for deferred compensation, deferred
income taxes and other reserves to the extent such reserves do not constitute
an obligation), (ii) Indebtedness secured by a Lien on property and (iii)
Guarantees of financial obligations referred to in clause (i) of this
definition. For purposes of paragraph 6B(2)(ii), indebtedness of the Company
owing to its Subsidiaries shall constitute "Funded Debt" of the Company but
only to the extent that the aggregate outstanding amount of all such
indebtedness exceeds $2,000,000.
"GUARANTEE" shall mean, with respect to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to
any indebtedness, lease, dividend or other obligation of another, including,
without limitation, any such obligation directly or indirectly guaranteed,
endorsed (otherwise than for collection or deposit in the ordinary course of
business) or discounted or sold with recourse by such Person, or in respect of
which such Person is otherwise directly or indirectly liable, including,
33
without limitation, any such obligation in effect guaranteed by such Person
through any agreement (contingent or otherwise) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide
funds for the payment or discharge of such obligation (whether in the form of
loans, advances, stock purchases, capital contributions or otherwise), or to
maintain the solvency or any balance sheet or other financial condition of the
obligor of such obligation, or to make payment for any products, materials or
supplies or for any transportation or service, regardless of the non-delivery
or non-furnishing thereof, in any such case if the purpose or intent of such
agreement is to provide assurance that such obligation will be paid or
discharged, or that any agreements relating thereto will be complied with, or
that the holders of such obligation will be protected against loss in respect
thereof. The amount of any Guarantee shall be equal to the outstanding
principal amount of the obligation guaranteed or such lesser amount to which
the maximum exposure of the guarantor shall have been specifically limited.
"HEDGE TREASURY NOTE(S)" shall mean, with respect to any Accepted Note,
the United States Treasury Note or Notes whose duration (as determined by
Prudential) most closely matches the duration of such Accepted Note.
"HOSTILE TENDER OFFER" shall mean, with respect to the use of proceeds
of any Note, any offer to purchase, or any purchase of, shares of capital
stock of any corporation or equity interests in any other entity, or
securities convertible into or representing the beneficial ownership of, or
rights to acquire, any such shares or equity interests, if such shares, equity
interests, securities or rights are of a class which is publicly traded on any
securities exchange or in any over-the-counter market, other than purchases of
such shares, equity interests, securities or rights representing less than 5%
of the equity interests or beneficial ownership of such corporation or other
entity for portfolio investment purposes, and such offer or purchase has not
been duly approved by the board of directors of such corporation or the
equivalent governing body of such other entity prior to the date on which the
Company makes the Request for Purchase of such Note.
"INCOME AVAILABLE FOR FIXED CHARGES" means, for any period, (a) the sum
of (i) Consolidated Net Income, (ii) tax expense and (iii) Consolidated Fixed
Charges, minus (b) Capital Expenditures, all determined with respect to the
Company and its Consolidated Subsidiaries on a consolidated basis for such
period and in accordance with generally accepted accounting principles.
"INDEBTEDNESS" of any Person means at any date, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) all obligations of such Person to pay the deferred purchase
price of property or services, except trade accounts payable arising in the
ordinary course of business, (iv) all Capitalized Lease Obligations, (v) all
obligations of such Person to reimburse any bank or other Person in respect of
amounts payable under a banker's acceptance, (vi) all Redeemable Preferred
Stock of such Person (in the event such Person is a corporation), (vii) all
non-contingent obligations of such Person to reimburse any bank or other
Person in respect of amounts paid under a letter of credit or similar
instrument, (viii) all Indebtedness of others secured by a Lien on any asset
of such Person, whether or not such Indebtedness is assumed by such Person,
(ix) all Indebtedness of others Guaranteed by such Person, and (x) for
purposes of paragraph 7A only, all obligations of such Person with respect to
interest rate protection agreements, foreign currency exchange agreements or
other hedging agreements (valued as the termination value thereof) computed in
accordance with a method approved by the International Swaps and Derivatives
Association, Inc. and agreed to by such Person in the applicable hedging
agreement, if any.
34
"INSTITUTIONAL INVESTOR" shall mean Prudential, any Prudential Affiliate
or any bank, bank affiliate, financial institution, insurance company, pension
fund, endowment or other organization which regularly acquires debt
instruments for investment.
"INVESTMENTS" shall have the meaning specified in paragraph 6B(3).
"ISSUANCE FEE" shall have the meaning specified in paragraph 2A(8)(i).
"ISSUANCE PERIOD" shall have the meaning specified in paragraph 2A(2).
"LIEN" shall mean any mortgage, pledge, security interest, encumbrance,
lien (statutory or otherwise) or charge of any kind (including any agreement
to give any of the foregoing, any conditional sale or other title retention
agreement, any lease in the nature thereof, and the filing of or agreement to
give any financing statement under the Uniform Commercial Code of any
jurisdiction) or any other type of preferential arrangement for the purpose,
or having the effect, of protecting a creditor against loss or securing the
payment or performance of an obligation.
"MULTIEMPLOYER PLAN" shall mean any Plan which is a "multiemployer plan"
(as such term is defined in section 4001(a)(3) of ERISA).
"NEW YORK BUSINESS DAY" shall mean any day other than a Saturday, a
Sunday or a day on which commercial banks in New York City are required to be
closed.
"NON-DOLLAR DELAYED DELIVERY FEE" shall have the meaning specified in
paragraph 2A(8)(ii).
"NOTES" shall have the meaning specified in paragraph 1B.
"OFFICER'S CERTIFICATE" shall mean a certificate signed in the name of
the Company by an Authorized Officer of the Company.
