41
EXHIBIT 10.8
------------
$40,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of
December 30, 1997
among
FRANKLIN ELECTRIC CO., INC.
as Borrower and as Guarantor
The Banks Listed Herein
and
WACHOVIA BANK, N.A.,
as Agent
42
TABLE OF CONTENTS
AMENDED AND RESTATED CREDIT AGREEMENT
ARTICLE IDEFINITIONS
SECTION 1.01. Definitions
SECTION 1.02. Accounting Terms and Determinations
SECTION 1.03. Use of Defined Terms
SECTION 1.04. Terminology
SECTION 1.05. References
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Make Syndicated Loans
SECTION 2.02. Method of Borrowing Loans
SECTION 2.03. Notes
SECTION 2.04. Maturity of Loans; Extension of Termination Date
SECTION 2.05. Interest Rates
SECTION 2.06. Fees
SECTION 2.07. Optional Termination or Reduction of Commitments
SECTION 2.08. Mandatory Termination of Commitments
SECTION 2.09. Optional Prepayments
SECTION 2.10. Mandatory Prepayments
SECTION 2.11. General Provisions as to Payments
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SECTION 2.12. Computation of Interest and Fees
SECTION 2.13. Additional Borrowers
ARTICLE III
CONDITIONS TO BORROWINGS
SECTION 3.01. Conditions to First Borrowing
SECTION 3.02. Conditions to All Borrowings
SECTION 3.03. First Borrowing By Each Additional Borrower
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Corporate Existence and Power
SECTION 4.02. Corporate and Governmental Authorization; No Contravention
SECTION 4.03. Binding Effect
SECTION 4.04. Financial Information
SECTION 4.05. Litigation
SECTION 4.06. Compliance with ERISA
SECTION 4.07. Taxes
SECTION 4.08. Subsidiaries
SECTION 4.09. Not an Investment Company
SECTION 4.10 Public Utility Holding Company Act
SECTION 4.11. Ownership of Property; Liens
SECTION 4.12. No Default
SECTION 4.13. Full Disclosure
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SECTION 4.14. Environmental Matters
SECTION 4.15. Compliance with Laws
SECTION 4.16. Capital Stock
SECTION 4.17. Margin Stock
SECTION 4.18. Insolvency
ARTICLE V
COVENANTS
SECTION 5.01. Information
SECTION 5.02. Inspection of Property, Books and Records
SECTION 5.03. Debt Restriction
SECTION 5.04. Current Obligation Coverage
SECTION 5.06. Loans or Advances
SECTION 5.07. Investments
SECTION 5.08. Negative Pledge
SECTION 5.09. Maintenance of Existence
SECTION 5.10. Consolidations, Mergers and Sales of Assets
SECTION 5.11. Use of Proceeds
SECTION 5.12. Compliance with Laws; Payment of Taxes
SECTION 5.13. Insurance
SECTION 5.14. Change in Fiscal Year
SECTION 5.15. Maintenance of Property
SECTION 5.16. Environmental Matters
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ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default
SECTION 6.02. Notice of Default
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment, Powers and Immunities
SECTION 7.02. Reliance by Agent
SECTION 7.03. Defaults
SECTION 7.04. Rights of Agent as a Bank
SECTION 7.05. Indemnification
SECTION 7.06. CONSEQUENTIAL DAMAGES
SECTION 7.07. Payee of Note Treated as Owner
SECTION 7.08. Non-Reliance on Agent and Other Banks
SECTION 7.09. Failure to Act
SECTION 7.10. Resignation or Removal of Agent
ARTICLE VIII
CHANGE IN CIRCUMSTANCES; COMPENSATION
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair
SECTION 8.02. Illegality
SECTION 8.03. Increased Cost and Reduced Return
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SECTION 8.04. Base Rate Loans or Other Fixed Rate Loans Substituted for
Affected Fixed Rate Loans
SECTION 8.05. Compensation
SECTION 8.06. Failure to Pay in Foreign Currency
SECTION 8.07. Judgment Currency
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices
SECTION 9.02. No Waivers
SECTION 9.03. Expenses; Documentary Taxes; Indemnification
SECTION 9.04. Setoffs; Sharing of Set-Offs
SECTION 9.05. Amendments and Waivers
SECTION 9.06. Margin Stock Collateral
SECTION 9.07. Successors and Assigns
SECTION 9.08. Confidentiality
SECTION 9.09. Representation by Banks
SECTION 9.10. Obligations Several
SECTION 9.11. Survival of Certain Obligations
SECTION 9.12. Georgia Law
SECTION 9.13. Severability
SECTION 9.14. Interest
SECTION 9.15. Interpretation
SECTION 9.16. Consent to Jurisdiction
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SECTION 9.17. Counterparts
ARTICLE X
REPRESENTATIONS AND WARRANTIES
OF ADDITIONAL BORROWERS
SECTION 10.01. Corporate Existence and Power
SECTION 10.02. Corporate and Governmental Authorization; No Contravention
SECTION 10.03. Binding Effect
ARTICLE XI
GUARANTEE BY FRANKLIN ELECTRIC
SECTION 11.01. The Guarantee
SECTION 11.02. Guarantee Unconditional
SECTION 11.03. Discharge Only Upon Payment in Full; Reinstatement in Certain
Circumstances.
SECTION 11.04. Waiver
SECTION 11.05. Subrogation
SECTION 11.06. Stay of Acceleration
SCHEDULE 4.08 Existing Subsidiaries
SCHEDULE 4.14A-1 Potentially Responsible Party Designations
SCHEDULE 4.14A-2 Properties Identified on Environmental Lists
EXHIBIT A Form of Dollar Note
EXHIBIT B Form of Foreign Currency Note
EXHIBIT C Form of Opinion of Counsel for the Borrowers
EXHIBIT D Form of Opinion of Special Counsel for the Agent
EXHIBIT E Form of Opinion of Counsel for Additional Borrower
EXHIBIT F Form of Election to Participate
EXHIBIT G Form of Election to Terminate
EXHIBIT H Form of Closing Certificate
EXHIBIT I Form of Secretary's Certificate
EXHIBIT J Form of Compliance Certificate
EXHIBIT K Form of Assignment and Acceptance
EXHIBIT L Form of Notice of Borrowing
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AMENDED AND RESTATED CREDIT AGREEMENT
AGREEMENT dated as of December 30, 1997 among FRANKLIN ELECTRIC CO.,
INC., the BANKS listed on the signature pages hereof and WACHOVIA BANK, N.A.,
as Agent.
Franklin Electric, the Agent and certain Banks listed therein (the
"Original Banks") entered into a Credit Agreement dated as of January 5, 1996
(the "Original Credit Agreement") to provide, among other things, for the
making of Loans from time to time by the Original Banks to Franklin Electric.
Franklin Electric, the Agent and the Banks listed on the signature
pages hereof (which currently hold all of the Commitments and Loans
outstanding under the Original Credit Agreement) wish to amend and restate the
Original Credit Agreement as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The terms as defined in this Section
1.01 shall, for all purposes of this Agreement and any amendment hereto
(except as herein otherwise expressly provided or unless the context otherwise
requires), have the meanings set forth herein:
Additional Borrower means any Wholly Owned Subsidiary that becomes an
Additional Borrower for purposes of this Agreement pursuant to Section 2.13.
Adjusted IBOR Rate has the meaning set forth in Section 2.05(d).
"Adjusted London Interbank Offered Rate" has the meaning set forth in
Section 2.05(c).
"Affiliate" of any Person means (i) any other Person which directly,
or indirectly through one or more intermediaries, controls such Person, or
(ii) any other Person which directly, or indirectly through one or more
intermediaries, is controlled by or is under common control with such Person.
As used herein, the term "control" means possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of
a Person, whether through the ownership of voting securities, by contract or
otherwise.
"Agent" means Wachovia Bank, N.A. (successor by merger to Wachovia
Bank of Georgia, N. A.), a national banking association organized under the
laws of the United States of America, in its capacity as agent for the Banks
hereunder, and its successors and permitted assigns in such capacity.
"Agent's Letter Agreement" means that certain letter agreement, dated
as of November 2, 1995, between Franklin Electric and the Agent relating to
the structure of the Loans, and certain fees from time to time payable by
Franklin Electric to the Agent, together with all amendments and modifications
thereto.
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"Agreement" means this Credit Agreement, together with all amendments
and supplements hereto.
"Applicable Facility Fee Rate" has the meaning set forth in Section
2.06(a).
"Applicable Margin" has the meaning set forth in Section2.05(a).
"Assignee" has the meaning set forth in Section 9.07(c).
"Assignment and Acceptance" means an Assignment and Acceptance
executed in accordance with Section 9.07(c) in the form attached hereto as
Exhibit K.
"Authority" has the meaning set forth in Section8.02.
"Bank" means each bank listed on the signature pages hereof as having
a Commitment, and its successors and permitted assigns.
"Base Rate" means for any Base Rate Loan for any day, the rate per
annum equal to the higher as of such day of (i) the Prime Rate, and (ii) one-
half of one percent above the Federal Funds Rate for such day. For purposes
of determining the Base Rate for any day, changes in the Prime Rate and the
Federal Funds Rate shall be effective on the date of each such change.
"Base Rate Loan" means a Loan which bears or is to bear interest at a
rate based upon the Base Rate.
"Borrower" means any of Franklin Electric and the Additional
Borrowers (if any); provided that the status of any such Person (except
Franklin Electric) as a Borrower hereunder shall terminate when the Agent (i)
receives an Election to Terminate with respect to such Person, duly executed
on behalf of Franklin Electric, and (ii) confirms to its satisfaction that the
representations and warranties of Franklin Electric set forth in such Election
to Terminate are true.
"Borrowing" means a borrowing hereunder consisting of Loans made to
the same Borrower at the same time by the Banks, pursuant to Article. A
Borrowing is a Dollar Borrowing if such Loans are Dollar Loans or a Foreign
Currency Borrowing if such Loans are Foreign Currency Loans. A Dollar
Borrowing is a "Base Rate Borrowing" if such Loans are Base Rate Loans or a
"Euro-Dollar Borrowing" if such Loans are Euro-Dollar Loans.
"Capital Expenditures" means, for any period, the sum of all capital
expenditures incurred during such period by Franklin Electric and its
Consolidated Subsidiaries, as determined in accordance with GAAP.
Capitalized Lease Obligations means any rental obligation which,
under GAAP, is or will be required to be capitalized on the books of Franklin
Electric or any Subsidiary, taken at the amount thereof accounted for as
indebtedness (net of interest expenses) in accordance with GAAP.
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"Capital Stock" means any nonredeemable capital stock of Franklin
Electric or any Consolidated Subsidiary (to the extent issued to a Person
other than Franklin Electric), whether common or preferred.
"CERCLA" means the Comprehensive Environmental Response Compensation
and Liability Act, 42 U.S.C. 9601 et seq. and its implementing regulations and
amendments.
"CERCLIS" means the Comprehensive Environmental Response Compensation
and Liability Inventory System established pursuant to CERCLA.
"Change of Law" shall have the meaning set forth in Section 8.02.
"Closing Certificate" has the meaning set forth in Section 3.01(e).
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor Federal tax code. Any reference to any provision of the Code shall
also be deemed to be a reference to any successor provision or provisions
thereof.
"Commitment" means, with respect to each Bank, (i) the amount set
forth opposite the name of such Bank on the signature pages hereof, or (ii) as
to any Bank which enters into an Assignment and Acceptance (whether as
transferor Bank or as Assignee thereunder), the amount of such Bank's
Commitment after giving effect to such Assignment and Acceptance, in each case
as such amount may be reduced from time to time pursuant to Sections 2.07 and
2.08.
"Compliance Certificate" has the meaning set forth in Section
5.01(c).
"Consolidated Fixed Charges" means, for any period, the sum of (i)
Consolidated Interest Expense for such period, and (ii) Depreciation for such
period.
"Consolidated Interest Expense" means, for any period, interest
expense in respect of Indebtedness of Franklin Electric or any of its
Consolidated Subsidiaries outstanding during such period, determined on a
consolidated basis as of such date in accordance with GAAP.
Consolidated Net Income means, for any period, the net income, after
taxes, of Franklin Electric and its Consolidated Subsidiaries, determined on
a consolidated basis for such period in accordance with GAAP, but excluding
extraordinary and other non-recurring items.
Consolidated Net Worth means the sum of (i) the par value (or value
stated on the books of Franklin Electric) of the capital stock of all classes
of Franklin Electric, plus (or minus in the case of a surplus deficit) (ii)
the amount of the consolidated surplus, whether capital or earned, of Franklin
Electric 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 GAAP.
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Consolidated Operating Profits means, for any period, the operating
income of Franklin Electric and its Consolidated Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
Consolidated Subsidiary means at any date any Subsidiary or other
entity the accounts of which, in accordance with GAAP, are consolidated with
those of Franklin Electric in its consolidated financial statements as of such
date.
Consolidated Tangible Net Worth means (i) Consolidated Net Worth less
(ii) intangible and similar assets in excess of $5,630,000 plus (iii) an
amount equal to 75% of Franklin Electric's LIFO reserve.
Consolidated Total Assets means, at any time, the total assets of
Franklin Electric and its Consolidated Subsidiaries, determined on a
consolidated basis, as set forth or reflected on the most recent consolidated
balance sheet of Franklin Electric and its Consolidated Subsidiaries, prepared
in accordance with GAAP.
"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 Franklin Electric, are treated as a single
employer under Section 414 of the Code.
Current Debt means, 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 1 year
from the date of the creation thereof.
Current Maturities means all payments in respect of Long-Term Debt
that are required to be made by Franklin Electric or any Consolidated
Subsidiary within 1 year from the date of determination, whether or not the
obligation to make such payments would constitute a current liability of
Franklin Electric or such Consolidated Subsidiary under GAAP.
Current Obligations means, for any period, the sum of (i)
Consolidated Interest Expense for such period and (ii) Current Maturities for
such period.
Debt means Current Debt of Franklin Electric and its Consolidated
Subsidiaries, determined on a consolidated basis in accordance with GAAP, and
Funded Debt of Franklin Electric and its Consolidated Subsidiaries, determined
on a consolidated basis in accordance with GAAP.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived in writing, become an Event of Default.
"Default Rate" means, with respect to any Loan, on any day, the sum
of 2% plus the then highest interest rate (including the Applicable Margin)
which may be applicable to any Loans hereunder (irrespective of whether any
such type of Loans are actually outstanding hereunder).
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"Depreciation" means, for any period, the sum of all depreciation and
amortization expenses of Franklin Electric and its Consolidated Subsidiaries
for such period, as determined on a consolidated basis in accordance with
GAAP.
"Dollar Equivalent" means the Dollar equivalent of the amount of a
Foreign Currency Loan or Foreign Currency Borrowing, as the case may be,
determined by the Agent on the basis of its spot rate for the purchase of the
appropriate Foreign Currency with Dollars.
"Dollar Loans" means Loans made in Dollars by all of the Banks at the
same time pursuant to Section 2.01, which may be either a Base Rate Loan or a
Euro-Dollar Loan.
"Dollar Notes" means promissory notes of each of the Borrowers,
substantially in the form of Exhibit A hereto, evidencing the obligation of
the Borrowers to repay the Dollar Loans, together with all amendments,
consolidations, modifications, renewals and supplements thereto.
"Dollars" or "$" means dollars in lawful currency of the United
States of America.
"Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in Georgia or Illinois are authorized or
required by law to close.
"EBITDA" for any period means the sum of (a) Consolidated Net Income,
(b) tax expense and (c) Consolidated Fixed Charges, all determined with
respect to Franklin Electric and its Consolidated Subsidiaries on a
consolidated basis for such period and in accordance with GAAP.
Election to Participate means an Election to Participate
substantially in the form of Exhibit F hereto.
Election to Terminate means an Election to Terminate substantially in
the form of Exhibit G hereto.
"Environmental Authority" means any foreign, federal, state, local or
regional government that exercises any form of jurisdiction or authority under
any Environmental Requirement.
"Environmental Authorizations" means all licenses, permits, orders,
approvals, notices, registrations or other legal prerequisites for conducting
the business of Franklin Electric or any Subsidiary required by any
Environmental Requirement.
"Environmental Judgments and Orders" means all judgments, decrees or
orders arising from or in any way associated with any Environmental
Requirements, whether or not entered upon consent or written agreements with
an Environmental Authority or other entity arising from or in any way
associated with any Environmental Requirement.
"Environmental Liabilities" means any liabilities, whether accrued,
contingent or otherwise, arising from and in any way associated with any
Environmental Requirements.
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"Environmental Notices" means notice from any Environmental Authority
or by any other person or entity, of possible or alleged noncompliance with or
liability under any Environmental Requirement, including without limitation
any complaints, citations, demands or requests from any Environmental
Authority or from any other person or entity for correction of any violation
of any Environmental Requirement or any investigations concerning any
violation of any Environmental Requirement.
"Environmental Proceedings" means any judicial or administrative
proceedings arising from or in any way associated with any Environmental
Requirement.
"Environmental Releases" means releases as defined in CERCLA or under
any applicable state or local environmental law or regulation.
"Environmental Requirements" means any legal requirement relating to
health, safety or the environment and applicable to Franklin Electric, any
Subsidiary or the Properties, including but not limited to any such
requirement under CERCLA or similar state legislation and all federal, state
and local laws, ordinances, regulations, orders, writs, decrees and common
law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, or any successor law. Any reference to any
provision of ERISA shall also be deemed to be a reference to any successor
provision or provisions thereof.
"Euro-Dollar Business Day" means any Domestic Business Day on which
dealings in Dollar deposits are carried out in the London interbank market.
"Euro-Dollar Loan" means a Loan which bears or is to bear interest at
a rate based upon the London Interbank Offered Rate.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section
2.05(c).
"Event of Default" has the meaning set forth in Section 6.01.
"Facility Fee Determination Date" has the meaning set forth in
Section 2.06(a).
"Facility Fee Payment Date" means each March 31, June 30, September
30 and December 31.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the next higher 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if the day for which such rate is
to be determined is not a Domestic Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding
Domestic Business Day as so published on the next succeeding Domestic Business
Day, and (ii) if such rate is not so published for any day, the Federal Funds
Rate for such day shall be the average rate charged to Wachovia on such day on
such transactions as determined by the Agent.
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"Fiscal Quarter" means any fiscal quarter of Franklin Electric.
"Fiscal Year" means any fiscal year of Franklin Electric.
"Fixed Rate Borrowing" means a Euro-Dollar Borrowing or a Foreign
Currency Borrowing.
"Fixed Rate Loans" means Euro-Dollar Loans or Foreign Currency Loans,
or any or all of them, as the context shall require.
Foreign Currencies means, individually and collectively, as the
context shall require: (i) Federal Republic of Germany deutsche marks; or (ii)
Australian dollars, (iii) Italian lira, or (iv) any other currency which is
freely transferable and convertible into Dollars; provided, however, that no
such other currency under this clause (iv) shall be included as a Foreign
Currency hereunder, or included in a Notice of Borrowing, unless (x) Franklin
Electric has first submitted a request to the Agent that it be so included;
and (y) the Agent, in its sole discretion, has agreed to such request.
Foreign Currency Business Day shall mean any Domestic Business Day,
excluding one on which trading is not carried on by and between banks in
deposits of the applicable Foreign Currency in the applicable interbank market
for such Foreign Currency.
Foreign Currency Loans means Loans made in a Foreign Currency by all
of the Banks at the same time pursuant to Section 2.01(a).
Foreign Currency Notes means promissory notes of each of the
Borrowers, substantially in the form of Exhibit B hereto, evidencing the
obligation of the Borrowers to repay the Foreign Currency Loans, together with
all amendments, consolidations, modifications, renewals and supplements
thereto.
Franklin Electric means Franklin Electric Co., Inc., an Indiana
corporation, and its successors and permitted assigns.
Funded Debt means, with respect to any Person, as of any time of
determination thereof and without duplication, the sum of (i) any obligation
payable more than 1 year from the date of creation thereof, including all
payments thereof required to be made within 1 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.