"OVERNIGHT INTEREST RATE" shall mean, with respect to an Accepted Note
denominated in any currency other than Dollars, the actual rate of interest,
if any, received by the Purchaser which intends to purchase such Accepted Note
on the overnight deposit of the funds intended to be used for the purchase of
such Accepted Note, it being understood that reasonable efforts will be made
by or on behalf of the Purchaser to make any such deposit in an interest-
bearing account.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor or replacement entity thereto under ERISA.
"PERMITTED DISPOSITIONS" shall mean and include:
(i) a mandatory divestiture of the Company's investment in South
Africa or companies doing business in South Africa required as a result
of applicable law or governmental decree,
(ii) any sale, lease or transfer of less than a material part of
the assets of the Company to any Subsidiary not to exceed in any event
during any fiscal year of the Company with respect to all such sales,
leases and transfers of assets $5,000,000 in the aggregate determined
based on book value,
(iii) any sale, lease, transfer or other disposition of assets
from (a) a Subsidiary to the Company or (b) a U.S. Subsidiary to any
other U.S. Subsidiary or (c) a Subsidiary which is not a U.S. Subsidiary
to any other Subsidiary or (d) a U.S. Subsidiary to a Subsidiary which
35
is not a U.S. Subsidiary so long as the book value of the assets so
transferred or disposed does not exceed $5,000,000 in any transaction or
$10,000,000 in the aggregate during any fiscal year and within six (6)
months after the date thereof the transferor acquires reasonably
comparable replacement assets,
(iv) any sale of the property listed on Schedule 6B(4) attached
hereto,
(v) any sale, lease, transfer or other disposition of assets in
the ordinary course of business, or
(vi) any sale, lease, transfer or other disposition of assets or
stock outside of the ordinary course of business so long as the
aggregate amount of assets and stock sold, leased, transferred or
otherwise disposed of outside of the ordinary course of business in the
then most recent twelve (12) month period which were not permitted by
clauses (i), (ii), (iii), (iv), or (v) above together with any assets
then proposed to be sold, leased, transferred or otherwise disposed of
outside of the ordinary course of business which are not permitted by
clauses (i), (ii), (iii), (iv) or (v) above (a) do not constitute more
than fifteen percent (15%) of consolidated total assets of the Company
and its Subsidiaries determined as of the end of the most recently ended
fiscal year and (b) have not contributed more than fifteen percent (15%)
of Consolidated Net Earnings for the most recently ended fiscal year of
the Company; provided, however, that any sale permitted by the foregoing
of stock and Indebtedness of a Subsidiary at the time owned by or owed
to the Company and all other Subsidiaries may only be sold as an
entirety for fair market value.
"PERSON" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.
"PLAN" shall mean any "employee pension benefit plan" (as such term is
defined in section 3 of ERISA) which is or has been established or maintained,
or to which contributions are or have been made, by the Company or any ERISA
Affiliate.
"PRIVATE SHELF CLOSING DAY" for any Accepted Note shall mean the
Business Day specified for the closing of the purchase and sale of such
Private Shelf Note in the Request for Purchase of such Private Shelf Note,
provided that (i) if the Acceptance Day for such Accepted Note is less than
five Business Days after the Company shall have made such Request for Purchase
and the Company and the Purchaser which is obligated to purchase such Private
Shelf Note agree on an earlier Business Day for such closing, the "Private
Shelf Closing Day" for such Accepted Note shall be such earlier Business Day,
and (ii) if the closing of the purchase and sale of such Accepted Note is
rescheduled pursuant to paragraph 2A(7), the Private Shelf Closing Day for
such Accepted Note, for all purposes of this Agreement except paragraph 2A(8),
shall mean the Rescheduled Closing Day with respect to such Closing.
"PRIVATE SHELF NOTE" and "PRIVATE SHELF NOTES" shall have the meaning
specified in paragraph 1B.
"PRUDENTIAL" shall mean The Prudential Insurance Company of America.
"PRUDENTIAL AFFILIATE" shall mean (i) any corporation or other entity
controlling, controlled by, or under common control with Prudential and (ii)
any managed account or investment fund which is managed by Prudential or a
Prudential Affiliate described in clause (i) of this definition. For purposes
of this definition, the terms "control", "controlling" and "controlled" shall
36
mean the ownership, directly or through Subsidiaries, of a majority of a
corporation's or other entity's Voting Stock or equivalent voting securities
or interests.
"PURCHASERS" shall mean, with respect to any Accepted Notes the Persons,
either Prudential or a Prudential Affiliate, who is purchasing such Accepted
Notes.
"QUOTATION" shall have the meaning provided in paragraph 2A(4).
"REDEEMABLE PREFERRED STOCK" of any Person means any preferred stock
issued by such Person which is at any time prior to the maturity date of any
Note either (i) mandatorily redeemable (by sinking fund or similar payments or
otherwise) or (ii) redeemable at the option of the holder thereof.
"REQUEST FOR PURCHASE" shall have the meaning specified in paragraph
2A(3).
"REQUIRED HOLDER(S)" shall mean at any time, the holder or holders of at
least 51% of the aggregate principal amount of the Notes outstanding at such
time.
"RESCHEDULED CLOSING DAY" shall have the meaning specified in paragraph
2A(7).
"RESPONSIBLE OFFICER" shall mean the chief executive officer, chief
operating officer, chief financial officer or chief accounting officer of the
Company or any other officer of the Company appointed by the board of
directors of the Company and involved principally in its financial
administration or its controllership function.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SERIES" shall have the meaning specified in paragraph 1B.
"SERIES A CLOSING DAY" shall mean
"SERIES A NOTES" shall mean the 6.31% $20,000,000 senior note issued by
the Company to Prudential pursuant to the Existing 1993 Shelf Agreement.