"GAAP" means generally accepted accounting principles applied on a
basis consistent with those which, in accordance with Section 1.02, are to be
used in making the calculations for purposes of determining compliance with
the terms of this Agreement.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Indebtedness
or other obligation of any other Person and, without limiting the generality
of the foregoing, any obligation, direct or indirect, contingent or otherwise,
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of such Person (i)to secure, purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness or other obligation (whether
arising by virtue of partnership arrangements, by agreement to keep-well, to
purchase assets, goods, securities or services, to provide collateral
security, to take-or-pay, or to maintain financial statement conditions or
otherwise) or (ii)entered into for the purpose of assuring in any other manner
the obligee of such Indebtedness or other obligation of the payment thereof or
to protect such obligee against loss in respect thereof (in whole or in part),
provided that the term Guarantee shall not include endorsements for collection
or deposit in the ordinary course of business. The term "Guarantee" used as a
verb has a corresponding meaning.
"Hazardous Materials" includes, without limitation, (a) solid or
hazardous waste, as defined in the Resource Conservation and Recovery Act of
1980, 42 U.S.C. 6901 et seq. and its implementing regulations and amendments,
or in any applicable state or local law or regulation, (b) any "hazardous
substance", "pollutant" or "contaminant", as defined in CERCLA, or in any
applicable state or local law or regulation, (c) gasoline, or any other
petroleum product or by-product, including crude oil or any fraction thereof,
(d) toxic substances, as defined in the Toxic Substances Control Act of 1976,
or in any applicable state or local law or regulation and (e) insecticides,
fungicides, or rodenticides, as defined in the Federal Insecticide, Fungicide,
and Rodenticide Act of 1975, or in any applicable state or local law or
regulation, as each such Act, statute or regulation may be amended from time
to time.
"IBOR" has the meaning set forth in Section 2.05(d).
"Income Available for Fixed Charges" for any period means (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
Franklin Electric and its Consolidated Subsidiaries on a consolidated basis
for such period and in accordance with GAAP.
"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
obligations (absolute or contingent) 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,
and (ix) all Indebtedness of others Guaranteed by such Person.
"Interest Period" means: (1) with respect to each Euro-Dollar
Borrowing and Foreign Currency Borrowing, the period commencing on the date of
such Borrowing and ending on the numerically corresponding day in the first,
second, third or sixth month thereafter, as the relevant Borrower may elect in
the applicable Notice of Borrowing; provided that:
(a) any Interest Period (subject to clause (c) below) which would
otherwise end on a day which is not a Euro-Dollar Business Day or a Foreign
Currency Business Day, as the case may be, shall be extended to the next
succeeding Euro-Dollar Business Day or Foreign Currency Business Day, as the
56
case may be, unless such Euro-Dollar Business Day or Foreign Currency Business
Day, as the case may be, falls in another calendar month, in which case such
Interest Period shall end on the next preceding Euro-Dollar Business Day or
Foreign Currency Business Day, as the case may be;
(b) any Interest Period which begins on the last Euro-Dollar Business
Day or Foreign Currency Business Day, as the case may be, of a calendar month
(or on a day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall, subject to clause(c) below, end
on the last Euro-Dollar Business Day or Foreign Currency Business Day, as the
case may be, of the appropriate subsequent calendar month; and
(c) no Interest Period may be selected which would end after the
Termination Date; and (2) with respect to each Base Rate Borrowing, the period
commencing on the date of such Borrowing and ending 30 days thereafter;
provided that:
(a) any Interest Period (subject to clause (b) below) which would
otherwise end on a day which is not a Domestic Business Day shall be extended
to the next succeeding Domestic Business Day; and
(b) no Interest Period may be selected which would end after the
Termination Date.
"Investment" means any investment in any Person, whether by means of
purchase or acquisition of obligations or securities of such Person, capital
contribution to such Person, loan or advance to such Person, making of a time
deposit with such Person or assumption of any obligation of such Person or
otherwise; provided that Investment shall not include the repurchase or
redemption by Franklin Electric of shares of Capital Stock of Franklin
Electric.
"Lending Office" means, as to each Bank, its office located at its
address set forth on the signature pages hereof (or identified on the
signature pages hereof as its Lending Office) or such other office as such
Bank may hereafter designate as its Lending Office by notice to Franklin
Electric and the Agent. Each Bank may designate a Lending Office for Dollar
Loans and a different Lending Office for Foreign Currency Loans and the term
Lending Office shall in such case mean either such Lending Office, as the
context shall require.
"Lien" means, with respect to any asset, any mortgage, deed to secure
debt, deed of trust, lien, pledge, charge, security interest, preferential
arrangement which has the practical effect of constituting a security interest
or encumbrance, or encumbrance of any kind in respect of such asset to secure
or assure payment of any Indebtedness or a Guarantee, whether by consensual
agreement or by operation of statute or other law, or by any agreement,
contingent or otherwise, to provide any of the foregoing. For the purposes of
this Agreement, Franklin Electric or any Subsidiary shall be deemed to own
subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.
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"Loan" means a Base Rate Loan, a Euro-Dollar Loan or a Foreign
Currency Loan and Loans means Base Rate Loans, Euro-Dollar Loans or Foreign
Currency Loans, or any or all of them, as the context shall require.
"Loan Documents" means this Agreement, the Notes, any other document
evidencing, relating to or securing the Loans, and any other document or
instrument delivered from time to time in connection with this Agreement, the
Notes or the Loans, as such documents and instruments may be amended or
supplemented from time to time.
"London Interbank Offered Rate" has the meaning set forth in Section
2.05(c).
"Long-Term Debt" means at any date any Indebtedness of Franklin
Electric or any Consolidated Subsidiary determined on a consolidated basis as
of such date in accordance with GAAP which matures (or the maturity of which
may at the option of Franklin Electric or any Consolidated Subsidiary be
extended such that it matures) more than 1 year after such date.
"Margin Stock" means "margin stock" as defined in Regulation U of the
Board of Governors of the Federal Reserve System, as in effect from time to
time, together with all official rulings and interpretations issued
thereunder.
"Material Adverse Effect" means, with respect to any event, act,
condition or occurrence of whatever nature (including any adverse
determination in any litigation, arbitration, or governmental investigation or
proceeding), whether singly or in conjunction with any other event or events,
act or acts, condition or conditions, occurrence or occurrences, whether or
not related, a material adverse change in, or a material adverse effect upon,
any of (a) the financial condition, operations, business or properties of
Franklin Electric and its Consolidated Subsidiaries taken as a whole, (b) the
rights and remedies of the Agent or the Banks under the Loan Documents, or the
ability of a Borrower to perform its obligations under the Loan Documents to
which it is a party, as applicable, or (c) the legality, validity or
enforceability of any Loan Document.
Material Subsidiary means at any time any Subsidiary having total
assets (determined in accordance with GAAP) in excess of $5,000,000.
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"Note" means a Dollar Note or a Foreign Currency Note and Notes means
Dollar Notes or Foreign Currency Notes, or any or all of them, as the context
shall require.
"Notice of Borrowing" has the meaning set forth in Section 2.02.
"Officer's Certificate" has the meaning set forth in Section 3.01(f).
"Participant" has the meaning set forth in Section 9.07(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
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"Person" means an individual, a corporation, a partnership (including
without limitation, a joint venture), an unincorporated association, a trust
or any other entity or organization, including, but not limited to, a
government or political subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by a member of the
Controlled Group for employees of any member of the Controlled Group or (ii)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to
which a member of the Controlled Group is then making or accruing an
obligation to make contributions or has within the preceding 5 plan years made
contributions.
"Prime Rate" refers to that interest rate so denominated and set by
Wachovia from time to time as an interest rate basis for borrowings. The
Prime Rate is but one of several interest rate bases used by Wachovia.
Wachovia lends at interest rates above and below the Prime Rate.
"Properties" means all real property owned or operated by Franklin
Electric or any Subsidiary, wherever located.
"Rate Determination Date" has the meaning set forth in Section
2.05(a).
"Redeemable Preferred Stock" of any Person means any preferred stock
issued by such Person which is at any time prior to the Termination Date
either (i) mandatorily redeemable (by sinking fund or similar payments or
otherwise) or (ii) redeemable at the option of the holder thereof.
"Required Banks" means at any time Banks having at least (i) 76% of
the aggregate amount of the Commitments or, if the Commitments are no longer
in effect, 76% of the aggregate outstanding principal amount of the Notes (in
the event that at such time there are 3 or more Banks party to this Agreement)
or (ii) 100% of the aggregate amount of the Commitments or, if the Commitments
are no longer in effect, 100% of the aggregate outstanding principal amount of
the Notes (in the event that at such time there are fewer than 3 Banks party
to this Agreement).
Responsible Officer means any of the chief executive officer, chief
operating officer, chief financial officer, chief accounting officer or
treasurer of Franklin Electric or any other officer of Franklin Electric
involved principally in its financial administration or its controllership
function.
"Subsidiary" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect
a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by Franklin Electric.
"Subsidiary Borrower" means any Borrower other than Franklin
Electric.
"Subsidiary Guarantor" means any Subsidiary which has (i) executed
and delivered to the Agent a Subsidiary Guaranty, and (ii) caused to be
executed and delivered to the Agent (A) an opinion of counsel (acceptable to
the Agent and the Required Banks) to such Subsidiary in such form and covering
such matters relating to such Subsidiary and the Subsidiary Guaranty being
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executed and delivered by such Subsidiary as the Agent or any Bank may
request, and (B) all documents which the Agent or any Bank may request
relating to the existence of such Subsidiary, the corporate authority for and
the validity of such Subsidiary Guaranty, and any other matters relevant
thereto, all in form and substance satisfactory to the Agent and the Required
Banks.
"Subsidiary Guaranty" means a guaranty agreement executed by a
Subsidiary Guarantor for the benefit of the Agent and the Banks in form and
substance satisfactory to the Agent and the Required Banks, guaranteeing the
obligations of the Borrowers (other than such Subsidiary Guarantor) under this
Agreement and the other Loan Documents to which the Borrowers (other than such
Subsidiary Guarantor) are parties.
"Taxes" has the meaning set forth in Section 2.11(d).
"Termination Date" means January 5, 2002, or such later date as may
be determined from time to time pursuant to Section 2.04(b).
"Third Parties" means all lessees, sublessees, licensees and other
users of the Properties, excluding those users of the Properties in the
ordinary course of Franklin Electric's or any Subsidiary's business and on a
temporary basis.
"Transferee" has the meaning set forth in Section 9.07(d).
"Unused Commitment" means at any date, with respect to any Bank, an
amount equal to its Commitment less the aggregate outstanding principal amount
of its Loans.
U.S. Subsidiary means a Subsidiary which has the majority of its
assets located in the United States of America.
"Wachovia" means Wachovia Bank, N.A., a national banking association
and its successors.
"Wholly Owned Subsidiary" means any Subsidiary all of the shares of
capital stock or other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly owned by Franklin
Electric.
SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all terms of an accounting character used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP, applied on a basis consistent (except for changes
concurred in by Franklin Electric's independent public accountants or
otherwise required by a change in GAAP) with the most recent audited
consolidated financial statements of Franklin Electric and its Consolidated
Subsidiaries delivered to the Banks, unless with respect to any such change
concurred in by Franklin Electric's independent public accountants or required
by GAAP, in determining compliance with any of the provisions of this
Agreement or any of the other Loan Documents: (i) Franklin Electric shall
have objected to determining such compliance on such basis at the time of
delivery of such financial statements, or (ii) the Required Banks shall so
object in writing within 30 days after the delivery of such financial
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statements, in either of which events (x) such calculations shall be made on a
basis consistent with those used in the preparation of the latest financial
statements as to which such objection shall not have been made (which, if
objection is made in respect of the first financial statements delivered under
Section 5.01, shall mean the financial statements referred to in Section
4.04), and (y) the Banks and Franklin Electric will negotiate in good faith to
revise the financial covenants contained in this Agreement solely for the
purpose of reflecting such changes so that the criteria for evaluating
Franklin Electric's consolidated financial condition and performance will be
substantially the same after such changes as they were before such changes.
SECTION 1.03. Use of Defined Terms. All terms defined in this
Agreement shall have the same meanings when used in any of the other Loan
Documents, unless otherwise defined therein or unless the context shall
otherwise require.
SECTION 1.04. Terminology. All personal pronouns used in this
Agreement, whether used in the masculine, feminine or neuter gender, shall
include all other genders; the singular shall include the plural and the
plural shall include the singular. Titles of Articles and Sections in this
Agreement are for convenience only, and neither limit nor amplify the
provisions of this Agreement.
SECTION 1.05. References. Unless otherwise indicated, references in
this Agreement to "Articles", "Exhibits", "Schedules", and "Sections" are
references to articles, exhibits, schedules and sections hereof.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Make Syndicated Loans. Each Bank
severally agrees, on the terms and conditions set forth herein, to make Loans
to the Borrowers from time to time before the Termination Date; provided that,
immediately after each such Loan is made (i) the sum of the aggregate
outstanding principal amount of Dollar Loans and the Dollar Equivalent of the
aggregate outstanding principal amount of Foreign Currency Loans by such Bank
to all Borrowers shall not exceed the amount of its Commitment, and (ii) the
sum of the aggregate outstanding principal amount of all Dollar Loans and the
Dollar Equivalent of the aggregate outstanding principal amount of all Foreign
Currency Loans shall not exceed the aggregate amount of the Commitments of all
of the Banks at such time. The Dollar Equivalent of each Foreign Currency
Loan on the date each Foreign Currency Loan is disbursed shall be deemed to be
the amount of the Foreign Currency Loan outstanding for the purpose of
calculating the unutilized portion of the Commitments on the date of
disbursement. Each Borrowing under this Section shall be in an aggregate
principal amount of $500,000 (or the Dollar Equivalent thereof, rounded to the
nearest Dollar, in any Foreign Currency) or any larger multiple of $500,000
(except that any Borrowing may be in the aggregate amount of the Unused
Commitments) and shall be made from the several Banks ratably in proportion to
their respective Commitments. Within the foregoing limits, the Borrowers may
borrow under this Section, repay or, to the extent permitted by Section 2.09,
prepay Loans and reborrow under this Section at any time before the
Termination Date.
SECTION 2.02. Method of Borrowing Loans. (a) Franklin Electric
shall give the Agent notice in the form attached hereto as Exhibit L (a
"Notice of Borrowing") prior to 11:00 A.M. (Atlanta, Georgia time) on the
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Domestic Business Day of each Base Rate Borrowing, at least 2 Euro-Dollar
Business Days before each Euro-Dollar Borrowing and at least 2 Foreign
Currency Business Days before each Foreign Currency Borrowing, specifying:
(i) the name of the Borrower,
(ii) the date of such Borrowing, which shall be a Domestic Business
Day in the case of a Base Rate Borrowing, a Euro-Dollar Business Day in the
case of a Euro-Dollar Borrowing and a Foreign Currency Business Day in the
case of a Foreign Currency Borrowing,
(iii) the aggregate amount of such Borrowing,
(iv) whether the Loans comprising such Borrowing are to be Dollar
Loans or Foreign Currency Loans, and (A) if such Loans are to be Dollar Loans,
whether they are to be Base Rate Loans or Euro-Dollar Loans and (B) if such
Loans are to be Foreign Currency Loans, specifying the Foreign Currency, and
(v) in the case of a Fixed Rate Borrowing, the duration of the
Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period.
(b) Upon receipt of a Notice of Borrowing, the Agent shall promptly
notify each Bank of the contents thereof and of such Bank's ratable share of
such Borrowing and such Notice of Borrowing shall not thereafter be revocable
by the relevant Borrower.
(c) Not later than 1:00 P.M. (Atlanta, Georgia time) on the date of
each Borrowing, each Bank shall (except as provided in subsection (d) of this
Section) make available its ratable share of such Borrowing, in Federal or
other funds immediately available in Atlanta, Georgia, to the Agent at its
address referred to in or specified pursuant to Section 9.01, which funds
shall be in Dollars and, if such Borrowing is a Foreign Currency Borrowing, in
an amount equal to the Dollar Equivalent of such Bank's ratable share of such
Foreign Currency Borrowing. Unless the Agent determines that any applicable
condition specified in Article III has not been satisfied, the Agent will make
the funds so received from the Banks available to the relevant Borrower by
wire transfer at the bank account specified by, and in the name of, such
Borrower. Unless the Agent receives notice from a Bank, at the Agent's
address referred to in Section9.01, before the date of a Fixed Rate Borrowing
or not later than 12:30 P.M. (local time at such address) on the date of a
Base Rate Borrowing, in either case stating that such Bank will not make a
Loan in connection with such Borrowing, the Agent shall be entitled to assume
that such Bank will make a Loan in connection with such Borrowing and, in
reliance on such assumption, the Agent may (but shall not be obligated to)
make available such Bank's ratable share of such Borrowing to the relevant
Borrower for the account of such Bank. If the Agent makes such Bank's ratable
share available to the relevant Borrower and such Bank does not in fact make
its ratable share of such Borrowing available on such date, the Agent shall be
entitled to recover such Bank's ratable share from such Bank or the relevant
Borrower (and for such purpose shall be entitled to charge such amount to any
account of the relevant Borrower maintained with the Agent), together with
interest thereon for each day during the period from the date of such
Borrowing until such sum shall be paid in full at a rate per annum equal to
the rate at which the Agent determines that it obtained (or could have
obtained) overnight Federal funds to cover such amount for each such day
during such period, provided that any such payment by the relevant Borrower of
62
such Bank's ratable share and interest thereon shall be without prejudice to
any rights that the relevant Borrower may have against such Bank. If such
Bank shall repay to the Agent such corresponding amount, such amount so repaid
shall constitute such Bank's Loan included in such Borrowing for purposes of
this Agreement.
(d) If any Bank makes a new Loan hereunder to a Borrower on a day on
which such Borrower is to repay all or any part of an outstanding Loan from
such Bank, such Bank shall apply the proceeds of its new Loan to make such
repayment and only an amount equal to the difference (if any) between the
amount being borrowed and the amount being repaid shall be made available by
such Bank to the Agent as provided in subsection (c) of this Section, or
remitted by such Borrower to the Agent as provided in Section 2.11, as the
case may be; provided, however, that if the Loan which is to be repaid is a
Foreign Currency Loan, the foregoing provisions shall apply only if the new
Loan is to be made in the same Foreign Currency.
(e) Notwithstanding anything to the contrary contained in this
Agreement, no Fixed Rate Borrowing may be made if there shall have occurred a
Default or an Event of Default, which Default or Event of Default shall not
have been cured or waived in writing.
f) In the event that a Notice of Borrowing fails to specify whether
the Loans comprising such Borrowing are to be Base Rate Loans, Euro-Dollar
Loans or Foreign Currency Loans, such Loans shall be made as Base Rate Loans.
If a Borrower is otherwise entitled under this Agreement to repay any Loans
maturing at the end of an Interest Period applicable thereto with the proceeds
of a new Borrowing, and the Borrower fails to repay such Loans using its own
moneys and Franklin Electric fails to give a Notice of Borrowing in connection
with such new Borrowing, a new Borrowing shall be deemed to be made on the
date such Loans mature in an amount equal to the principal amount of the Loans
so maturing, and the Loans comprising such new Borrowing shall be Base Rate
Loans, which shall be made in the Dollar Equivalent of such maturing Loans, if
such maturing Loans were Foreign Currency Loans.
(g) Notwithstanding anything to the contrary contained herein, there
shall not be more than 10 different Interest Periods applicable to Fixed Rate
Loans.
SECTION 2.03. Notes. (a) The Dollar Loans of each Bank shall be
evidenced by a single Dollar Note and the Foreign Currency Loans of each Bank
shall be evidenced by a single Foreign Currency Note, each payable to the
order of such Bank for the account of its Lending Office in an amount equal to
the original principal amount of such Bank's Commitment.