"SIGNIFICANT HOLDER" shall mean (i) Prudential or any Prudential
Affiliate, so long as Prudential or any Prudential Affiliate shall hold any
Note or any amount remains available under the Facility or (ii) any other
holder of at least 10% of the aggregate principal amount of the Notes from
time to time outstanding. To the extent that any notice or document is
required to be delivered to the Purchasers or a Significant Holder under this
Agreement, such requirement shall be satisfied (a) with respect to Prudential,
all Prudential Affiliates and accounts managed by Prudential or Prudential
Affiliates by giving notice, or delivery of a copy of any such document, to
Prudential (addressed to Prudential and each such Prudential Affiliate) and
(b) with respect to any entity or group of affiliates whose Notes are managed
by a single entity, by giving notice or making delivery of a copy of any such
document to the managing entity (addressed to each holder of the Notes managed
by such entity).
"SUBSIDIARY" shall mean any corporation of which greater than fifty
percent (50%) of the stock of every class of which, except directors'
qualifying shares, shall, at the time of which any determination is being
made, be owned by the Company directly or through Subsidiaries.
"TRANSFEREE" shall mean any direct or indirect transferee of all or any
part of any Note purchased by any Purchaser under this Agreement.
37
"UNRESTRICTED SUBSIDIARY" shall mean any Subsidiary (i) whose assets
constitute less than five percent (5%) of the consolidated net assets of the
Company and its Subsidiaries and (ii) which has contributed less than five
percent (5%) of Consolidated Net Earnings for the most recently ended fiscal
year of the Company.
"U.S. CANCELLATION FEE" shall have the meaning specified in paragraph
2A(8)(iii).
"U.S. SUBSIDIARY" shall mean a Subsidiary which has the majority of its
assets located in the United States.
"VOTING STOCK" shall mean, with respect to any corporation, any shares
of stock of such corporation whose holders are entitled under ordinary
circumstances to vote for the election of directors of such corporation
(irrespective of whether at the time stock of any other class or classes shall
have or might have voting power by reason of the happening of any
contingency).
10C. ACCOUNTING PRINCIPLES, TERMS AND DETERMINATIONS. All references
in this Agreement to "general accepted accounting principles" shall be deemed
to refer to generally accepted accounting principles in effect in the United
States at the time of application thereof. Unless otherwise specified herein,
all accounting terms used herein shall be interpreted, all determinations with
respect to accounting matters hereunder shall be made, and all unaudited
financial statements and certificates and reports as to financial matters
required to be furnished hereunder shall be prepared, in accordance with
generally accepted accounting principles applied on a basis consistent with
the most recent audited consolidated financial statements of the Company and
its Subsidiaries delivered pursuant to clause (ii) of paragraph 5A or, if no
such statements have been so delivered, the most recent audited financial
statements referred to in clause (i) of paragraph 8B.
11. MISCELLANEOUS.
11A. NOTE PAYMENTS. The Company agrees that, so long as any Purchaser
shall hold any Note, it will make payments of principal of, interest on and
any Yield-Maintenance Amount payable with respect to such Note, which comply
with the terms of this Agreement, by wire transfer of immediately available
funds for credit (not later than 12:00 noon, New York City local time, on the
date due) to (i) such Purchaser's account or accounts as specified in the
Purchaser Schedule attached hereto (in the case of the Series A Notes), (ii)
the account or accounts in the United States specified in the applicable
Confirmation of Acceptance (in the case of any Private Shelf Note) or (iii)
such other account or accounts in the United States as such Purchaser may
designate in writing, notwithstanding any contrary provision herein or in any
Note with respect to the place of payment. Each Purchaser agrees that, before
disposing of any Note, such Purchaser will make a notation thereon (or on a
schedule attached thereto) of all principal payments previously made thereon
and of the date to which interest thereon has been paid. The Company agrees
to afford the benefits of this paragraph 11A to any Transferee which shall
have made the same agreement as each Purchaser has made in this paragraph 11A.
11B. EXPENSES. The Company agrees, whether or not the transactions
contemplated hereby shall be consummated, to pay, and save Prudential, each
Purchaser and, only to the extent specified below, any Transferee harmless
against liability for the payment of, all out-of-pocket expenses arising in
connection with such transactions, including (i) all document production and
duplication charges and the fees and expenses of any special counsel engaged
by the Purchasers in connection with this Agreement the transactions
contemplated hereby and any subsequent proposed modification of, or proposed
consent under, this Agreement, whether or not such proposed modification shall
38
be effected or proposed consent granted, (ii) all fees and expenses of the
type referred to in clause (i) of this paragraph incurred by any special
counsel engaged by any Transferee in connection with any proposed modification
of, or proposed consent under, this Agreement, whether or not such proposed
modification shall be effected or proposed consent granted and (iii) the costs
and expenses, including reasonable attorneys' fees, incurred by any Purchaser
or any Transferee in enforcing (or determining whether or how to enforce) any
rights under this Agreement or the Notes or in responding to any subpoena or
other legal process or informal investigative demand issued in connection with
this Agreement or the transactions contemplated hereby, including without
limitation costs and expenses incurred in any bankruptcy case. The
obligations of the Company under this paragraph 11B shall survive the transfer
of any Note or portion thereof or interest therein by any Purchaser or any
Transferee and the payment of any Note.
11C. CONSENT TO AMENDMENTS. This Agreement may be amended, and the
Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, if the Company shall obtain the written
consent to such amendment, action or omission to act, of the Required
Holder(s) except that, (i) with the written consent of the holders of all
Notes of a particular Series, and if an Event of Default shall have occurred
and be continuing, of the holders of all Notes of all Series, at the time
outstanding (and not without such written consents), the Notes of such Series
may be amended or the provisions thereof waived to change the maturity
thereof, to change or affect the principal thereof, or to change or affect the
rate or time of payment of interest on or any Yield-Maintenance Amount payable
with respect to the Notes of such Series, (ii) without the written consent of
the holder or holders of all Notes at the time outstanding, no amendment to or
waiver of the provisions of this Agreement shall change or affect the
provisions of paragraph 7A or this paragraph 11C insofar as such provisions
relate to proportions of the principal amount of the Notes of any Series, or
the rights of any individual holder of Notes, required with respect to any
declaration of Notes to be due and payable or with respect to any consent,
amendment, waiver or declaration, (iii) with the written consent of Prudential
(and not without the written consent of Prudential) the provisions of
paragraph 2 may be amended or waived (except insofar as any such amendment or
waiver would affect any rights or obligations with respect to the purchase and
sale of Notes which shall have become Accepted Notes prior to such amendment
or waiver), and (iv) with the written consent of all of the Purchasers which
shall have become obligated to purchase Accepted Notes of any Series (and not
without the written consent of all such Purchasers), any of the provisions of
paragraphs 2 and 3 may be amended or waived insofar as such amendment or
waiver would affect only rights or obligations with respect to the purchase
and sale of the Accepted Notes of such Series or the terms and provisions of
such Accepted Notes. Each holder of any Note at the time or thereafter
outstanding shall be bound by any consent authorized by this paragraph 11C,
whether or not such Note shall have been marked to indicate such consent, but
any Notes issued thereafter may bear a notation referring to any such consent.
No course of dealing between the Company and the holder of any Note nor any
delay in exercising any rights hereunder or under any Note shall operate as a
waiver of any rights of any holder of such Note. As used herein and in the
Notes, the term "this Agreement" and references thereto shall mean this
Agreement as it may from time to time be amended or supplemented.
11D. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; LOST NOTES.
The Notes are issuable as registered notes without coupons in denominations of
at least $2,000,000 (or its equivalent if denominated in another currency)
except as may be necessary to reflect any principal amount not evenly
divisible by $2,000,000 or as may be necessary to represent the entire
principal amount of a Note being transferred or exchanged the principal amount
of which shall be less than $2,000,000 (or its equivalent if denominated in
another currency) because of prepayments; provided, however, that no such
39
minimum denomination shall apply to Notes issued to, or issued upon transfer
by any holder of the Notes to, Prudential or one or more Prudential Affiliates
or accounts managed by Prudential or Prudential Affiliates or to any other
entity or group of affiliates so long as the Company shall have received a
certificate from the proposed Transferee(s) in form and substance reasonably
acceptable to the Company stating that the Notes so issued or transferred
shall be managed by a single entity and the aggregate amount so issued or
transferred to all such affiliates is at least $2,000,000. The Company shall
keep at its principal office a register in which the Company shall provide for
the registration of Notes and of transfers of Notes. Upon surrender for
registration of transfer of any Note at the principal office of the Company,
the Company shall, at its expense, execute and deliver one or more new Notes
of like tenor and of a like aggregate principal amount, registered in the name
of such transferee or transferees. At the option of the holder of any Note,
such Note may be exchanged for other Notes of like tenor and of any authorized
denominations, of a like aggregate principal amount, upon surrender of the
Note to be exchanged at the principal office of the Company. Whenever any
Notes are so surrendered for exchange, the Company shall, at its expense,
execute and deliver the Notes which the holder making the exchange is entitled
to receive. Each installment of principal payable on each installment date
upon each new Note issued upon any such transfer or exchange shall be in the
same proportion to the unpaid principal amount of such new Note as the
installment of principal payable on such date on the Note surrendered for
registration of transfer or exchange bore to the unpaid principal amount of
such Note. No reference need be made in any such new Note to any installment
or installments of principal previously due and paid upon the Note surrendered
for registration of transfer or exchange. Every Note surrendered for
registration of transfer or exchange shall be duly endorsed, or be accompanied
by a written instrument of transfer duly executed, by the holder of such Note
or such holder's attorney duly authorized in writing. Any Note or Notes
issued in exchange for any Note or upon transfer thereof shall carry the
rights to unpaid interest and interest to accrue which were carried by the
Note so exchanged or transferred, so that neither gain nor loss of interest
shall result from any such transfer or exchange. Upon receipt of written
notice from the holder of any Note of the loss, theft, destruction or
mutilation of such Note and, in the case of any such loss, theft or
destruction, upon receipt of such holder's unsecured indemnity agreement, or
in the case of any such mutilation upon surrender and cancellation of such
Note, the Company will make and deliver a new Note, of like tenor, in lieu of
the lost, stolen, destroyed or mutilated Note.
11E. PERSONS DEEMED OWNERS; PARTICIPATIONS. Prior to due presentment
for registration of transfer, the Company may treat the Person in whose name
any Note is registered as the owner and holder of such Note for the purpose of
receiving payment of principal of and interest on, and any Yield-Maintenance
Amount payable with respect to, such Note and for all other purposes
whatsoever, whether or not such Note shall be overdue, and the Company shall
not be affected by notice to the contrary. Subject to the preceding sentence,
the holder of any Note may from time to time grant participations in all or
any part of such Note to any Person on such terms and conditions as may be
determined by such holder in its sole and absolute discretion.
11F. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. All
representations and warranties contained herein or made in writing by or on
behalf of the Company in connection herewith shall survive the execution and
delivery of this Agreement and the Notes, the transfer by any Purchaser of any
Note or portion thereof or interest therein and the payment of any Note, and
may be relied upon by any Transferee, regardless of any investigation made at
any time by or on behalf of any Purchaser or any Transferee. Subject to the
preceding sentence, this Agreement and the Notes embody the entire agreement
and understanding between the parties hereto with respect to the subject
matter hereof and supersede all prior agreements and understandings relating
40
to such subject matter.