(b) Upon receipt of each Bank's Notes pursuant to Section 3.01, the
Agent shall deliver such Notes to such Bank. Each Bank shall record, and
prior to any transfer of its Notes shall endorse on the schedule forming a
part thereof appropriate notations to evidence, the date, amount and maturity
of, and effective interest rate for, each Loan made by it, the date and amount
of each payment of principal made by the Borrower with respect thereto and
whether, in the case of such Bank's Dollar Note, such Dollar Loan is a Base
Rate Loan or Euro-Dollar Loan, and, in the case of such Bank's Foreign
Currency Note, specification of the Foreign Currency, and such schedule shall
constitute rebuttable presumptive evidence of the principal amount owing and
unpaid on such Bank's Notes; provided that the failure of any Bank to make, or
any error in making, any such recordation or endorsement shall not affect the
63
obligation of any Borrower hereunder or under the Notes or the ability of any
Bank to assign its Notes. Each Bank is hereby irrevocably authorized by each
Borrower so to endorse its Notes and to attach to and make a part of any Note
a continuation of any such schedule as and when required.
SECTION 2.04. Maturity of Loans; Extension of Termination Date. (a)
Each Loan included in any Borrowing shall mature, and the principal amount
thereof shall be due and payable, on the last day of the Interest Period
applicable to such Borrowing.
(b) Upon written request of Franklin Electric, which may be made from
time to time and which shall be made in writing and delivered to the Agent on
a Domestic Business Day no fewer than 60 days prior to each anniversary of the
Effective Date, the Banks and the Agent in their sole and absolute discretion
may (but shall not be obligated to) extend the then effective Termination Date
for a period of 1 year; provided that in no event shall the Termination Date
be extended later than January 5, 2006. In the event that a Bank chooses to
extend the Termination Date for such a 1 year period, notice shall be given by
such Bank to Franklin Electric and the Agent not more than 45, nor fewer than
30, days prior to the next succeeding anniversary of the Effective Date;
provided that the Termination Date shall not be extended with respect to any
of the Banks unless the Required Banks are willing to extend the Termination
Date and either (i) the remaining Banks shall purchase ratable assignments
(without any obligations so to do) from such terminating Bank (in the form of
an Assignment and Acceptance) in accordance with their respective percentage
of the remaining aggregate amount of the Commitments; provided that such Banks
shall be provided such opportunity (which opportunity shall allow such Banks
at least 15 Domestic Business Days in which to make a decision) prior to the
Borrower finding another bank pursuant to the immediately succeeding clause
(ii); and provided, further, that should any of the remaining Banks elect not
to purchase such an assignment, then such other remaining Banks shall be
entitled to purchase an assignment from any terminating Bank which includes
the ratable interest that was otherwise available to such non-purchasing
remaining Bank or Banks, as the case may be, (ii) Franklin Electric shall find
another bank, reasonably acceptable to the Agent, willing to accept an
assignment from such terminating Bank (in the form of an Assignment and
Acceptance) or (iii) Franklin Electric shall reduce the aggregate amount of
the Commitments in an amount equal to the unassigned portion of the Commitment
of any such terminating Bank.
SECTION 2.05. Interest Rates. (a)"Applicable Margin" shall be
determined quarterly based upon the ratio of Debt to EBITDA (calculated as of
the last day of each Fiscal Quarter), as follows:
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Ratio of Debt to Foreign
EBITDA Base Rate Loans Currency Loans Euro-Dollar Loans
------ --------------- -------------- -----------------
Greater than 2.0 to 1.0 0% .325% .325%
Greater than 1.5 to 1.0
but equal to or less
than 2.0 to 1.0 0% .30% .30%
Greater than or equal
to 1.0 to 1.0
but less than or equal
to 1.5 to 1.0 0% .25% .25%
Less than 1.0 to 1.0 0% .20% .20%
The Applicable Margin shall be determined effective as of the date (herein,
the "Rate Determination Date") which is 60 days after the last day of the
Fiscal Quarter as of the end of which the foregoing ratio is being determined,
based on the quarterly financial statements for such Fiscal Quarter, and the
Applicable Margin so determined shall remain effective from such Rate
Determination Date until the date which is 60 days after the last day of the
Fiscal Quarter in which such Rate Determination Date falls (which latter date
shall be a new Rate Determination Date); provided that (i) for the period from
and including the Effective Date to but excluding the Rate Determination Date
next following the Effective Date, the Applicable Margin shall be (A)0% for
Base Rate Loans, (B) .20% for Foreign Currency Loans, and (C) .20% for Euro-
Dollar Loans, (ii)in the case of any Applicable Margin determined for the
fourth and final Fiscal Quarter of a Fiscal Year, the Rate Determination Date
shall be the date which is 90 days after the last day of such final Fiscal
Quarter and such Applicable Margin shall be determined based upon the annual
audited financial statements for the Fiscal Year ended on the last day of such
final Fiscal Quarter, and (iii) if on any Rate Determination Date Franklin
Electric shall have failed to deliver to the Banks the financial statements
required to be delivered pursuant to Section 5.01(b) with respect to the
Fiscal Quarter most recently ended prior to such Rate Determination Date, then
for the period beginning on such Rate Determination Date and ending on the
earlier of (A) the date on which Franklin Electric shall deliver to the Banks
the financial statements to be delivered pursuant to Section 5.01(b) with
respect to such Fiscal Quarter or any subsequent Fiscal Quarter, or (B)the
date on which Franklin Electric shall deliver to the Banks annual financial
statements required to be delivered pursuant to Section 5.01(a) with respect
to the Fiscal Year which includes such Fiscal Quarter or any subsequent Fiscal
Year, the Applicable Margin shall be determined as if the ratio of Debt to
EBITDA was more than 2.0 to 1.0 at all times during such period. Any change
in the Applicable Margin on any Rate Determination Date shall result in a
corresponding change, effective on and as of such Rate Determination Date, in
the interest rate applicable to each Loan outstanding on such Rate
Determination Date.
(b)Each Base Rate Loan shall bear interest on the outstanding
principal amount thereof, for each day from the date such Loan is made until
it becomes due, at a rate per annum equal to the Base Rate for such day plus
the Applicable Margin. Such interest shall be payable for each Interest
Period on the last day thereof. Any overdue principal of and, to the extent
permitted by applicable law, overdue interest on any Base Rate Loan shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the Default Rate.
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(c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a
rate per annum equal to the sum of the Applicable Margin plus the applicable
Adjusted London Interbank Offered Rate for such Interest Period; provided that
if any Euro-Dollar Loan shall, as a result of clause (1)(c) of the definition
of Interest Period, have an Interest Period of less than one month, such Euro-
Dollar Loan shall bear interest during such Interest Period at the rate
applicable to Base Rate Loans during such period. Such interest shall be
payable for each Interest Period on the last day thereof and, if such Interest
Period is longer than 3 months, at intervals of 3 months after the first day
thereof. Any overdue principal of and, to the extent permitted by applicable
law, overdue interest on any Euro-Dollar Loan shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to the Default Rate.
The "Adjusted London Interbank Offered Rate" applicable to any
Interest Period means a rate per annum equal to the quotient obtained (rounded
upward, if necessary, to the next higher 1/100th of 1%) by dividing (i)the
applicable London Interbank Offered Rate for such Interest Period by (ii)1.00
minus the Euro-Dollar Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Euro-Dollar
Loan means for the Interest Period of such Euro-Dollar Loan the rate per annum
determined on the basis of the offered rate for deposits in Dollars of amounts
equal or comparable to the principal amount of such Euro-Dollar Loan offered
for a term comparable to such Interest Period, which rates appear on Telerate
Page 3750 as of 11:00 a.m., London time, 2 Euro-Dollar Business Days prior to
the first day of such Interest Period, provided that (i)if more than one such
offered rate appears on Telerate Page 3750, the "London Interbank Offered
Rate" will be the arithmetic average (rounded upward, if necessary, to the
next higher 1/100th of 1%) of such offered rates; and (ii)if no such offered
rates appear on such page, the "London Interbank Offered Rate" for such
Interest Period will be the arithmetic average (rounded, if necessary, to the
next higher 1/100th of 1%) of rates quoted by not less than 2 major banks in
New York City, selected by the Agent, at approximately 10:00 a.m., New York
City time, 2 Euro-Dollar Business Days prior to the first day of such Interest
Period, for deposits in Dollars offered by leading European banks for a period
comparable to such Interest Period in an amount comparable to the principal
amount of such Euro-Dollar Loan.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in respect of "Eurocurrency liabilities" (or in respect of any
other category of liabilities which includes deposits by reference to which
the interest rate on Euro-Dollar Loans is determined or any category of
extensions of credit or other assets which includes loans by a non-United
States office of any Bank to United States residents). The Adjusted London
Interbank Offered Rate shall be adjusted automatically on and as of the
effective date of any change in the Euro-Dollar Reserve Percentage.
(d) Each Foreign Currency Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a
rate per annum equal to the sum of the Applicable Margin plus the applicable
Adjusted IBOR Rate for such Interest Period. Such interest shall be payable
for each Interest Period on the last day thereof and, if such Interest Period
is longer than 3 months, at intervals of 3 months after the first day thereof.
Any overdue principal of and, to the extent permitted by law, overdue interest
on any Foreign Currency Loan shall bear interest, payable on demand, for each
day until paid at a rate per annum equal to the Default Rate.
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Adjusted IBOR Rate means, with respect to each Interest Period for a
Foreign Currency Loan, the sum of (i) the rate obtained by dividing (A) IBOR
for such Interest Period by (B) a percentage equal to 1 minus the then stated
maximum rate (stated as a decimal) of all reserve requirements in respect of
any category of liabilities by reference to which the interest rate on such
Foreign Currency Loan is determined (including, without limitation, any
marginal, emergency, supplemental, special or other reserves) applicable to
any member bank of the Federal Reserve System as defined in Regulation D (or
against any successor category of liabilities as defined in Regulation D),
plus (ii) if the relevant Foreign Currency Loan is in British pounds sterling,
a percentage sufficient to compensate the Banks for the cost of complying with
any reserves, liquidity and/or special deposit requirements of the Bank of
England directly or indirectly affecting the maintenance or funding of such
Foreign Currency Loan.
IBOR means, for any Interest Period, with respect to Foreign Currency
Loans, the offered rate for deposits in the applicable Foreign Currency, for a
period comparable to the Interest Period and in an amount comparable to the
amount of such Foreign Currency Loan appearing on the applicable Telerate Page
as of 11:00 A.M. (London, England time) on the day that is two Business Days
prior to the first day of the Interest Period. If the foregoing rate is
unavailable from Telerate for any reason, then such rate shall be determined
by the Agent from any other interest rate reporting service of recognized
standing designated in writing by the Agent to Franklin Electric.
(e) The Agent shall determine each interest rate applicable to the
Loans hereunder. The Agent shall give prompt notice to Franklin Electric and
the Banks by telecopy of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
(f) After the occurrence and during the continuance of a Default,
the principal amount of the Loans (and, to the extent permitted by applicable
law, all accrued interest thereon) may, at the election of the Required Banks,
bear interest at the Default Rate; provided that the Required Banks shall
deliver written notice to Franklin Electric of such election prior to or
promptly after such election.
SECTION 2.06. Fees. (a) Franklin Electric shall pay to the Agent
for the ratable account of each Bank a facility fee equal to the product of:
(i)the aggregate of the daily average amounts of such Bank's Commitment, times
(ii)a per annum percentage equal to the Applicable Facility Fee Rate. Such
facility fee shall accrue from and including the Effective Date to and
including the Termination Date (or earlier date on which the Commitments are
terminated pursuant to Section 2.07 or 6.01). Facility fees shall be payable
quarterly in arrears on the first Facility Fee Payment Date following each
Facility Fee Determination Date and on the Termination Date; provided that
should the Commitments be terminated at any time prior to the Termination Date
for any reason, the entire accrued and unpaid facility fee shall be paid on
the date of such termination. The "Applicable Facility Fee Rate" shall be
determined quarterly based upon the ratio of Debt to EBITDA (calculated as of
the last day of each Fiscal Quarter) as follows:
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Applicable
Ratio of Debt to EBITDA Facility Fee Rate
----------------------- -----------------
Greater than 2.0 to 1.0 .15%
Greater than or equal to 1.0 to 1.0
but less than or equal to 2.0 to 1.0 .125%
Less than 1.0 to 1.0 .10%
The Applicable Facility Fee Rate shall be determined effective as of the date
(herein, the "Facility Fee Determination Date") which is 60 days after the
last day of the Fiscal Quarter as of the end of which the foregoing ratio is
being determined, based on the quarterly financial statements for such Fiscal
Quarter, and the Applicable Facility Fee Rate so determined shall remain
effective from such Facility Fee Determination Date until the date which is 60
days after the last day of the Fiscal Quarter in which such Facility Fee
Determination Date falls (which latter date shall be a new Facility Fee
Determination Date); provided that (i) for the period from and including the
Effective Date to but excluding the Facility Fee Determination Date next
following the Effective Date, the Applicable Facility Fee Rate shall be .10%;
(ii) in the case of any Applicable Facility Fee Rate determined for the fourth
and final Fiscal Quarter of a Fiscal Year, the Facility Fee Determination Date
shall be the date which is 90 days after the last day of such final Fiscal
Quarter and such Applicable Facility Fee Rate shall be determined based upon
the annual audited financial statements for the Fiscal Year ended on the last
day of such final Fiscal Quarter, and (iii) if on any Facility Fee
Determination Date Franklin Electric shall have failed to deliver to the Banks
the financial statements required to be delivered pursuant to Section 5.01(b)
with respect to the Fiscal Quarter most recently ended prior to such Facility
Fee Determination Date, then for the period beginning on such Facility Fee
Determination Date and ending on the earlier of (A) the date on which Franklin
Electric shall deliver to the Banks the financial statements to be delivered
pursuant to Section 5.01(b) with respect to such Fiscal Quarter or any
subsequent Fiscal Quarter, and (B) the date on which Franklin Electric shall
deliver to the Banks annual financial statements required to be delivered
pursuant to Section 5.01(a) with respect to the Fiscal Year which includes
such Fiscal Quarter or any subsequent Fiscal Year, the Applicable Facility Fee
Rate shall be determined as if the ratio of Debt to EBITDA was more than 2.0
to 1.0 at all times during such period.
(b) Franklin Electric shall pay to the Agent, for the account and
sole benefit of the Agent, such fees and other amounts at such times as set
forth in the Agent's Letter Agreement.
SECTION 2.07. Optional Termination or Reduction of Commitments.
Franklin Electric may, upon at least 3 Domestic Business Days' notice to the
Agent, terminate at any time, or proportionately reduce from time to time by
an aggregate amount of at least $500,000 or any larger multiple of $500,000,
the Commitments. If the Commitments are terminated in their entirety, all
accrued fees (as provided under Section2.06) shall be payable on the effective
date of such termination.
SECTION 2.08. Mandatory Termination of Commitments. The Commitments
shall terminate on the Termination Date and any Loans then outstanding
(together with accrued interest thereon) shall be due and payable on such
date.
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SECTION 2.09. Optional Prepayments. (a) Franklin Electric may, upon
notice to the Agent, prepay any Base Rate Borrowing in whole at any time, or
from time to time in part in amounts aggregating at least $500,000 or in an
amount equal to the then outstanding principal amount of all Base Rate Loans,
by paying the principal amount to be prepaid together with accrued interest
thereon to the date of prepayment. Each such optional prepayment shall be
applied to prepay ratably the Base Rate Loans of the several Banks included in
such Base Rate Borrowing.
(b) Except as provided in Section 8.02, no Borrower may prepay all
or any portion of the principal amount of any Fixed Rate Loan prior to the
maturity thereof.
(c) Upon receipt of a notice of prepayment pursuant to this Section,
the Agent shall promptly notify each Bank of the contents thereof and of such
Bank's ratable share of such prepayment and such notice shall not thereafter
be revocable by any Borrower.
SECTION 2.10. Mandatory Prepayments. (a) On each date on which the
Commitments are reduced pursuant to Section 2.07 or Section 2.08, Franklin
Electric shall repay or prepay such principal amount of the outstanding Loans,
if any (together with interest accrued thereon and any amounts due under
Section 8.05(a)), as may be necessary so that after such payment the aggregate
unpaid principal amount of the Loans does not exceed the aggregate amount of
the Commitments as then reduced. Each such payment or prepayment shall be
applied to repay or prepay ratably the Loans of the several Banks.
(b) If the Agent determines at any time (either on its own
initiative or at the instance of any Bank) that the aggregate principal amount
of the Foreign Currency Loans outstanding (after converting each such Foreign
Currency Loan to its Dollar Equivalent on the date of calculation) at any time
exceeds the aggregate Commitments less the outstanding aggregate amount of all
Dollar Loans, then upon 5 Foreign Currency Business Days' written notice from
the Agent, Franklin Electric shall prepay an aggregate principal amount of
Loans sufficient to bring the aggregate of the Dollar Equivalent of the
Foreign Currency Loans and the Dollar Loans outstanding to an amount not
exceeding the Commitment. Nothing in the foregoing shall require the Agent to
make any such calculation unless expressly requested to do so by the Required
Banks. All such prepayments shall be applied in the following order: (i)
first to Base Rate Loan; (ii) then to Euro-Dollar Loans; and (iii) lastly, to
Foreign Currency Loans.
SECTION 2.11. General Provisions as to Payments. (a)The Borrowers
shall make each payment of principal of, and interest on, the Loans and of
facility fees hereunder, not later than 11:00 A.M. (Atlanta, Georgia time) on
the date when due, in Federal or other funds (subject to paragraph (c) of this
Section with respect to Foreign Currency Loans) immediately available in
Atlanta, Georgia, to the Agent at its address referred to in Section 9.01.
The Agent will promptly distribute to each Bank its ratable share of each such
payment received by the Agent for the account of the Banks.
(b) Whenever any payment of principal of, or interest on, the
Domestic Loans or of fees shall be due on a day which is not a Domestic
Business Day, the date for payment thereof shall be extended to the next
succeeding Domestic Business Day. Whenever any payment of principal of, or
interest on, the Euro-Dollar Loans or the Foreign Currency Loans shall be due
on a day which is not a Euro-Dollar Business Day or Foreign Currency Business
69
Day, as the case may be, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day or Foreign Currency Business Day, as
the case may be, unless such Euro-Dollar Business Day or Foreign Currency
Business Day, as the case may be, falls in another calendar month, in which
case the date for payment thereof shall be the next preceding Euro-Dollar
Business Day or Foreign Currency Business Day, as the case may be. If the
date for any payment of principal is extended by operation of law or
otherwise, interest thereon shall be payable for such extended time.
(c) All payments of principal and interest with respect to Foreign
Currency Loans shall be made in the Foreign Currency in which the related
Foreign Currency Loan was made.
(d) All payments of principal, interest and fees and all other
amounts to be made by the Borrowers pursuant to this Agreement with respect to
any Loan or fee relating thereto shall be paid without deduction for, and free
from, any tax, imposts, levies, duties, deductions, or withholdings of any
nature now or at anytime hereafter imposed by any governmental authority or by
any taxing authority thereof or therein excluding in the case of each Bank (i)
taxes imposed on or measured by its net income, and franchise taxes imposed on
it, by the jurisdiction under the laws of which such Bank is organized or any
political subdivision thereof (including for the purpose of this clause (i)
with respect to any Bank organized under the laws of one of the states of the
United States, United States federal income taxes) and (ii) taxes imposed on
its income, and franchise taxes imposed on it, by the jurisdiction of such
Bank's applicable Lending Office or any political subdivision thereof (all
such non-excluded taxes, imposts, levies, duties, deductions or withholdings
of any nature being "Taxes"). In the event that any Borrower is required by
applicable law to make any such withholding or deduction of Taxes with respect
to any Loan or fee or other amount, such Borrower shall pay such deduction or
withholding to the applicable taxing authority, shall promptly furnish to any
Bank in respect of which such deduction or withholding is made all receipts
and other documents evidencing such payment and shall pay to such Bank
additional amounts as may be necessary in order that the amount received by
such Bank after the required withholding or other payment shall equal the
amount such Bank would have received had no such withholding or other payment
been made. If no withholding or deduction of Taxes are payable in respect of
any Loan or fee relating thereto, a Borrower shall furnish, at such Bank's
reasonable request, evidence reasonably acceptable to such Bank, stating that
such payments are exempt from or not subject to withholding or deduction of
Taxes. If a Borrower fails to provide such evidence, such Borrower hereby
agrees to compensate such Bank for, and indemnify them with respect to, the
tax consequences of such Borrower's failure to provide evidence of tax
payments or tax exemption.