11G. SUCCESSORS AND ASSIGNS. All covenants and other agreements in
this Agreement contained by or on behalf of any of the parties hereto shall
bind and inure to the benefit of the respective successors and assigns of the
parties hereto (including, without limitation, any Transferee) whether so
expressed or not.
11H. DISCLOSURE TO OTHER PERSONS. By its acceptance of any Note, each
Purchaser of a Note and each Transferee agrees to use reasonable efforts to
hold in confidence and not disclose any written information (other than
information (a) which was publicly known or otherwise known to such Person, at
the time of disclosure (except pursuant to disclosure in connection with this
Agreement), (b) which subsequently becomes publicly known through no act or
omission by such Person, or (c) which otherwise becomes known to such Person,
other than through disclosure by the Company) delivered or made available by
or on behalf of the Company or any Subsidiary to such Person (including,
without limitation, any non-public information obtained pursuant to paragraph
5A or 5B) in connection with or pursuant to this Agreement; provided, however,
that nothing herein shall prevent the holder of any Note from disclosing any
information disclosed to such holder to (i) its directors, officers,
employees, agents, attorneys, and professional consultants, (ii) any
Institutional Investor which holds any Note, (iii) any Institutional Investor
which is not a Competitor to which it offers to sell any Note or any part
thereof, (iv) any Institutional Investor which is not a Competitor to which it
sells or offers to sell a participation in all or any part of any Note, (v)
any federal or state regulatory authority having jurisdiction over it, (vi)
the National Association of Insurance Commissioners or any similar
organization, or (vii) any other Person to which such delivery or disclosure
may be reasonably necessary (1) in compliance with any law, rule, regulation
or order applicable to it, (2) in response to any subpoena or other legal
process or informal investigative demand, (3) in connection with any
litigation to which it is a party or (4) in order to enforce the rights of any
holder under this Agreement or in any Note; provided, further, that in the
case of sales contemplated by clauses (iii) and (iv) above, each Purchaser and
each Transferee agrees to distribute first to the potential purchaser the
financial statements and audit reports received pursuant to paragraph 5A(i),
(ii), (iii) and (iv) (collectively referred to as the "Public Information")
and second after such potential purchaser indicates that it is still
considering consummating a purchase and has agreed in writing to be bound by
this paragraph for the benefit of the Company, such Purchaser or Transferee
may distribute such other information as it deems necessary in order for such
potential purchaser to independently evaluate the Company's creditworthiness
(collectively referred to as the "Non-Public Information"). Prior to
disclosing Non-Public Information to any potential purchaser, each holder of a
Note by its acceptance of the Note agrees to use reasonable efforts to give
the Company written notice of its intention to disclose Non-Public Information
in connection with any proposed sale or transfer to an Institutional Investor
stating in such notice the name of the Institutional Investor to whom such
disclosure is to be made. The term "Competitor" shall mean and include each
of the companies identified as competitors in a writing delivered to
Prudential on the date of this Agreement and specifically referring to
paragraph 11H hereof as supplemented in writing from time to time by the
Company with the consent of the Required Holder(s) which consent shall not be
unreasonably withheld.
11I. NOTICES. All written communications provided for hereunder (other
than communications provided for under paragraph 2) shall be sent by first
class mail or nationwide overnight delivery service (with charges prepaid) or
by hand delivery and (i) if to any Purchaser, addressed to such Purchaser at
the address specified for such communications in the Purchaser Schedule
attached hereto (in the case of the Series A Notes) or in the Confirmation of
41
Acceptance (in the case of any Private Shelf Notes), or at such other address
as any Purchaser shall have specified in writing to the Company, and (ii) if
to any other holder of any Note, addressed to such other holder at such
address as such other holder shall have specified in writing to the Company
or, if any such other holder shall not have so specified an address to the
Company, then addressed to such other holder in care of the last holder of
such Note which shall have so specified an address to the Company, and (iii)
if to the Company, addressed to it at Franklin Electric Co., Inc., 000 Xxxx
Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx 00000, Attention: Secretary, or at such other
address as the Company shall have specified to the holder of each Note in
writing.
11J. PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this Agreement or
the Notes to the contrary notwithstanding, any payment of principal of or
interest on, or Yield-Maintenance Amount payable with respect to, any Note
that is due on a date other than a New York Business Day shall be made on the
next succeeding New York Business Day. If the date for any payment is
extended to the next succeeding New York Business Day by reason of the
preceding sentence, the period of such extension shall be included in the
computation of the interest payable on such New York Business Day.
11K. SEVERABILITY. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11L. DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
11M. SATISFACTION REQUIREMENT. If any agreement, certificate or other
writing, or any action taken or to be taken, is by the terms of this Agreement
required to be satisfactory to any Purchaser, to any holder of Notes or to the
Required Holder(s), the determination of such satisfaction shall be made by
such Purchaser, such holder or the Required Holder(s), as the case may be, in
the sole and exclusive judgment (exercised in good faith) of the Person or
Persons making such determination.
11N. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE
INTERNAL LAWS AND DECISIONS (AS OPPOSED TO THE CONFLICTS OF LAW PROVISIONS) OF
THE STATE OF ILLINOIS.
11O. PAYMENT CURRENCY. All payments on account of the Series A Notes
and any Private Shelf Notes denominated in Dollars (including principal,
interest and Yield-Maintenance Amounts) shall be made in Dollars, and all
payments on account of any Private Shelf Notes denominated in any other
currency (including principal, interest and Yield-Maintenance Amounts) shall
be made in such other currency. The obligation of the Company to make payment
on account of any Notes in the applicable currency specified in the preceding
sentence shall not be discharged or satisfied by any tender, or any recovery
pursuant to any judgment, which is expressed in or converted into any currency
other than such applicable currency, except to the extent the holder of the
applicable Note actually receives the full amount of the currency in which the
underlying obligation is denominated. The obligation of the Company to make
payment in any given currency as required by the first sentence of this
paragraph shall be enforceable as an alternative or additional cause of action
for the purpose of recovery in such currency, of the amount, if any, by which
such actual receipt shall fall short of the full amount of such currency
expressed to be payable in respect of any such obligation, and shall not be
42
affected by judgment being obtained for any other sums due under the Notes or
this Agreement, as the case may be.
11P. PAYMENTS FREE AND CLEAR OF TAXES. The Company will pay all
amounts of principal of, Yield-Maintenance Amount, if any, and interest on the
Notes, and all other amounts payable hereunder or under the Notes, without
set-off or counterclaim and free and clear of, and without deduction or
withholding for or on account of, all present and future income, stamp,
documentary and other taxes and duties, and all other levies, imposts,
charges, fees, deductions and withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any governmental authority (except net
income taxes and franchise taxes in lieu of net income taxes imposed on any
holder of any Note by its jurisdiction of incorporation or the jurisdiction in
which its applicable lending office is located) (all such non-excluded taxes,
duties, levies, imposts, duties, charges, fees, deductions and withholdings
being hereinafter called "TAXES"). If any Taxes are required to be withheld
from any amounts payable to a holder of any Notes, the amounts so payable to
such holder shall be increased to the extent necessary to yield such holder
(after payment of all Taxes) interest on any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement and the
Notes. Whenever any Taxes are payable by the Company, as promptly as possible
thereafter, the Company shall send to each holder of the Notes, a certified
copy of an original official receipt received by the Company showing payment
thereof. If the Company fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to each holder of the Notes the required
receipts or other required documentary evidence, the Company shall indemnify
each holder of the Notes for any Taxes (including interest or penalties) that
may become payable by such holder as a result of any such failure. The
obligations of the Company under this paragraph 11P shall survive the payment
and performance of the Notes and the termination of this Agreement.
11Q. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
[The remainder of this page is intentionally left blank.]
43
11R. BINDING AGREEMENT. When this Agreement is executed and delivered
by the Company and Prudential, it shall become a binding agreement between the
Company and Prudential. This Agreement shall also inure to the benefit of
each Purchaser on the Purchaser Schedule and each Purchaser which shall have
executed and delivered a Confirmation of Acceptance, and each such Purchaser
shall be bound by this Agreement to the extent provided in such Confirmation
of Acceptance.
Very truly yours,
FRANKLIN ELECTRIC CO., INC.
By: _________________________________
Title: Senior Vice President and CFO
The foregoing Agreement is
hereby accepted as of the
date first above written.
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: _____________________________
Vice President
44
Series A Notes
--------------
PURCHASER SCHEDULE
FRANKLIN ELECTRIC CO., INC.
Aggregate
Principal
Amount of
Notes to be Note
Purchased Denomination(s)
----------- ---------------
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA $20,000,000 $20,000,000
(1) All payments on account of Notes held by such
purchaser shall be made by wire transfer of
immediately available funds for credit to:
Account No. 000-00-000
Xxxxxx Guaranty Trust Company of New York
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(ABA No.: 021-000-238)
Each such wire transfer shall set forth the name
of the Company, a reference to "6.31% Series A Senior
Notes due November 10, 2008, Security No.
!INV4623!", and the due date and application
(as among principal, interest and Yield-Maintenance
Amount) of the payment being made.
(2) Address for all notices relating to payments:
The Prudential Insurance Company of America
c/o Prudential Capital Group
Four Gateway Center
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attention: Investment Administration Unit
Telecopy: (000) 000-0000
(3) Address for all other communications and notices:
The Prudential Insurance Company of America
c/o Prudential Capital Group
Two Xxxxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
45
Attention: Managing Director
Telecopy: (000) 000-0000
(4) Recipient of telephonic prepayment notices:
Manager, Asset Management Unit
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(5) Recipient of telephonic prepayment notices:
Manager, Asset Management Unit
(000) 000-0000
(6) Tax Identification No.: 00-0000000
46
EXHIBIT A
---------
[FORM OF PRIVATE SHELF NOTE]
FRANKLIN ELECTRIC CO., INC.
SENIOR NOTE
(Fixed Rate)
SERIES ______
No.
CURRENCY AND ORIGINAL PRINCIPAL AMOUNT:
ORIGINAL ISSUE DATE:
INTEREST RATE:
INTEREST PAYMENT DATES:
FINAL MATURITY DATE:
PRINCIPAL PREPAYMENT DATES AND AMOUNTS:
FOR VALUE RECEIVED, the undersigned, FRANKLIN ELECTRIC CO., INC.
(herein called the "Company"), a corporation organized and existing under the
laws of the State of Indiana, hereby promises to pay to _____________________,
or registered assigns, the principal sum of __________________________
[specify principal amount and currency] on the Final Maturity Date specified
above] [, payable on the Principal Prepayment Dates and in the amounts
specified above, and on the Final Maturity Date specified above in an amount
equal to the unpaid balance of the principal hereof,] with interest (computed
on the basis of a 360-day year--30-day month) (a) on the unpaid balance
thereof at the Interest Rate per annum specified above, payable on each
Interest Payment Date specified above and on the Final Maturity Date specified
above, commencing with the Interest Payment Date next succeeding the date
hereof, until the principal hereof shall have become due and payable, and (b)
on any overdue payment (including any overdue prepayment) of principal, any
overdue payment of interest, and any overdue payment of any Yield-Maintenance
Amount (as defined in the Agreement referred to below), payable on each
Interest Payment Date as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate per annum from time to time equal to the greater
of (i) 2% plus the Interest Rate specified above or (ii) 2% over the rate of
interest publicly announced by the Bank of New York from time to time in New
York City as its Prime Rate.