In the event any Bank receives a refund of any Taxes paid by a
Borrower pursuant to this Section 2.11, it will pay to such Borrower the
amount of such refund promptly upon receipt thereof; provided, however, if at
any time thereafter it is required to return such refund, such Borrower shall
promptly repay to it the amount of such refund.
(e) Each Bank which shall be a foreign person (a person other than a
United States person for United States Federal income tax purposes) hereby
agrees that:
(i) it shall no later than the Effective Date (or, in the
case of a Bank which shall become a party hereto pursuant to Section 9.07
after the Effective Date, the date upon which such Bank shall become a part
70
hereto) deliver to Franklin Electric (with a copy to the Agent) (A) if any
Lending Office is located in the United States, two (2) accurate and complete
signed originals of Internal Revenue Service Form 4224 (or any successors
thereto) ("Form 4224"), and/or (B) if any Lending Office is located outside
the United States, two (2) accurate and complete signed originals of Internal
Revenue Service Form 1001 (or any successor thereto) ("Form 1001"), in each
case indicating that such Bank is on the date of delivery thereof entitled to
receive payments of principal, interest and fees for the account of such
Lending Office or Lending Offices under this Agreement free from withholding
of United States Federal income tax, in the case of Form 1001, pursuant to a
United States tax treaty currently in effect and for which notice of
termination has not been given (and, if any political subdivision of the
United States shall impose similar reporting requirements with respect to
payments to such Bank under this Agreement and such Bank shall receive notice
from Franklin Electric of the same, such Bank shall deliver any applicable
forms to Franklin Electric with a copy to the Agent promptly after receipt of
such notice);
(ii) if at any time such Bank shall change its Lending
Office or Lending Offices or select an additional Lending Office as herein
provided, it shall, at the same time or reasonably promptly thereafter,
deliver to Franklin Electric (with a copy to the Agent) in replacement for, or
in addition to, the forms previously delivered by it hereunder (A) if such
changed or additional Lending Office is located in the United States, two (2)
accurate and complete signed originals of Form 4224 or (B) otherwise, two (2)
accurate and complete signed originals of Form 1001, in each case indicating
that such Bank is on the date of delivery thereof entitled to receive payments
of principal, interest and fees for the account of such changed or additional
Lending Office under this Agreement free from withholding of United States
Federal income tax;
(iii) it shall, before or promptly after the occurrence of
any event (including the passing of time but excluding any event mentioned in
(ii) above) requiring a change in the most recent Form 4224 or Form 1001
previously delivered by such Bank and if the delivery of the same be lawful,
deliver to Franklin Electric (with a copy to the Agent) two (2) accurate and
complete original signed copies of Form 4224 or Form 1001 in replacement for
the forms previously delivered by such Bank;
(iv) if such Bank claims exemption from withholding tax
under a United States tax treaty by providing a Form 1001 and such Bank sells
or grants a participation of all or part of its rights under this Agreement,
such Bank shall notify Franklin Electric and the Agent of the percentage
amount in which it is no longer the beneficial owner under this Agreement. To
the extent of this percentage amount, Franklin Electric shall treat such
Bank's Form 1001 as no longer in compliance with this Section 2.11(e). In the
event a Bank claiming exemption from United States withholding tax by filing
Form 4224 with Franklin Electric, sells or grants a participation in its
rights under this Agreement, such Bank agrees to undertake sole responsibility
for complying with the withholding tax requirements imposed by Sections 1441
and 1442 of the Code;
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(v) if the Internal Revenue Service or any authority of
the United States of America or other jurisdiction successfully asserts a
claim that the Agent or any Borrower did not properly withhold tax from
amounts paid to or for the account of any Bank (because the appropriate form
was not delivered, was not properly executed, or because such Bank failed to
notify such Borrower or the Agent of a change in circumstances which rendered
the exemption from withholding tax ineffective), such Bank shall indemnify the
Agent and/or such Borrower, as applicable, fully for all amounts paid,
directly or indirectly, by the Agent and/or such Borrower, as applicable, as
tax or otherwise, including penalties and interest, and including any taxes
imposed by any jurisdiction on the amounts payable to the Agent and/or such
Borrower, as applicable under this paragraph (e), together with all costs,
expenses and attorneys' fees (including the reasonable allocated costs for in-
house staff counsel); and
(vi) it shall, promptly upon the Agent's or Franklin
Electric's reasonable request to that effect, deliver to Franklin Electric
(with a copy to the Agent) such other forms or similar documentation as may be
required from time to time by any applicable law, treaty, rule or regulation
in order to establish such Bank's tax status for withholding purposes.
(f) The Borrowers will not be required to pay any additional amounts
in respect of United States Federal income tax pursuant to Section 2.11(d) to
any Bank for the account of any Lending Office of such Bank:
(i) if the obligation to pay such additional amounts would
not have arisen but for a failure by such Bank to comply with its obligations
under Section 2.11(e) in respect of such Lending Office;
(ii) if such Bank shall have delivered to the Borrower a
Form 4224 in respect of such Lending Office pursuant to Section 2.11(e) and
such Bank shall not at any time be entitled to exemption from deduction or
withholding of United States Federal income tax in respect of payments by the
Borrower hereunder for the account of such Lending Office for any reason other
than a change in United States law or regulations or in the official
interpretation of such law or regulations by any Governmental Authority
charged with the interpretation or administration thereof (whether or not
having the force of law) after the date of delivery of such Form 4224; or
(iii) if such Bank shall have delivered to Franklin
Electric a Form 1001 in respect of such Lending Office pursuant to Section
2.11(e) and such Bank shall not at any time be entitled to exemption from
deduction or withholding of United States Federal income tax in respect of
payments by any Borrower hereunder for account of such Lending Office for any
reason other than a change in United States law or regulations or any
applicable tax treaty or regulations or in the official interpretation of any
such law, treaty or regulations by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law) after the date of delivery of such Form 1001.
(g) If, at any time, Franklin Electric shall request any Bank to
deliver any forms or other documentation pursuant to Section 2.11(e)(vi), then
Franklin Electric shall, on demand of such Bank, reimburse such Bank for any
72
reasonable costs or expenses incurred by such Bank in the preparation or
delivery of such forms or other documentation.
(h) If any Borrower shall be required to pay additional amounts to
any Bank pursuant to Section 2.11(d), then such Bank shall use its best
efforts (consistent with legal and regulatory restrictions) to change the
jurisdiction of its Lending Office so as to eliminate any such additional
payment by the Borrower which may thereafter accrue if such change in the
judgment of such Bank shall not otherwise be disadvantageous to such Bank.
(i) Without prejudice to the survival of any other agreement of the
Borrowers hereunder, the agreements and obligations of the Borrowers contained
in Section 2.11(d) shall be applicable with respect to any Transferee, and any
calculations required by such provisions (i) shall be made based upon the
circumstances of such Transferee, and (ii) constitute a continuing agreement
and shall survive the termination of this Agreement and the payment in full or
cancellation of the Notes.
SECTION 2.12. Computation of Interest and Fees. Interest on Domestic
Loans based on the Base Rate shall be computed on the basis of a year of 360
days and paid for the actual number of days elapsed (including the first day
but excluding the last day). Interest on Euro-Dollar Loans and on Foreign
Currency Loans shall be computed on the basis of a year of 360 days (except
for any Foreign Currency Loans outstanding in British pounds sterling,
Canadian dollars or Irish punts (if any of such currencies is selected as a
Foreign Currency pursuant to clause (iv) of the definition of "Foreign
Currency"), which shall be computed on a basis of 365 or 366 days, as the case
may be) and paid for the actual number of days elapsed, calculated as to each
Interest Period from and including the first day thereof to but excluding the
last day thereof. Facility fees and any other fees payable hereunder shall
be computed on the basis of a year of 360 days and paid for the actual number
of days elapsed (including the first day but excluding the last day).
SECTION 2.13. Additional Borrowers. (a) Franklin Electric may from
time to time cause any Wholly-Owned Subsidiary to become eligible to borrower
under Section 2.01 by delivering to the Agent an Election to Participate with
respect to such Wholly-Owned Subsidiary, duly executed on behalf of such
Wholly-Owned Subsidiary and Franklin Electric. Promptly upon receiving any
such Election to Participate, the Agent shall give notice to the Banks of its
receipt thereof, whereupon such Wholly-Owned Subsidiary shall become an
Additional Borrower for all purposes of this Agreement.
(b) The eligibility of any such Additional Borrower to borrow under
Section 2.01 shall terminate when the Agent receives an Election to Terminate
with respect to such Additional Borrower, duly executed on behalf of Franklin
Electric. Promptly upon receiving any such Election to Terminate, the Agent
shall give notice to the Banks of its receipt thereof, and thereafter such
Additional Borrower shall no longer be eligible to borrow under Section 2.01.
The delivery of an Election to Terminate shall not affect any obligation of
such Additional Borrower theretofore incurred.
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ARTICLE III
CONDITIONS TO BORROWINGS
SECTION 3.01. Conditions to First Borrowing. The obligation of each
Bank to make a Loan on the occasion of the first Borrowing is subject to the
satisfaction of the conditions set forth in Section 3.02 and the following
additional conditions:
(a) receipt by the Agent from each of the parties hereto of either
(A)a duly executed counterpart of this Agreement signed by such party or (B)a
facsimile transmission stating that such party has duly executed a counterpart
of this Agreement and sent such counterpart to the Agent;
(b) receipt by the Agent of a duly executed Dollar Note and a duly
executed Foreign Currency Note of Franklin Electric for the account of each
Bank complying with the provisions of Section 2.03;
(c) receipt by the Agent of an opinion (together with any opinions
of local counsel relied on therein) of Schiff, Hardin & Xxxxx, counsel for
Franklin Electric, dated as of the Effective Date, substantially in the form
of Exhibit C hereto and covering such additional matters relating to the
transactions contemplated hereby as the Agent or any Bank may reasonably
request;
(d) receipt by the Agent of an opinion of Xxxxxx Xxxxxxx Xxxxxxxxx &
Xxxx, PLLC, special counsel for the Agent, dated as of the Effective Date,
substantially in the form of Exhibit D hereto and covering such additional
matters relating to the transactions contemplated hereby as the Agent may
reasonably request;
(e) receipt by the Agent of a certificate (the "Closing
Certificate"), dated the Effective Date, substantially in the form of Exhibit
H hereto, signed by a principal financial officer of the Franklin Electric, to
the effect that (i)no Default has occurred and is continuing on the date of
the first Borrowing and (ii)the representations and warranties of Franklin
Electric contained in Article IV are true on and as of the date of the first
Borrowing hereunder; and
(f) receipt by the Agent of all documents which the Agent or any
Bank may reasonably request relating to the existence of Franklin Electric,
the corporate authority for and the validity of this Agreement and the Notes,
and any other matters relevant hereto, all in form and substance reasonably
satisfactory to the Agent, including without limitation a certificate of
incumbency of Franklin Electric (the "Officer's Certificate"), signed by the
Secretary or an Assistant Secretary of Franklin Electric, substantially in the
form of Exhibit I hereto, certifying as to the names, true signatures and
incumbency of the officer or officers of Franklin Electric authorized to
execute and deliver the Loan Documents, and certified copies of the following
items: (i) Franklin Electric's Certificate of Incorporation, (ii) Franklin
Electric's Bylaws, (iii) a certificate of the Secretary of State of the state
of incorporation for Franklin Electric as to the good standing of Franklin
Electric in such state, and (iv) the action taken by the Board of Directors of
74
Franklin Electric authorizing Franklin Electric's execution, delivery and
performance of this Agreement, the Notes and the other Loan Documents to which
Franklin Electric is a party.
SECTION 3.02. Conditions to All Borrowings. The obligation of each
Bank to make a Loan on the occasion of each Borrowing is subject to the
satisfaction of the following conditions:
(a) receipt by the Agent of Notice of Borrowing as required by
Section 2.02;
(b) the fact that, immediately before and after such Borrowing, no
Default shall have occurred and be continuing;
(c) the fact that the representations and warranties of the
Borrowers contained in Article IV of this Agreement shall be true on and as of
the date of such Borrowing, except (i) to the extent any such representation
or warranty is stated to relate to an earlier date and (ii) for changes in the
Schedules hereto reflecting transactions after the Effective Date permitted by
this Agreement; and
(d) the fact that, immediately after such Borrowing (i) the
aggregate outstanding principal amount of the Loans of each Bank will not
exceed the amount of its Commitment and (ii) the aggregate outstanding
principal amount of the Loans will not exceed the aggregate amount of the
Commitments of all of the Banks as of such date.
Each Borrowing hereunder shall be deemed to be a representation and warranty
by the Borrowers on the date of such Borrowing as to the truth and accuracy of
the facts specified in clauses (b), (c) and (d) of this Section; provided that
such Borrowing shall not be deemed to be such a representation and warranty to
the effect set forth in Section4.04(b) as to any event, act or condition
having a Material Adverse Effect which has theretofore been disclosed in
writing by Franklin Electric to the Banks if the aggregate outstanding
principal amount of the Loans immediately after such Borrowing will not exceed
the aggregate outstanding principal amount thereof immediately before such
Borrowing.
SECTION 3.03. First Borrowing By Each Additional Borrower. The
obligation of each Bank to make a Loan on the occasion of the first Borrowing
by each Additional Borrower is subject to the satisfaction of the following
further conditions:
(a) receipt by the Agent of an Election to Participate with respect
to such Additional Borrower appropriately completed and signed;
(b) receipt by the Agent for the account of each Bank of duly
executed Notes of such Additional Borrower, dated on or before the date of
such Borrowing, complying with the provisions of Section 2.03;
(c) receipt by the Agent of one or more opinions of counsel for such
Additional Borrower, reasonably acceptable to the Agent, which taken together
cover the matters set forth in Exhibit E hereto; and
75
(d) receipt by the Agent of all documents which it may reasonably
request relating to (i) the existence of such Additional Borrower, (ii) the
corporate authority for and validity of such Additional Borrower's Election to
Participate and Notes; and (iii) the corporate authorization by Franklin
Electric's Board of Directors of the guaranty set forth in Article XI of this
Agreement with respect to such Additional Borrower, in each case in form and
substance reasonably satisfactory to the Agent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Franklin Electric represents and warrants that:
SECTION 4.01. Corporate Existence and Power. Franklin Electric is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, is duly qualified to transact
business in every jurisdiction where, by the nature of its business, such
qualification is necessary, and has all corporate powers and all governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted, except where the failure to have such licenses,
authorizations, consents and approvals could not reasonably be expected to
have a Material Adverse Effect.
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by Franklin Electric
of this Agreement, the Notes and the other Loan Documents (i)are within
Franklin Electric's corporate powers, (ii)have been duly authorized by all
necessary corporate action, (iii)require no action by or in respect of, or
filing with, any governmental body, agency or official, (iv)do not contravene,
or constitute a default under, any provision of any applicable law or
regulation or of the Certificate of Incorporation or Bylaws of Franklin
Electric or of any agreement, judgment, injunction, order, decree or other
instrument binding upon Franklin Electric or any of its Subsidiaries, and
(v)do not result in the creation or imposition of any Lien on any asset of
Franklin Electric or any of its Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement constitutes a valid
and binding agreement of Franklin Electric enforceable in accordance with its
terms, and the Notes and the other Loan Documents, when executed and delivered
in accordance with this Agreement, will constitute valid and binding
obligations of Franklin Electric enforceable in accordance with their
respective terms, provided that the enforceability hereof and thereof is
subject in each case to general principles of equity and to bankruptcy,
insolvency and similar laws affecting the enforcement of creditors' rights
generally.
SECTION 4.04. Financial Information. (a)The consolidated balance
sheet of Franklin Electric and its Consolidated Subsidiaries as of December
31, 1996, and the related consolidated statements of income, shareholders'
equity and cash flows for the Fiscal Year then ended, reported on by Deloitte
& Touche LLP, copies of which have been delivered to each of the Banks, and
the unaudited consolidated financial statements of Franklin Electric for the
interim period ended September 30, 1997, copies of which have been delivered
to each of the Banks, fairly present, in conformity with GAAP, the
76
consolidated financial position of Franklin Electric and its Consolidated
Subsidiaries as of such dates and their consolidated results of operations and
cash flows for such periods stated.
(b) Since December 31, 1996, there has been no event, act, condition
or occurrence having a Material Adverse Effect.
SECTION 4.05. Litigation. There is no action, suit or proceeding
pending, or to the knowledge of Franklin Electric threatened, against or
affecting Franklin Electric or any of its Subsidiaries before any court or
arbitrator or any governmental body, agency or official which could reasonably
be expected to have a Material Adverse Effect or which in any manner draws
into question the validity or enforceability of, or could reasonably be
expected to impair the ability of Franklin Electric to perform its obligations
under, this Agreement, the Notes or any of the other Loan Documents.
SECTION 4.06. Compliance with ERISA. (a) Franklin Electric 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 Franklin Electric nor any member of the
Controlled Group is or within the preceding 5 years ever has been obligated to
contribute to any Multiemployer Plan, or (ii) if Franklin Electric or any
member of the Controlled Group is or within the preceding 5 years has been
obligated to contribute to any Multiemployer Plan, neither Franklin Electric
nor any member of the Controlled Group has incurred any withdrawal liability
in excess of $1,000,000 with respect to any Multiemployer Plan under Title IV
of ERISA.
SECTION 4.07. Taxes. There have been filed on behalf of Franklin
Electric and its Subsidiaries all Federal and state income and other material
tax returns which are required to be filed by them and all taxes due pursuant
to such returns or pursuant to any assessment received by or on behalf of
Franklin Electric or any Subsidiary have been paid, except those being
contested in good faith by appropriate proceedings and as to which adequate
reserves have been established in accordance with GAAP. The charges, accruals
and reserves on the books of Franklin Electric and its Subsidiaries in respect
of taxes or other governmental charges are, in the opinion of Franklin
Electric, adequate. United States income tax returns of Franklin Electric and
its Subsidiaries have been examined and closed through the Fiscal Year ended
December 31, 1993.
SECTION 4.08. Subsidiaries. Each of Franklin Electric's
Subsidiaries is duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, is duly qualified to transact
business in every jurisdiction where, by the nature of its business, such
qualification is necessary, and has all powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business as
now conducted, except where the failure to have such licenses, authorizations,
consents and approvals could not reasonably be expected to have a Material
Adverse Effect. Franklin Electric has no Subsidiaries except those
Subsidiaries listed on Schedule 4.08 (as such Schedule may be updated by
Franklin Electric (without any consent or approval by the Agent or any Bank)
from time to time to delete therefrom Persons which cease to be Subsidiaries
77
of Franklin Electric after the Effective Date and to add thereto Persons which
become Subsidiaries of Franklin Electric after the Effective Date), which
accurately sets forth each such Subsidiary's complete name and jurisdiction of
organization.
SECTION 4.09. Not an Investment Company. Neither Franklin Electric
nor any of its Subsidiaries is an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
SECTION 4.10 Public Utility Holding Company Act. Neither Franklin
Electric nor any of its Subsidiaries is 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", as such terms are defined in
the Public Utility Holding Company Act of 1935, as amended.
SECTION 4.11. Ownership of Property; Liens. Each of Franklin
Electric and its Consolidated Subsidiaries has title to its properties
sufficient for the conduct of its business, and none of such property is
subject to any Lien except as permitted in Section5.07.
SECTION 4.12. No Default. Neither Franklin Electric nor any of its
Consolidated Subsidiaries is in default under or with respect to any
agreement, instrument or undertaking to which it is a party or by which it or
any of its property is bound which could reasonably be expected to have or
cause a Material Adverse Effect.