Payments of principal of, and interest on, and any Yield-
Maintenance Amount payable with respect to, this Note are to be made at the
main office of the Bank of New York in New York City or at such other place in
the United States as the holder hereof shall designate to the Company in
writing, in lawful money of the United States of America.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to an Amended and Restated Note Purchase and Private
Shelf Agreement, dated as of March 1, 2002 (herein called the "Agreement"),
between the Company, on the one hand, and The Prudential Insurance Company of
America and each "Prudential Affiliate" (as defined in the Agreement) which
becomes a party thereto, on the other hand, and is entitled to the benefits
thereof. As provided in the Agreement, this Note is subject to prepayment, in
whole or from time to time in part on the terms specified in the Agreement.
47
This Note is a registered Note and, as provided in the Agreement,
upon surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the
registered holder hereof or such holder's attorney duly authorized in writing,
a new Note for a like principal amount will be issued to, and registered in
the name of, the transferee. Prior to due presentment for registration of
transfer, the Company may treat the person in whose name this Note is
registered as the owner hereof for the purpose of receiving payment and for
all other purposes, and the Company shall not be affected by any notice to the
contrary.
In case an Event of Default, as defined in the Agreement, shall
occur and be continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner and with the effect provided in
the Agreement.
Capitalized terms used and not otherwise defined herein shall have
the meanings provided in the Agreement.
THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF ILLINOIS AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS AND
DECISIONS (AS OPPOSED TO THE CONFLICTS OF LAW PROVISIONS) OF SUCH STATE.
FRANKLIN ELECTRIC CO., INC.
By: _________________________________
Title: ______________________________
48
EXHIBIT B
---------
[FORM OF REQUEST FOR PURCHASE]
FRANKLIN ELECTRIC CO., INC.
Reference is made to the Amended and Restated Note Purchase and
Private Shelf Agreement (the "Agreement"), dated as of March 1, 2002, between
Franklin Electric Co., Inc. (the "Company"), and The Prudential Insurance
Company of America and each Prudential Affiliate which becomes a party
thereto. All terms used herein that are defined in the Agreement have the
respective meanings specified in the Agreement.
Pursuant to Paragraph 2A(3) of the Agreement, the Company hereby
makes the following Request for Purchase:
1. Aggregate principal amount of
the Notes and Available Currency
covered hereby (the "Notes") .............. $_________ (amount)
$_________ (currency)
2. Individual specifications of the Notes:
Principal
Final Installment Interest
Principal Maturity Dates and Payment
Amount* Date Amounts Period
--------- -------- ----------- --------
3. Use of proceeds of the Notes:
4. Proposed day for the closing of the purchase and sale of the
Notes:
5. The purchase price of the Notes is to be transferred to:
Name, Address Name and
and ABA Routing Number of Telephone No.
Number of Bank Account of Bank Officer
--------------- --------- ---------------
_________________________
* Minimum principal amount of $5,000,000
49
6. The Company certifies (a) that the representations and warranties
contained in paragraph 8 of the Agreement are true on and as of the date of
this Request for Purchase except to the extent of changes caused by the
transactions contemplated in the Agreement and (b) that there exists on the
date of this Request for Purchase no Event of Default or Default.
7. The Issuance Fee to be paid pursuant to paragraph 2A(8)(i) of the
Agreement will be paid by the Company on the closing date.
8. The Company has reviewed the closing conditions set forth in
paragraph 3 of the Agreement and understands that it will be required to
deliver certain documents at closing, including, without limitation, an
opinion of special counsel to the Company.
Dated: FRANKLIN ELECTRIC CO., INC.
By: _______________________
Authorized Officer
50
EXHIBIT C
---------
[FORM OF CONFIRMATION OF ACCEPTANCE]
FRANKLIN ELECTRIC CO., INC.
Reference is made to the Amended and Restated Note Purchase and
Private Shelf Agreement (the "Agreement"), dated as of March 1, 2002 between
Franklin Electric Co., Inc. (the "Company") and The Prudential Insurance
Company of America. All terms used herein that are defined in the Agreement
have the respective meanings specified in the Agreement.
Prudential or the Prudential Affiliate which is named below as a
Purchaser of Notes hereby confirms the representations as to such Notes set
forth in paragraph 9 of the Agreement, and agrees to be bound by the
provisions of paragraphs 2A(5) and 2A(7) of the Agreement relating to the
purchase and sale of such Notes.
Pursuant to paragraph 2A(5) of the Agreement, an Acceptance with
respect to the following Accepted Notes is hereby confirmed:
I. Accepted Notes: Aggregate principal
amount $__________________
(A) (a) Name of Purchaser:
(b) Principal amount:
(c) Designated Currency:
(d) Final maturity date:
(e) Principal prepayment dates and amounts:
(f) Interest rate:
(g) Interest payment period:
(h) Payment and notice instructions: As set forth on attached
Purchaser Schedule
(B) (a) Name of Purchaser:
(b) Principal amount:
(c) Designated Currency:
(d) Final maturity date:
(e) Principal prepayment dates and amounts:
(f) Interest rate:
(g) Interest payment period:
(h) Payment and notice instructions: As set forth on attached
Purchaser Schedule
51
II. Closing Day:
III. Issuance Fee:
Dated: FRANKLIN ELECTRIC CO., INC.
By: _______________________
Title:
[THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA]
By: ______________________
Vice President
[PRUDENTIAL AFFILIATE]
By: ______________________
Vice President
52
EXHIBIT D
---------
[FORM OF OPINION OF COMPANY'S SPECIAL COUNSEL]
[Date of Closing]
[Name(s) and address(es) of
purchaser(s)]
Re: Franklin Electric Co., Inc.