SECTION 4.13. Full Disclosure. All information heretofore furnished
by Franklin Electric to the Agent or any Bank for purposes of or in connection
with this Agreement or any transaction contemplated hereby is, and all such
information hereafter furnished by Franklin Electric to the Agent or any Bank
will be, true, accurate and complete in every material respect or based on
reasonable estimates on the date as of which such information is stated or
certified. Franklin Electric has disclosed to the Banks in writing any and
all facts which could reasonably be expected to have or cause a Material
Adverse Effect.
SECTION 4.14. Environmental Matters. (a) Neither Franklin Electric
nor any Subsidiary is subject to any Environmental Liability which could
reasonably be expected to have or cause a Material Adverse Effect, and, except
as disclosed on Schedule 4.14A-1 hereto, neither Franklin Electric nor any
Subsidiary has been designated as a potentially responsible party under CERCLA
or under any state statute similar to CERCLA. Except as disclosed on Schedule
4.14A-2 hereto, none of the Properties has been identified on any current or
proposed (i) National Priorities List under 40 C.F.R. 300, (ii) CERCLIS list
or (iii) any list arising from a state statute similar to CERCLA.
(b) No Hazardous Materials have been or are being used, produced,
manufactured, processed, treated, recycled, generated, stored, disposed of,
managed or otherwise handled at, or shipped or transported to or from the
Properties or are otherwise present at, on, in or under the Properties, or, to
the best of the knowledge of Franklin Electric, at or from any adjacent site
or facility, except for Hazardous Materials, such as cleaning solvents,
pesticides and other materials used, produced, manufactured, processed,
treated, recycled, generated, stored, disposed of, and managed or otherwise
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handled in minimal amounts in the ordinary course of business in compliance in
all material respects with all applicable Environmental Requirements.
(c) Franklin Electric, and each of its Subsidiaries and Affiliates,
has procured all Environmental Authorizations necessary for the conduct of its
business, and is in compliance with all Environmental Requirements in
connection with the operation of the Properties and Franklin Electric's, and
each of its Subsidiary's and Affiliate's, respective businesses, except where
any failure to procure any such Environmental Authorizations or any failure to
comply with any such Environmental Requirements could not, alone or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
SECTION 4.15. Compliance with Laws. Franklin Electric and each
Subsidiary is in compliance with all applicable laws, including, without
limitation, all Environmental Requirements, except where any failure to comply
with any such laws could not, alone or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
SECTION 4.16. Capital Stock. All Capital Stock, debentures, bonds,
notes and all other securities of Franklin Electric and its Subsidiaries
presently issued and outstanding are validly and properly issued in accordance
with all applicable laws, including, but not limited to, the "Blue Sky" laws
of all applicable states and the federal securities laws. The issued shares
of Capital Stock of Franklin Electric's Wholly Owned Subsidiaries are owned by
Franklin Electric free and clear of any Lien or adverse claim. At least a
majority of the issued shares of stock of each of Franklin Electric's other
Subsidiaries (other than Wholly Owned Subsidiaries) having ordinary voting
power to elect a majority of the board of directors of such Subsidiary is
owned by Franklin Electric free and clear of any Lien or adverse claim.
SECTION 4.17. Margin Stock. Neither Franklin Electric nor any of
its Subsidiaries is engaged principally, or as one of its important
activities, in the business of purchasing or carrying any Margin Stock.
Margin Stock constitutes less than 25% of those assets of Franklin Electric
and its Subsidiaries which are subject to any limitation on sale, pledge or
other restriction hereunder.
SECTION 4.18. Insolvency. After giving effect to the execution and
delivery of the Loan Documents and the making of the Loans under this
Agreement, Franklin Electric will not be "insolvent," within the meaning of
such term as used in O.C.G.A. 18-2-22 or as defined in 101 of Title 11 of
the United States Code or Section 2 of the Uniform Fraudulent Transfer Act, or
any other applicable state law pertaining to fraudulent transfers, as each may
be amended from time to time, or be unable to pay its debts generally as such
debts become due, or have an unreasonably small capital to engage in any
business or transaction, whether current or contemplated.
ARTICLE V
COVENANTS
Franklin Electric agrees that, so long as any Bank has any Commitment
hereunder or any amount payable under any Note remains unpaid:
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SECTION 5.01. Information. Franklin Electric will deliver to each
of the Banks:
(a) as soon as available and in any event within 90 days after the
end of each Fiscal Year, a consolidated balance sheet of Franklin Electric and
its Consolidated Subsidiaries as of the end of such Fiscal Year and the
related consolidated statements of income, shareholders' equity and cash flows
for such Fiscal Year, setting forth in each case in comparative form the
figures for the previous fiscal year, all certified by Deloitte & Touche LLP
or other independent public accountants of nationally recognized standing,
with such certification to be free of exceptions and qualifications not
acceptable to the Required Banks;
(b) as soon as available and in any event within 60 days after the
end of each of the first 3 Fiscal Quarters of each Fiscal Year, a consolidated
balance sheet of Franklin Electric and its Consolidated Subsidiaries as of the
end of such Fiscal Quarter and the related statement of income and statement
of cash flows for such Fiscal Quarter and for the portion of the Fiscal Year
ended at the end of such Fiscal Quarter, setting forth in each case in
comparative form the figures for the corresponding Fiscal Quarter and the
corresponding portion of the previous Fiscal Year, all certified (subject to
normal year-end and audit adjustments) as to fairness of presentation, GAAP
and consistency by the chief financial officer or the chief accounting officer
of Franklin Electric;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate,
substantially in the form of Exhibit J (a "Compliance Certificate"), of the
chief financial officer or the chief accounting officer of Franklin Electric
(i) setting forth in reasonable detail the calculations required to establish
whether Franklin Electric was in compliance with the requirements of Sections
5.03, 5.04, 5.06, 5.07 and 5.08 on the date of such financial statements and
(ii) stating whether any Default exists on the date of such certificate and,
if any Default then exists, setting forth the details thereof and the action
which Franklin Electric is taking or proposes to take with respect thereto;
(d) within 5 Domestic Business Days after any Responsible Officer
becomes aware of the occurrence of any Default, a certificate of the chief
financial officer or the chief accounting officer of Franklin Electric setting
forth the details thereof and the action which Franklin Electric is taking or
proposes to take with respect thereto;
(e) promptly upon the mailing thereof to the shareholders of
Franklin Electric generally, copies of all financial statements, reports and
proxy statements so mailed;
(f) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and annual or quarterly reports which Franklin
Electric shall have filed with the Securities and Exchange Commission;
(g) if and when Franklin Electric or, to the knowledge of a
Responsible Officer, any member of the Controlled Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined in
Section4043 of ERISA) with respect to any Plan which might constitute grounds
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for a termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii)receives notice of complete or partial
withdrawal liability under Title IV of ERISA, a copy of such notice; or
(iii)receives notice from the PBGC under Title IV of ERISA of an intent to
terminate or appoint a trustee to administer any Plan, a copy of such notice;
(h) promptly after a Responsible Officer knows of the commencement
thereof, notice of any litigation, dispute or proceeding involving a claim
against Franklin Electric and/or any Subsidiary for $3,000,000 or more in
excess of amounts covered in full by applicable insurance; and
(i) from time to time such additional information regarding the
financial position or business of Franklin Electric and its Subsidiaries as
the Agent, at the request of any Bank, may reasonably request.
SECTION 5.02. Inspection of Property, Books and Records. Franklin
Electric will (i) keep, and will cause each Subsidiary to keep, proper books
of record and account in which full, true and correct entries in conformity
with GAAP (where applicable) shall be made of all dealings and transactions in
relation to its business and activities; and (ii) permit, and will cause each
Subsidiary to permit, representatives of any Bank at such Bank's expense prior
to the occurrence of an Event of Default and at the Borrower's expense after
the occurrence of an Event of Default to visit and inspect any of their
respective properties, to examine and make abstracts from any of their
respective books and records and to discuss their respective affairs, finances
and accounts with their respective officers and independent public
accountants; provided that in any such discussions with the independent public
accountants of Franklin Electric, Franklin Electric shall be afforded the
opportunity to have one or more of its officers present at such discussions.
Franklin Electric agrees to cooperate and assist in such visits and
inspections, in each case upon reasonable prior notice and at such times
during normal business hours and as often as may reasonably be desired.
SECTION 5.03. Debt to EBIDTA. At the end of each Fiscal Quarter,
commencing with the Fiscal Quarter ending September 30, 1997, the ratio of
Debt as at the end of such Fiscal Quarter to EBITDA for the period of 4
consecutive Fiscal Quarters then ended shall not exceed 2.5 to 1.0.
SECTION 5.04. Current Obligation Coverage. At the end of each
Fiscal Quarter, commencing with the Fiscal Quarter ending September 30, 1997,
the ratio of Income Available for Fixed Charges for the period of 4
consecutive Fiscal Quarters then ended to Current Obligations for the period
of 4 consecutive Fiscal Quarters then ended, shall not have been less than 2.5
to 1.0.
SECTION 5.05. [Reserved]
SECTION 5.06. Loans or Advances. Neither Franklin Electric nor any
of its Subsidiaries shall make loans or advances to any Person except: (i)
loans or advances to employees made in the ordinary course of business and
consistently with practices existing on the Effective Date; (ii)deposits
required by government agencies or public utilities; (iii)loans or advances to
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any Subsidiary Guarantor; (iv) loans or advances to any Subsidiary (other than
any Subsidiary Guarantor) to the extent (A) the aggregate outstanding amount
of all loans and advances to such Subsidiary does not exceed $10,000,000 and
(B) the aggregate outstanding amount of all loans and advances to all
Subsidiaries (other than any Subsidiary Guarantor) does not exceed
$30,000,000; (v) loans or advances to senior management of Franklin Electric
pursuant to Franklin Electric's stock purchase plan in an aggregate
outstanding amount not to exceed $5,000,000; (vi) loans or advances to the
existing employee stock ownership plan of Franklin Electric and any new
employee stock ownership plan of Franklin Electric which is approved by
Franklin Electric's shareholders; and (vii) loans or advances permitted by
Section 5.07; provided that after giving effect to the making of any loans,
advances or deposits permitted by clause (i), (ii), (iii), (iv), (v), (vi) or
(vii) of this Section, no Default shall have occurred and be continuing.
SECTION 5.07. Investments. Neither Franklin Electric nor any of its
Subsidiaries shall make Investments in any Person except as permitted by
Section 5.10, and except Investments (i) indirect obligations of or guaranteed
by the United States Government or any state of the United States or any
agency of either thereof maturing within 2 years, (ii) in certificates of
deposit issued by, and time deposits with, a commercial bank with a capital of
$100,000,000 or more or whose credit is reasonably satisfactory to the Agent,
(iii) in commercial paper rated A or better by Standard & Poor's Ratings
Group, a division of XxXxxx-Xxxx, Inc., or the equivalent thereof by any
nationally recognized rating agency, (iv) in the form of loans and advances
permitted by Section 5.06, (v) in tender bonds the payment of the principal of
and interest on which is fully supported by a letter of credit issued by a
United States bank whose long-term certificates of deposit are rated at least
A or better by Standard & Poor's Ratings Group, a division of XxXxxx-Xxxx,
Inc., or the equivalent thereof by any nationally recognized rating agency,
(vi) in any Subsidiary or any corporation or other Person which immediately
after such Investment is made will be a Subsidiary, (vii) consisting of stock,
obligations or securities received in settlement of debts created in the
ordinary course of business owing to Franklin Electric or any Subsidiary, to
the extent the aggregate amount of all such Investments described in this
clause (vii) made after the Effective Date does not exceed $1,000,000, (viii)
consisting of demand deposit accounts, (ix) consisting of repurchase
agreements with respect to Investments described in clauses (ii) and (iii)
above, (x) consisting of money market funds which invest exclusively in
Investments described in clauses (i), (ii), (iii) and (ix) above, and (xi) not
otherwise permitted by the foregoing clauses (i) through (x) in an aggregate
amount not to exceed an amount equal to 25% of Consolidated Tangible Net
Worth.
SECTION 5.08. Negative Pledge. Neither Franklin Electric nor any
Consolidated Subsidiary will create, assume or suffer to exist any Lien on any
asset now owned or hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement securing
Indebtedness outstanding on the date of this Agreement in an aggregate
principal amount not exceeding $0;
(b) any Lien existing on any asset of any corporation or other
Person at the time such corporation or other Person becomes a Consolidated
Subsidiary and not created in contemplation of such event;
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(c) any Lien on any asset securing Indebtedness incurred or assumed
for the purpose of financing all or any part of the cost of acquiring or
constructing such asset, provided that such Lien attaches to such asset
concurrently with or within 18 months after the acquisition or completion of
construction thereof;
(d) any Lien on any asset of any corporation or other Person
existing at the time such corporation or other Person is merged or
consolidated with or into Franklin Electric or a Consolidated Subsidiary and
not created in contemplation of such event;
(e) any Lien existing on any asset prior to the acquisition thereof
by Franklin Electric or a Consolidated Subsidiary and not created in
contemplation of such acquisition;
(f) Liens securing Indebtedness owing by any Subsidiary to Franklin
Electric or another Subsidiary;
(g) any Lien arising out of the refinancing, extension, renewal or
refunding of any Indebtedness secured by any Lien permitted by any of the
foregoing clauses of this Section, provided that (i) such Indebtedness is not
secured by any additional assets, and (ii) the amount of such Indebtedness
secured by any such Lien is not increased;
(h) Liens incidental to the conduct of its business or the ownership
of its assets which (i) do not secure Indebtedness and (ii) do not in the
aggregate materially detract from the value of its assets or materially impair
the use thereof in the operation of its business;
(i) any Lien on Margin Stock; and
(j) Liens not otherwise permitted by the foregoing clauses of this
Section securing Indebtedness (other than indebtedness represented by the
Notes) in an aggregate principal amount at any time outstanding not to exceed
15% of Consolidated Tangible Net Worth.
SECTION 5.09. Maintenance of Existence. Franklin Electric shall,
and shall cause each Material Subsidiary to, maintain its corporate existence
(except as otherwise permitted by Section 5.10) and carry on its business in
substantially the same manner and in substantially the same fields as such
business is now carried on and maintained.
SECTION 5.10. Consolidations, Mergers and Sales of Assets. Franklin
Electric will not, nor will it permit any Subsidiary to, consolidate or merge
with or into, or sell, lease or otherwise transfer all or any substantial part
of its assets to, any other Person, provided that (a)Franklin Electric may
merge with another Person if (i) such Person was organized under the laws of
the United States of America or one of its states, (ii)Franklin Electric is
the corporation surviving such merger and (iii) immediately after giving
effect to such merger, no Default shall have occurred and be continuing,
(b)Subsidiaries of Franklin Electric may merge with one another or with
Franklin Electric, and (c) the foregoing limitation on the sale, lease or
other transfer of assets shall not prohibit (1) any sale of accounts
receivable of Franklin Electric or any Subsidiary, (2) any sale and leaseback
of any Property owned by Franklin Electric or any of its Subsidiaries, (3) any
sale, lease or other transfer of assets made by Franklin Electric or any
83
Subsidiary in the ordinary course of its business, or (4) any sale, lease or
other transfer of assets outside of the ordinary course of business so long as
the aggregate amount of assets sold, leased or otherwise transferred outside
of the ordinary course of business in the then most recent twelve (12) month
period which were not otherwise permitted by this Section 5.10 to be sold,
leased or otherwise transferred together with the amount of any assets then
proposed to be sold, leased or otherwise transferred outside of the ordinary
course of business which are not otherwise permitted by this Section 5.10 to
be sold, leased or otherwise transferred (A) does not constitute more than
fifteen percent (15%) of Consolidated Total Assets determined as of the end of
the most recently ended Fiscal Year and (B) has not contributed more than
fifteen percent (15%) of Consolidated Operating Profits for the most recently
ended Fiscal Year.
SECTION 5.11. Use of Proceeds. No portion of the proceeds of the
Loans will be used by Franklin Electric or any Subsidiary (i) in a manner
which would violate or cause any Bank to be in violation of Regulation G, T, U
or X of the Board of Governors of the Federal Reserve System, (ii)for any
purpose in violation of any applicable law or regulation, or (iii) to finance
the acquisition of a controlling interest in any Person if the board of
directors (or the functional equivalent thereof) of such Person has not
recommended or approved such acquisition.
SECTION 5.12. Compliance with Laws; Payment of Taxes. Franklin
Electric will, and will cause each of its Subsidiaries and (as to ERISA and
regulations and similar requirements of the PBGC only) each member of the
Controlled Group to, comply in all material respects with applicable laws
(including but not limited to ERISA), regulations and similar requirements of
governmental authorities (including but not limited to PBGC), except where the
necessity of such compliance is being contested in good faith through
appropriate proceedings diligently pursued. Franklin Electric will, and will
cause each of its Subsidiaries to, pay promptly when due all taxes,
assessments, governmental charges, claims for labor, supplies, rent and other
obligations which, if unpaid, might become a lien against the property of
Franklin Electric or any Subsidiary not permitted by Section 5.08, except
liabilities being contested in good faith by appropriate proceedings
diligently pursued and against which, if requested by the Agent, Franklin
Electric shall have set up reserves in accordance with GAAP.
SECTION 5.13. Insurance. Franklin Electric will maintain, and will
cause each of its Subsidiaries to maintain (either in the name of Franklin
Electric or in such Subsidiary's own name), with financially sound and
reputable insurance companies, insurance on all its Property in at least such
amounts and against at least such risks as are usually insured against in the
same general area by companies of established repute engaged in the same or
similar business; provided that Franklin Electric may satisfy the requirements
of this Section through adequate self-insurance programs.
SECTION 5.14. Change in Fiscal Year. Franklin Electric will not
change its Fiscal Year without the consent of the Required Banks.
SECTION 5.15. Maintenance of Property. Franklin Electric shall, and
shall cause each Subsidiary to, maintain its properties and assets in all
material respects in good condition, repair and working order, ordinary wear
and tear excepted.
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SECTION 5.16. Environmental Matters. (a) Franklin Electric shall
furnish to the Banks and the Agent prompt written notice of all material
Environmental Liabilities, pending or, to the best knowledge of any
Responsible Officer, threatened material Environmental Proceedings, material
Environmental Notices, Environmental Judgments and Orders, and material
Environmental Releases at, on, in, under or in any way affecting the
Properties or any adjacent property.
(b) Franklin Electric and its Subsidiaries will not, and will not
permit any Third Party to, use, produce, manufacture, process, treat, recycle,
generate, store, dispose of, manage at, or otherwise handle or ship or
transport to or from the Properties any Hazardous Materials except for
Hazardous Materials such as cleaning solvents, pesticides and other similar
materials used, produced, manufactured, processed, treated, recycled,
generated, stored, disposed, managed or otherwise handled in minimal amounts
in the ordinary course of business in compliance in all material respects with
all applicable Environmental Requirements.