---------------------------
Ladies and Gentlemen:
We have acted as counsel for Franklin Electric Co., Inc., an
Indiana corporation (the "Company"), in connection with the Amended and
Restated Note Purchase and Private Shelf Agreement, dated as of March 1, 2002,
between the Company and The Prudential Insurance Company of America (the
"Agreement"), pursuant to which the Company has issued to you today its Series
____ Private Shelf Notes in the aggregate principal amount of $_______________
(the "Notes"). All terms used herein that are defined in the Agreement have
the respective meanings specified in the Agreement.
In this connection, we have examined such certificates of public
officials, certificates of officers of the Company and copies certified to our
satisfaction of corporate documents and records of the Company and of other
papers, and have made such other investigations, as we have deemed relevant
and necessary as a basis for my opinion hereinafter set forth. We have relied
upon such certificates of public officials and of officers of the Company with
respect to the accuracy of material factual matters contained therein which
were not independently established. With respect to the opinion expressed in
paragraph 3 below, we have also relied upon the representation made by you in
paragraph 9A of the Agreement.
Based on the foregoing, it is our opinion that:
1. The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Indiana. Each
Subsidiary is a corporation duly organized and validly existing in good
standing under the laws of its jurisdiction of incorporation. The Company
has, and each Subsidiary has, the corporate power to carry on its business as
now being conducted. The Company has the corporate power to enter into the
Agreement and to perform its obligations under the Agreement and the Notes.
2. The Agreement and the Notes have been duly authorized by all
requisite corporate action and duly executed and delivered by authorized
officers of the Company, and are valid obligations of the Company, legally
binding upon and enforceable against the Company in accordance with their
respective terms, except as such enforceability may be limited by (a)
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and (b) general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
53
3. It is not necessary in connection with the offering, issuance,
sale and delivery of the Notes under the circumstances contemplated by the
Agreement to register the Notes under the Securities Act or to qualify an
indenture in respect of the Notes under the Trust Indenture Act of 1939, as
amended.
4. The extension, arranging and obtaining of the credit
represented by the Notes do not result in any violation of regulation T, U or
X of the Board of Governors of the Federal Reserve System.
5. The execution and delivery of the Agreement and the Notes, the
offering, issuance and sale of the Notes and fulfillment of and compliance
with the respective provisions of the Agreement and the Notes do not conflict
with, or result in a breach of the terms, conditions or provisions of, or
constitute a default under, or result in any violation of, or result in the
creation of any Lien upon any of the properties or assets of the Company
pursuant to, or require any authorization, consent, approval, exemption, or
other action by or notice to or filing with any court, administrative or
governmental body or other Person (other than routine filings after the date
hereof with the Securities and Exchange Commission and/or state Blue Sky
authorities) pursuant to, the charter or by-laws of the Company, any
applicable law (including any securities or Blue Sky law), statute, rule or
regulation or (insofar as is known to us after having made due inquiry with
respect thereto) any agreement (including, without limitation, any agreement
listed in Schedule 8G to the Agreement), instrument, order, judgment or decree
to which the Company or any of its Subsidiaries is a party or otherwise
subject.
Very truly yours,
54
EXHIBIT E
---------
CERTIFICATE AS TO REPRESENTATIONS, DEFAULTS, ETC.
I, ____________________, [title] of Franklin Electric Co., Inc. (an
Indiana corporation) (herein called the "Company"), do hereby certify,
pursuant to paragraph 3B of the Amended and Restated Note Purchase and Private
Shelf Agreement dated as of March 1, 2002 ("Note Agreement") between the
Company and The Prudential Insurance Company of America, as follows:
1. The representations and warranties contained in paragraph 8 of the
Note Agreement are true on and as of the date hereof (except to the extent of
changes caused by transactions contemplated by the Note Agreement).
2. There exists on the date hereof no Default or Event of Default as
specified in paragraph 7 of the Note Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal
of the Company this _____ day of _____________, 20___.
_________________________________
Title: __________________________
55
SCHEDULE 6B(1)
--------------
LIST OF EXISTING LIENS
----------------------
None.
56
SCHEDULE 6B(4)
--------------
PERMITTED DISPOSITIONS
----------------------
None.
57
SCHEDULE 8A
-----------
LIST OF SUBSIDIARIES
--------------------
State or Percent
Country of of Voting
Incorporation Stock Owned
------------- -----------
Subsidiaries consolidated:
Franklin Electric Subsidiaries, Indiana 100
Inc. [inactive]
FE Petro, Inc. Indiana 100
Franklin Electric International, Delaware 100
Inc.
Franklin Electric Europa, GmbH Germany 100
Franklin Electric (South Africa) South Africa 100
Pty. Limited
Franklin Electric Foreign U.S. Virgin Islands 100
Sales Corporation
Franklin Electric Australia 100
(Australia) Pty. Ltd.
Motores Xxxxxxxx X.X. de C.V. Mexico 100
Franklin Electric B.V. Netherlands 100
Franklin Electric (Suzhou) Co., Ltd. China 100
Advanced Polymer Technology, Inc. Michigan 100
EBW, Inc. Michigan 100
Motori Sommersi Riavvolgibili, s.r.l. Italy 75
Coverco s.r.l. Italy 100
Franklin Electric spol s.r.o. Czech Republic 100
58
SCHEDULE 8G
-----------
LIST OF AGREEMENTS RESTRICTING DEBT
-----------------------------------
$60,000,000 Credit Agreement dated as of November 26, 2001 among the Company,
Wachovia Bank, N.A., as Administrative Agent and the other Banks named
therein.