(c) Franklin Electric agrees that upon the occurrence of a material
Environmental Release at or on any of the Properties it will act immediately
to investigate the extent of, and to take appropriate remedial action to
eliminate, such Environmental Release, whether or not ordered or otherwise
directed to do so by any Environmental Authority.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following
events ("Events of Default") shall have occurred and be continuing:
(a) any Borrower shall fail to pay when due any principal of any Loan
or shall fail to pay any interest on any Loan within 10 Domestic Business Days
after such interest shall become due, or shall fail to pay any fee or other
amount payable hereunder within 10 Domestic Business Days after such fee or
other amount becomes due; or
(b) Franklin Electric shall fail to observe or perform any covenant
contained in Sections 5.02(ii), 5.03 to 5.11, inclusive, or Section 5.14; or
(c) Franklin Electric shall fail to observe or perform any covenant
or agreement contained or incorporated by reference in this Agreement (other
than those covered by clause (a) or (b) above) for thirty days after the
earlier of (i) the first day on which any Responsible Officer has knowledge
of such failure or (ii) written notice thereof has been given to Franklin
Electric by the Agent at the request of any Bank; or
(d) any representation, warranty, certification or statement made or
deemed made by any Borrower in this Agreement or by any Subsidiary Guarantor
in any Subsidiary Guaranty to which such Subsidiary Guarantor is a party or in
any certificate, financial statement (other than any projections made in such
financial statement) or other document delivered pursuant to this Agreement or
85
any Subsidiary Guaranty shall prove to have been incorrect or misleading in
any material respect when made (or deemed made); or
(e) Franklin Electric or any Subsidiary shall fail to make any
payment in respect of Indebtedness outstanding in an aggregate amount
exceeding $3,000,000 (other than the Notes) when due or within any applicable
grace period; or
(f) any event or condition shall occur which results in the
acceleration of the maturity of Indebtedness outstanding in an aggregate
amount exceeding $3,000,000 of Franklin Electric or any Subsidiary or the
mandatory prepayment or purchase of such Indebtedness by Franklin Electric (or
its designee) or such Subsidiary (or its designee) prior to the scheduled
maturity thereof, or enables the holders of such Indebtedness or any Person
acting on such holders' behalf to accelerate the maturity thereof or require
the mandatory prepayment or purchase thereof prior to the scheduled maturity
thereof, without regard to whether such holders or other Person shall have
exercised or waived their right to do so; or
(g) Franklin Electric, any other Borrower or any Subsidiary shall
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or shall
consent to any such relief or to the appointment of or taking possession by
any such official in an involuntary case or other proceeding commenced against
it, or shall make a general assignment for the benefit of creditors, or shall
fail generally, or shall admit in writing its inability, to pay its debts as
they become due, or shall take any corporate action to authorize any of the
foregoing; or
(h) an involuntary case or other proceeding shall be commenced
against Franklin Electric, any other Borrower or any Subsidiary seeking
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 60 days; or an order for relief shall
be entered against Franklin Electric, any other Borrower or any Subsidiary
under the federal bankruptcy laws as now or hereafter in effect; or
(i) Franklin Electric 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 Franklin
Electric, any member of the Controlled Group, any plan administrator or any
combination of the foregoing which results in liability of Franklin Electric
or any member of the Controlled Group of greater than $2,000,000; or the PBGC
shall institute proceedings under Title IV 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
Section515 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
86
Plan or Plans must be terminated; or Franklin Electric 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
(j) one or more judgments or orders for the payment of money in an
aggregate amount in excess of $2,000,000 shall be rendered against Franklin
Electric or any Subsidiary and such judgment or order shall continue
unsatisfied, unbonded and unstayed for a period of 60 days; or
(k) (i) any Person or two or more Persons acting in concert shall
have acquired beneficial ownership (within the meaning of Rule13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934)
of 35% or more of the outstanding shares of the voting stock of Franklin
Electric; or (ii) except as may occur solely as a result of natural disasters
or other accidental causes, as of any date a majority of the Board of
Directors of Franklin Electric consists of individuals who were not either (A)
directors of Franklin Electric as of the corresponding date of the previous
year, (B)selected or nominated to become directors by the Board of Directors
of Franklin Electric of which a majority consisted of individuals described in
clause (A), or (C)selected or nominated to become directors by the Board of
Directors of Franklin Electric of which a majority consisted of individuals
described in clause (A) and individuals described in clause (B); or
(l) any provision of Article XI shall cease to be in full force and
effect with respect to Franklin Electric, or Franklin Electric or any Person
acting on behalf of Franklin Electric shall so assert in writing; or
(m) any material provision of any Subsidiary Guaranty shall cease to
be in full force and effect with respect to the Subsidiary Guarantor party to
such Subsidiary Guaranty, or such Subsidiary Guarantor or any Person acting on
behalf of such Subsidiary Guarantor shall so assert in writing;
then, and in every such event, the Agent shall (i)if requested by the Required
Banks, by notice to Franklin Electric terminate the Commitments and they shall
thereupon terminate, and (ii) if requested by the Required Banks, by notice to
Franklin Electric declare the Notes (together with accrued interest thereon)
and all other amounts payable hereunder and under the other Loan Documents to
be, and the Notes (together will all accrued interest thereon) and all other
amounts payable hereunder and under the other Loan Documents shall thereupon
become, immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by Franklin Electric;
provided that if any Event of Default specified in clause (g) or (h) above
occurs with respect to Franklin Electric, without any notice to Franklin
Electric or any other act by the Agent or the Banks, the Commitments shall
thereupon automatically terminate and the Notes (together with accrued
interest thereon) and all other amounts payable hereunder and under the other
Loan Documents shall automatically become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by Franklin Electric. Notwithstanding the foregoing, the Agent
shall have available to it all other remedies at law or equity, and shall
exercise any one or all of them at the request of the Required Banks.
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SECTION 6.02. Notice of Default. The Agent shall give notice to
Franklin Electric of any Default under Section6.01(c) promptly upon being
requested to do so by any Bank and shall thereupon notify all the Banks
thereof.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment, Powers and Immunities. Each Bank hereby
irrevocably appoints and authorizes the Agent to act as its agent hereunder
and under the other Loan Documents with such powers as are specifically
delegated to the Agent by the terms hereof and thereof, together with such
other powers as are reasonably incidental thereto. The Agent: (a) shall have
no duties or responsibilities except as expressly set forth in this Agreement
and the other Loan Documents, and shall not by reason of this Agreement or any
other Loan Document be a trustee for any Bank; (b) shall not be responsible to
the Banks for any recitals, statements, representations or warranties
contained in this Agreement or any other Loan Document, or in any certificate
or other document referred to or provided for in, or received by any Bank
under, this Agreement or any other Loan Document, or for the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document or any other document referred to or provided for
herein or therein or for any failure by Franklin Electric or any other
Borrower to perform any of its obligations hereunder or thereunder; (c) shall
not be required to initiate or conduct any litigation or collection
proceedings hereunder or under any other Loan Document except to the extent
requested by the Required Banks, and then only on terms and conditions
satisfactory to the Agent, and (d) shall not be responsible for any action
taken or omitted to be taken by it hereunder or under any other Loan Document
or any other document or instrument referred to or provided for herein or
therein or in connection herewith or therewith, except for its own gross
negligence or willful misconduct. The Agent may employ agents and attorneys-
in-fact and shall not be responsible for the negligence or misconduct of any
such agents or attorneys-in-fact selected by it with reasonable care. The
provisions of this Article VII are solely for the benefit of the Agent and the
Banks, and the Borrowers shall not have any rights as a third party
beneficiary of any of the provisions hereof. In performing its functions and
duties under this Agreement and under the other Loan Documents, the Agent
shall act solely as agent of the Banks and does not assume and shall not be
deemed to have assumed any obligation towards or relationship of agency or
trust with or for the Borrowers. The duties of the Agent shall be ministerial
and administrative in nature, and the Agent shall not have by reason of this
Agreement or any other Loan Document a fiduciary relationship in respect of
any Bank.
SECTION 7.02. Reliance by Agent. The Agent shall be entitled to
rely upon any certification, notice or other communication (including any
thereof by telephone, telefax, telegram or cable) believed by it to be genuine
and correct and to have been signed or sent by or on behalf of the proper
Person or Persons, and upon advice and statements of legal counsel,
independent accountants or other experts selected by the Agent. As to any
matters not expressly provided for by this Agreement or any other Loan
Document, the Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder and thereunder in accordance with
instructions signed by the Required Banks, and such instructions of the
Required Banks in any action taken or failure to act pursuant thereto shall be
binding on all of the Banks.
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SECTION 7.03. Defaults. The Agent shall not be deemed to have
knowledge of the occurrence of a Default or an Event of Default (other than
the non-payment of principal of or interest on the Loans) unless the Agent has
received notice from a Bank or Franklin Electric specifying such Default or
Event of Default and stating that such notice is a "Notice of Default". In
the event that the Agent receives such a notice of the occurrence of a Default
or an Event of Default, the Agent shall give prompt notice thereof to the
Banks. The Agent shall give each Bank prompt notice of each non-payment of
principal of or interest on the Loans, whether or not it has received any
notice of the occurrence of such non-payment. The Agent shall (subject to
Section 9.05) take such action with respect to such Default or Event of
Default as shall be directed by the Required Banks, provided that, unless and
until the Agent shall have received such directions, the Agent may (but shall
not be obligated to) take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable in
the best interests of the Banks.
SECTION 7.04. Rights of Agent as a Bank. With respect to the Loans
made by it, Wachovia in its capacity as a Bank hereunder shall have the same
rights and powers hereunder as any other Bank and may exercise the same as
though it were not acting as the Agent, and the term "Bank" or "Banks" shall,
unless the context otherwise indicates, include Wachovia in its individual
capacity. The Agent may (without having to account therefor to any Bank)
accept deposits from, lend money to and generally engage in any kind of
banking, trust or other business with any Borrower (and any of its Affiliates)
as if it were not acting as the Agent, and the Agent may accept fees and other
consideration from any Borrower (in addition to any agency fees and
arrangement fees heretofore agreed to between Franklin Electric and the Agent)
for services in connection with this Agreement or any other Loan Document or
otherwise without having to account for the same to the Banks.
SECTION 7.05. Indemnification. Each Bank severally agrees to
indemnify the Agent, to the extent the Agent shall not have been reimbursed by
the Borrowers, ratably in accordance with its Commitment, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including, without limitation, counsel fees and
disbursements) or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Agent in any way relating to
or arising out of this Agreement or any other Loan Document or any other
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby (excluding, unless an Event of Default has
occurred and is continuing, the normal administrative costs and expenses
incident to the performance of its agency duties hereunder) or the enforcement
of any of the terms hereof or thereof or any such other documents; provided,
however, that no Bank shall be liable for any of the foregoing to the extent
they arise from the gross negligence or willful misconduct of the Agent. If
any indemnity furnished to the Agent for any purpose shall, in the opinion of
the Agent, be insufficient or become impaired, the Agent may call for
additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished.
SECTION 7.06. CONSEQUENTIAL DAMAGES. THE AGENT SHALL NOT BE
RESPONSIBLE OR LIABLE TO ANY BANK, ANY BORROWER OR ANY OTHER PERSON OR ENTITY
FOR ANY EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF
THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
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SECTION 7.07. Payee of Note Treated as Owner. The Agent may deem
and treat the payee of any Note as the owner thereof for all purposes hereof
unless and until a written notice of the assignment or transfer thereof shall
have been filed with the Agent and the provisions of Section 9.07(c) have been
satisfied. Any requests, authority or consent of any Person who at the time
of making such request or giving such authority or consent is the holder of
any Note shall be conclusive and binding on any subsequent holder, transferee
or assignee of that Note or of any Note or Notes issued in exchange therefor
or replacement thereof.
SECTION 7.08. Non-Reliance on Agent and Other Banks. Each Bank
agrees that it has, independently and without reliance on the Agent or any
other Bank, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrowers and decision to
enter into this Agreement and that it will, independently and without reliance
upon the Agent or any other Bank, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own analysis
and decisions in taking or not taking action under this Agreement or any of
the other Loan Documents. The Agent shall not be required to keep itself (or
any Bank) informed as to the performance or observance by the Borrowers of
this Agreement or any of the other Loan Documents or any other document
referred to or provided for herein or therein or to inspect the properties or
books of the Borrowers or any other Person. Except for notices, reports and
other documents and information expressly required to be furnished to the
Banks by the Agent hereunder or under the other Loan Documents, the Agent
shall not have any duty or responsibility to provide any Bank with any credit
or other information concerning the affairs, financial condition or business
of the Borrowers or any other Person (or any of their Affiliates) which may
come into the possession of the Agent.
SECTION 7.09. Failure to Act. Except for action expressly required
of the Agent hereunder or under the other Loan Documents, the Agent shall in
all cases be fully justified in failing or refusing to act hereunder and
thereunder unless it shall receive further assurances to its satisfaction by
the Banks of their indemnification obligations under Section 7.05 against any
and all liability and expense which may be incurred by the Agent by reason of
taking, continuing to take, or failing to take any such action.
SECTION 7.10. Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent
may resign at any time by giving notice thereof to the Banks and Franklin
Electric and the Agent may be removed at any time with or without cause by the
Required Banks. Upon any such resignation or removal, the Required Banks
shall have the right to appoint a successor Agent (subject to the approval of
Franklin Electric if such successor Agent is not a Bank). If no successor
Agent shall have been so appointed by the Required Banks and shall have
accepted such appointment within 30 days after the retiring Agent's notice of
resignation or the Required Banks' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Banks, appoint a successor Agent (subject
to the approval of Franklin Electric if such successor Agent is not a Bank).
Any successor Agent shall be a bank, which has a combined capital and surplus
of at least $500,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed
to and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation or removal
hereunder as Agent, the provisions of this Article VII shall continue in
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effect for its benefit in respect of any actions taken or omitted to be taken
by it while it was acting as the Agent hereunder.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES; COMPENSATION
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period:
(a) the Agent determines that deposits in Dollars (in the applicable
amounts) are not being offered in the relevant market for such Interest
Period, or
(b) the Required Banks advise the Agent that the London Interbank
Offered Rate or IBOR, as the case may be, as determined by the Agent will not
adequately and fairly reflect the cost to such Banks of funding the relevant
type of Fixed Rate Loans for such Interest Period,
the Agent shall forthwith give notice thereof to Franklin Electric and the
Banks, whereupon until the Agent notifies Franklin Electric that the
circumstances giving rise to such suspension no longer exist, the obligations
of the Banks to make the type of Fixed Rate Loans specified in such notice
shall be suspended. Unless the relevant Borrower notifies the Agent at least
2 Domestic Business Days before the date of any Borrowing of such type of
Fixed Rate Loans for which a Notice of Borrowing has previously been given
that it elects not to borrow on such date, such Borrowing shall instead be
made as a Base Rate Borrowing.
SECTION 8.02. Illegality. If, after the date hereof, the adoption
of any applicable law, rule or regulation, or any change in any existing or
future law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof
(any such authority, bank or agency being referred to as an "Authority" and
any such event being referred to as a "Change of Law"), or compliance by any
Bank (or its Lending Office) with any request or directive (whether or not
having the force of law) of any Authority shall make it unlawful or impossible
for any Bank (or its Lending Office) to make, maintain or fund its Euro-Dollar
Loans or Foreign Currency Loans and such Bank shall so notify the Agent, the
Agent shall forthwith give notice thereof to the other Banks and Franklin
Electric, whereupon until such Bank notifies Franklin Electric and the Agent
that the circumstances giving rise to such suspension no longer exist, the
obligation of such Bank to make Euro-Dollar Loans or Foreign Currency Loans,
as the case may be, shall be suspended. Before giving any notice to the Agent
pursuant to this Section, such Bank shall designate a different Lending Office
if such designation will avoid the need for giving such notice and will not,
in the judgment of such Bank, be otherwise disadvantageous to such Bank. If
such Bank shall determine that it may not lawfully continue to maintain and
fund any of its outstanding Euro-Dollar Loans or Foreign Currency Loans, as
the case may be, to maturity and shall so specify in such notice, the
relevant Borrower shall immediately prepay in full the then outstanding
principal amount of each Euro-Dollar Loan or Foreign Currency Loan, as the
case may be, of such Bank, together with accrued interest thereon and any
amount due such Bank pursuant to Section 8.05(a). Concurrently with prepaying
each such Euro-Dollar Loan or Foreign Currency Loan, as the case may be, such
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Borrower shall borrow a Base Rate Loan in an equal principal amount from such
Bank (on which interest and principal shall be payable contemporaneously with
the related Euro-Dollar Loans or Foreign Currency Loans, as the case may be,
of the other Banks), and such Bank shall make such a Base Rate Loan.
SECTION 8.03. Increased Cost and Reduced Return. (a) If after the
date hereof, a Change of Law or compliance by any Bank (or its Lending Office)
with any request or directive made or issued after the date hereof (whether or
not having the force of law) of any Authority:
(i) shall subject any Bank (or its Lending Office) to any tax, duty
or other charge with respect to its Fixed Rate Loans, its Notes or its
obligation to make Fixed Rate Loans, or shall change the basis of taxation of
payments to any Bank (or its Lending Office) of the principal of or interest
on its Fixed Rate Loans or any other amounts due under this Agreement in
respect of its Fixed Rate Loans or its obligation to make Fixed Rate Loans
(except for (A) taxes imposed on or measured by the income of such Bank and
franchise taxes imposed on such Bank by the jurisdiction under the laws of
which such Bank is organized or any political subdivision thereof (including
for the purpose of this clause (A) with respect to any Bank organized under
the laws of one of the states of the United States, United States federal
income taxes) and (B) taxes imposed on the income of such Bank and franchise
taxes imposed on such Bank by the jurisdiction of such Bank's applicable
Lending Office or any political subdivision thereof); or
(ii) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve System,
but excluding (A) with respect to any Foreign Currency Loan any such
requirement included in an applicable Adjusted IBOR Rate and (B) with respect
to any Euro-Dollar Loan any such requirement included in an applicable Euro-
Dollar Reserve Percentage) against assets of, deposits with or for the account
of, or credit extended by, any Bank (or its Lending Office); or
(iii) shall impose on any Bank (or its Lending Office) or on the
London interbank market any other condition affecting its Fixed Rate Loans,
its Notes or its obligation to make Fixed Rate Loans;
and the result of any of the foregoing is to increase the cost to such Bank
(or its Lending Office) of making or maintaining any Fixed Rate Loan, or to
reduce the amount of any sum received or receivable by such Bank (or its
Lending Office) under this Agreement or under its Notes with respect thereto,
by an amount deemed by such Bank to be material, then, within 15days after
demand by such Bank (with a copy to the Agent), the relevant Borrower shall
pay to such Bank such additional amount or amounts as will compensate such
Bank for such increased cost or reduction.
(b) If any Bank shall have determined that the adoption after the
date hereof of any applicable law, rule or regulation regarding capital
adequacy, or any change after the date hereof in any existing or future law,
rule or regulation, or any change after the date hereof in the interpretation
or administration thereof, or compliance by any Bank (or its Lending Office)
with any request or directive made after the date hereof regarding capital
adequacy (whether or not having the force of law) of any Authority, has or
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would have the effect of reducing the rate of return on such Bank's capital as
a consequence of its obligations hereunder to a level below that which such
Bank could have achieved but for such adoption, change or compliance (taking
into consideration such Bank's policies with respect to capital adequacy) by
an amount deemed by such Bank to be material, then from time to time, within
15 days after demand by such Bank, Franklin Electric shall pay to such Bank
such additional amount or amounts as will compensate such Bank for such
reduction.
(c) Each Bank will promptly notify Franklin Electric and the Agent of
any event of which it has knowledge, occurring after the date hereof, which
will entitle such Bank to compensation pursuant to this Section and will
designate a different Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the judgment
of such Bank, be otherwise disadvantageous to such Bank. Notice by any Bank
hereunder will be deemed to have been delivered promptly if given within 90
days after such Bank shall have determined it is entitled to compensation as a
result of the occurrence of any such event. Franklin Electric shall not be
liable for compensation pursuant to this Section 8.03 for which prompt notice
has not been given. A certificate of any Bank claiming compensation under
this Section and setting forth the additional amount or amounts to be paid to
it hereunder shall be conclusive in the absence of manifest error. In
determining such amount, such Bank may use any reasonable averaging and
attribution methods.
(d) The provisions of this Section 8.03 shall be applicable with
respect to any Transferee, and any calculations required by such provisions
shall be made based upon the circumstances of such Transferee.
SECTION 8.04. Base Rate Loans or Other Fixed Rate Loans Substituted
for Affected Fixed Rate Loans (a) If (i)the obligation of any Bank to make or
maintain any type of Fixed Rate Loans has been suspended pursuant to Section
8.02 or (ii) any Bank has demanded compensation under Section 8.03, and
Franklin Electric shall, by at least 5 Euro-Dollar Business Days' or Foreign
Currency Business Days', as applicable, prior notice to such Bank through the
Agent, have elected that the provisions of this Section shall apply to such
Bank, then, unless and until such Bank notifies Franklin Electric that the
circumstances giving rise to such suspension or demand for compensation no
longer apply:
(A) all Loans which would otherwise be made by such Bank as Foreign
Currency Loans or Euro-Dollar Loans, as the case may be, shall be made instead
either (A) as Base Rate Loans, (B) if such suspension or demand for
compensation relates to Euro-Dollar Loans, but not Foreign Currency Loans, as
Foreign Currency Loans, or (C) if such demand for compensation relates to
Foreign Currency Loans, but not Euro-Dollar Loans, as Euro-Dollar Loans, as
Franklin Electric may elect in the notice to such Bank through the Agent
referred to hereinabove (in all cases interest and principal on such Loans
shall be payable contemporaneously with the related Fixed Rate Loans of the
other Banks), and
(B) after each of its Foreign Currency Loans or Euro-Dollar Loans,
as the case may be, has been repaid, all payments of principal which would
otherwise be applied to repay such Fixed Rate Loans shall be applied to repay
its Base Rate Loans instead.
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In the event that Franklin Electric shall elect that the provisions of this
Section shall apply to any Bank, Franklin Electric shall remain liable for,
and shall pay to such Bank as provided herein, all amounts due such Bank under
Section 8.03 in respect of the period preceding the date of conversion of such
Bank's Loans resulting from Franklin Electric's election.
(b) If any Bank (the Requesting Bank) gives any notice to Franklin
Electric pursuant to Section 8.02 suspending such Bank's obligation to make
Euro-Dollar Loans or Foreign Currency Loans or demands compensation or any
other amount under Section 8.03, then upon written notice to the Agent and the
Requesting Bank given no later than 60 days after such suspension or demand,
Franklin Electric shall have the right to (i) seek a bank or banks (the
Replacement Bank), satisfactory to Franklin Electric and the Agent (whose
approval will not be unreasonably withheld), to purchase all of the Requesting
Bank's rights and assume its obligations under this Agreement, the Notes and
the other Loan Documents pursuant to Section 9.07 or (ii) terminate the
Requesting Bank's Commitment upon payment to the Requesting Bank of its share
of the outstanding principal amount of all Loans, all accrued interest thereon
and any other amounts payable to the Requesting Bank hereunder; provided that
prior to any purchase by a Replacement Bank under clause (i) above or any
termination of any Commitment under clause (ii) above, the remaining Banks
shall have the opportunity (which opportunity shall allow such remaining Banks
at least 15 Domestic Business Days in which to make a decision) ratably to
purchase (in the form of an Assignment and Acceptance in accordance with their
respective percentage of the aggregate amount of the Commitments) the
Requesting Bank's rights and assume its obligations under this Agreement, the
Notes and the other Loan Documents pursuant to Section 9.07. The Requesting
Bank shall execute or cause to be executed all instruments and documents
reasonably requested by Franklin Electric or the Agent in order to effect any
purchase and assumption or termination under this Section 8.04(b).
SECTION 8.05. Compensation. Upon the request of any Bank, delivered
to Franklin Electric and the Agent, Franklin Electric shall pay to such Bank
such amount or amounts as shall compensate such Bank for any loss, cost or
expense incurred by such Bank as a result of:
(a) any payment or prepayment of a Fixed Rate Loan on a date other
than the last day of an Interest Period for such Fixed Rate Loan;
(b) any failure by the Borrower to prepay a Fixed Rate Loan on the
date for such prepayment specified in the relevant notice of prepayment
hereunder;
(c) any failure by the Borrower to borrow a Fixed Rate Loan on the
date for the Fixed Rate Borrowing of which such Fixed Rate Loan is a part
specified in the applicable Notice of Borrowing delivered pursuant to Section
2.02 (other than any failure arising as a result of a notice given by the
Agent pursuant to Section 8.01); or
(d) any failure by a Borrower to pay a Foreign Currency Loan in the
applicable Foreign Currency;
such compensation to include, without limitation, as applicable: (A) an amount
equal to the excess, if any, of (x) the amount of interest which would have
accrued on the amount so paid or prepaid or not prepaid or borrowed for the
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period from the date of such payment, prepayment or failure to prepay or
borrow to the last day of the then current Interest Period for such Fixed Rate
Loan (or, in the case of a failure to prepay or borrow, the Interest Period
for such Fixed Rate Loan which would have commenced on the date of such
failure to prepay or borrow) at the applicable rate of interest for such Fixed
Rate Loan provided for herein over (y) the amount of interest (as reasonably
determined by such Bank) such Bank would have paid on (i) deposits in Dollars
of comparable amounts having terms comparable to such period placed with it by
leading banks in the London interbank market (if such Fixed Rate Loan is a
Euro-Dollar Loan), or (ii) any deposit in a Foreign Currency of comparable
amounts having terms comparable to such period placed with it by leading banks
in the applicable interbank market for such Foreign Currency (if such Fixed
Rate Loan is a Foreign Currency Loan) or (B) any such loss, cost or expense
incurred by such Bank in liquidating or closing out any foreign currency
contract undertaken by such Bank in funding or maintaining such Fixed Rate
Loan (if such Fixed Rate Loan is a Foreign Currency Loan).
SECTION 8.06. Failure to Pay in Foreign Currency. If any Borrower
is unable for any reason to effect payment in a Foreign Currency as required
by this Agreement or if any Borrower shall default in the Foreign Currency,
each Bank may, through the Agent, require such payment to be made in Dollars
in the Dollar Equivalent amount of such payment. In any case in which any
Borrower shall make such payment in Dollars, such Borrower agrees to hold the
Banks harmless from any loss incurred by the Banks arising from any change in
the value of Dollars in relation to such Foreign Currency between the date
such payment became due and the date of payment thereof.
SECTION 8.07. Judgment Currency. If for the purpose of obtaining
judgment in any court or enforcing any such judgment it is necessary to
convert any amount due in any Foreign Currency into any other currency, the
rate of exchange used shall be the Agent's spot rate of exchange for the
purchase of the Foreign Currency with such other currency at the close of
business on the Foreign Currency Business Day preceding the date on which
judgment is given or any order for payment is made. The obligation of the
relevant Borrower in respect of any amount due from it hereunder shall,
notwithstanding any judgment or order for a liquidated sum or sums in respect
of amounts due hereunder or under any judgment or order in any other currency
or otherwise be discharged only to the extent that on the Foreign Currency
Business Day following receipt by the Agent of any payment in a currency other
than the relevant Foreign Currency the Agent is able (in accordance with
normal banking procedures) to purchase the relevant Foreign Currency with such
other currency. If the amount of the relevant Foreign Currency that the Agent
is able to purchase with such other currency is less than the amount due in
the relevant Foreign Currency, notwithstanding any judgment or order, such
Borrower shall indemnify the Banks for the shortfall.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
transmission or similar writing) and shall be given to such party at its
address or telecopy number set forth on the signature pages hereof or such
other address or telecopy number as such party may hereafter specify for the
purpose by notice to each other party. Each such notice, request or other
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communication shall be effective (i) if given by telecopier, when such
telecopy is transmitted to the telecopy number specified in this Section and
the telecopy machine used by the sender provides a written confirmation that
such telecopy has been so transmitted or receipt of such telecopy transmission
is otherwise confirmed, (ii) if given by mail, 72hours after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid, and (iii) if given by any other means, when delivered
at the address specified in this Section; provided that notices to the Agent
under Article II or Article VIII shall not be effective until received.
SECTION 9.02. No Waivers. No failure or delay by the Agent or any
Bank in exercising any right, power or privilege hereunder or under any Note
or other Loan Document shall operate as a waiver thereof nor shall any single
or partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 9.03. Expenses; Documentary Taxes; Indemnification. (a)
Franklin Electric shall pay (i) all reasonable out-of-pocket expenses of the
Agent, including fees and disbursements of special counsel for the Agent (but
subject to the provisions of the Agent's Letter Agreement), in connection with
the preparation of this Agreement and the other Loan Documents, any waiver or
consent hereunder or thereunder or any amendment hereof or thereof or any
Default or alleged Default hereunder or thereunder that has occurred and, to
the knowledge of the Agent, is continuing and (ii) if a Default occurs and, to
the knowledge of the Agent or such Bank (as the case may be), is continuing
all reasonable out-of-pocket expenses incurred by the Agent or any Bank,
including fees and disbursements of counsel, in connection with collection and
other enforcement proceedings resulting therefrom, including out-of-pocket
expenses incurred in enforcing this Agreement and the other Loan Documents.
(b) Franklin Electric shall indemnify the Agent and each Bank against
any transfer taxes, documentary taxes, assessments or charges made by any
Authority by reason of the execution and delivery of this Agreement or the
other Loan Documents.
(c) Franklin Electric shall indemnify the Agent, the Banks and each
Affiliate thereof and their respective directors, officers, employees and
agents from, and hold each of them harmless against, any and all losses,
liabilities, claims or damages to which any of them may become subject,
insofar as such losses, liabilities, claims or damages arise out of or result
from any actual or proposed use by any Borrower of the proceeds of any
extension of credit by any Bank hereunder or breach by any Borrower of this
Agreement or any other Loan Document or from investigation, litigation
(including, without limitation, any actions taken by the Agent or any of the
Banks to enforce this Agreement or any of the other Loan Documents) or other
proceeding (including, without limitation, any threatened investigation or
proceeding) relating to the foregoing, and Franklin Electric shall reimburse
the Agent and each Bank, and each Affiliate thereof and their respective
directors, officers, employees and agents, upon demand for any expenses
(including, without limitation, reasonable legal fees) incurred in connection
with any such investigation or proceeding; but excluding any such losses,
liabilities, claims, damages or expenses incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified.
SECTION 9.04. Set-offs; Sharing of Set-Offs. (a) Each Borrower
hereby grants to each Bank, as security for the full and punctual payment and
performance of the obligations of the Borrower under this Agreement, a
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continuing lien on and security interest in all deposits and other sums
credited by or due from such Bank to such Borrower or subject to withdrawal by
such Borrower; and regardless of the adequacy of any collateral or other means
of obtaining repayment of such obligations, each Bank may at any time upon or
after the occurrence of any Event of Default (so long as such Bank lacks
actual knowledge that such Event of Default is no longer continuing), and
without notice to any Borrower, set off the whole or any portion or portions
of any or all such deposits and other sums against such obligations, whether
or not any other Person or Persons could also withdraw money therefrom.
(b) Each Bank agrees that if it shall, by exercising any right of
set-off or counterclaim or otherwise, receive payment of a proportion of the
aggregate amount of principal and interest owing with respect to the Notes
held by it which is greater than the proportion received by any other Bank in
respect of the aggregate amount of all principal and interest owing with
respect to the Notes held by such other Bank, the Bank receiving such
proportionately greater payment shall purchase such participations in the
Notes held by the other Banks owing to such other Banks, and/or such other
adjustments shall be made, as may be required so that all such payments of
principal and interest with respect to the Notes held by the Banks owing to
such other Banks shall be shared by the Banks pro rata; provided that (i)
nothing in this Section shall impair the right of any Bank to exercise any
right of set-off or counterclaim it may have and to apply the amount subject
to such exercise to the payment of indebtedness of any Borrower other than its
indebtedness under the Notes, and (ii) if all or any portion of such payment
received by the purchasing Bank is thereafter recovered from such purchasing
Bank, such purchase from each other Bank shall be rescinded and such other
Bank shall repay to the purchasing Bank the purchase price of such
participation to the extent of such recovery together with an amount equal to
such other Bank's ratable share (according to the proportion of (x) the amount
of such other Bank's required repayment to (y) the total amount so recovered
from the purchasing Bank) of any interest or other amount paid or payable by
the purchasing Bank in respect of the total amount so recovered. Each
Borrower agrees, to the fullest extent it may effectively do so under
applicable law, that any holder of a participation in a Note, whether or not
acquired pursuant to the foregoing arrangements, may exercise rights of set-
off or counterclaim and other rights with respect to such participation as
fully as if such holder of a participation were a direct creditor of such
Borrower in the amount of such participation.
SECTION 9.05. Amendments and Waivers. (a) Any provision of this
Agreement, the Notes or any other Loan Documents may be amended or waived if,
but only if, such amendment or waiver is in writing and is signed by the
Borrowers and the Required Banks (and, if the rights or duties of the Agent
are affected thereby, by the Agent); provided that no such amendment or waiver
shall, unless signed by all the Banks, (i) change the Commitment of any Bank
or subject any Bank to any additional obligation, (ii) change the principal of
or rate of interest on any Loan or any fees hereunder, (iii) change the date
fixed for any payment of principal of or interest on any Loan or any fees
hereunder, (iv) change the amount of principal, interest or fees due on any
date fixed for the payment thereof, (v) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Notes, or the
percentage of Banks, which shall be required for the Banks or any of them to
take any action under this Section or any other provision of this Agreement,
(vi)change the manner of application of any payments made under this Agreement
or the Notes, (vii) release or substitute all or any substantial part of the
collateral (if any) held as security for the Loans, or (viii) release any
guaranty given to support payment of the Loans; provided further, however,
that if one or more Banks (each a Declining Bank) refuse to sign any amendment
97
or waiver which is otherwise signed by the Required Banks and which, but for
this proviso, would (under the immediately preceding proviso) require the
signature of all of the Banks in order to become effective, then Franklin
Electric shall have the right to (A) seek a bank or banks (the New Bank),
satisfactory to Franklin Electric and the Agent (whose approval will not be
unreasonably withheld), to purchase all of the Declining Bank's rights and
assume its obligations under this Agreement, the Notes and the other Loan
Documents pursuant to Section 9.07 or (B) terminate the Declining Bank's
Commitment upon payment to the Declining Bank of its share of the outstanding
principal amount of all Loans, all accrued interest thereon and any other
amounts payable to the Declining Bank hereunder; provided that prior to any
purchase by a New Bank under clause (A) above or any termination of any
Commitment under clause (B) above, the remaining Banks shall have the
opportunity (which opportunity shall allow such remaining Banks at least 15
Domestic Business Days in which to make a decision) ratably to purchase (in
the form of an Assignment and Acceptance in accordance with their respective
percentage of the aggregate amount of the Commitments) the Declining Bank's
rights and assume its obligations under this Agreement, the Notes and the
other Loan Documents pursuant to Section 9.07. The Declining Bank shall
execute or cause to be executed all instruments and documents reasonably
requested by Franklin Electric or the Agent in order to effect any purchase
and assumption or termination under this Section 9.05(a). Once all Declining
Banks which have refused to sign an amendment or waiver otherwise requiring
the signature of all the Banks have either (x) had their Commitments
terminated and all amounts owing to them hereunder paid or (y) assigned all of
their rights and obligations under this Agreement to one or more existing
Banks or New Banks (all in accordance with the second proviso of this Section
9.05(a)), such amendment or waiver signed by the Required Banks shall become
effective.
(b) The Borrowers will not solicit, request or negotiate for or with
respect to any proposed waiver or amendment of any of the provisions of this
Agreement unless each Bank shall be informed thereof by Franklin Electric and
shall be afforded an opportunity of considering the same and shall be supplied
by Franklin Electric with sufficient information to enable it to make an
informed decision with respect thereto. Executed or true and correct copies
of any waiver or consent effected pursuant to the provisions of this Agreement
shall be delivered by Franklin Electric to each Bank forthwith following the
date on which the same shall have been executed and delivered by the requisite
percentage of Banks. The Borrowers will not, directly or indirectly, pay or
cause to be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, to any Bank (in its capacity as such)
as consideration for or as an inducement to the entering into by such Bank of
any waiver or amendment of any of the terms and provisions of this Agreement
unless such remuneration is concurrently paid, on the same terms, ratably to
all such Banks.
SECTION 9.06. Margin Stock Collateral. Each of the Banks represents
to the Agent and each of the other Banks that it in good faith is not,
directly or indirectly (by negative pledge or otherwise), relying upon any
Margin Stock as collateral in the extension or maintenance of the credit
provided for in this Agreement.
SECTION 9.07. Successors and Assigns. (a)The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; provided that no Borrower may
assign or otherwise transfer any of its rights under this Agreement.
98
(b) Any Bank may at any time sell to one or more Persons (each a
"Participant") participating interests in any Loan owing to such Bank, any
Note held by such Bank, any Commitment hereunder or any other interest of such
Bank hereunder. In the event of any such sale by a Bank of a participating
interest to a Participant, such Bank's obligations under this Agreement shall
remain unchanged, such Bank shall remain solely responsible for the
performance thereof, such Bank shall remain the holder of any such Note for
all purposes under this Agreement, and the Borrowers and the Agent shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement. In no event shall a Bank
that sells a participation be obligated to the Participant to take or refrain
from taking any action hereunder except that such Bank may agree that it will
not (except as provided below), without the consent of the Participant, agree
to (i)postpone any date fixed for the payment of principal of or interest on
the related Loan or Loans, (ii) reduce the amount of any principal, interest
or fees due on any date fixed for the payment thereof with respect to the
related Loan or Loans, (iii) any reduction in the rate at which either
interest is payable thereon or (if the Participant is entitled to any part
thereof) commitment fee is payable hereunder from the rate at which the
Participant is entitled to receive interest or commitment fee (as the case may
be) in respect of such participation, (iv)the release or substitution of all
or any substantial part of the collateral (if any) held as security for the
Loans, or (v) the release of any guaranty given to support payment of the
Loans. Each Bank selling a participating interest in any Loan, Note,
Commitment or other interest under this Agreement shall, within 10 Domestic
Business Days of such sale, provide Franklin Electric and the Agent with
written notification stating that such sale has occurred and identifying the
Participant and the interest purchased by such Participant. The Borrowers
agree that each Participant shall be entitled to the benefits of Article VIII
with respect to its participation in Loans outstanding from time to time.
(c) Any Bank may at any time assign to one or more banks or
financial institutions (each an "Assignee") all, or a proportionate part of
all, of its rights and obligations under this Agreement, the Notes and the
other Loan Documents, and such Assignee shall assume all such rights and
obligations, pursuant to an Assignment and Acceptance in the form attached
hereto as Exhibit K, executed by such Assignee, such transferor Bank and the
Agent (and, in the case of an Assignee that is not then a Bank or an Affiliate
of a Bank, by Franklin Electric); provided that (i)no interest may be sold by
a Bank pursuant to this paragraph (c) unless the Assignee shall agree to
assume ratably equivalent portions of the transferor Bank's Commitment,
(ii)the amount of the Commitment of the assigning Bank subject to such
assignment (determined as of the effective date of the assignment) shall be
equal to $5,000,000 (or any larger multiple of $1,000,000), (iii)no interest
may be sold by a Bank pursuant to this paragraph (c) to any Assignee that is
not then a Bank or an Affiliate of a Bank without the consent of Franklin
Electric, and (iv)a Bank may not have more than 2 Assignees that are not then
Banks. Upon (A) execution of the Assignment and Acceptance by such transferor
Bank, such Assignee, the Agent and (if applicable) Franklin Electric, (B)
delivery of an executed copy of the Assignment and Acceptance to Franklin
Electric and the Agent, (C)payment by such Assignee to such transferor Bank of
an amount equal to the purchase price agreed between such transferor Bank and
such Assignee, and (D) payment by the Assignor or the Assignee of a processing
and recordation fee of $2,500 to the Agent, such Assignee shall for all
purposes be a Bank party to this Agreement and shall have all the rights and
obligations of a Bank under this Agreement to the same extent as if it were an
original party hereto with a Commitment as set forth in such instrument of
assumption, and the transferor Bank shall be released from its obligations
hereunder to a corresponding extent, and no further consent or action by the
Borrowers, the Banks or the Agent shall be required. Upon the consummation of
any transfer to an Assignee pursuant to this paragraph (c), the transferor
99
Bank, the Agent and Franklin Electric shall make appropriate arrangements so
that, if required, a new Note is issued to each of such Assignee and such
transferor Bank.
(d) Subject to the provisions of Section9.08, the Borrowers
authorize each Bank to disclose to any Participant or Assignee (each a
"Transferee") and any prospective Transferee any and all financial and other
information in such Bank's possession concerning the Borrowers which has been
delivered to such Bank by any Borrower pursuant to this Agreement or which has
been delivered to such Bank by any Borrower in connection with such Bank's
credit evaluation prior to entering into this Agreement.
(e) No Transferee shall be entitled to receive any greater payment
under Section8.03 than the transferor Bank would have been entitled to receive
with respect to the rights transferred, unless such transfer is made with
Franklin Electric's prior written consent or by reason of the provisions of
Section8.02 or 8.03 requiring such Bank to designate a different Lending
Office under certain circumstances or at a time when the circumstances giving
rise to such greater payment did not exist.
(f) Anything in this Section 9.07 to the contrary notwithstanding,
any Bank may assign and pledge all or any portion of the Loans and/or
obligations owing to it to any Federal Reserve Bank or the United States
Treasury as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and Operating Circular issued by such
Federal Reserve Bank, provided that any payment in respect of such assigned
Loans and/or obligations made by any Borrower to the assigning and/or pledging
Bank in accordance with the terms of this Agreement shall satisfy such
Borrower's obligations hereunder in respect of such assigned Loans and/or
obligations to the extent of such payment. No such assignment shall release
the assigning and/or pledging Bank from its obligations hereunder.
SECTION 9.08. Confidentiality. Each Bank agrees to exercise its
best efforts to keep any information delivered or made available by any
Borrower to it which is clearly indicated to be confidential information,
confidential from anyone other than persons employed or retained by such Bank
who are or are expected to become engaged in evaluating, approving,
structuring or administering the Loans; provided, however, that nothing herein
shall prevent any Bank from disclosing such information (i) to any other Bank,
(ii) upon the order of any court or administrative agency, (iii) upon the
request or demand of any regulatory agency or authority having jurisdiction
over such Bank, (iv) which has been publicly disclosed, (v) to the extent
reasonably required in connection with any litigation to which the Agent, any
Bank or their respective Affiliates may be a party, (vi) to the extent
reasonably required in connection with the exercise of any remedy hereunder,
(vii) to such Bank's legal counsel and independent auditors and (viii) to any
actual or proposed Participant, Assignee or other Transferee of all or part of
its rights hereunder which has agreed in writing to be bound by the provisions
of this Section 9.08.
SECTION 9.09. Representation by Banks. Each Bank hereby represents
that it is a commercial lender or financial institution which makes loans in
the ordinary course of its business and that it will make its Loans hereunder
for its own account in the ordinary course of such business; provided,
however, that, subject to Section 9.07, the disposition of the Note or Notes
held by that Bank shall at all times be within its exclusive control.
100
SECTION 9.10. Obligations Several. The obligations of each Bank
hereunder are several, and no Bank shall be responsible for the obligations or
commitment of any other Bank hereunder. Nothing contained in this Agreement
and no action taken by the Banks pursuant hereto shall be deemed to constitute
the Banks to be a partnership, an association, a joint venture or any other
kind of entity. The amounts payable at any time hereunder to each Bank shall
be a separate and independent debt, and each Bank shall be entitled to protect
and enforce its rights arising out of this Agreement or any other Loan
Document and it shall not be necessary for any other Bank to be joined as an
additional party in any proceeding for such purpose.
SECTION 9.11. Survival of Certain Obligations. Sections 8.03(a),
8.03(b), 8.05 and 9.03, and the obligations of the Borrowers thereunder, shall
survive, and shall continue to be enforceable notwithstanding, the termination
of this Agreement and the Commitments and the payment in full of the principal
of and interest on all Loans.
SECTION 9.12. Georgia Law. This Agreement and each Note shall be
construed in accordance with and governed by the law of the State of Georgia.
SECTION 9.13. Severability. In case any one or more of the
provisions contained in this Agreement, the Notes or any of the other Loan
Documents should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired thereby and
shall be enforced to the greatest extent permitted by law.
SECTION 9.14. Interest. In no event shall the amount of interest
due or payable hereunder or under the Notes exceed the maximum rate of
interest allowed by applicable law, and in the event any such payment is
inadvertently made to any Bank by any Borrower or inadvertently received by
any Bank, then such excess sum shall be credited as a payment of principal,
unless such Borrower shall notify such Bank in writing that it elects to have
such excess sum returned forthwith. It is the express intent hereof that no
Borrower pay and the Banks not receive, directly or indirectly in any manner
whatsoever, interest in excess of that which may legally be paid by such
Borrower under applicable law.
SECTION 9.15. Interpretation. No provision of this Agreement or any
of the other Loan Documents shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or
judicial authority by reason of such party having or being deemed to have
structured or dictated such provision.
SECTION 9.16. Consent to Jurisdiction. The Borrowers (a) submit to
non-exclusive personal jurisdiction in the State of Georgia, the courts
thereof and the United States District Courts sitting therein, for the
enforcement of this Agreement, the Notes and the other Loan Documents, (b)
waive any and all personal rights under the law of any jurisdiction to object
on any basis (including, without limitation, inconvenience of forum) to
jurisdiction or venue within the State of Georgia for the purpose of
litigation to enforce this Agreement, the Notes or the other Loan Documents,
and (c) agree that service of process may be made upon it in the manner
prescribed in Section 9.01 for the giving of notice to the Borrowers. Nothing
herein contained, however, shall prevent the Agent from bringing any action or
101
exercising any rights against any security and against any Borrower
personally, and against any assets of any Borrower, within any other state or
jurisdiction.
SECTION 9.17. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
ARTICLE X
REPRESENTATIONS AND WARRANTIES
OF ADDITIONAL BORROWERS
Each Wholly Owned Subsidiary that becomes an Additional Borrower
pursuant to Section 2.13 shall, by signing and delivering its Election to
Participate, represent and warrant as of the date thereof that:
SECTION 10.01. Corporate Existence and Power. It is a corporation
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and is, and at the time of each Borrowing by it
hereunder will be, a Wholly Owned Subsidiary.
SECTION 10.02. Corporate and Governmental Authorization; No
Contravention. The execution and delivery by it of its Election to
Participate and its Notes, and the performance by it of its obligations under
this Agreement and its Notes, are within its corporate powers, have been duly
authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or official and do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of its certificate of incorporation of bylaws, or of any
agreement, judgment, injunction, order, decree or other instrument binding
upon Franklin Electric or such Additional Borrower or result in the creation
or imposition of any Lien on any asset of Franklin Electric or any of its
Subsidiaries.
SECTION 10.03. Binding Effect. This Agreement constitutes a valid
and binding agreement of such Additional Borrower and its Notes, when executed
and delivered in accordance with this Agreement, will constitute valid and
binding obligations of such Additional Borrower, in each case enforceable in
accordance with its terms, subject in each case to bankruptcy, insolvency and
similar laws affecting the enforcement of creditors' rights generally and to
general principles of equity.
ARTICLE XI
GUARANTEE BY FRANKLIN ELECTRIC
SECTION 11.01. The Guarantee. Franklin Electric unconditionally and
irrevocably guarantees the full and punctual payment of all present and future
indebtedness and other obligations of each Subsidiary Borrower evidenced by or
arising out of any Loan Document, including the full and punctual payment of
principal of and interest on the Notes of each Subsidiary Borrower and the
full and punctual payment of all other sums now or hereafter owed by any
Subsidiary Borrower under any Loan Document as and when the same shall become
102
due and payable, whether at maturity or by declaration or otherwise, according
to the terms hereof and thereof (including any interest which accrues on any
of the foregoing obligations after the commencement of any case, proceeding or
other action relating to the bankruptcy, insolvency or reorganization of any
Subsidiary Borrower, whether or not allowed or allowable as a claim in any
such proceeding). If any Subsidiary Borrower fails punctually to pay the
indebtedness and other obligations guaranteed by Franklin Electric hereby,
Franklin Electric unconditionally agrees to cause such payment to be made
punctually as and when the same shall become due and payable, whether at
maturity or by declaration or otherwise, and as if such payment were made by
such Subsidiary Borrower.
SECTION 11.02. Guarantee Unconditional. The obligations of Franklin
Electric under this Article XI shall be unconditional and absolute and,
without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of any Subsidiary Borrower under any Loan
Document by operation of law or otherwise;
(b) any modification, amendment or waiver of or supplement to any
Loan Document;
(c) any release, impairment, non-perfection or invalidity of any
direct or indirect security, or of any guarantee or other liability of any
third party, for any obligation of any Subsidiary Borrower under any Loan
Document;
(d) any change in the corporate existence, structure or ownership of
any Subsidiary Borrower, or any insolvency, bankruptcy, reorganization or
other similar proceeding affecting any Subsidiary Borrower or its assets, or
any resulting release or discharge of any obligation of any Subsidiary
Borrower contained in any Loan Document;
(e) the existence of any claim, set-off or other rights which
Franklin Electric (or any Subsidiary Borrower) may have at any time against
any Bank, the Agent or any other Person, whether or not arising in connection
with this Agreement, provided that nothing herein shall prevent the assertion
of any such claim by separate suit or compulsory counterclaim;
(f) any invalidity or unenforceability relating to or against any
Subsidiary Borrower for any reason of any Loan Document, or any provision of
applicable law or regulation purporting to prohibit the payment by any
Subsidiary Borrower of the principal of or interest on any Note or any other
amount payable by it under any Loan Document; or
(g) any other act or omission to act or delay of any kind by any
Subsidiary Borrower, any Bank, the Agent or any other Person or any other
circumstance whatsoever that might, but for the provisions of this Section
11.02, constitute a legal or equitable discharge of Franklin Electric's
obligations under this Article XI.
103
SECTION 11.03. Discharge Only Upon Payment in Full; Reinstatement in
Certain Circumstances. Franklin Electric's obligations under this Article XI
constitute a continuing guaranty and shall remain in full force and effect
until the Commitments of each Bank shall have terminated and all amounts
payable by each Subsidiary Borrower under the Loan Documents shall have been
paid in full. If at any time any payment of the principal of or interest on
any Note or any other amount payable by any Subsidiary Borrower under any Loan
Document is rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy or reorganization of such Subsidiary Borrower or
otherwise, Franklin Electric's obligations under this Article XI with respect
to such payment shall be reinstated at such time as though such payment had
become due but had not been made at such time.
SECTION 11.04. Waiver. Franklin Electric irrevocably waives
acceptance hereof, presentment, demand, protest and any notice not provided
for herein, as well as any requirement that at any time any action be taken by
any Person against any Subsidiary Borrower or any other Person or against any
security.
SECTION 11.05. Subrogation. Upon making any payment with respect to
the obligations of any Subsidiary Borrower hereunder, Franklin Electric shall
be subrogated to the rights of the payee against such Subsidiary Borrower with
respect to such payment; provided that Franklin Electric shall not enforce any
payment by way of subrogation against such Subsidiary Borrower so long as any
Bank has any Commitment to such Subsidiary Borrower hereunder or any interest
or fees payable by such Subsidiary Borrower hereunder remain unpaid.
SECTION 11.06. Stay of Acceleration. If acceleration of the time
for payment of any amount payable by any Subsidiary Borrower under any Loan
Document is stayed upon the insolvency, bankruptcy or reorganization of such
Subsidiary Borrower, all such amounts otherwise subject to acceleration under
the terms of this Agreement shall nonetheless by payable by Franklin Electric
hereunder forthwith on demand by the Agent made at the request of the Required
Banks.
104
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, under seal, by their respective authorized officers as of
the day and year first above written.
FRANKLIN ELECTRIC CO., INC.
By: /s/ XXXX X. XXXX (SEAL)
------------------------
Title: CFO
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
(with a copy to the Treasurer)
Telecopy number: (000) 000-0000
Telephone number: (000) 000-0000
COMMITMENTS WACHOVIA BANK, N.A.,
----------- as Agent and as a Bank
$25,000,000
By: (SEAL)
------------------------
Title: VP
Lending Office
--------------
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxxx
Telecopy number: (000) 000-0000
Telephone number: (000) 000-0000
105
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, under seal, by their respective authorized officers as of
the day and year first above written.
FRANKLIN ELECTRIC CO., INC.
By: (SEAL)
------------------------
Title: CFO
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
(with a copy to the Treasurer)
Telecopy number: (000) 000-0000
Telephone number: (000) 000-0000
COMMITMENTS WACHOVIA BANK, N.A.,
----------- as Agent and as a Bank
$25,000,000
By: /s/ XXXX X. EAGLE (SEAL)
------------------------
Title: VP
Lending Office
--------------
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxxx
Telecopy number: (000) 000-0000
Telephone number: (000) 000-0000
106
$15,000,000
BANK OF AMERICA NATIONAL TRUST
& SAVINGS ASSOCIATION
By: /s/ XXXX X. XXXXXX (SEAL)
------------------------
Title: Vice President
Lending Office
--------------
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. X'Xxxx
Telecopy number: (000) 000-0000
Telephone number: (000) 000-0000
TOTAL COMMITMENTS:
$40,000,000
107
SCHEDULE 4.08
Existing Subsidiaries
Name of Subsidiary Jurisdiction of Incorporation
------------------ -----------------------------
Franklin Electric Subsidiaries, Inc. [inactive] Indiana
FE Petro, Inc. Indiana
Franklin Electric International, Inc. Delaware
Franklin Electric of Canada, Limited [inactive] Canada
Franklin Electric Europa, GmbH Germany
Franklin Electric (South Africa) Pty. Limited South Africa
Franklin Electric Foreign Sales Corporation X.X.Xxxxxx Islands
Franklin Electric (International) Pty. Ltd. Australia
Motores Xxxxxxxx X.X. de C.V. Mexico
Franklin Electric B.V. Netherlands
Franklin Electric AG Switzerland
Franklin Electric spol S.R.O. Czech Republic
Franklin Electric S.R.L. Italy
108
SCHEDULE 4.14A-1
Potentially Responsible Party Designations
1. Xxxxx Reclamation & Recycling Columbia City, Indiana
2. X. Xxxxx Recycling Xxxxxxxxx Road, Ft. Xxxxx, Indiana
3. PCB Treatment Inc. Kansas City, Missouri
4. Diaz Refinery Diaz, Arkansas
5. Enviro Chem Third Site Zionsville, Indiana
109
SCHEDULE 4.14A-2
Properties Identified on Environmental Lists
None
110
EXHIBIT A
DOLLAR NOTE
$_____________ Atlanta, Georgia
December 30, 1997
For value received, [name of Borrower], a ________ corporation (the
"Borrower"), promises to pay to the order of ________ the "Bank"), for the
account of its Lending Office, the principal sum of ________ and No/100
Dollars ($_______), or such lesser amount as shall equal the unpaid principal
amount of each Dollar Loan made by the Bank to the Borrower pursuant to the
Credit Agreement referred to below, on the dates and in the amounts provided
in the Credit Agreement. The Borrower promises to pay interest on the unpaid
principal amount of this Dollar Note on the dates and at the rate or rates
provided for in the Credit Agreement. Interest on any overdue principal of
and, to the extent permitted by law, overdue interest on the principal amount
hereof shall bear interest at the Default Rate, as provided for in the Credit
Agreement. All such payments of principal and interest shall be made in
lawful money of the United States in Federal or other immediately available
funds at the office of Wachovia Bank, N.A., 000 Xxxxxxxxx Xxxxxx, X.X.,
Xxxxxxx, Xxxxxxx 00000, or such other address as may be specified from time
to time pursuant to the Credit Agreement.
All Dollar Loans made by the Bank, the respective maturities thereof,
the interest rates from time to time applicable thereto and all repayments of
the principal thereof shall be recorded by the Bank and, prior to any transfer
hereof, endorsed by the Bank on the schedule attached hereto, or on a
continuation of such schedule attached to and made a part hereof; provided
that the failure of the Bank to make, or any error of the Bank in making, any
such recordation or endorsement shall not affect the obligations of the
Borrower hereunder or under the Credit Agreement.
This Note is one of the Dollar Notes referred to in the Amended and
Restated Credit Agreement dated as of December 30, 1997 among Franklin
Electric Co., Inc., the other Borrowers referred to therein, the Banks listed
on the signature pages thereof and Wachovia Bank, N.A., as Agent (as the same
may be amended or modified from time to time, the "Credit Agreement"). Terms
defined in the Credit Agreement are used herein with the same meanings.
Reference is made to the Credit Agreement for provisions for the prepayment
and the repayment hereof and the acceleration of the maturity hereof.
The Borrower hereby waives presentment, demand, protest, notice of
demand, protest and nonpayment and any other notice required by law relative
hereto, except to the extent as otherwise may be expressly provided for in the
Credit Agreement.
The Borrower agrees, in the event that this Dollar Note or any
portion hereof is collected by law or through an attorney at law, to pay all
reasonable costs of collection, including, without limitation, reasonable
attorneys' fees.
111
IN WITNESS WHEREOF, the Borrower has caused this Dollar Note to be
duly executed under seal, by its duly authorized officer as of the day and
year first above written.
[BORROWER]
By: (SEAL)
--------------------
Title:
112
Dollar Note (cont'd)
DOLLAR LOANS AND PAYMENTS OF PRINCIPAL
Type Amount Amount of
Of Interest of Principal Maturity Notation
Date Loan* Rate Loan Repaid Date Made By
---- ---- -------- ------ --------- -------- --------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
* I.e., a Base Rate or Euro-Dollars Loan.
113
EXHIBIT B
FOREIGN CURRENCY NOTE
Atlanta, Georgia
December 30, 1997
For value received, [name of Borrower], a _______ corporation (the
Borrower), promises to pay to the order of ________________, a _____________
(the Bank), for the account of its Lending Office, the outstanding principal
amount of each Foreign Currency Loan made by the Bank to the Borrower pursuant
to the Credit Agreement referred to below, on the dates and in the amounts
provided in the Credit Agreement. The Borrower promises to pay interest on
the unpaid principal amount of this Foreign Currency Note on the dates and at
the rate or rates provided for Foreign Currency Loans in the Credit Agreement.
Interest on any overdue principal of and, to the extent permitted by law,
overdue interest on the principal amount hereof shall bear interest at the
Default Rate, as provided for in the Credit Agreement. All such payments of
principal and interest shall be made in lawful money of the applicable Foreign
Currency in immediately available funds at the office of Wachovia Bank, N.A.,
000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000, or such other address as
may be specified from time to time pursuant to the Credit Agreement.
All Foreign Currency Loans made by the Bank, the respective
maturities thereof, the interest rates from time to time applicable thereto,
and all repayments of the principal thereof shall be recorded by the Bank and,
prior to any transfer hereof, endorsed by the Bank on the schedule attached
hereto, or on a continuation of such schedule attached to and made a part
hereof; provided that the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower hereunder or
under the Credit Agreement.
This Note is one of the Foreign Currency Notes referred to in the
Amended and Restated Credit Agreement dated as of December 30, 1997 among
Franklin Electric Co., Inc., the other Borrowers referred to therein, the
Banks listed on the signature pages thereof and Wachovia Bank, N.A., as Agent
(as the same may be amended and modified from time to time, the Credit
Agreement). Terms defined in the Credit Agreement are used herein with the
same meanings. Reference is made to the Credit Agreement for provisions for
the optional and mandatory prepayment and the repayment hereof and the
acceleration of the maturity hereof.
The Borrower hereby waives presentment, demand, protest, notice of
demand, protest and nonpayment and any other notice required by law relative
hereto, except to the extent as otherwise may be expressly provided for in the
Credit Agreement.
The Borrower agrees, in the event that this Foreign Currency Note or
any portion hereof is collected by law or through an attorney at law, to pay
all reasonable costs of collection, including, without limitation, reasonable
attorneys' fees.
114
IN WITNESS WHEREOF, the Borrower has caused this Foreign Currency
Note to be duly executed under seal, by its duly authorized officer as of the
day and year first above written.
[BORROWER]
By: (SEAL)
-------------------------
Title:
115
Foreign Currency Note (cont'd)
FOREIGN CURRENCY LOANS AND PAYMENTS OF PRINCIPAL
Type Amount of Amount of
of Interest Loan and Principal Maturity Notation
Date Foreign Rate Foreign Currency Repaid Date Made By
---- Currency -------- ---------------- --------- -------- --------
--------
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